Hyatt v. USPTO: Mandamus Action Requesting an Impartial Administrative Review

Gilbert P. Hyatt v. USPTO and Iancu (E.D. Va. 2018) (Hyatt – Mandamus Action Complaint)

Hyatt has filed a new mandamus action against the USPTO as the next step in the 40+ year battle over his microcomputer patent applications. Hyatt has over 300 patents applications pending before the USPTO.

According to the complaint, “Most of Mr. Hyatt’s applications have been pending for over 20 years, with about a dozen pending for over 35 years and three applications pending for over 40 years.”  The complaint details:

[In the 1990’s then Commissioner Bruce] Lehman and other PTO officials falsely branded Mr. Hyatt a ‘submariner’ and unlawfully decided that the PTO would never issue him another patent. . . . Having made that decision, the PTO proceeded to carry it out. It acted almost immediately to withdraw from issuance four patents either issued or in the final stages of being issued to Mr. Hyatt—actions in which the PTO has acknowledged the unusual participation of Commissioner Lehman and other senior PTO officials. It applied unlawful secret procedures (since acknowledged  by the PTO) to block the issuance of applications that examiners found patentable. Internal PTO documents reveal that these unlawful procedures prevented issuance of at least several patents to Mr. Hyatt. It put more than 80 of Mr. Hyatt’s pending administrative appeals on ice for up to a decade before terminating them by reopening prosecution and restarting the examination process from scratch. It secretly used what PTO officials called “Shadow Art Units,” “Phantom Art Units,” and “parking lots” to stow Mr. Hyatt’s applications and take them off the books. And it delayed actions across the board, with a degree of creativity that bespeaks the PTO’s enmity for Mr. Hyatt: issuing suspensions amounting to over a millennium of aggregate delay; secretly assigning his applications to management personnel who do not examine applications; dismissing his petitions imploring the agency to act on the false basis that his applications were already being expedited; leaving approximately 100 of Mr. Hyatt’s applications for a single examiner to process in his personal time, without pay; and manipulating its reporting systems to hide its failure to act on Mr. Hyatt’s applications. All the while, PTO officials spread the word high and low throughout the agency that Mr. Hyatt was a “submariner” and that he would never get another patent, poisoning the well against him.

More recently, the PTO created the “Hyatt Unit . . . “for the purpose of miring all of Mr. Hyatt’s applications in administrative purgatory until Mr. Hyatt gives up or dies.”

The Hyatt Unit began its work by restarting prosecution from scratch, throwing out years of work and enormous effort by Mr. Hyatt in the process. It blanketed Mr. Hyatt in what its leader described as a “boatload” of hundreds of burdensome Office Actions in just a few months, forcing him to scramble to make any response. And now it is in the process of systematically abandoning and rejecting his applications, piling on numerous, overlapping rejections on every patent claim and entering frivolous “objections” that take years to correct due to the PTO’s refusal to decide his administrative petitions for relief on a timely basis or at all. . . The Hyatt Unit has never allowed a single one of Mr. Hyatt’s claims in its more than-5 years of existence.

Finally, in an attempt to eliminate all of Hyatt’s claims, the PTO asserted prosecution laches against all of Hyatt’s applications.  That approach has seemingly now failed with a 2017 district court decision rejecting the PTO’s prosecution laches case.

In this action, Hyatt is looking for several forms of relief — perhaps most pointedly is a mandamus action from the court ordering the PTO “expeditiously to conduct a fair, impartial, and timely examination of his applications in accordance with law, to allow patentable subject matter, to issue patents claiming such patentable such subject matter upon payment of the issue fee, to provide timely action on Mr. Hyatt’s petitions, and to permit Mr. Hyatt to obtain timely final agency action on rejections from the Appeal Board.”

In addition, Hyatt is requesting compensation for post-GATT patent applications whose potential term have expired due to PTO delay and issuance of those patents.

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The complaint is an interesting read, but was filed partially under seal (based upon a protective order from a prior case), including the following paragraph:

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A separate proceeding is ongoing in DC Federal Court  Hyatt v. Iancu, Nos. 05-2310, 09-1864, 09-1869, 09-1872 (D.D.C.).  In a recent briefing, the PTO explained its contention regarding the bulk of Hyatt’s patents:

Mr. Hyatt filed a patent application in 1984 that describes, in over 650 pages of text and figures, a system for manipulating images on a screen by rotating, sliding, and zooming. His explanation includes something that he called a “window” that is in the computer’s memory and is not visible to the user. Mr. Hyatt amended his claims a number of times and, fifteen years later, in 1999, filed the claims that are now at  issue. By 1999, the term “window” had taken on a much different and more valuable meaning in computing and to the general public. Mr. Hyatt’s claims now recite a type of window that is visible on the user’s screen, can be overlapped to run multiple applications at once, includes interactive features such as menus and icons, and allows the user to interact directly with the display monitor by, for example, clicking on a pull-down menu or choosing a menu option. Those claimed inventions are not described in Mr. Hyatt’s original specification, and that lack of written description means the claims have correctly been rejected by the USPTO and should also be rejected by this Court.

USPTO Proposed Findings of Fact and Conclusions of Law [04e9202c-6214-442a-998d-3b74156ca79b]

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Example claim (1984 priority date):

Claim 131. A process comprising the acts of:

generating background image information;

generating a first window of three dimensional perspective image information;

overlaying the first window of three dimensional perspective image information onto the background image information;

generating a second window of three dimensional perspective image information;

overlaying the second window of three dimensional perspective image information onto the background image information overlapping with the first window of three dimensional perspective image information; and

displaying a background image overlaid by a first window of three dimensional perspective images and overlaid by an overlapping second
window of three dimensional perspective images in response to the background image information overlaid with the first window of three dimensional perspective image information and in response to the background image information overlaid with the overlapping second window of three dimensional perspective image information.

No Substance: Hyatt’s Challenge of MPEP 1207.04 (reopening prosecution rather than hearing appeal)

by Dennis Crouch

Hyatt v. USPTO (Fed. Cir. 2018) (Judges HUGHES, Reyna, and Wallach)

This billionaire gets no respect!  Gilbert Hyatt is the named invenetor on 70+ US patents and has 400+ pending patent applications “all of which were filed prior to June 8, 1995.” That date is critical because those “pre-GATT” applications will remain in force for 17-years from their issue date (if they ever issue).  These applications claim priority back to the early 1970s. For the past 10 years, Hyatt has been trying to get his cases heard by the PTAB – but has been repeatedly foiled by PTO delays and unilateral reopening of prosecution.  Here, the Federal Circuit sided with the PTO in Hyatt’s generalized challenge to this practice — finding portions of his his petition time-barred and that the substance of his challenge lacked merit.

The Big Deal for this case for the rest of us: If the PTO has spelled out an improper practice within the MPEP, an APA challenge on procedure or policy must be filed within six years of MPEP publication, if at all.  Also, the Court says its fine for the USPTO to reopen prosecution rather than hearing the appeal.  (more…)

Hyatt v. USPTO: Three generations of poor examination are enough.

By Dennis Crouch

Gilbert Hyatt v. USPTO (D. Nevada 2014)  (Download Hyatt v USPTO Complaint)

Inventor Gilbert Hyatt recently filed a lawsuit against the USPTO in his home state of Nevada asking that the USPTO be ordered to go ahead and examine his applications already. The complaint focuses primarily on two applications that have been pending "since the early 1970s – over 40 years." Hyatt's patents cover early microchip technology and have proven extremely valuable because of the ongoing explosion in that marketplace. Because these applications were filed prior June of 1995, they will have a patent term of 17 years from the issue date (assuming they eventually issue and their term not disclaimed). Hyatt keeps his pending applications secret and so we do not know which applications are at stake here, or the actual content of the file histories.

