The Federal Circuit recently ruled in favor of the Patent Office asserting the rarely used doctrine of prosecution laches against serial patent applicant Gil Hyatt. Hyatt had brought an action in district court to order the Patent Office to grant multiple long-standing applications. The district court found in Hyatt’s favor and refused to apply prosecution laches. The Federal Circuit reversed that decision.
The conflict in this case centered on “submarine patents”—applications kept pending, i.e., submerged, for long periods of time until they can surface against a technology that has become widespread during the pendency. Under current law, a patent term lasts twenty years from the application’s filing date, which deters submarine patents because lengthening the pendency cuts into the term of the patent. But before the current law was enacted in 1995, a patent term lasted seventeen years from the patent’s issuance, meaning a lengthy pendency did not diminish the term.
The Patent Office experienced a spike in filings, also called the “GATT bubble,” right before the law governing patent terms changed in 1995, and Hyatt’s applications formed a sizable chunk of that spike. The four applications at issue in this case were filed during the spike, but they claimed priority back to the 1970s and ʼ80s. In total, Hyatt filed 381 applications right before the changeover. The applications were hundreds of pages long and featured short claim sets that were often identical to each other. A few months later, a group director at the Patent Office came to an agreement with Hyatt that he would focus each application on a distinct functionality. Between then and 2003, Hyatt filed amendments growing the number of pending claims to approximately 115,000, several hundred per application. Hyatt’s applications were stayed as a result of litigation with the Patent Office from 2003 to 2012. When examination resumed, the Patent Office created a dedicated art unit with twelve experienced examiners focused solely on Hyatt’s applications. Because of the number of claims per application, the length of each application, and the priority claims of each application to thirty or more earlier applications, a first office action for each application took an examiner four to five months. For comparison, a first office action for a typical application takes an examiner two to three business days. When amending claims, rather than line-editing claims as applicants typically do, Hyatt would often cancel entire claim sets and insert completely different claims. On some occasions, the amendments reintroduced claims that had been abandoned in an earlier application.
When Hyatt eventually appealed from the Patent Office to district court, the Patent Office argued that his manner of prosecuting applications fell under the doctrine of prosecution laches. The doctrine dates to two Supreme Court cases from the 1920s, Woodbridge v. United States and Webster Elec. Co. v. Splitdorf Elec. Co. The Woodbridge decision characterized prosecution laches as an affirmative defense against “[a]ny practice by the inventor and applicant for a patent through which he deliberately and without excuse postpones beyond the date of the actual invention, the beginning of the term of his monopoly.” While prosecution laches is rarely invoked, the Federal Circuit has confirmed in more recent cases that it is still good law, e.g., In re Bogese in 2002.
The district court did not find prosecution laches persuasive. The district court took the position that applicants generally have latitude to prosecute applications how they want to according to the rules. Beyond that, the court emphasized the Patent Office’s contribution to the delays. Given Hyatt’s unusual prosecution tactics, the Office should have employed “atypical procedures” for handling these applications. Also, the Office failed to take any action to enforce the agreement between Hyatt and the group director in 1995, and the Office failed to object to Hyatt’s strategies in real time.
The Federal Circuit panel found the district court’s permissiveness toward Hyatt and emphasis on the Patent Office’s action misplaced. In response to the district court’s statement that “there is no abstract requirement for a citizen to tailor his conduct in pursuit of his constitutional right to a patent, to conform to what is ‘feasible’ for the agency,” the panel noted that “the doctrine of prosecution laches itself—the subject of the district court’s analysis—is one example of an obligation to tailor prosecution conduct in pursuit of patent rights.” Moreover, the Patent Office has no obligation to make special procedures. With the emphasis properly on Hyatt’s actions, applying prosecution laches is the correct outcome. Hyatt’s strategies are actually more egregious than the applicants to which prosecution laches was applied in Woodbridge, Webster, and Borgese.
Lessons for Practice
While applicants have less incentive to try a submarine strategy for applications filed after 1995, it’s not unheard of. There can still be an advantage, for example, to delaying so that claims can be drafted with an existing accused product in mind. The takeaway for practitioners from this decision is mainly that prosecution laches exists and may apply in those situations. According to the panel, “[i]t is not the case that an applicant may prosecute his patents however he or she wishes within the statute and PTO regulation, because the doctrine of prosecution laches places an additional, equitable restriction on patent prosecution conduct beyond those imposed by statute or PTO regulation.” Applicants should avoid excessive strategic delay, and accused infringers can use this potential tool against possible submarine patents.