Action and Inaction: Either way, Hyatt loses at the Federal Circuit

by Dennis Crouch

Inaction is generally defined as “the lack of action.”  The two terms are antonyms.  Still, courts regularly find that–at times–inaction constitutes action.  Most of us learned in criminal law about crimes of omission where the actus reus is the “failure to perform a legal duty even when one has the capacity to do so.”  The Federal Circuit performed this analysis in its recent decision in Gilbert Hyatt v. USPTO, 21-2324, — F.4th — (Fed. Cir. Sept 8, 2022).

Hyatt’s microprocessor patent applications have been pending since the 1990s and claim priority back much earlier filings.  All this was prior to the 1995 implementation of the Uruguay Round Agreements Act that started measuring patent term from the filing date. Under the old rules that govern Hyatt’s applications, a patent is given force for 17 years following issuance.  For the most part, these applications are also unpublished and the file histories are kept secret.

Hyatt’s appeal here relates to his pending U.S. Patent Application No. 08/435,938.  Back in 2013 the application included about 200 pending claims. However, the USPTO forced Hyatt to select eight of those claims for examination as part of the PTO’s Hyatt-Management-Efforts.  The examiner then rejected all eight of those claims.  Hyatt then significantly amended the pending claims.  According to the Federal Circuit, the amendments replaced all of the words of one of the claims except for the “A” starting the claim and the word “comprising.”  The examiner then responded with a restriction requirement.

For most patent applicants, restriction requirements are just slightly annoying and add some cost to the clients. But, for the most part the restriction/divisional don’t substantially reduce the rights. And, in fact at times they can be beneficial because they avoid obviousness-type double patenting problems.

For Hyatt, the restriction requirement was very problematic.  If he filed a divisional application to the remaining claims, he would lose his pre-GATT status.  The result for the divisional application would be zero-days of patent term.  Hyatt filed a civil action that the PTO’s restriction requirement violated the Administrative Procedure Act (APA).  In particular, Hyatt pointed to 37 C.F.R. § 1.129 as prohibiting the restriction practice. The district court sided with the USPTO as has the Federal Circuit on appeal.

Section 129(b) generally prohibits the USPTO from issuing a restriction requirement in applications that has a priority claim from at least three years before the the June 1995 cut-off.  Hyatt’s case meets that three year timeline.  The provision also includes the following exception: A restriction requirement is allowed if: “(ii) The examiner has not made a requirement for restriction in the present or parent application prior to April 8, 1995, due to actions by the applicant.”   The fight here is on the question of whether the PTO’s failure to issue a restriction requirement prior to April 1995 was “due to actions by the applicant.”

Due to Action by the Applicant: The USPTO’s explains that it didn’t issue a restriction requirement pre-1995 because, back then the application’s claims were all directed to the same invention.  Hyatt’s amendments 20-years later necessitated the restriction. In this scenario, the USPTO explained that Hyatt’s pre-1995 action was that he “failed to disclose claims to a separate invention”  pre-1995.

On appeal, the Federal Circuit agreed that Hyatt’s pre-1995 actions could be characterized as the action of “withholding” the future claims, and it is easy imagine the causation chain–the PTO’s failure to issue a restriction pre-1995 was due to Hyatt’s withholding of the future claims.  Since around 2001, the MPEP explanation of how the rule works included an example that appears to exactly match Hyatt’s situation:

Examples of what constitute “actions by the applicant under 37 CFR 1.129(b) are: … (C) applicant disclosed a plurality of independent and distinct inventions in the present or parent application, but delayed presenting claims to more than one of the disclosed independent and distinct inventions in the present or parent application such that no restriction requirement could be made prior to April 8, 1995.

MPEP 803.03 (8th Ed, 2001).  Here, Hyatt disclosed several different inventions “delayed presenting claims” until much later.  The court notes, as it always does, that the MPEP does not carry force of law. Still, the manual does at least put everyone on notice.

Affirmed — the restriction requirement stays.

33 thoughts on “Action and Inaction: Either way, Hyatt loses at the Federal Circuit

  1. 8

    One of the games the USPTO plays is not allowing applicants to get beyond the PTAB. I had a pre-GATT case that would get bounced back to prosecution and a new rejection of reference added every time I appealed, leaving my client with mandamus as the only choice for getting out of the endless loop. I believe I filed 4 appeal briefs. The applicant eventually let the application go abandoned. Incredibly, the examiner expressed surprise and disappointment.

    1. 8.1

      PTAB appeals serially prevented by 4 new serial examiner rejections [after 4 wasted appeal briefs] was indeed inexcusable non-compact PTO prosecution. Curious if you tried the Patent Ombudsman route? Curious if you considered an APA suit rather than mandamus? Even just filing such a suit will get the Solicitors Office attention to the matter.

      1. 8.1.1

        We did not try either. We assumed we fell in that super secret group of applications that were treated “special.”

