CAFC Declines to Take Prosecution Laches En Banc

By Jason Rantanen

Cancer Research Technology Ltd. v. Barr Laboratories, Inc. (Fed. Cir. 2011) (Precedential Order) Download 10-1204 enbanc order

This morning the CAFC denied Barr Laboratories' request for rehearing en banc.  Review was barely denied: the judges split 5-5, just short of the 6-judge majority currently required for rehearing en banc.  Dissenting from the denial, both Judges Prost and Dyk expressed opinions on the issue of prosecution laches.

I previously wrote about Cancer Research Technology here.  In a nutshell, the panel majority reversed the district court's finding of prosecution laches on the ground that no prejudice was shown due to the lack of any evidence of intervening rights arising during the prosecution period.  Judge Prost dissented from that ruling, rejecting the idea that prosecution laches requires either prejudice or intervening rights. 

Judge Prost's dissent from the denial of rehearing en banc, joined by Judges Gajarsa, Moore, and O'Malley, reiterates and bolsters that view.  Drawing on Supreme Court precedent, Judge Prost again argues that the Supreme Court's test for prosecution laches does not require evidence of intervening rights:

This narrowing of the doctrine is not only unnecessary, it is contrary to Supreme Court precedent.  It is true that in both Woodbridge and Webster the Court refused to enforce the patent where both unreasonable delay and intervening rights existed. Woodbridge, 263 U.S. at 53, 56-57; Webster, 264 U.S. at 465-66. In each of these cases, however, the Court made clear that both unreasonable delay and intervening rights were not required to support a finding of prosecution laches.

Prost dissent at 3-4.  In Judge Prost's view, this precedent instead requires the court to favor flexibility over rigidity as the Supreme Court instructed in decisions such as Bilski, KSR, and eBay.

Judge Dyk wrote separately, commenting that while he agrees with Judge Prost that evidence of intervening rights should not be required, he disagrees with the use of a "totality of the circumstances" test, "which is really no test at all." Dyk dissent at 1.

Is Woodridge Applicable? In his IP newsletter, Hal Wegner takes issue with Judge Prost's characterization of a Supreme Court "doctrine" of prosecution laches based on Woodridge, pointing out that the case had nothing to do with a granted patent.  As explained in an amicus brief filed in Symbol Technologies:

Woodbridge v. United States, 263 U.S. 50 (1923), does not provide any guidance regarding prosecution laches because Woodbridge never received a patent. Rather, the Woodbridge case involved a statutory compensation act for private relief for an unpatented invention of Woodbridge. Woodbridge, 263 U.S. at 51. The statute's language required the trial court to deny relief to Woodbridge because there had been laches in his patent procurement process. Id. This statutory laches in a private law therefore had nothing to do with laches in the patent law.

In contrast, Webster Elec. Co. v. Splitdorf Elec. Co., 264 U.S. 463 (1924), did include a discussion of prosecution laches. An examination of the facts in that case, however, reveals that the key issue involved what today would be inequitable conduct. Accordingly, Webster hardly shapes the contours for a well-formed ‘doctrine.’”

Hal Wegner, quoting Symbol Technologies, Inc. v. Lemelson Medical, Educ. & Research Foundation, 422 F.3d 1378 (Fed. Cir. 2005), Brief Amicus Curiae of Takeda Pharmaceutical Co., 2004 Westlaw 3335267, p. 4 (2004)(original emphasis).

21 thoughts on “CAFC Declines to Take Prosecution Laches En Banc

  1. 20

    Here is a similar story

    QUINN: Regarding the antitrust issue. And it was always my understanding, and maybe this is not correct, and I’ve been dying to ask somebody this question who would know for many years. What actually happened with the original panel withdrawing that decision? Was that sua sponte or was that provoked by a motion?

    DUNNER: Well, I remember that case very well. And I will tell you an interesting anecdote about that case. The case is now no longer in the system so I can talk about it. Two of the judges issued a panel decision in my favor on the antitrust issue; with one dissent. Shortly after the opinion came down, I received a phone call from a friend of mine, who suggested that if I hadn’t had any Supreme Court cases, I probably would have one soon. A petition for en banc rehearing was filed, and we filed a response. The case, however, never went en banc because the panel issued an opinion changing its decision vacating the antitrust part of the decision in my favor and going the other way. So I don’t know what happened in the Federal Circuit, but I can guess.

