Reviving Unintentionally Abandoned Patent Applications

Aristocrat Technologies v. IGT (pending before the CAFC).

The pending Aristocrat case is interesting for several reasons: (1) it involves the greatest fear of many practicing patent prosecutors — missing a deadline; (2) it will decide the scope of PTO authority in advance of Tafas v. Dudas; and (3) pending legislation would expand PTO authority to cover some of the issues here.

Background: The Patent Act discusses revival for unintentional abandonment due to failure to submit proper application fees (35 USC 111) and failure to rescind a nonpublication request (35 USC 122). In other cases, however, the Patent Act only explicitly allows revival of unavoidably abandoned cases — a much higher standard. These include Abandonment due to failure to respond to a PTO notice (35 USC 133); failure to pay the issue fee (35 USC 151); and failure to comply with national stage filing requirements (35 USC 371). The fee schedule (35 USC 41) further provides for a specific fee for revival of unintentionally abandoned applications as an explicit alternative to revival of unavoidably abandoned applications.

Aristocrat’s patent application was originally filed in Australia, but the US national stage filing was one day late. Per its usual operation, the PTO allowed Aristocrat to revive the application based on the unintentional standard. The district court (J. Jenkins N.D. Cal.) found that the PTO lacked authority to revive the application.

Revival is Common: The USPTO estimates that it has revived approximately 73,000 patent applications since 1982. If the lower court’s decision is upheld, most of the related patents would be put in jeopardy. In addition, many of the revived applications have spawned multiple family members – potentially leading to further invalidation.

In a brief supporting the appeal, the Patent argues that Section 41(a)(7) of the Patent Act authorizes the Office to revive unintentionally abandoned patent applications – regardless of the form of abandonment. As a backup, the Office demands Chevron deference:

“To the extent that any ambiguities or gaps exist between § 41(a)(7) and the other provisions of Title 35, the USPTO’s reasonable and contemporaneous interpretations of its governing statute is entitled to Chevron deference. ”

Beyond Chevron, the Patent Office argues that it is entitled to “great deference” because it has been applying its interpretation for so many years. See US v. Clark, 454 U.S. 555 (1982).  In amicus, the Neurotechnology Industry Organization also argues that 35 U.S.C. § 2(b)(2)(A) requires that the PTO be given great deference.

Notes:

  • Briefs & Documents:
  • Statutory provisions for revival due to unintentional abandonment:
    • 35 USC 111: Failure to submit fee and oath of a patent application;
    • 35 USC 41: Fee schedule for revival of unintentionally abandoned applications. This section provides a specific fee for revival of unintentionally abandoned applications as an explicit alternative to revival of unavoidably abandoned applications; and
    • 35 USC 122: Abandonment due to failure to rescind nonpublication request.
  • Statutory provisions that only refer to revival due to unavoidable abandonment:
    • 35 USC 133: Abandonment due to failure to respond to PTO notice (Normally a 6–month deadline, but may be less);
    • 35 USC 151: Revival for failure to pay issue fee; and
    • 35 USC 371: Failure to comply with national stage filing requirements.
  • PTO Rules:
    • 37 C.F.R. 1.137(b) provide for revival of applications based on an applicant’s unintentional delay in replying. Under the rule, abandoned applications, reexamination prosecution terminated under §§ 1.550(d) or 1.957(b) or limited under § 1.957(c), or lapsed patents may all be revived under this standard.  The PTO rules are, however, subordinate to statutes.
  • Caselaw:
    • Lumenyte v. Cable Lite (Fed. Cir. 1996): Patentee revived case as unintentionally abandoned. The CAFC affirmed the ruling without questioning whether such revival is ever permissible.
    • Morganroth v. Quigg (Fed. Cir. 1989): Affirming that the Director does not have authority to revive an unintentionally abandoned patent application “that resulted from the applicant’s failure to appeal from a final district court judgment that upheld the Commissioner’s prior refusal to issue a patent.”
    • New York Univ. v. Autodesk, Inc., 2007 U.S. Dist. LEXIS 50832 (SDNY 2007): The court found that the delay in reviving was not even unintentional. The court explicitly did not reach the question of whether revival for unintentional abandonment due to failure to respond to an office action is even permitted. (Remember, 35 USC 133 only allows for revival of unavoidably abandoned applications.)
    • Field Hybrids v. Toyota (D.Minn 2005).
  • This case is not the recently decided Aristocrat v. Multimedia Games.