  2. 7

    “Hyatt then significantly amended the pending claims. According to the Federal Circuit, the amendments replaced all of the words of one of the claims except for the “A” starting the claim and the word “comprising.” The examiner then responded with a restriction requirement.”

    Yeah, that’s one way of giving the middle finger to the USPTO, and experiencing the predictable result.

  3. 6

    OT, but the continued discussion of section 230.

    Here is an interesting debate where it appears that Klobuchar is trying to facilitate censorship. Cruz is trying to eliminate section 230.
    link to youtube.com

    1. 6.1

      Klubacher is engaging in misinformation.

      Cruz can come across as an ego-maniac, but he consistently de-1984’s much of the nonsense coming from the Liberal Left.

      Here’s a hint for the Liberal Left: if you want to stop Cruz from having such an impact, stop feeding him these easy shots.

      1. 6.1.1

        Klubacher appears to be openly corrupt in this. The Rs ask her to explain if they are getting anything wrong and Klubacher has speechless. Like, gee, I am caught. I thought I had my $10 million payment in the bank.

      2. 6.1.2

        I FAXED numbered pages to Denise O’Gara specifically to make sure it would be received in total. I then mailed same without numbers on the pages. So Denise will gave some serious explaining to do.Imagine each time the BC was replaced with another BC and I was assumed to be a Loon. Only one Lewis left that was faxed in May. I am sure it would have been removed replaced with EGAN. And my house would have been filled with EGAN after May 2023. But not now. The crime has been solved.

  4. 5

    Hyatt has done some good things in the past. However, both he and the USPTO have been playing games, and I have little sympathy for either.

    Because of Hyatt’s game playing (or gaming the system), the USPTO has been forced to come up with more and more onerous interpretations of their own rules.

    We will all be better off once the last of Hyatt’s applications is either granted or abandoned.

    1. 5.1

      IMHO, I think the USPTO has been grossly incompetent in examining the Hyatt patents.

      I did a deep dive of one of the patent applications. I could reject the claims under 103 and 112. I think the examiners have been incompetent.

      1. 5.1.1

        I could reject the claims under 103 and 112. I think the examiners have been incompetent.

        What claims are those? When the applicant keeps amending to generate entirely new claims you can reject all you want, you will never end prosecution.

        1. 5.1.1.1

          Random: I read the application and read the claims. I could reject any claim coming from that application under 103/112.

          So what if you have to keep rejecting. You don’t have to resort to forcing the applicant to chose claims and so forth.

          This was an easy problem to deal with that the USPTO just mishandled.

          1. 5.1.1.1.1

            Feel free to file 3rd party submissions.

  5. 4

    This APA decision seems properly compelled by the term change statute and its authorized transitional rule 37 C.F.R. § 1.129. However, the various long term conducts of both Hyatt and the PTO leaves this [and other] Hyatt applications still pending after 35 or so years, still avoiding any PTAB review of rejected claims, and still containing very large numbers of never even examined claims.

    1. 4.1

      Isn’t this application dead now?

      1. 4.1.1

        Not at all. The restriction requirement means that Mr. Hyatt will not be able to get all the claims that he wants from this application, but he is still able to get some granted claims from this one.

        1. 4.1.1.1

          I haven’t looked at this application from any internal tool. So I’m not relying on any non-public information here.

          I originally read about this case in BloombergLaw which stated that the CAFC did not agree with Hyatt that the PTO had “forced him to abandon [the application]”. I now see that this doesn’t appear to be referenced here or in the CAFC’s opinion.

          Curious to see if Bloomberg was wrong, I found the summary judgment on Justia, and it makes it quite clear that the patent application at issue in the appeal has been abandoned.

          Also interesting… the “other things” referenced in the CAFC opinion appear to include a challenge to the PTO’s dismissal of Hyatt’s petitions to withdraw abandonment in seventeen applications.

          So that’s 17 more applications down in case Paul is still acting like the PTO is not working to make progress with Hyatt’s applications.

          1. 4.1.1.1.1

            How did the district court have jurisdiction to hear the challenge to the restriction requirement if the application in question was already abandoned?

            1. 4.1.1.1.1.1

              It seems like he’s arguing that the dismissal of the petition to withdraw abandonment was actually a final agency action, and is challenging that action under some APA statute. The restriction requirement is only part of that argument against the dismissal, and the case is not a challenge of the requirement itself. But I don’t know, I’m not a lawyer.

              1. 4.1.1.1.1.1.1

                Sure enough and you are correct. Strange of the CAFC not to mention that the application is now abandoned, but that is what the summary judgment decision says.

                1. Why did he have to abandon the application?

                  Restriction requirement of all claims so all are barred by time?