In the lawsuit, Hyatt alleges that these two applications have been pending before the USPTO Board of Appeals for a very long time (one more than twenty years):

In these two appealed patent applications – referred to herein as patent application Docket Nos. 104 and 112 – the PTO's patent examiners issued rejections of Mr. Hyatt's patent applications, which Mr. Hyatt timely appealed to the PTO's Board of Patent Appeals and Interferences, now known as the Patent Trial and Appeal Board ("Appeal Board"). In both cases, the PTO failed to file any response. Rather than decide the appeals, the PTO has left them undecided for more than 20 years (in the case of patent application Docket No. 104) and for more than five years (in the case of patent application Docket No. 112). Each of these two patent applications has been pending before the PTO for more than forty years. . . .

Mr. Hyatt filed his patent applications and has prosecuted them in good faith and in accordance with PTO rules. Whether out of animus toward Mr. Hyatt or for other reasons, the PTO has demonstrated its determination not to allow Mr. Hyatt to obtain patents for his inventions. This Court's intervention is required to ensure that the PTO complies with the law.

Hyatt then asks the court to place strict deadlines on the PTO to decide his cases.

Hyatt makes the almost believable allegation that: "Several years ago, the PTO apparently determined that it would refuse to grant Mr. Hyatt any further patents, irrespective of the merits of his patent applications."

The complaint also highlights several other Hyatt applications where the PTO has "suspended examination" for very long periods of time:

At some point, rather than subject its decisions to review, the PTO apparently embraced a strategy of denying Mr. Hyatt any reviewable adjudication of his patent applications. Mr. Hyatt consequently has a large number of patent applications that have languished for years in various states of procedural limbo without an action on the merits or a decision on appeal.

In many cases, the PTO has simply ceased examination of Mr. Hyatt's patent applications on the merits. In many other cases, the PTO has refused to allow Mr. Hyatt's patent appeals to go to the Appeal Board for decisions.

For example, in seven cases that Mr. Hyatt filed in 1995, the patent examiners issued first office actions in 1995 or 1996, and Mr. Hyatt responded, yet the PTO has not issued an action on the merits in more than 17 years. Instead, the PTO repeatedly suspended action on these patent applications. Mr. Hyatt filed numerous "Petition[s] For An Action On The Merits" in these patent applications, but the PTO summarily dismissed those petitions.

For another set of applications, Hyatt walks through the PTO churning that involves repeated withdrawal of final rejections following appeal-brief filings by Hyatt.

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For the past 40+ years, the PTO has seen Hyatt as something of a pesky thorn in its side. The "problem" is that Hyatt takes full advantage of the law, hires excellent lawyers, and does not give-up. It turns out that it is the PTO's job to deal with Hyatt and to issue him the patents that he deserves.

Federal Circuit Gives PTO “OK” to Treat Hyatt as a Special Case

Gilbert Hyatt v. Michelle Lee (Fed. Cir. 2015)

Hyatt is a highly successful patentee with more than 75 issued patents and hundreds of millions of dollars in licensing revenue. He also has over 400 patent applications pending before the USPTO that were all filed more than 20-years ago. Hyatt’s applications represent 80% of the applications still-pending that were originally filed prior to the June 1995 patent term transition. Because these old patent applications were filed under the old regime, if they ever issue they will be given a 17-year patent term extending from the issue date (barring a terminal disclaimer or prosecution laches finding). Many of these applications claim priority to much earlier filed applications – some claiming priority back in to the 1970s and most having a complex set of continuation and continuation-in-part applications.

According to the USPTO, these 400 pending applications have – on average – 300 claims each – resulting in about 120,000 pending claims – roughly the equivalent of 6,000 ordinary-sized applications.

I expect that many of Hyatt’s patent claims would cover chip and display technology that is now ubiquitous. If valid and enforceable then we’re talking billions of dollars in licensing fees. If the USPTO has anything to do about it, that result is not coming anytime soon.

Over the years, the USPTO has developed a number of special procedures for Hyatt applications. In 2013, the USPTO began issuing requirements that Hyatt limit each patent family to <600 claims absent a showing of necessity and also identify the earliest priority date for each chosen claim (along with links to the supporting disclosure).

The USPTO also indicated that it would publicize the family linkage of Hyatt’s (otherwise secret) applications. In particular, the disclosure would occur by placing the requirements in the file histories of all of Hyatt’s pending applications, some of which are public. Apparently, this requirements document includes a number of examples of how Hyatt applications overlap claim scope – relying upon specific claim texts of Hyatt’s otherwise secret applications.

In response, Hyatt filed a complaint in the E.D. Virginia asking the district court to enjoin the USPTO from disclosing information in violation of 35 U.S.C. 122(a) (“applications for patents shall be kept in confidence by the Patent and Trademark Office and no information concerning the same given without authority of the applicant or owner unless necessary to carry out the provisions of an Act of Congress or in such special circumstances as may be determined by the Director”). However, the district court dismissed the case for lack of jurisdiction and – in the alternative – held that the extraordinary nature of Hyatt’s situation created “special circumstances” that allowed for the publication.

Although the statute provides the PTO with seeming authority to determining when to disclose the confidential information (“special circumstances as determined by the director”), the Federal Circuit on appeal here found that the PTO’s power is both “narrow and reviewable.” In particular the appellate panel found that the PTO must “determine that special circumstances exist” and those special circumstances must be sufficient and particular enough to “justify the specific content to be disclosed.” However, because of the seeming discretionary nature of the statute, the Federal Circuit determined that it should review the PTO’s determination of these factors with deference and only overturn the PTO’s decision upon finding of an abuse of discretion.

In determining that the PTO had then acted within these requirements, the panel first held that the requirements were proper – given Hyatt’s unique and special status among patent applicants. The court also found that the disclosure of confidential claim scope proper.

In light of the nature of Mr. Hyatt’s applications, longstanding PTO rules justify the issuance of the Requirements. 37 C.F.R. § 1.75(b) provides that, in a patent application, “[m]ore than one claim may be presented provided they differ substantially from each other and are not unduly multiplied” The PTO issued the Requirements to ensure that Mr. Hyatt’s applications complied with § 1.75(b). Given the extraordinary number and duplicative nature of Mr. Hyatt’s various pending applications, all drawn from the same 12 specifications, it was reasonable for the PTO to be concerned that the claims did not “differ substantially from each other,” and that some claims were “unduly multiplied.” § 1.75(b). In fact, in the Requirements the PTO demonstrates that across these applications, Mr. Hyatt has in numerous cases filed identical or nearly identical claims. This sort of redundant, repetitive claiming is inconsistent with § 1.75(b).

These special circumstances, which justify issuing the Requirements, also justify the disclosure of the confidential information contained in them. . . .

We hold that the Director did not abuse her discretion when she found that the “special circumstances” exception justified the otherwise-prohibited disclosure of the Requirements

It is fairly amazing to look at the effort going-in on both sides in Hyatt’s patent applications. One that is public and available in PAIR Application No. 05/849,812 that claims priority back to 1970 through a series of 20 continuations-in-part.

Hyatt v. Kappos: Federal Circuit Opens Door to Post-BPAI Civil Actions

By Dennis Crouch

Hyatt v. Kappos (Fed. Cir. 2010) (en banc)

Summary: In a 6-2-1 en banc decision, the Federal Circuit has reversed its prior precedent and held that a patent applicant must be allowed to introduce new evidence in a Section 145 civil action filed to challenge a USPTO refusal to grant patent rights and that the issues implicated by the new facts must be considered de novo.

[W]e hold that the only limitations on the admissibility of evidence applicable to a § 145 proceeding are the limitations imposed by the Federal Rules of Evidence and Federal Rules of Civil Procedure. Therefore, we hold that the district court applied the wrong legal standard for the admissibility of evidence in a § 145 proceeding and abused its discretion when it excluded Mr. Hyatt's declaration. . . .

The particular significance of a § 145 civil action is that it affords an applicant the opportunity to introduce new evidence after the close of the administra-tive proceedings—and once an applicant introduces new evidence on an issue, the district court reviews that issue de novo.