  

25 thoughts on “Reviving Unintentionally Abandoned Patent Applications

  1. The PTO is fair and square in re “Revival is Common”: This situation should not be tampered with because the result just might open another can of wormes. So long as ones Petition is honest & truthful everyone receives justice. The problem with the PTO is the micro-management to which We are subjected; ie: A generous overburdon of needless paperwork. A petition to Revive costs $400 and a full days work which cannot in good faith be charged to the Client. Let sleeping Dogs lay (lie ?). Fifty years of Patent Law Practice has not deminished My Love & respect for the USPTO system; but recent years has disgusted me respective the inapt Captain of this misguided ship thats headed towards the rocks.

  2. There is a time honored principle in equity that states that valuable rights should not be forfeited based on minor procedural error. I wish I remembered what case that was from…

    Also, I found some interesting words of wisdom from Jefferson that today’s Federal and Supreme Court Justices would be wise to heed for patent cases which still sound in equity.

    Thomas Jefferson explained in 1785 that there are three main limitations on the power of a court of equity:

    1. That it cannot take cognisance of any case wherein the common law can give complete remedy.

    2. That it cannot interpose in any case against the express letter and intention of the legislature. If the legislature means to enact an injustice, however palpable, the court of Chancery is not the body with whom a correcting power is lodged.

    3. That it shall not interpose in any case which does not come within a general description and admit of redress by a general and practicable rule.[2] ”

    I hope the Tafas court pays attention to number 2…

  3. “Equity abhors a forfeiture”, not law. The maxim arose to correct those situations in which the law acted without consideration of the underlying circumstances. Like an “unavoidable delay” which the law would not consider.

    IMHO, the unavoidable delay provisions are the only ones that should exist. The unintentional delay scheme seems to be merely revenue related. As professionals, we should not be easily excused from our nonfeasance. And, yes, I have missed a deadline or two in my 31 years of doing this.

  4. I’m in academia. My patent attorney was a solo practitioner who lived way out in the countryside, didn’t like email, and didn’t answer his phone much. But he was cheap so my university used him. Then, he apparently developed Alzheimer’s and stopped answering mail from the USPTO. He had been slow and reclusive anyway, and no one at my university was tracking this case. When I finally asked about what response the USPTO had to our reply to their first Office Action, my university belatedly realized that the attorney was negligent. He also messed up dozens of other cases. In at least one case, a professor’s startup company tried to sue him, but he had no insurance and was broke himself. Ultimately, my case was transferred to a superb patent attorney from a nearby reputable firm. She found out that USPTO had marked my file abandoned, and then went on to revive the case. My patent just issued a few months ago. Now, we are raising $10-20 million to build an entire company on the basis of this patent.

    So – don’t tell me that patents shouldn’t be revivable if they were abandoned unintentionally. That just doesn’t take account of reality.

    Suppose someone said that if your plane was going to leave late, then the entire flight should be cancelled? It’s really like that. Unintentional abandonment has nothing to do with patentability, so long as we’re not talking revival years after the fact. What is this mythical disservice to the public of reviving a patent < 1 year later – give an example of who is hurt by this. I suspect no one is, and the revived patent can then be reborn as a candidate for investment and further development. Opposing the revival of abandoned patents is just plain nonsense that has nothing to do with the purpose of the patent system.

  5. Firstly, Mr. Petitions is right, the court could hold that the PTO has no authority to do this in the national stage without disturbing the right to file under the unintentional standard in all other cases, but it might not even go that far. Jim H is also right, the congressional record should ensure that the status quo ante is not otherwise disturbed.

    As for Chevron deferrence, if past decisions are anything to go by, the court will sidestep this issue entirely, and so have no effect upon Tafas.

    Now we have to wait and see.

  6. The various discussions miss the main points that the Court is likely to deal with. Whether the PTO has the right to revive an abandoned application under the unintentional standard is the easy issue. It does. If a continuing application is filed one day late, the continuing application cannot be revived. However, the parent application can be revived long enough to gain copendency with the late filed child application, thus making the late filed continuing application a proper one under 35 USC 120. In Aristocrat Technologies v. IGT (pending before the CAFC), the real issue will be whether the PTO can “revive” a national stage application that was not filed by the deadline. Thus, it is the International application that would have to be revived long enough to make it copending with the national stage application filed under 35 USC 371. Does the PTO have the authority to revive an International application? Can the PTO revive an International application under both, the unavoidable and unintentional standard? Would or should the outcome be different if the National stage application had been filed one day late as a bypass continuation application? These are the issues that the CAFC will be considering.

