October 06, 2008
By Jay Gordon Taylor
In an artful job of issue dodging and a narrowly focused reading of the Patent Act, the Court of Appeals for the Federal Circuit (CAFC) has dodged the key issue in Aristocrat Technologies Australia PTY Ldt. v. International Gaming Technology, i.e., whether the United States Patent and Trademark office (PTO) has the statutory authority to revive abandoned patent applications for mere "unintentional" abandonment rather than the apparent statutory authority of "unavoidable" abandonment, and delivered an astonishing decision that makes it impossible for anyone to ever challenge patents issued from improperly revived patent applications. Thus, once the PTO revives a patent application, regardless of whether PTO had any statutory authority whatsoever to do so, any patent that issues from that application can remain as an impediment to competition and commerce, without any possible challenge.
In arriving at this decision, the court put on its horse blinders and read 35 U.S.C. §282 (2) of the statue as only allowing defenses specified in Part II of the act that are a "condition for patentability." Thus, the CAFC panel (Newman, Bryson and Linn) concluded, because "improper revival" of an application is not listed as a condition of patentability in Part II of the Act, i.e., §§ 101, 102 & 103, it cannot be a defense under §282 (2). Similarly, the CAFC panel concluded that §282 (4) ("any other act or fact made a defense by this title") did not apply because there was no provision in the patent act that specifically made "improper revival" a defense. The CAFC panel had to distinguish Quantum Corp. v Rodine, PLC, 65 F.3d 1577 (Fed. Cir. 1996) which held that violation of 35 U.S.C. § 305 which prohibits enlarging the scope of patent claims by reissue, was a defense, even though that section does not specifically make it a defense, because, the court decided, to hold otherwise would render that prohibition of § 305 "meaningless." The CAFC panel concluded that the concerns addressed in Quantum did not apply to the Aristocrat case because they could "discern no legitimate incentive … to improperly revive…" an abandoned patent application. Apparently the CAFC panel believes that attempting to get the earliest possible filing date to avoid possibly invalidating prior art is not an incentive to an applicant to attempt to improperly revive an abandoned application. For judge Bryson, such a conclusion is understandable as his prior experience is in criminal law with the Justice Department and U.S. Attorney's Office, but Justices Linn and Newman should know better as they have had patent prosecution experience prior to going on the bench. As will be discussed below, there was every incentive to attempt to revive the original application in the Aristocrat case as it could not, due to 35 U.S.C. §102 (b), be refiled as a new application.
To further buttress its position, the CAFC panel likened "improper revival" to "procedural lapses" during prosecution which the CAFC purportedly had previously excluded as a defense in Magnivision, Inc. v. Bonneau Co., 115 F.3d 956 (Fed. Cir. 1997). Apparently, the panel concluded that the lack of statutory authority for the Patent Office to take an action is a mere "procedural lapse." Query, would the CAFC find that the PTO's extension or restoration of a patent term beyond that allowed by statutory authority to be a mere "procedural lapse" that is beyond judicial review if challenged in litigation? Moreover, in Magnivision, "procedural lapses" were not even at issue (reference thereto merely dicta), and were not held to be excluded as a defense. Rather, in Magnivision, the issue was whether defendant's repeated references at trial before the jury to "procedural irregularities" allegedly committed by the patent examiner in not recording a telephone interview call with patentee's patent counsel during prosecution prejudiced the jury's decision in the case. The court concluded that because there was no requirement in the rules for the examiner to make a record of the call and the patentee's counsel had filed a record of the call as required by the rules, the lower courts allowance of repeated references to such "procedural irregularities" by the examiner was improper and prejudiced the jury. Additionally, the court found a jury instruction referencing "procedural irregularities" was also improper and prejudicial and ordered a new trial. It is submitted that there is a vast difference between the issue of whether the Patent Office has the statutory authority to revive an abandoned application and the issue of whether repeated unjustified prejudicial comments about an examiner's actions prejudiced a jury. I may be missing something, but I thought it was established law that if a government agency does not have the statutory authority to take an action, such action is null and void. A government agency simply cannot legally operate outside the bounds of its statutory authority.