However, the Court also wrote that an applicant may still be barred from presenting new "issues" in the civil action and that, when no new evidence is presented, that BPAI findings and rulings should be given deference under the Administrative Procedures Act.

Impact: This decision could be seen as relieving some pressure on applicants to ensure that their cases for patentability are exhaustively presented to the USPTO's internal Board of Patent Appeals and Interferences (BPAI). The decision is especially important in light of the growing role of BPAI appeals in the ordinary course of patent prosecution. In its argument, the USPTO suggests that a strategic applicant may now choose hold-back some evidence from the BPAI appeal in order to overcome the APA deference if the case goes to the District Court.

Statute in Question: 35 U.S.C. § 145 creates a right to a "civil action" in Federal District Court against the USPTO Director whenever an applicant is "dissatisfied with the decision of the Board of Patent Appeals and Interferences in an appeal under section 134(a)." In the alternative, an applicant may appeal directly to the Court of Appeals for the Federal Circuit.

Background: Gil Hyatt is a well-known inventor and successful patentee. Hyatt filed a civil action in 2003 after the BPAI sustained written description and enablement rejections for seventy-nine of Hyatt's claims. The examiner had issued "2546 separate rejections of Mr. Hyatt's 117 claims" based on the doctrines of inadequate "written description, lack of enablement, double patenting, anticipation, and obviousness." The Board reversed all of the examiner rejections except for the § 112 p1 arguments. Complicating this case is the fact that the application's claimed priority date is 1975. Hyatt has aggressively pushed the bounds of USPTO practice. This decision is one of more than a dozen Federal Circuit decisions focusing on Hyatt's patent rights. When California pursued Hyatt for tax revenue for his patent licenses, Hyatt took the case to the Supreme Court and eventually won a $388 million judgment against the state of California for invasion of privacy.

After the Board affirmed a set of written description and enablement rejections, Hyatt filed a Section 145 civil action and included a declaration offering new evidence of enablement and written description. The district court excluded that inventor-declaration from evidence based on Hyatt's "negligence" in failing to previously submit the information to the PTO. In a 2009 panel decision, the Federal Circuit held that the district court had properly excluded the new evidence – holding that the district court may properly exclude evidence that Hyatt should have produced to the PTO. That opinion was penned by former Chief Judge Michel and Joined by Judge Dyk. Judge Moore wrote a vigorous dissent that supported a patent applicant's right to a full civil action including the right to submit additional evidence when challenging a PTO decision.

Judge Moore wrote the en banc decision that was joined by Chief Judge Rader and Judges Lourie, Bryson, Linn, and Prost. Judge Dyk dissented and was joined by Judge Gajarsa. Judge Newman Concurred-in-Part – arguing that the civil action should not give deference to PTO factual determinations.

A key to the majority decision is the notion that a Section 145 civil action is not an appeal, but rather a new, separate lawsuit filed to force the PTO to act. In its analysis, the court began with a focus on the 150-year history of the civil action right (and its predecessor Bill in Equity) and the reality that new evidence has always a part of those remedies. See, e.g., Gandy v. Marble, 122 U.S. 432 (1887) (explaining that the [predecessor] § 4915 suit in equity was "not a technical appeal from the Patent Office, nor confined to the case as made in the record on that office"). The court then reviewed the current text of the statute, implications of the APA, and various policy arguments before reaching its conclusions.

In a 37-page dissent, Judge Dyk argued that the majority made an improper leap from (1) the correct premise that new evidence should be admissible in the civil action to (2) the incorrect conclusion that the law provides no meaningful limits on the introduction of new evidence regardless of what was presented at the BPAI.

Notes:

USPTO vs Hyatt: When an Applicant has Too Many Patent Applications

Hyatt v. USPTO, Case No. 14-1300 (E.D.Va. 2014) [HyattMotiontoDismiss]

Earlier this year, Gilbert Hyatt sued the USPTO for unreasonably delaying examination of 80 of his pending patent applications — many of which have been pending for decades.  See Crouch, Three Generations of Poor Examination are Enough.  That case has been transferred from Nevada to Virginia but is otherwise still pending. In its most recent motion to dismiss, the USPTO explained its delay in action — noting that Hyatt has 399 pending patent applications that include a total of over 100,000 claims that apparently all have a pre-URAA (1995) filing date.  While the USPTO admits that it stayed prosecution of most of Hyatt’s cases from 2002-2012, it started examining them again in 2013.  Because of the many overlapping applications held by a single entity, the USPTO has required Hyatt to “streamline” his applications.  The USPTO writes in its brief:

What Mr. Hyatt’s Complaint fails to acknowledge is that the 80 pending applications at issue represent roughly one-fifth of 399 applications he has pending before the USPTO, which contain an estimated total of 115,000 claims; that the size, volume, and interconnectedness of these 399 applications have created extraordinary challenges for the USPTO in examining his applications; that, faced with these challenges, the USPTO, last year, commenced a renewed effort to bring order and finality to Mr. Hyatt’s applications by requiring Mr. Hyatt to take certain steps to help organize and streamline his applications; and that, in response to that effort, prosecution is now actively ongoing in Mr. Hyatt’s applications, with Mr. Hyatt amending many of his claims and engaging in an iterative process with the 14 patent examiners who the USPTO has dedicated to working full-time on his applications.

The basic argument in the case is that the USPTO is now working on the applications and that there is therefore no role for the courts to play in ordering the applications to be moved forward.

I agree with the USPTO that 100,000 claims is quite a few, although it is fairly small compared with the more than 7.5 million claims that I estimate were disposed-of in 2013 (either allowed or abandoned).  Part of the problem is apparently the number of claims-per-patent-application.  The USPTO writes: “almost every one of Mr. Hyatt’s pending applications has one of the largest claim sets that the USPTO has ever encountered in any application.”   The USPTO is correct that such large claim sets are rare. From my database, I found that – out of the 200,000+ patents issued thus far in 2014, only six have more than 300 claims. (See. e.g., Patent No 8,694,657).

Under the streamlining procedures outlined above, the USPTO first grouped the applications into 12-families and in now requiring:

  1. That Hyatt select no more than 600 claims per patent family; and
  2. That Hyatt identify the earliest claimed priority date for each claim selected.

To move all of this forward, the USPTO has assigned 14 primary examiners to Hyatt’s cases.  Based upon prior history – I suspect that number won’t be enough to keep up with Hyatt!

Pre-GATT Applications

One small aspect of Director Michelle Lee’s testimony to congress was that the number of pending pre-GATT applications still pending has been reduced to only 20 – not counting those owned by Gill Hyatt. (She did not mention Hyatt by name, but it was clear who she was talking about.)  The PTO has 14 full time patent examiners going after these remaining applications that were all filed prior to June 7, 1995.

These pre-GATT applications are important because they retain the 17-year-from-issuance term.  An example is Patent No. 9,376,478 that was recently issued to the Japanese Foundation for Cancer Research and broadly claims: “2. Recombinant Human fibroblast β1 Interferon.” The application was filed June 5, 1995 and looks to be enforceable until 2033.  (This particular case was delayed by an interference proceeding).

Gilbert Hyatt apparently continues to have a substantial number of pre-GATT applications pending and is fighting multiple lawsuits against the Government regarding the applications.  According to his own court filings, Hyatt has more than 400 pending applications, most of which have been pending for over twenty years and more than a dozen pending for more than 35 years.

In Hyatt v. OMB, Civ No. 16-1944 (D.Nevada, Filed August 16, 2016), Hyatt explains that he “has experienced first-hand the unnecessary, duplicative, and overly burdensome information collection demands that the PTO imposes on individuals seeking patents.”  The lawsuit asks for an order that the OMB consider Rules 111, 115, and 116 (37 C.F.R. Sections 1.111, 1.115, and 1.116) and hold them subject to the requirements of the Paperwork Reduction Act.