  7. Here is the expression of Congressional intent memorialized in the Congressional Record by Congress way back in 1982 and quoted by the PTO in its brief (I did not provide the full quote in my remarks shown above):

    “Section 41(a)(7) establishes two different fees for filing petitions with different standards to revive abandoned patent applications. The same two fees are applicable to petitions to accept the delayed payment of the fee for issuing a patent. The fees set forth in this section are due on filing the petition. Since the section provides for two alternative fees with different standards, the section would permit the applicant seeking revival or acceptance of a delayed payment of the fee for issuing a patent to choose one of the other of the fees and standards under such regulations as the Commissioner may establish.”

  8. “JustAnExaminer

    Please tell us how high malpractice insurance rates should be per year.

    I’m in interested as to why you think they’re too low.”

    Posted by: Mark Pitchford | Feb 26, 2008 at 04:48 PM

    I did not say I think they are too low, please re-review what I said. For your convenience, it was in response to this question from JTS: “if the unintentional basis for revival gets killed, will malpractice rates go up for attorneys?”. My response was: “Yes, as they should. There should really be no reason why you can’t be on time, as a professional.” This does not equate to thinking they are too low, but rather a recognition that malpractice rates should (be expected to) go up if reliance on the unintentional excuse is no longer available.

    JustAnExaminer says:

    “The shortend statutory deadlines are merely money makers. This is a nonsensical argument. What we are talking about are missing statutory deadlines, and other statutory sections that accommodate missing the statutory deadlines.”

    Posted by: DVM | Feb 26, 2008 at 11:38 PM

    Yes, it is nonsensical. Just as much as arguing that the delay was unavoidable if you miss a statutory deadline by more than a few days is nonsensical.

    “I completely disagree. Mistakes happen. I’ve had a few applications in which the office action mailed was never received or was mailed to the wrong address. Are inventors to be held responsible for such mistakes, possibly losing their intellectual property? In these instances, how were they to know that there was such a deadline when they never received an action in the first place?

    Yes, rules need to be followed, but people do make mistakes. I don’t think inventors or attorneys should be heavily penalized for making a minor mistake (i.e. losing track of the file, entering an incorrect correspondance address, ect). There are, and should be, exceptions to rules.”

    Posted by: Some Examiner | Feb 27, 2008 at 10:23 AM

    Perhaps you missed this sentence, but again, for your convenience it was: “Your fault (your firm, you personally or that of your non-responsive clients), your penalty.” That implicitly means that if it’s the USPTO’s fault, USPTO bears the penalty.

    Yes, I agree there should be exceptions. In my opinion, with the education and salary norms in the field of patent law, the standard is raised for professional responsibility, and the extent of the exceptions should be several days. Any more than that and the concept of “unavoidable” can be pretty much thrown out the window. Again, to make sure your understanding of my view on this is perfectly clear, this is only when the USPTO is blameless (correct correspondence address on every communication, mailed to the correct address, file not lost, etc.)

  9. In my opinion, this is a pure statutory construction issue to which there is no need to determine issues of substantive v. procedural rule making authority (which seems to be the main issue in Tafas to which Professor Crouch mentions). Hence, the outcome of this matter should not affect the outcome of Tafas, and to this respect, I disagree with the professor.

    The first (and main) principle in statutory construction is to ascertain (if possible) Congressional intent. Here, as the PTO points out in its brief on pages 14-15 of its brief (Adobe pages 22-23) the intent expressly stated in the record back in 1982 when 41(a)(7) to its basic form:

    Since section 41(a)(7) “provides for two alternative fees with different standards, the section would permit the applicant seeking revival or acceptance of a delayed payment of the fee for issuing a patent to choose one of the other of the fees and standards under such regulations as the Commissioner may establish.” (Emphasis in PTO’s brief omitted).

    Although I do agree with IGT’s argument regarding the statutory scheme as it exists, Congress expressed its intent back in 1982; because such intent is known (and thereby precluding the Federal Circuit of having to perform an exercise of ascertaining or recreating intent), and further because determining Congressional intent is the primary rule of statutory construction, I believe Aristocrat should prevail despite the poorly written Section 41(a)(7), lack of “plain meaning,” and otherwise persuasive argument of IGT.