  2. 19

    Actually, ping, they might in this case if the change to a requirement of prompt filing of divisionals was in reaction to a genuine public policy issue that pertains in the US as well.

    That said, I actually think that if the Director were to try to set a two year time limit on filing of divisionals by rule, his rules would again be declared ultra vires. This is the perogative of Congress.

    So where does that leave us? It is within the discretion of the commissioner to call a halt to any prosecution for delay, or to continue it for good cause shown. The public should not interfere.

    If a member of the public is harmed, a court might consider “intervening rights,” but that may be no more than an royalty-bearing license.

  3. 18

    I know of a case where this issue came up, albeit not in this country. Briefly, a divisional was filed nominally on a date when the prosecution was beyond the statutory deadline for a response in the parent. However, before the filing of the divisional, a petition to reopen prosecution in the parent was filed and accepted. The divisional was then filed.

    The allegation was that the PTO had no authority to extend the deadline and that the divisional was invalid. The holding of the court was that the PTO was within its rights to reopen prosecution for good cause shown. As such, the divisional was timely.

    I take this to mean that so long as the matter is in the PTO, whether to continue, terminate or reopen prosecution is within the discretion of the PTO. Absent a violation of a statute, the public cannot and should not interfere with the conduct of prosecution within the discretion of the commissioner.

    If a particular defendant is harmed in some fashion by the delay, there might be some basis for intervening rights. But typically, this to depends upon the totality of the circumustances and is within the discretion of a court.

  4. 17

    Just another note on Muncie Gear. If the anti-cavitation plate claims were fully supported, then the Supremes holding can be understood in number of different ways:

    A prohibition on late claiming.

    A holding that all claims first presented with claims to directed to new matter are conclusively presumed to be infected by the new matter. (This would turn Section 132 into a substantive statute, which heretofore has not been considered such.)

    Claims first presented in a late CIP that are fully supported in a parent are nevertheless still invalid.

    If the latter, one might consider the case partially overruled by Section 120 which seems to expressly authorize continuations by invention.

  5. 16

    Wow Ned – ya don’t see a problem with the Supremes bringin in foreign law to settle a question of US law?


    Last I checked, no other country’s laws directly bind us (any binding be through the power of treaty – definitely not somethin to be showin up in the Judiciary).

  6. 15

    My main man – help me out,

    Your number one confuses me, as it seems that you want the defense to be an automatic “public defense” standard, when equity indicates that a “private defense” is correct. I don’t get why ya want to bring in inequitable conduct and the showing required under that different defense. Do you want to conflate the issue? Do you think the two defenses are the same? should be treated the same?

    Your number two seems off the mark. No one is saying that the Commissioner has a “prerogative” to grant an invalid patent. There is no question that the Commissioner does has “prerogative” in treatment of non-statutory items (see at least 37 CFR 1.183). The only way to get to your comment of invalidity is to assume something not evident. And your “it can’t be proper” only goes to the current debate of C&C – Are ya trying to conflate here too?

    Iza just want ta know if ya be carpet-bombing, so Iza can get out of the way.

  7. 13

    While extending the effective period of exclusive use is no longer a major issue since 20yr patent term measured from initial filing, there are historical cases that frown on delay in obtaining a patent while publicly exploiting the invention.

    See, e.g., Pennock v. Dialog and Muncie Gear.

    Muncie Gear is particularly apt. The Supremes lumped claims directed to an anti-cavitation plate that appeared to be fully supported in the specification-as-filed in with the claims directed to new matter (housing) in deciding that claims to the anti-cavitation plate first presented two years after the patent owner’s own public use were late.

  8. 12

    But, given the posture of this case, where the defense was raised by a private party and where the Commissioner has granted a patent despite the delays,

    To my mind, this raises two important issues:

    1) Who else would raise this defense other than a private party? Shouldn’t a private party be entitled to assert that the PTO improperly granted a patent, and thereby avail himself of the “public defense” standard? After all, inequitable conduct doesn’t require a showing of personal harm, only impropriety as between the PTO and the applicant.