In Hyatt v. USPTO, Civ. No. 16-1490 (D.Nevada, Filed June 22, 2016), Hyatt asks for injunctive relief to stop the PTO from repeatedly ‘reopening prosecution’ in his cases and consequently shielding the cases from judicial review by either the PTAB or Article III courts.  Hyatt is experiencing the common reality of examiners reopening prosecution once an appeal brief is filed.

Background:

US Government Asks for Increased Deference When Patent Applicants Challenge BPAI Decisions in Court

Kappos v. Hyatt (On petition for writ of certiorari, 2011) (Download Hyatt.GovtBrief)

Although the US Patent & Trademark Office (USPTO) and the Department of Justice (DOJ) have been at odds on the issue of the patent eligibility of genetic material isolated from a living organism, the two agencies are speaking with one voice against the Federal Circuit's recent decision in Hyatt v. Kappos. In that en banc opinion, the court broadened a patent applicant's rights associated with the "remedy by civil action" provided by Section 145 of the Patent Act. Under § 145, an applicant can file a civil action in DC District Court whenever "[a]n applicant dissatisfied with the decision of the Board of Patent Appeals and Interferences."

In a 6-2-1 decision, the Federal Circuit reversed its prior precedent and held that a patent applicant is allowed to introduce new evidence in a Section 145 civil action filed to challenge a USPTO refusal to grant patent rights and that the issues implicated by the new facts must be considered de novo.

Judge Moore wrote in the majority opinion that:

[W]e hold that the only limitations on the admissibility of evidence applicable to a § 145 proceeding are the limitations imposed by the Federal Rules of Evidence and Federal Rules of Civil Procedure. Therefore, we hold that the district court applied the wrong legal standard for the admissibility of evidence in a § 145 proceeding and abused its discretion when it excluded Mr. Hyatt's declaration. . . .

The particular significance of a § 145 civil action is that it affords an applicant the opportunity to introduce new evidence after the close of the administrative proceedings—and once an applicant introduces new evidence on an issue, the district court reviews that issue de novo.

However, the Court also held that an applicant may still be barred from presenting new "issues" in the civil action and that, when no new evidence is presented, that BPAI findings and rulings should be given deference under the Administrative Procedures Act.

Petition for Writ of Certiorari: In its petition to the Supreme Court, the US Government argues that the Federal Circuit decision is faulty because it "disregards fundamental principles of administrative law" and diverges from the traditional understanding of the statute.

Getting from the PTO to the Court: After losing at the Board, an applicant has two primary avenues for challenging the Board's decision: (1) Appeal to the Court of Appeals for the Federal Circuit under 35 U.S.C. § 141; or (2) File a civil action in district court under 35 U.S.C. § 145. In Dickinson v. Zurko, the Supreme Court held that Federal Circuit direct review of BPAI decisions under Section 141 must follow the deferential standards that govern judicial review of final agency action under the Administrative Procedure Act (APA). 527 U.S. 150 (1999).  In that decision, the Supreme Court distinguished between Section 145 and Section 141 actions – noting that Section 145 actions "permit the disappointed applicant to present to the court evidence that the applicant did not present to the PTO." However, the court did not address the particular circumstances in which new evidence may be permitted nor did it address how the new evidence should be treated.

Here, the government asks the Supreme Court to fill the gap in Zurko by holding that:

  1. The plaintiff in a Section 145 action may not introduce new evidence that could have been presented to the PTO in the first place; and
  2. When new evidence is introduced, the district court should still give deference to the prior decisions of the PTO.

Background: Gilbert Hyatt is a well-known inventor and successful patentee. Hyatt filed a civil action in 2003 after the BPAI sustained written description and enablement rejections for seventy-nine of Hyatt's claims. The examiner had issued "2546 separate rejections of Mr. Hyatt's 117 claims" based on the doctrines of inadequate "written description, lack of enablement, double patenting, anticipation, and obviousness." The Board reversed all of the examiner rejections except for the § 112 p1 arguments. Complicating this case is the fact that the application's claimed priority date is 1975. Hyatt has aggressively pushed the bounds of USPTO practice. This decision is one of more than a dozen Federal Circuit decisions focusing on Hyatt's patent rights. If the Supreme Court takes the case, it will be the second for Hyatt who won a 2002 case against California income tax collectors. In that case, California was pursuing Hyatt for tax revenue for his patent licenses. Hyatt took the case to the Supreme Court and eventually won a $388 million judgment against the state of California for invasion of privacy.

Appealing a BPAI Rejection: Can the Applicant Present New Arguments and New Evidence to the District Court?

Hyatt v. Kappos (Fed. Cir. 2010)

The Federal Circuit has ordered an en banc rehearing of its August 14 decision. The appeal focuses on evidentiary and procedural limits of an appeal of a BPAI decisions to a District Court under 35 USC 145. The Court framed the en banc issues as follows:

(a) Are there any limitations on the admissibility of evidence in section 145 proceedings? In particular—

(i) Does the Administrative Procedure Act require review on the agency record in proceedings pursuant to section 145?
(ii) Does section 145 provide for a de novo proceeding in the district court?
(iii) If section 145 does not provide for a de novo proceeding in the district court, what limitations exist on the presentation of new evidence before the district court?

(b) Did the district court properly exclude the Hyatt declaration?

Background: Hyatt's district court action was originally filed in 2003 as Hyatt v. Rogan after the BPAI sustained written description and enablement rejections for seventy-nine of Hyatt's claims. The examiner had issued 45 separate rejections of Hyatt's claims based on the doctrines of inadequate "written description, lack of enablement, double patenting, anticipation, and obviousness." Complicating the case is the fact that the application's claimed priority date is 1975.

The issues in this appeal case arose when Hyatt filed a civil action in DC District Court to challenge the BPAI decision. In the civil action, Hyatt submitted a new declaration offering additional evidence of enablement and written description. However, the district court excluded that inventor-declaration from evidence based on Hyatt's "negligence" in failing to previously submit the information to the PTO.

Writing for the majority in the original panel opinion, Judge Michel affirmed the exclusion of evidence – holding that the district court may properly exclude evidence that Hyatt should have produced to the PTO. Judge Moore penned a compelling dissent in support of the patent applicant's right to a full civil action including the right to submit additional evidence when challenging a PTO decision.

Briefing: Hyatt's en banc brief will be due around March 31 and the USPTO's response due 28-days later. Briefs of amici curiae may be filed without leave of the court, but must otherwise comply with FRAP 29 and Fed Cir R 29.

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35 U.S.C. 145 Civil action to obtain patent.

An applicant dissatisfied with the decision of the Board of Patent Appeals and Interferences in an appeal under section 134(a) of this title may, unless appeal has been taken to the United States Court of Appeals for the Federal Circuit, have remedy by civil action against the Director in the United States District Court for the District of Columbia if commenced within such time after such decision, not less than sixty days, as the Director appoints. The court may adjudge that such applicant is entitled to receive a patent for his invention, as specified in any of his claims involved in the decision of the Board of Patent Appeals and Interferences, as the facts in the case may appear, and such adjudication shall authorize the Director to issue such patent on compliance with the requirements of law. All the expenses of the proceedings shall be paid by the applicant.

Franchise Tax Board of California v. Gilbert P. Hyatt

I posted an article earlier on Gil Hyatt’s ongoing disputes with the USPTO.  He also has ongoing disputes with the California Tax Board that reach back to his early licensing revenue from his 1990 microprocessor patent.  The case is back before the Supreme Court for the third time.  See  Franchise Tax Board v. Hyatt (Hyatt I), 538 U.S. 488 (2003); Franchise Tax Board v. Hyatt (Hyatt II), 136 S.Ct. 1277 (2016).

The basic issue is that a Nevada jury found that California had used improper aggression in pursuing Hyatt for taxes that were not really owed.  At trial, the jury awarded Hyatt $300 million in damages. The punitive damages were reduced however by the Supreme Court.