    As for Tafas, I do not beleive such Congressional record exists to provide an expression of Congressional intent to aide the Court in the substantive v. procedural issue of which the district court must determine.

  10. “Yes, people are human. That’s why there exists extensions of up to three months to reply to an office action, for example. The human element has already been factored in to it. At some point, it’s time to say: “These are the rules You didn’t follow them. Hundreds of thousands of other people were able to. You’re out of luck.” (73,000 applications since 1982 is a tiny fraction of all applications since 1982). Unless it’s the governments fault, there should be no revival. Your fault (your firm, you personally or that of your non-responsive clients), your penalty.”

    I completely disagree. Mistakes happen. I’ve had a few applications in which the office action mailed was never received or was mailed to the wrong address. Are inventors to be held responsible for such mistakes, possibly losing their intellectual property? In these instances, how were they to know that there was such a deadline when they never received an action in the first place?

    Yes, rules need to be followed, but people do make mistakes. I don’t think inventors or attorneys should be heavily penalized for making a minor mistake (i.e. losing track of the file, entering an incorrect correspondance address, ect). There are, and should be, exceptions to rules.

  11. “I don’t know why Crouch has to tie this in to Tafas.”

    Because it is at least possible that the CAFC will say something about deference under Chevron because the PTO specifically briefed that point.

    “Not to mention ths statute gives deference ot the Commissioner “unless it be shown to the satisfaction of the Director that such delay was unavoidable” Plain reading, commissioner can subscribe lower standards when necessary de-facto.”

    I’d be extremely surprised if the CAFC followed this line of reasoning.

  12. I don’t know why Crouch has to tie this in to Tafas.

    Unitentional abandonment is not automatic, but decided case-by-case, been around forever AND USPTO practice has been revisited by Congress and left unchanged.

    Tafas = extreme patent makeover, tortured readings of statute(s), taking of property, due process, and the American Way. <==substantive, non-procedural

    Not to mention ths statute gives deference ot the Commissioner “unless it be shown to the satisfaction of the Director that such delay was unavoidable” Plain reading, commissioner can subscribe lower standards when necessary de-facto.

    This is just a badly decided case. These cases happen from time to time. Except now, we have blogs and professors, and everytime some court comes out with a bad decision, we get discussion. This case will be overturned. Lets all turn the page

  13. JustAnExaminer says:

    “Yes, people are human. That’s why there exists extensions of up to three months to reply to an office action, for example. The human element has already been factored in to it. At some point, it’s time to say: “These are the rules You didn’t follow them. Hundreds of thousands of other people were able to. You’re out of luck.” (73,000 applications since 1982 is a tiny fraction of all applications since 1982). Unless it’s the governments fault, there should be no revival. Your fault (your firm, you personally or that of your non-responsive clients), your penalty”

    The shortend statutory deadlines are merely money makers. This is a nonsensical argument. What we are talking about are missing statutory deadlines, and other statutory sections that accommodate missing the statutory deadlines.

    The better argument is that Sec. 41(a)(7) provides but one, non-exclusive method for revival, i.e., the USPTO can make available additional paths for revival or dealing with unintended failures.

  14. coast … depends on your coverage … E&O / D&O are common … a reasonable measure would be looking at a market for patents say an ocean tomo auction … average sale is say 50K … a start

    in an oa a specific originally quoted *term* was changed to fit an examiner’s argument (a 112 – no less) : couldn’t find the quote … mpep 707.06 was the easiest way to broach the subject … “i cant find that quote” … so, we searched during an interview and wallah >>> bpai reversed >> in each of three nonprecedential cases … same quote with the same original term …

    mistake? liability? (with due respect lionel)

  15. After reading the briefs, here’s a question: If the attorney receives a notice of abandonment and a revival request isn’t filed for 13 months, how can the attorney file a statement saying “that the entire delay in filing the required reply” was unintentional? 37 CFR 1.137(b)(3). I always thought that the section implicitly required prompt action to revive once it was known that the application had become abandoned albeit unintentionally.

  16. Coast,

    I am assuming your question is rhetorical. Examiners are simply not held to the standards that private practitioners are.

  17. I wonder if Examiners have ever made mistakes where if comparable mistakes had been made by a private practice attorney would have subjected him/her to malpractice liability?

  18. JustAnExaminer

    Please tell us how high malpractice insurance rates should be per year.

    I’m in interested as to why you think they’re too low.

