by Dennis Crouch
Droplets, Inc. v. E*Trade Bank (Fed. Cir. 2018)
Droplets Patent No. 8,402,115 (interactive link delivery) is invalid as obvious unless it properly claimed priority back to its 1999 provisional application. The Board found that priority had not been properly claimed — a judgment affirmed on appeal by the Federal Circuit.
The ‘115 patent (the patent at issue) was filed as an application in January 2009 and claims priority to U.S. Pat. No. 7,502,838 (filed November 2003) which itself expressly claims priority to the 1999 provisional via a separate utility patent (the ‘745 patent filed in June 2000). The ‘115 patent also claims priority directly to the 1999 provisional, although the provisional had expired well before the 2009 file date.
Full Chain of Priority: The problem for the patentee, is that the patent does not expressly spell-out the full chain of priority. In other words, the patentee should have stated something like:
The present application is a continuation of allowed U.S. patent application Ser. No. 10/720,728, filed on Nov. 24, 2003 which has issued as U.S. Pat. No. 7,502,838, which is a continuation application U.S. application Ser. No. 09/599,382 filed Jun. 22, 2000, which has issued as U.S. Pat. No. 6,687,745 on Feb. 3, 2004, and which claims the benefit of Provisional Patent Application No. 60/153,917, filed Sep. 14, 1999.
Instead, the the patentee left-out the full chain (omitting the middle application):
The present application is a continuation of allowed U.S. patent application Ser. No. 10/720,728 … Priority is [also] herewith claimed … from copending Provisional Patent Application No. 60/153,917, filed Sep. 14, 1999.
At an abstract level, the patentee has done enough to show its intent to claim priority through the chain of priority back to the 1999 application. In my view, the Statute seems to support what the patentee has done. 35 U.S.C. 120 (requiring only “specific reference to the earlier filed application”); see also Section 119(e)(1).
The Earlier Filed Application: The problem, though is that the statute is quite poorly written on the chain-of-priority point. The statute allows for a priority claim to the filing date of a no-longer-pending “first application” if filed during the pendency of a later filed and still pending application that is “similarly entitled to the benefit of the filing date of the first application.” The primary requirement in that circumstance is that the new application must include a “specific reference to the earlier filed application.” Note here, that the statute does not discuss further intermediary priority filings — only the “first application” and the later filed application that claims priority back to the first application. We’re left without a definition of what Congress meant by “the earlier filed application.” I would suggest three possible definitions: (1) the first application; (2) the later-filed application or (3) both the of these applications (the only two mentioned in the statute). Federal Circuit holds here, however, that a fourth possibility is correct: (4) “the earlier filed application” means all applications in the priority chain, including all intermediate priority documents.
Let me note here, this decision is not new, but repeats prior Federal Circuit decisions, including Medtronic CoreValve, LLC v. Edwards Lifesciences Corp., 741 F.3d 1359, (Fed. Cir. 2014). In Medtronic, the Federal Circuit particularly held that Section 120 “requires ‘a specific reference’ to each earlier filed application.” The PTO also has regulations on point that require “specific reference to each prior-filed application to which the application seeks to claim priority … [including] a reference to each such prior-filed application, identifying it by application number … and the relationship of the applications.” see 37 C.F.R. § 1.78(d)(3). See also Encyclopaedia Britannica, Inc. v. Alpine Elecs. of Am., Inc., 609 F.3d 1345 (Fed. Cir. 2010). Perhaps this is beating a dead horse, but I have quite a bit of difficulty following the Federal Circuit’s interpretation of the Statute, but it is the precedent.
Incorporation by Reference: The priority statement in the Droplets patent also included an incorporation-by-reference provision. Here the Federal Circuit also held that the intermediate priority claims could not be made “specific” via incorporation by reference.