The question that the court will focus on again this year:

Whether Nevada v. Hall, 440 U.S. 410 (1979), which permits a sovereign State to be haled into another State’s courts without its consent, should be overruled.

In its 2016 decision, the Supreme Court was evenly divided on the same question.

The board has asked us to overrule Hall and hold that the Nevada courts lack jurisdiction to hear this lawsuit. The Court is equally divided on this question, and we consequently affirm the Nevada courts’ exercise of jurisdiction over California.

This time though, that tie is potentially already broken with the addition of Justice Gorsuch.

Read more at ScotusBlog: http://www.scotusblog.com/case-files/cases/franchise-tax-board-of-california-v-hyatt-2/

 

Challenging PTO Decisions in District Court: Federal Circuit Affirms Exclusion of Enablement Evidence that “Should Have” Been Raised During Prosecution

Hyatt v. Doll (Fed. Cir. 2009) 07-1066.pdf

Gil Hyatt is a prolific inventor who has spent much of his time over the past thirty years challenging the bounds of USPTO practice. This August 11, 2009 opinion marks the seventeenth Federal Circuit decision focusing on Hyatt’s patent rights in addition to the 2003 Supreme Court decision Franchise Tax Bd. of California v. Hyatt.

This Case: During prosecution, the examiner rejected each of Hyatt’s 117 computer memory architecture claims based on anticipation, obviousness, enablement, double patenting, and written description. Hyatt appealed (pro se) to the BPAI who reversed the bulk of the rejections, but affirming only the written description and enablement rejections associated with 79 claims. Hyatt then took his case to Federal Court by filing a civil action in DC District Court grounded in 35 U.S.C. 145.

At the district court, Hyatt submitted a new declaration offering additional evidence of enablement and written description. However, the district court excluded that inventor-declaration from evidence based on Hyatt’s “negligence” in failing to previously submit the information to the PTO.

On appeal, the Federal Circuit affirmed the exclusion of evidence – holding that the district court may properly exclude evidence that Hyatt should have produced to the PTO. (Chief Judge Michel as author joined by Judge Dyk)

Hyatt was obligated to respond to the examiner’s written description rejection by In re Alton, 76 F.3d 1168, 1175 (Fed. Cir. 1996), by explaining where in the specification support for each of these limitations could be found. . . . The Board noted, “It is far easier for appellant to describe where the limitation he wrote is disclosed than for the Office to prove that the limitation is not disclosed.” . . . Hyatt, however, refused to cooperate, even though he necessarily possessed the information the examiner sought by the time he filed his application.   

On these facts, the district court’s exclusion of Hyatt’s new evidence must be affirmed. . . . [I]t is clear from the record that Hyatt willfully refused to provide evidence in his possession in response to a valid action by the examiner. Such a refusal to provide evidence which one possessed was grounds in Barrett to exclude the withheld evidence. Similarly, we hold that in light of Hyatt’s willful non-cooperation here, the district court did not abuse its discretion by excluding the Hyatt declaration.

Judge Moore penned a vigorous dissent in support of the patent applicant’s right to a full civil action including the right to submit additional evidence when challenging a PTO decision.

The majority takes away this patent applicant’s fundamental right to a “civil action to obtain [a] patent” as granted by Congress in 35 U.S.C. § 145. Today the majority decides that a patent applicant may not introduce the inventor’s declaration in a § 145 proceeding before the district court because the inventor had an “affirmative duty” or “obligation” to disclose this evidence to the PTO. His failure to fulfill his affirmative duty, by not disclosing evidence he could have disclosed to the PTO, results in such evidence being excluded from the district court § 145 proceeding. The district court made no fact findings indicating willful withholding or intentional suppression; in fact, the district court did not even conclude that Mr. Hyatt’s conduct amounted to gross negligence, but rather excluded the evidence under a negligence “could have” standard. Nor did the PTO even argue, at any stage of these proceedings, that Mr. Hyatt’s conduct in this case was willful or intentional. Nonetheless, the majority concludes that the applicant “owed,” the PTO all evidence he possesses that is responsive to a rejection and that failure to fulfill this newly created “affirmative duty” amounts to willful withholding as a matter of law. There are only two possible ways to interpret the majority’s willful withholding determination. Either the majority is engaging in appellate fact finding or it is determining that breach of its newly created affirmative duty is willful withholding as a matter of law.

. . .

Congress granted patent applicants the right to a civil action in the district court distinct from their right of appeal. It is our obligation to protect the distinction Congress codified in § 145, not to reweigh the virtues of that decision. The § 145 proceeding is a civil action and ought to be governed by the same Federal Rules of Evidence that govern other civil actions. Patent cases do not need, nor should they have, special rules of evidence.

. . .

The statute itself distinguishes the appeal that may be brought pursuant to 35 U.S.C. § 141 because a § 145 action is not an appeal; it is a “civil action.” The statute obligates the district court to adjudicate the facts in this civil action. Because the statute affords no limitations on the type of evidence that ought to be admissible in a civil action brought under § 145, the standard Federal Rules of Evidence that govern all civil actions ought to govern. The legislative histories of § 145 and its predecessor statute, section 4915 of the Revised Statutes, repeatedly and without contradiction indicate that the intent of Congress was to permit a patent applicant to bring a new suit built upon a new record. . . . Congress intended that the district court in a § 145 action have everything that a court would have in an infringement suit. Under this standard, Congress certainly intended for an inventor, such as Mr. Hyatt, to be permitted to introduce his own declaration in a § 145 action.

. . .

The majority holds that by failing to offer his testimony to the PTO, Hyatt has failed to satisfy “an affirmative and specific duty.” Maj. Op. at 2. In this way, this new affirmative duty for prosecution seems to resemble inequitable conduct, though here the applicant is penalized regardless of their intent. . . . With all due respect to the majority, I do not believe a new “affirmative duty” to disclose is warranted, nor do I believe Hyatt was “required by law” or “obligated” to provide his declaration to the PTO. While Mr. Hyatt may have failed to overcome the rejections or to convince the Board based upon his submissions to the PTO, he did not fail to fulfill an “obligation” or “affirmative duty” as the majority alleges.   

. . .

In this case, the district court found that Mr. Hyatt’s failure to proffer his

declaration to the PTO was merely negligent. . . . I find troubling the majority’s characterizations of Mr. Hyatt. See, e.g., Maj. Op. at 51 (Mr. “Hyatt purposefully kept [the Board] in the dark”); id. (his “blatant non-cooperation”); id. at 50 (Mr. “Hyatt willfully refused to provide evidence in his possession”); id. (Hyatt “refused to cooperate”); id. (“Hyatt’s willful non-cooperation”); id. at 55 (“Hyatt willfully refused”); id. at 49 (providing his declaration “should have been simple for him”); id. at 55 (that Hyatt’s failure “to perform a simple task that it was his burden to perform is inexcusable”); id. at 54 (“Hyatt’s perverse unhelpfulness”). None of this appears in the district court proceedings, the PTO proceedings, or the record— these fact findings ought to be left to the district court which is in the best position to weigh the contradictory evidence.

. . .

Contrary to the appellate finding of willful withholding, the record contains ample evidence of a lack of willful withholding. Here, the examiner rejected all of Mr. Hyatt’s 117 claims for lack of written description, failure to enable, obviousness-type double patenting (over 8 separate references), and Schneller-type double patenting (over the same 8 references). The examiner also rejected 9 claims as anticipated (Hill reference) and 7 as obvious (over a combination of three references). Technically, Mr. Hyatt was appealing 45 separate issues totaling 2546 separate rejections of his 117 claims to the Board. He wrote a 129-page appeal brief addressing all of these different rejections. And, to be clear, the Board reversed all the examiner’s rejections for obviousness, anticipation, obviousness-type double patenting, Schneller-type double patenting, and many of the written description and enablement rejections. With regard to the written description rejections in particular, the Board reversed the rejections of 38 claims and sustained the rejections of 79 claims. Mr. Hyatt prevailed on 92% of all the examiner’s rejections at the Board level. Despite Mr. Hyatt’s success, the majority declares Mr. Hyatt’s response to be “completely and wholly inadequate” and Mr. Hyatt to have been perversely unhelpful. Maj. Op. at 55, 56.