Another issue not addressed by the CAFC panel in the Aristocrat case is that under the statute, one of the conditions of patentability under §102 is "(c) he has [not] abandoned the invention." While an abandonment of an application is not necessarily an abandonment of the invention because the applicant can possibly refile the application and only loses the priority date, there are circumstances where abandonment of an application effectively abandons the invention as well. For example, if the applicant abandons an application more that one year after the first public use or sale in the United States or the first publication of the invention, all rights to the invention in the United States are effectively abandoned because the application cannot be refiled. In the Aristocrat case, the PCT application was first published on January 21, 1999. The notice of abandonment was mailed on June 13, 2000, more that a year later. Thus, if the applicant could not revive the original application, all rights to the invention in the United States are bared under §102(b) and a patent for the invention could never be acquired. Certainly, in this case, the issue of proper revival is relevant to one of the conditions of patentability, i.e., whether a non-abandoned application was filed less than one year after the first publication. Thus, the issue of whether the Patent Office had the statutory authority to revive the application is directly relevant to whether or not there was an abandonment of the invention, one of the conditions of patentability.
By analogy, under 35 U.S.C. § 151 failure to timely pay the issue fee for an allowed application is regarded as an abandonment of the application which can only be revived by paying a late fee and making a showing that the late payment was "unavoidable." Thus, under the Aristocrat holding any improper revival by the PTO of such an abandoned application under a standard other than the statutory "unavoidable" standard is beyond judicial review in a patent infringement case as it is a mere "procedural lapse" and not a listed in Part II as defense to the validity of the improperly issued patent. However, who else other than a defendant to a patent infringement case would ever challenge whether that patent should have been allowed to issue? Such a result appears absurd but fully within the Aristocrat holding.
Perhaps the motivation for the CAFC panel's decision was to avoid a holding that would place a large number of issued patents at risk. The PTO has been using the "unintentional" standard to revise patent applications for many years, statutory authority or not, and undoubtedly there are many patents that have issued from applications revived under the "unintentional" standard that would be at risk of being invalidated. However, reaching a desired result is hardly justification for dodging a fundamental issue and failing to interpret and correctly apply the law. This is a decision that screams for en banc review, and failing that, Supreme Court review.
Jay Taylor is a Partner with Ice Miller LLP focusing his efforts on patent, trademark, copyright, and trade secret litigation.
In an artful job of issue dodging and a narrowly focused reading of the Patent Act, the Court of Appeals for the Federal Circuit (CAFC) has dodged the key issue in Aristocrat Technologies Australia PTY Ldt. v. International Gaming Technology, i.e., whether the United States Patent and Trademark office (PTO) has the statutory authority to revive abandoned patent applications for mere "unintentional" abandonment rather than the apparent statutory authority of "unavoidable" abandonment, and delivered an astonishing decision that makes it impossible for anyone to ever challenge patents issued from improperly revived patent applications. Thus, once the PTO revives a patent application, regardless of whether PTO had any statutory authority whatsoever to do so, any patent that issues from that application can remain as an impediment to competition and commerce, without any possible challenge.
In arriving at this decision, the court put on its horse blinders and read 35 U.S.C. §282 (2) of the statue as only allowing defenses specified in Part II of the act that are a "condition for patentability." Thus, the CAFC panel (Newman, Bryson and Linn) concluded, because "improper revival" of an application is not listed as a condition of patentability in Part II of the Act, i.e., §§ 101, 102 & 103, it cannot be a defense under §282 (2). Similarly, the CAFC panel concluded that §282 (4) ("any other act or fact made a defense by this title") did not apply because there was no provision in the patent act that specifically made "improper revival" a defense. The CAFC panel had to distinguish Quantum Corp. v Rodine, PLC, 65 F.3d 1577 (Fed. Cir. 1996) which held that violation of 35 U.S.C. § 305 which prohibits enlarging the scope of patent claims by reissue, was a defense, even though that section does not specifically make it a defense, because, the court decided, to hold otherwise would render that prohibition of § 305 "meaningless." The CAFC panel concluded that the concerns addressed in Quantum did not apply to the Aristocrat case because they could "discern no legitimate incentive … to improperly revive…" an abandoned patent application. Apparently the CAFC panel believes that attempting to get the earliest possible filing date to avoid possibly invalidating prior art is not an incentive to an applicant to attempt to improperly revive an abandoned application. For judge Bryson, such a conclusion is understandable as his prior experience is in criminal law with the Justice Department and U.S. Attorney's Office, but Justices Linn and Newman should know better as they have had patent prosecution experience prior to going on the bench. As will be discussed below, there was every incentive to attempt to revive the original application in the Aristocrat case as it could not, due to 35 U.S.C. §102 (b), be refiled as a new application.