                2. Thanks for the link to the D.C. summary judgement below! Apparently the PTO had declared this application abandoned for lack of response and two months later Hyatt petitioned against that abandonment but with some missing required petition requirements. Since he lost on the latter as well, this application does seem abandoned.
                  This D.C. decision starts with: “Plaintiff is the named inventor on approximately 400 patent applications, nearly all of which were filed in 1995 or earlier. As originally filed, each of Plaintiff’s applications contained up to 100 claims. Plaintiff has also repeatedly amended his applications. By August 2013, his interconnected applications contained a total of approximately 115,000 claims.” [That unprecedented situation was the asserted PTO justification of the PTO requirement for only a limited number of exemplary claims per patent to be selected to be examined, but Hyatt then substituted completely different claims.]

                3. Why did he have to abandon the application?

                  Good question. Only once has it happened to me that an examiner considered that my amendments departed so thoroughly from the scope at the beginning of examination that she refused them as violating a constructive restriction requirement. In that instance, the examiner refused to enter my amendment and sent me a notice of incomplete response, which set a new two-month deadline to make a different response.

                  I see that MPEP 704 makes it a matter for examiner discretion whether to give the applicant another two months for reply, or declare the application abandoned in such a circumstance. I guess that this examiner (unlike mine) was unwilling to extend Hyatt that extra grace.

          2. 4.1.1.1.2

            How many per person-year is that, Ben?

            How does that compare to any other (normal) docket rate?

      2. 4.1.2

        How has Hyatt fared outside the US? I presume he foreign filed some applications, did he?

        1. 4.1.2.1

          Thanks for that info. Also, “the various long term conducts of both Hyatt and the PTO” was not an assertion that the PTO is not nowadays “working to make progress with Hyatt applications” in the special examining group finally set up for that a few years ago. The subject case is one small example.
          As for WT’s argument that “We will all be better off once the last of Hyatt’s applications is either granted or abandoned.” Not if many U.S. companies may then face 17 years of future infringements even for their 35 year or older product features by hundreds of previously secret newly granted claims.
          I am not aware of any Gilbert Hyatt foreign equivalent applications. Is anyone?

  6. 3

    >Back in 2013 the application included about 200 pending claims. However, the USPTO forced Hyatt to select eight of those claims for examination as part of the PTO’s Hyatt-Management-Efforts …Hyatt then significantly amended the pending claims…the amendments replaced all of the words of one of the claims except for the “A” starting the claim and the word “comprising.

    I’m confused. Did he amend back to one of the other 192 other original claims? Or are these new, new claims (i.e., he’s now up to 208 claims)?

    Substantively, were they amendments? (one semi-common old strategy wrt Festo/DoE was to present amendments as new claims)

    1. 3.1

      File history is still secret, but this is what I understand:

      (1) First selected 8 claims to be exemplary;
      (2) PTO then rejected those claims;
      (3) Hyatt then substantially amended the claims.

      I don’t have the claim text.

      1. 3.1.1

        >File history is still secret

        Fair enough.

        Pretty sloppy opinion drafting by Judge Prost’s clerks, imho, as it would obviously be unjust to punish Hyatt for “’withholding’ the future claims” when said withholding wasn’t voluntary. It’s a key fact.

    2. 3.2

      Hard to tell how this should have turned out without looking at the claims.

  7. 2

    Across the many years . . . across the many applications of one of America’s greatest inventors . . . across the many honorable battles he has valiantly fought . . . from the Patent Office . . . to the District Courts . . . to the CAFC . . . to the Supreme Court . . . four little words sum up why Mr. Hyatt will likely never receive the justice he deserves:

    The. Fix. Is. In.

    1. 2.1

      Got that right In fact the USPTO will ‘never again’ issue a broad patent to any inventor, especially a non-corporate inventor (as it used to do all the time 100+ years ago)! No more Teslas, Edisons, Bells, Wrights, etc. That would be BAD for the big corporations & monopolies that PAID for and WROTE the AIA and who are the USPTO’s ‘best customers’! They DON’T WANT competition from ‘upstarts’ and are willing to spend millions rather than have to license their innovations. Stealing them is still cheaper (especially if they don’t even get sued). !

      I think it’s their new ‘secret and unwritten’ replacement policy for their earlier ‘super secret’ SAWS (suppression) program that went on for 20 years and that lawyers never complained about (or didn’t know about)! You’d think Congress wouldn’t like any of this, but they seem to have been bought too! Of course that wouldn’t be much of a surprise! Inventors in the U.S. will soon become extinct! Will serve this country right! Let China do everything! Give them all our inventions. Doesn’t matter anyway! Most patents are worthless now – even Elon Musk says that!

  8. 1

    Is this the first ever CAFC precedent about when a restriction requirement is appropriate? I can think of some old CCPA case law about appropriateness of restriction requirements, but I am not sure that I can think of a CAFC case. Restriction requirements are only petitionable, not appealable to the PTAB, so there is not ordinarily a vehicle by which one may take an appeal to the CAFC (except, as here, where one is willing to sue the USPTO in ED Va after the petition’s denial).

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