. . .

Although Mr. Hyatt may have failed to overcome all of the written description rejections based upon his submissions to the PTO, he did not fail to fulfill an “obligation” or “affirmative duty,” and he certainly was not “perversely unhelpful” as the majority alleges. . . I believe the court is wrong to hold that breach of the newly created affirmative duty, i.e., not producing evidence to the PTO, is willful withholding as a matter of law.

. . .

In hindsight, perhaps Mr. Hyatt should have submitted his declaration or that of any other expert earlier in the prosecution process. But hindsight is misleadingly acute. Declarations and expert reports are time consuming and expensive to prepare. It is hardly reasonable or even desirable to require patent applicants to put massive declarations into the record at an early stage of prosecution, weighing the cost to both the applicant and the PTO. See generally Mark A. Lemley, Rational Ignorance at the Patent Office, 95 Nw. U.L. Rev. 1495 (2003) (arguing that it would be inefficient for the PTO to overinvest in examination because so few patents are enforced). In this case, for example, the examiner rejected the claims on many different bases (double patenting on 8 different references, obviousness, anticipation, enablement, written description, etc.), totaling 2546 separate rejections. The Board overturned nearly all of them. It is easy with the benefit of hindsight to say Mr. Hyatt should have introduced more evidence on written description to the Board. But Mr. Hyatt was not facing merely a written description rejection, he was facing 2546 separate rejections on many, many different bases. The majority implausibly asserts that 2546 separate rejections is “proportional to Hyatt’s prosecution of an application containing 117 pending claims spanning 79 pages.” Maj. Op. at 56 n.35. An average of 21 rejections per claim is hardly proportional. Mr. Hyatt was forced to appeal 45 independent issues to the Board when the average is two. Dennis D. Crouch, Understanding the Role of the Board of Patent Appeals in Ex Parte Appeals, 4, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1423922. Despite this challenge, Mr. Hyatt was largely successful on appeal. Further, the length of Mr. Hyatt’s application suggests that his efforts to pinpoint pages containing certain terms was helpful and in good faith. Mr. Hyatt’s response may have been especially valuable in the time before searchable electronic applications.

To say that Mr. Hyatt had an affirmative duty to introduce all evidence to the Board or that he “owed” (Maj. Op. at 56) all the evidence he possessed is to put an enormous and undesirable burden on the patentee, one that will foreclose patent protection for many small inventors. Congress foresaw exactly this problem and ameliorated it with § 145 by providing applicants a way to initiate a civil action and introduce new evidence after Board proceedings when the issues are much more succinct and consolidated. This is illustrated perfectly here, where the applicant was contending with 2546 rejections on many different bases before the Board. After the Board overturned nearly all of them, only a small number of rejections—based on written description/enablement—were maintained. Hence at the district court the applicant could proffer much more extensive evidence because the universe of issues was greatly narrowed. This is the sensible approach Congress enacted. The statute even places the cost of the proceeding on the party better positioned to know the value of the application—the applicant. The majority’s new exclusionary rule based upon its new affirmative duty upsets this balance.

Notes: I expect that Hyatt will ask for reconsideration and will then push for Supreme Court review.

Written Description: CAFC Finds Prima Facie Rejection

Hyatt v. Dudas (Fed. Cir. 2007)

Under MPEP guidelines, the addition of new claims limitations lightens the examiner’s burden of proving inadequate written description.  In particular, Section 2163.04(I)(B) provides for a Section 112 rejection of a newly amended claim where “Applicant has not pointed out where the new (or amended) claim limitation ‘____’ is supported, nor does there appear to be a written description of the claim limitation in the application as filed.”

In this case, Gilbert Hyatt had filed a new set of claims in a continuation (claiming priority back to 1970’s) and the examiner rejected those claims for lack of written description. Without arguing the merits, Hyatt focused his appeal on the examiner’s failure to provide a prima facie case — and the legal founding of the MPEP provision.

During prosecution, the PTO is given the initial burden of providing a prima facie case for any rejection. The rejection must include at least some specifics regarding problems with the claims.  However, that requirement can be met through an explanation of “what, in the examiner’s view, is missing from the written description.”

MPEP is OK: The CAFC found that MPEP 2163.04(I)(B) is properly written because it requires specific recitation of the problematic claim language (as opposed to a vague general rejection)

[S]ection 2163.04(I) expressly instructs the examiner to specify which claim limitation is lacking adequate support in the written description.

Specifics?: The examiner’s written description rejection asserted that the claimed combination was not adequately described (although each particular element was described).  After reviewing the rejection, the CAFC found that the examiner’s focus on “support for linkage” was sufficient to “clearly notif[y Hyatt] of what exactly the examiner felt was missing by way of written description.”  This shifted the burden going forward, and consequently, Hyatt is now under a duty to bring-forth the requested descriptive evidence.

Notes:

  • Gilbert Hyatt is known for receiving a broad patent on the microcontroller.  (That patent was later invalidated in an interference with TI).
  • Before the patent was invalidated, Hyatt received $70 million+ in royalties.
  • California wanted Hyatt’s taxes and took the case to the Supreme Court. (California v. Hyatt)

 

 

When Examiners Reopen Prosecution …

by Dennis Crouch

Gilbert P. Hyatt v. Andrei Iancu (Supreme Court 2019)

The following is a fairly typical pattern within the USPTO:

  • After final rejection, applicant files a PTAB appeal notice and brief;
  • Rather than pursue its side of the appeal, the Examiner withdraws the pending rejections — and then re-opens prosecution with a new set of rejections.

Although few cases go through this more than one cycle.  Gilbert Hyatt has long been an exception — both in terms of how he treats the PTO and how he is treated by the PTO.

Going back to the my typical pattern above — note that the Manual of Patent Examination Policy (MPEP) expressly permits cycling by the examiner, although it requires SPE approval:

The examiner may, with approval from the supervisory patent examiner, reopen prosecution to enter a new ground of rejection in response to appellant’s brief.

MPEP § 1207.04.

Hyatt’s petition to the U.S. Supreme Court argues that a patent applicant has a right to appeal — and that this examination cycling violates his statutory rights.  In particular, Hyatt points to 35 U.S.C. § 134 and § 6.

134(a). An applicant for a patent, any of whose claims has been twice rejected, may appeal from the decision of the primary examiner to the Patent Trial and Appeal Board, having once paid the fee for such appeal.

6(b). Duties.—The Patent Trial and Appeal Board shall— (1) on written appeal of an applicant, review adverse decisions of examiners upon applications for patents pursuant to section 134(a).

In a remarkably parallel situation from the early 1900’s the U.S. Supreme Court held that mandamus was appropriate where the examiner refused to forward cases to the Board. U.S. ex rel. Steinmetz v. Allen, 192 U.S. 543 (1904).

Thus, Hyatt’s Question Presented:

Whether MPEP § 1207.04 violates patent applicants’ statutory right of appeal following a second rejection.

This is a well presented case and you can read the brief here: [USSCPetitionforWritofCertiorari]

Gilbert Hyatt: BPAI Erred in Aggressive Grouping of Claims

Hyatt v. Dudas (Fed. Cir. 2008)

Gilbert Hyatt has been famous for his early microprocessor patents. This appeal “concerns the patentability of approximately 2,400 claims in twelve related patent applications … that claim priority … to the early 1980s or before.” Since being filed, all twelve applications have also been “amended to add hundreds of claims that were not included in the original applications.”

The PTO examiner rejected all the claims in all twelve applications – most commonly for lacking proper written description. On appeal, the BPAI refused to independently review each of Hyatt’s claims, and instead only considered the twenty-one claims that he had discussed in the “Summary of the Invention” section of the BPAI briefs. Appealing that decision, Hyatt convinced the DC district court that the BPAI had improperly selected the representative claims. The PTO now appeals that district court decision.