    2) Since when does the Commissioner have a “prerogative” to grant an invalid patent? We don’t ever talk like that when it comes to prior art. At most you might say the PTO is entitled to some level of deference, but it can’t be proper to say that the administrative grant of a patent is conclusive as to any question of law or equity.

  9. 11

    Paul, I have no studied the issue, so I am commenting here just from gut instinct.

    Private defense requires intervening rights

    When a party is asserting the defense, he will be successful only if he is personally harmed.

    Public defense does not

    The PTO can still terminate prosecution for wilful delay that is unexcused. I don’t see why they should have to prove intervening rights. That makes no sense at all.

    But, given the posture of this case, where the defense was raised by a private party and where the Commissioner has granted a patent despite the delays, the private party is no position to interfere with the perogatives of the Commissioner to grant the patent despite the delays.

    Thus, given a proper case where the Commissioner is terminating prosecution for delay, I think the Feds will back him or her.

  10. 10

    Perhaps, the point of equity here is that there is no hole worth plugging…?

    The Lemelson era died with the transition of when the clock for Rights starts sticking from the date of issue to the earliest claimed priority date.

  11. 9

    As the above comment correctly notes, the panel decision below, on which en banc review was denied here, was Judge Newman’s success in getting one other judge to help cripple the prior Lemelson decisions clairifying prosecution estoppel that she had strongly objected to in the minority. As understood, her objection was that there was not a clear prior legal basis for it. I found that ironic, since the whole point of equity, for centuries, which this is, has always been just that – to do justice in fact situations crying for it, plugging missing holes in legal defenses.

  12. 8

    Not sure if distinguishing Webster as a purely an “inequitable conduct” case is warranted. It’s clear that in Webster the Supreme Court was cheesed off by the strategy of waiting until just before issuance before seeking different claims through a divisional. That’s prosecution laches, even if you can reframe it as inequitable conduct.

    In any event, both inequitable conduct and prosecution laches are — or are supposed to be — broadly defined equitable doctrines. There isn’t a meaningful difference between the two; they’re really just two labels that courts use to describe less-than-ideal prosecution practices that lead to equitable consequences. They are related to one another in the same way that laches, waiver and estoppel are often related.

    In any event, the 5-5 split is very interesting. The chief opponent of a broad prosecution laches doctrine is Judge Newman, who dissented vigorously in one of the Symbol cases and in In re Bogese. She joined Lourie in authoring Cancer Research and creating the new “intervening rights” legal requirement. Opponents of a narrow prosecution laches doctrine are generally younger, e.g., Moore and O’Malley.

    Keep an eye on this issue because it will come up again, and my money’s on prosecution laches gaining meaningful strength next time around.

  13. 7

    So where does this leave the PTO with its “submarine” applications? The PTO seems to already have a hard enough time preventing egregious prosecution laches delays. The PTO has no mechanism for addressing this newly added requirement of “intervening rights” even it made any sense for anything still inside the PTO and thus unenforceable. The CAFC panel majority that created this new legal twist should have thought of that.
    What Court would say that it doesn’t care how many years attorneys can drag on a judical proceeding as long as nobody can prove “intervening rights”?

  14. 6

    Yeah the actual order isn’t much to look at. But Prost is right. As to Judge Dyk chiming in that prosecutors need guidance as to when they might be facing laches problems, well, perhaps they should bother themselves to study the principles of equity and then act accordingly.

    O well, maybe another USSC in the que for us.

  15. 5

    I note that the Euro’s now require divisionals to be filed within two years (of a restriction). Also, broadening reissues must be filed within two years. Both these are data points that might be considered by the Supremes.

    Both the European practice and the reissue statute suggest that delayed filing of broader or different claims is itself a problem that cannot be fully compensated by intervening rights.

  16. 4

    Hal Wegner is often good about correcting the CAFC’s occasional misreading of old Supreme Court cases. I don’t know whether he’s right in this particular case, but I will be sure to read Woodbridge and Webster closely if I ever do anything with this issue.

  17. 3

    I have heard Hal speak (often) of good reasons for filing continuations for delay purposes. I think he may be protecting his clients.

    I’m of two minds on this issue, at it appears to be the case with the Federal Circuit as well. The badly split court suggests that this case might well be Supreme Court fodder if, as the dissent alleges, the majority got it wrong on he law.

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