To further buttress its position, the CAFC panel likened "improper revival" to "procedural lapses" during prosecution which the CAFC purportedly had previously excluded as a defense in Magnivision, Inc. v. Bonneau Co., 115 F.3d 956 (Fed. Cir. 1997). Apparently, the panel concluded that the lack of statutory authority for the Patent Office to take an action is a mere "procedural lapse." Query, would the CAFC find that the PTO's extension or restoration of a patent term beyond that allowed by statutory authority to be a mere "procedural lapse" that is beyond judicial review if challenged in litigation? Moreover, in Magnivision, "procedural lapses" were not even at issue (reference thereto merely dicta), and were not held to be excluded as a defense. Rather, in Magnivision, the issue was whether defendant's repeated references at trial before the jury to "procedural irregularities" allegedly committed by the patent examiner in not recording a telephone interview call with patentee's patent counsel during prosecution prejudiced the jury's decision in the case. The court concluded that because there was no requirement in the rules for the examiner to make a record of the call and the patentee's counsel had filed a record of the call as required by the rules, the lower courts allowance of repeated references to such "procedural irregularities" by the examiner was improper and prejudiced the jury. Additionally, the court found a jury instruction referencing "procedural irregularities" was also improper and prejudicial and ordered a new trial. It is submitted that there is a vast difference between the issue of whether the Patent Office has the statutory authority to revive an abandoned application and the issue of whether repeated unjustified prejudicial comments about an examiner's actions prejudiced a jury. I may be missing something, but I thought it was established law that if a government agency does not have the statutory authority to take an action, such action is null and void. A government agency simply cannot legally operate outside the bounds of its statutory authority.
Another issue not addressed by the CAFC panel in the Aristocrat case is that under the statute, one of the conditions of patentability under §102 is "(c) he has [not] abandoned the invention." While an abandonment of an application is not necessarily an abandonment of the invention because the applicant can possibly refile the application and only loses the priority date, there are circumstances where abandonment of an application effectively abandons the invention as well. For example, if the applicant abandons an application more that one year after the first public use or sale in the United States or the first publication of the invention, all rights to the invention in the United States are effectively abandoned because the application cannot be refiled. In the Aristocrat case, the PCT application was first published on January 21, 1999. The notice of abandonment was mailed on June 13, 2000, more that a year later. Thus, if the applicant could not revive the original application, all rights to the invention in the United States are bared under §102(b) and a patent for the invention could never be acquired. Certainly, in this case, the issue of proper revival is relevant to one of the conditions of patentability, i.e., whether a non-abandoned application was filed less than one year after the first publication. Thus, the issue of whether the Patent Office had the statutory authority to revive the application is directly relevant to whether or not there was an abandonment of the invention, one of the conditions of patentability.
By analogy, under 35 U.S.C. § 151 failure to timely pay the issue fee for an allowed application is regarded as an abandonment of the application which can only be revived by paying a late fee and making a showing that the late payment was "unavoidable." Thus, under the Aristocrat holding any improper revival by the PTO of such an abandoned application under a standard other than the statutory "unavoidable" standard is beyond judicial review in a patent infringement case as it is a mere "procedural lapse" and not a listed in Part II as defense to the validity of the improperly issued patent. However, who else other than a defendant to a patent infringement case would ever challenge whether that patent should have been allowed to issue? Such a result appears absurd but fully within the Aristocrat holding.
Perhaps the motivation for the CAFC panel's decision was to avoid a holding that would place a large number of issued patents at risk. The PTO has been using the "unintentional" standard to revise patent applications for many years, statutory authority or not, and undoubtedly there are many patents that have issued from applications revived under the "unintentional" standard that would be at risk of being invalidated. However, reaching a desired result is hardly justification for dodging a fundamental issue and failing to interpret and correctly apply the law. This is a decision that screams for en banc review, and failing that, Supreme Court review.
Jay Taylor is a Partner with Ice Miller LLP focusing his efforts on patent, trademark, copyright, and trade secret litigation.
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