On appeal, the Federal Circuit affirmed – finding that the BPAI cannot create a representative claim by simply grouping all claims rejected for lacking written description under the same “ground of rejection” “unless the claims share a common limitation that lacks written description support.” 37 CFR 1.192(c)(7).

“[T]he applicant can waive appeal of a ground of rejection, and can waive the right to demand additional subgrouping of claims within a given appealed ground. But the applicant cannot waive the Board’s obligation to select and consider at least one representative claim for each properly defined ground of rejection appealed.”

Affirmed. On remand, the BPAI must consider “all grounds of rejection challenged by Hyatt. . . However, the Board is free on remand to apply the rule of waiver to any grounds of rejection not contested by Hyatt in his initial appeals to the Board, provided that such grounds do not become relevant on remand due to realignment of the representative claims or other aspects not previously at issue.”

Notes:

  • 2400 claiming priority thirty years back…

Technical Amendment H.R. 6621

H.R. 6621 has passed in the Senate, but only after the Senate eliminated section (m) of the bill that would have brought to light information regarding the hundreds of "pre-GATT" patent applications that have been pending since 1995. According to Capitol Hill rumors, well known patentee Gil Hyatt was able to convince one Senator to put a hold on the bill that would have eliminated possibility of passage barring the amendment. Hyatt apparently has a number of applications pending that claim architecture and logic design of very basic integrated circuits. There are several hundred of these pre-GATT applications pending. The majority are apparently ones delayed because of Department of Defense secrecy orders. However, a substantial number would be properly classified as submarine patents whose existence is currently unknown but that potentially claim a broad scope of coverage that could potentially cover elements of an entire mature industry (such as integrated circuits). Because the Senate amended the bill, it must be passed again by the House and signed by the President before conclusion of the term.

Bits and Bytes No. 125: Comments on Comments

  • Gil Hyatt’s attorney contacted me this morning and asked that a few “offending” comments be removed from the post associated with his case. I agreed that they were potentially problematic and removed them. Two discuss LL’s role as an examiner of HYATT’s cases. Because Hyatt’s applications were filed before 1995, those files are likely still secret and thus should not be publicly discussed. I also removed the “sleazeball” comments. As a reminder to commenters – you may appear anonymous, but a well heeled plaintiff could probably track you down unless you take special precautions. I have thus-far successfully resisted providing any identifying information to interested parties. However, I would obey a court order.
  • For PTO Examiners who Comment Regularly. I enjoy your comments and they helpfully reveal aspects of PTO operations that would otherwise be hidden. You should, however, occasionally re-read MPEP 1701: “Public policy demands that every employee of the United States Patent and Trademark Office (USPTO) refuse to express to any person any opinion as to the validity or invalidity of, or the patentability or unpatentability of any claim in any U.S. patent, except to the extent necessary to carry out (A) an examination of a reissue application of the patent, (B) a reexamination proceeding to reexamine the patent, or (C) an interference involving the patent. “
  • Fraud not Inequitable Conduct: IPO executive director Herb Wamsley (writing as the IP LANGUAGE CURMUDGEON) argues that the term “Inequitable Conduct” is misleading. The doctrine does not follow a traditional balancing of the equities, but is seated in fraud. Thus, Wamsley “proposes scrapping the term ‘inequitable conduct’ in favor of ‘fraud,’ a term that is not very well defined in law either, but which better conveys the idea that patents should be unenforceable only if serious misconduct has been proven. If courts had to find ‘fraud’ before they could hold a patent unenforceable, perhaps they would apply the doctrine now called inequitable conduct only in cases of very clear intent and materiality” as the law requires. I think that Wamsley’s suggestion makes perfect sense.
  • IPO’s annual meeting is Sept 13-15 in Chicago: Link. Over 500 individuals (including yours truly) are already signed-up to attend this patent law powwow. This is probably the largest mixer of in-house patent counsel and patent attorneys in private practice. The only problem is the cost: IPO members pay $950; Non-Members pay $1,450; Inventors and academics pay $500.
  • Update on the Faculty Position at the University of Utah Law School200908142110.jpg : They are hiring, but may not have received your e-mail. “Due to a server switch, the email address facultyrecruitment@law.utah.edu was not functioning correctly for a few days in August. We sincerely apologize for this error. As of today, August 14th, the email address is once again fully functional. We encourage interested applicants to send their materials to us at that email address, particularly those who sent, or attempted to send, materials in the past two weeks, so that we can be sure that we received them.” [Read the Job Listing] [Klarquist Sparkman is also looking for an O-Chem Patent Attorney or Agent]

The Timeliness of the En Banc Rehearing of Hyatt v. Kappos

The pending en banc case of Hyatt v. Kappos is more important now than ever before because the Board of Patent Appeals and Interferences (BPAI or Board) is deciding more appeals than ever before.  The chart below reflects the number of applications with completed appellate briefing that are pending resolution at the BPAI. As active patent prosecutors are well aware, this chart only reveals a small portion of a complex problem.  Appeal briefing has largely become an ordinary part of patent prosecution practice. Most cases where appeal briefs are filed do not actually reach a BPAI decision.  Rather, in most cases the examiner withdraws the standing rejection rather than pursue the appeal.  In this system, appeal briefs have largely become a priced commodity rather than an all-out factual and legal effort.

PatentLawPic928

In Hyatt v. Kappos, the en banc Federal Circuit is focusing on the amount of new evidence that can be presented when challenging a BPAI decision in Federal District Court under 35 USC 145.  The panel decision held that the district court properly refused to allow Hyatt to submit additional expert testimony that went beyond the arguments presented to the BPAI.  Judge Moore dissented from that holding and instead argued that the right to a “civil action” under Section 145 includes a right for a de novo consideration of patentability.

The issues raised in Hyatt v. Kappos are now important for many patent applicants because of the cost-pressures of appeal briefs and the high-likelihood that rejections will be withdrawn based on the briefing.  Typical Applicants do not submit substantial additional evidence of patentability during the appeal process.  However, under Hyatt, the applicant would be barred from substantially adding to the record in a subsequent civil action.

Supreme Court takes Two More Patent Cases

The Supreme Court has granted writs of certiorari in two pending patent cases. 

In Kappos v. Hyatt, the Supreme Court will decide (1) whether a patent applicant who files a Section 145 civil action has a right to present new evidence to the Federal District Court that could have been (but was not) presented during the proceedings before the USPTO and (2) when new evidence is presented, whether the court may decide the related factual questions de novo and without deference to prior PTO findings.  An en banc Federal Circuit previously sided with the applicant, Hyatt, and held that the district court must allow new evidence and that factual conclusions affected by the new evidence must be decided de novo even if previously determined by the PTO. Judge Kimberly Moore penned the en banc opinion after dissenting from the original panel that had arrived at the opposite conclusion. This is Hyatt’s second case at the Supreme Court.  He won the first against the State of California who was attempting to tax his receipts from patent licensing awards.  Hyatt’s patents are related to computer micro-controller designs and claim a 1975 priority date.

Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S is a brand versus generic pharmaceutical dispute involving the scope of a generic company’s right to counterclaim against the brand based upon a brand’s overbroad description of claim scope submitted to the FDA.  The Federal Circuit held that the Hatch-Waxman Act only allows for deleting of improperly listed patents while the petitioner here argues that the Act also allows for correction of misstatements for patent scope.

The Supreme Court today also decided two personal jurisdiction  that could have some impact on how foreign entities are treated in US patent cases. In  J. McIntyre Machinery v. Nicastro, the court held that a the “stream of commerce” theory of personal jurisdiction was being taken too far and that the foreign manufacturer (Nicastro) could not be subject to courts located in New Jersey because it had not engaged in activities in that state that “revealed an intent to involde or benefit from the protection of the [New Jersey] laws.”  In Goodyear Luxembourg Tires v. Brown, the court held that courts located in North Carolina did not have general jurisdiction over Goodyear’s foreign subsidiary.