  19. ip-esq

    “But, i think in a high-dollar litigation, stuff happens doesn’t work well with the shareholders or Board.”

    That’s true, but prosecution is from Mars and litigation is from Venus.

    It should be noted that making budget on prosecution work at the prices given to big clients these days is near impossible. And it should be noted that inside counsel is preoccupied thinking, “Can I get this cheaper?”, instead of, “Is this the protection that my company needs?”

    In litigation, clients pay every penny, every time, and expect everything to be perfect whatever the cost. Their only thought is, “Are we going to win?” They almost never ask about how cheap they can get it done.

    Those are two completely different scenarios and should be recognized as such.

  20. “The moral of the story…know the deadlines and make the deadlines…”

    Posted by: ip-esq | Feb 26, 2008 at 01:04 PM

    “I understand about knowing the deadlines and so on, but sometimes stuff happens. People are human (well, at least most of them) and make mistakes. Cases are transferred between firms. Dates get mistyped. Mail does get lost. Is the public so disadvantaged by having to wait a little longer to see if the app is really abandoned? What’s that saying from real property, the law abhors a forfeiture, or something like that? There seems to be something unfair about losing a valuable piece of property because of some simple human error like a typo.”

    Posted by: JTS | Feb 26, 2008 at 01:36 PM

    Yes, people are human. That’s why there exists extensions of up to three months to reply to an office action, for example. The human element has already been factored in to it. At some point, it’s time to say: “These are the rules You didn’t follow them. Hundreds of thousands of other people were able to. You’re out of luck.” (73,000 applications since 1982 is a tiny fraction of all applications since 1982). Unless it’s the governments fault, there should be no revival. Your fault (your firm, you personally or that of your non-responsive clients), your penalty.

    “Here’s a question: if the unintentional basis for revival gets killed, will malpractice rates go up for attorneys?”
    Posted by: JTS | Feb 26, 2008 at 01:36 PM

    Yes, as they should. There should really be no reason why you can’t be on time, as a professional.

  21. “Here’s a question: if the unintentional basis for revival gets killed, will malpractice rates go up for attorneys?”

    Yes.

  22. JTS – Point taken.

    I just keep seeing the entire concept of Patenting going to this high priced…Golden plated patent…no forgiveness place and taking away the revival is par for the course.

    We’ll see. Although i do agree with the “human element” stuff happens point of view.

    But, i think in a high-dollar litigation, stuff happens doesn’t work well with the shareholders or Board.

  23. “If the public is shown that a patent is abandoned, then an automatic revival some time in the future would contravene the public notice function of patents.”

    Right, but if the public knows that a patent can be revived, then they’re equally on notice that a case may not be abandoned. By the same reasoning, unavoidably abandoned applications should also be be un-revivable. Anyway, much of the time the record will include a notice of abandonment in which the examiner states that they talked to the applicant and confirmed that the case was abandoned, or that the case was unintentionally abandoned. If you see an examiner remark like that, then you don’t have to worry about revival.

    Agreed that there is a public notice issue, but it only amounts to a period of perhaps a year or two when it’s uncertain whether a patent can/will be revived. After enough time, unintentional revival is unavailable. That is, given enough time, it’s safe to assume that an apparently abandoned app can’t be revived and is irrevocably abandoned.

    I understand about knowing the deadlines and so on, but sometimes stuff happens. People are human (well, at least most of them) and make mistakes. Cases are transferred between firms. Dates get mistyped. Mail does get lost. Is the public so disadvantaged by having to wait a little longer to see if the app is really abandoned? What’s that saying from real property, the law abhors a forfeiture, or something like that? There seems to be something unfair about losing a valuable piece of property because of some simple human error like a typo.

    Here’s a question: if the unintentional basis for revival gets killed, will malpractice rates go up for attorneys?

  24. “Beyond Chevron, the Patent Office argues that it is entitled to “great deference” because it has been applying its interpretation for so many years. See US v. Clark, 454 U.S. 555 (1982).”

    But the PTO has also been granting CON and RCE’s for so many years…But, they feel like stopping now for arbitrary reasons…

    Sorry (and I feel bad for the practitioners in this case) but in my opinion the District court should be upheld. They blew the deadline…period.

    I think the heart of this is the public notice provision. If the public is shown that a patent is abandoned, then an automatic revival some time in the future would contravene the public notice function of patents.

    The moral of the story…know the deadlines and make the deadlines…

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