This one is interesting, but because it was pending while I was clerking, I don't want to see a lot about it. Basically, the patentee was faced with deciding whether to pay the 7.5 year maintenance fee, and decided not to because there was no commercial interest in the patent. Two weeks after the lapse, someone expressed interest in it, and the patentee filed a form that said the lapse was unintentional. The district court found inequitable conduct on summary judgment; the panel reversed, with Judge Clevenger dissenting. The case, authored by Judge Newman with Judge Wallach, Network Signatures v. State Farm, is here.
I don’t think the skipped payment notion works very well.
It is not as if a mistake in fact innurs with a decision to skip a payment – in and of itself. The facts here simply present a different picture, and a very reasonable (and easily within the legal discretionary power) ‘but for’ exists.
Now if you want to extend beyond the present facts, with a ‘hold-out’ for more time theory (incremental improvement), I could see a ‘freezing of facts at the time’ reasonableness test, but that would be up to the Director to decide – as is currently is his discretion.
Or are we really just engaging in a debate about what discretion has been (legally) made and formalized – with those disagreeing with this decision wanting the Director to exercise his discretion differently?
A plurality, what if one held a contest for kids where it was intended that everyone would receive a prize. After the contest was over, in order to claim the prize, all the kid had to do was say he won, without explanation, and he would receive his prize.
Now after Suzy claims her prize, along comes Uncle Scrooge who takes Suzy’s prize away claiming that Suzy had not in fact won.
You decide, plurality. Should Suzy forfeit here prize and be cast out from the bar for not telling the truth?
David, 35 USC 41(c) puts the discretion in the Director, and ends with these words:
“If the Director accepts payment of a maintenance fee after the six-month grace period, the patent shall be considered as not having expired at the end of the grace period.”
The public has intervening rights under (2). They are not harmed.
The Director has provided by rule and form a simple statement. No explanation. No penalty of perjury.
What seems clear is that late payment is a simple formality — unintentional simply means that one can change one’s mind within the window as the Director’s say is final and he requires no explanation.
The fact situation – in toto – weakens the argument presented.
Can you show ANY indication that you would have selected the actual winning numbers?
Can you show a plausible story of a reasonable methodology that would alleviate a harsh brightline rule?
Would you have been able to show that the lottery commissioner had the type of authority and latitude for the actions that the commissioner of patents has – by rule?
This reminds me of good hands…
WOuld intervening rights come into play?
A great analogy. Have you tried to do that?
I didn’t buy a Powerball ticket last week because I didn’t know what the winning numbers would be. Had I known, I would certainly have purchased one. A “mistake of fact”, if you will.
Let me play law professor:
What if it had been two months later? Six months? (I think that’s the longest period? I don’t remember off the top of my head). Doesn’t this allow people to skip paying and gamble for a free X month period? Doesn’t that hurt people who meet the deadlines?
It is interesting. The older I get, the more I realize I like clear words, rules and bright lines. I must be growing old.
Clearly at the time of non payment, the act was intentional, but based on the false assumption that the patent was not licensable. When that proved not to be true, the patentee acted promptly.
I think the defendant/infringer, and the court below, were being extreme in their defense of rules that were intended to be flexible. They forgot the big picture. No one was harmed. The government got its fees. Between the patentee and the government, everyone was happy.
The Feds here got it right.
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