Patently-O Bits and Bytes No. 59

  • The Patent Hawk Strikes: Gary Odom enjoyed inventing and patenting so much that he became a patent searcher. He also writes the Patent Hawk blog from his Oregon roost. He has now sued Microsoft in the Eastern District of Texas for infringing his Patent covering toolbar groupings (Patent No. 7,363,592). If you are using Office 2007, you might check to see whether your Microsoft click-through license includes indemnification.
  • Law students ask me about law firm titles, so I created the following “Glossary of Patent Law Firm Professionals
    • Associate: A lawyer who is not yet a partner, but is on that track.
    • Partner: Could be either equity partner or non-equity partner.
    • Equity Partner: An owner of the firm. Firms may have complex ownership structures and various levels of equity.
    • Non-Equity Partner: A senior associate with a fancy title. Many firms do not tell its clients which partners are equity vs non-equity.
    • Of Counsel: Catch-all used when an attorney wants to work a reduced load or not be fully engaged with the firm. Also, many firms hire lateral would-be partners as of counsel until the firm decides to make a partnership offer.
    • Special Counsel: Same as of counsel.
    • Senior Counsel: Same as of counsel, but indicates a senior level attorney
    • Technical Advisor: non-lawyer, often a patent agent. Some firms separate patent agents from technical advisors based on PTO registration.
    • Law Clerk: non-lawyer, typically also a law student.
    • Docketing clerk: Typically a paralegal. The most important job in a patent prosecution firm.
    • Patent Paralegals and Secretaries: The most difficult positions to fill with qualified individuals willing to work with patent attorneys.
    • Contract Attorney: The person who is treated the worst but is paid fairly well. Spends the day doing document review and checking facebook.
  • Quote of the week: “Next time wear a tie. This is the Federal Circuit.” CAFC Judge to appellate counsel.
  • Inventor Gil Hyatt gets $388 million more – this time from the California Franchise Tax Board. The lawsuit by Hyatt was filed in 1998 after California assessed Hyatt with millions of dollars of income tax while Hyatt claimed he did not live in the state. In the case, the Supreme Court had rejected California’s immunity argument – finding that a Nevada court was not required to give full faith and credit to California’s self-immunity statute. [Link] Gilbert Hyatt is known for receiving a broad patent on the microcontroller. Before the patent was invalidated, Hyatt received $70 million+ in royalties.

   

PTO Publishes Comments on Proposed BPAI Rules

Because of the expected increase of appeals to the Board of Patent Appeals and Interferences (the “Board”), the Patent Office has proposed a new set of rules governing practice before the Board. [Proposed Rules]. The PTO received over fifty comments from the public — mostly negative.  As it turns out, the rules appear to primarily serve as a roadblock to appeals — either by raising costs or creating procedural stumbling blocks.  The extra rules are especially shocking when you consider that the vast majority of appeals filed never reach the BPAI. Rather, even after the applicant files an appeal brief, most cases are re-opened by the Examiner who either allows the case or re-opens prosection. [cite]

In its letter to the PTO, the AIPLA noted problems with the new rules:

Some of these new requirements … do not appear to address any specific problem being experienced by the Board, and would simply add additional formal requirements that would increase the burden and costs of preparing an appeal brief, and lead to even more disputes over compliance of an appeal brief with the many formalities already required.

Intellectual Ventures said it more forcefully:

The proposed new rules are onesided and will serve as a significant hurdle to a patent applicant in pursuing their statutory right of an appeal to the BPAI. Many of the proposed changes run counter to the patent statute and improperly attempt to transfer responsibilities and shift burdens of proof from the USPTO to applicants. … Since the agency is forcing more appeals, the appeal process should be reformed to make appeals easier and less expensive to prepare rather than make appeals more expensive and burdensome as in the proposal.

Some Examples:

  • Proposed Rule 41.37(q) and (r): would require applicants to identify for every argued claim where every claim limitation finds support in the specification and is illustrated in the drawings — even where a claim limitation is not at issue in the appeal. This requirement only raises the cost of preparing an appeal brief.
  • Proposed Rule 41.37(o)(7): Would require applicant to provide an explanation of patentability when obviousness is asserted. There may be some policy reasons for requiring this. However, under current law, the applicant is not required to prove patentability — rather, the applicant only needs to poke holes in the Examiner’s prima facie case of obviousness.  

In its comments, the Adams law firm of New Mexico noted a recent Patently-O posting on BPAI delay — and suggested that briefs should be submitted directly to the BPAI — not to examiners for their initial review.  

David Boundy – writing for CantorFitz – debated whether these rules are actually ‘procedural.’

When combined, the various limits imposed in the propped Appeal Rule accumulate to a substantive denial of an applicant’s right to a fair and efficient appellate review. Increased fonts [14 point], decreased page limits [25 pages], added material that must be included, no limits on the amount of material that an Examiner can present, and a draconian remedy for failing to address every point raised by an Examiner – all make one question the motivation for these proposed changes. At some point, a collection of “procedural” limits becomes so stringent that they amount to a “substantive” limit on the ability to prosecute an application.

A. Intellectual Property Organizations and Government Agencies

  1. American Bar Association (ABA) [PDF]
  2. American Intellectual Property Law Association (AIPLA) [PDF]
  3. Bar Association District Columbia (BADC) [PDF]
  4. Intellectual Property Owners Association (IPO) [PDF]
  5. BIOCOM [PDF]
  6. Minnesota Intellectual Property Law Association (MIPLA) [PDF]
  7. National Association of Patent Practitioners (NAPP) [PDF]
  8. Washington State Patent Law Association [DOC]

B. Corporations and Associations

  1. 3M Innovative Properties Company (3M IPC) [PDF]
  2. Alkermes, Inc. [PDF]
  3. Amylin Pharmaceuticals, Inc. [PDF]
  4. Intellectual Ventures (IV) [PDF]
  5. Ceres [PDF]
  6. Cantor Fitzgerald L.P. [PDF]
  7. Eastman Kodak Company [PDF]
  8. Eli Lilly and Company [PDF]
  9. IBM Corporation [DOC]
  10. Microsoft Corporation [DOC]
  11. Wyeth [DOC]

C. Law Firm

  1. Adams Law Firm Co. [PDF]
  2. Greenblum & Bernstein, P.L.C. [PDF]

D. Individuals

  1. Aaronson, Larry [DOC]
  2. Alstadt, Lynn, J. [DOC]
  3. Baker, Daniel [DOC]
  4. Calvert, Ian, A. [DOC]
  5. Cermank, Adam, J. [DOC]
  6. Dolce, Marcus, P. [PDF]
  7. Golladay, James, E., II [PDF]
  8. Haynes, Michael [PDF]
  9. Hoover, Allen, E. [DOC]
  10. Hyatt, Gilbert P. (comments) [PDF]
  11. Hyatt, Gilbert P. (appendix) [PDF]
  12. Hyatt, Gilbert P. (comments) [PDF]
  13. Hyatt, Gilbert P. (appendix) [PDF]
  14. Hyatt, Gilbert P. [PDF]
  15. Jocke, Ralph, E. [PDF]
  16. Keegan, Robert, R. [DOC]
  17. Katznelson, Ron, D. [PDF]
  18. Marshall, Bob [DOC]
  19. Meirs, Raymond, C. Jr.. [DOC]
  20. Miller, Jerry, A. [PDF]
  21. Moore, Steven, J. [DOC]
  22. Moore, Steven, J. [DOC]
  23. Mullen, James, J. [PDF]
  24. Murashige, Kate, H. [PDF]
  25. Paul, Scott, D. [PDF]
  26. Reeves, Nancy, L. [DOC]
  27. Schideler, Blynn, L. [DOC]
  28. Steinkraus, Walter, J. [PDF]
  29. Svensson, Leonard [PDF]