Symbol Technologies:

1. Symbol Technologies: The (re)birth of Prosecution Laches HIPLA, October 10, 2002 Jennifer C Kuhn, Gray Cary, Austin

2. The takeaway points: • The enforceability of a patent may be challenged because of the length of the prosecution, even if all statutes and rules were followed. • Non-precedential opinions may be disregarded by the Federal Circuit.

3. Symbol Techs., Inc. v. Lemelson Medical 277 F.3d 1361 (Fed. Cir. 2002). • Symbol and Cognex Corp. filed separate DJ’s against the Lemelson foundation. • After consolidation, Lemelson filed a Motion to Dismiss arguing: • No claim or controversy (12(b)(1)) • Prosecution Laches failed to state a claim upon which relief could be granted (12(b)(6)). • District Court denied the 12(b)(1), and granted the 12(b)(6).

4. The issue on appeal: • “The sole issue on appeal is whether, as a matter of law, the equitable doctrine of laches may be applied to bar enforcement of patent claims that issued after an unreasonable and unexplained delay in prosecution even though the applicant complied with pertinent statutes and rules.” Symbol Techs., 277 F.3d at 1263.

5. Limitations of the Decision • The panel only addresses the existence of the prosecution laches defense. • There is almost no guidance on the scope of the defense.

6. Facts about the Lemelson Patents • Of the patents involved in the suit, the average time from filing to issue: 34 months (range 7 months through 10 years 2 months). • Average time from priority date to issuance of claims: 15 years, 5 months (range 6 years, 3 months through 27 years, 6 months).

7. The Three Sources of Law for the Federal Circuit’s Decision • Supreme Court “precedent.” • 1952 Patent Act’s application on that Supreme Court precedent • Prior unpublished Federal Circuit opinions. • (But, the majority neglects to cite a precedential Fed. Cir. Decision, or analyze CCPA and Court of Claims cases interpreting 1952 Patent Act)

8. The Three Sources of Law for the Federal Circuit’s Decision • Supreme Court “precedent.” • 1952 Patent Act’s application on that Supreme Court precedent. • Prior unpublished Federal Circuit opinions.

9. Woodbridge v. United States, 263 U.S. 50 (1923): Patent was not issued after a nine year delay in prosecution. Webster Electric Co. v. Splitdorf Electrical Co., 264 U.S. 463 (1924): Claims subject to an unreasonable eight-year delay were not enforceable in infringement suit. Supreme Court Prosecution Laches Precedent

10. Woodbridge: • Woodbridge filed his application in 1852, used the PTO’s “secret archive” to keep his patent from issuing until 1861, to increase his return on his invention. • PTO ultimately refused to allow his claims to issue because of the “length of time he had allowed his invention to slumber.” 263 U.S. at 54. • Other inventors had obtained patents in the field without the benefit of Woodbridge’s, and he had completely circumvented the statutory patent term. Id. at 56.

11. The Potential Standard: • The Supreme Court cited the Constitution, the special statute referring the case which created a laches defense, and Court’s own opinion in Kendall which stated an inventor may forfeit his rights “by an attempt to withhold the benefit of his improvement from the public until a similar or the same invention should have been made and introduced by others.” Kendall v. Winsor, 21 How. 322, 329.

12. Ambiguity of the standard • Appears to be similar to intervening rights from the law of reissue applications, except with “should have” language. • However, Supreme Court uses “forfeiture” instead of “laches” to describe Woodbridge’s transgression. • Court is more concerned with the Constitution than competitors.

13. Distinguishing Lemelson from Woodbridge • The Congressional Reference statute authorizing Woodbridge’s case explicitly authorized forfeiture and laches as defenses. • Woodbridge violated PTO rules, lied to the PTO about filing a foreign patent application and admitted to the Court that he delayed to maximize his royalties.

14. Distinguishing Lemelson from Woodbridge • Lemelson has not violated any PTO rule. • Symbol Technologies litigation is about enforceability, not issuance. • PTO was much faster in 1852, making a nine year delay that much more unreasonable.

15. Webster: (1924) • Eight years after original application, and after self serving interference, broad claims were added by amendment to a divisional that were drafted to cover a competitor’s product. 264 U.S. at 465 • Inventor “stood by and awaited developments” as others disclosed subject matter of later filed claims. Id. • Court expressed concern for competitors, rather than Constitution.

16. Potential standard • Webster creates a rebuttable presumption that the two year limit from reissue practice applies to “laches, equitable estoppel or intervening private or public rights.” 264 U.S. at 471. • If claims are added more than two years after the parent issues, the patentee can avoid laches by “proof of special circumstances justifying a longer delay.”

17. Supreme Court “Ratifies” Laches • Crown Cork & Seal Co., Inc. v. Ferdinand Gutman Co., Inc., 304 U.S. 159 (1937): Two year time limit of Webster was held to be dictum. Affirmed finding of no laches due to no intervening rights, but indicated that the facts might support abandonment. Id. at 168. • General Talking Pictures Corp. v. Western Elec. Co., Inc., 304 U.S. 175 (1938): Rejected laches because there was no evidence of “intervening rights.” Id. at 183.

18. Supreme Court Summary • Woodbridge is not cited in these other Supreme Court cases, and has no impact. • Proof of “adverse intervening rights” is required before patentee must justify delay. • There is no time after which prosecution is presumptively unreasonable. • Equity for competitors, rather than Constitutional limitations on patent terms, forms basis for prosecution laches. (Webster, rather than Woodbridge prevails).

19. Another Supreme Court case • Overland Motor Co. v. Packard Motor Car Co., 274 U.S. 417, 424 (1927). • “We do not know on what principle we could apply the equitable doctrine of abandonment be laches [sic] in a case where the measure of reasonable promptness is fixed by statute, and no other ground appears by reason of which laches could be imputed to the applicant.”

20. Lemelson’s arguments: • Webster and following cases are limited to interferences. • But Crown Cork and General Talking Pictures are not interference cases.

21. The Three Sources of Law for the Federal Circuit’s Decision • Supreme Court “precedent.” • 1952 Patent Act’s application on that Supreme Court precedent. • Prior unpublished Federal Circuit opinions.

22. Sections 120 and 121 • These two sections codified existing continuation practice which had been governed by PTO rules: • Section 120: Benefit of parent filing date in the U.S for continuations. • Section 121: Same for divisional applications • No part of Title 35 directly addresses prosecution laches.

23. Reliance on Legislative History • Plain language of statute controls “in the absence of clearly expressed legislative intent to the contrary.” Transco Prods. Inc. v. Performance Contracting Inc., 38 F.3d 551, 556-57 (Fed. Cir. 1994) (Rich, J.). • Transco holds that the 1952 patent act merely codified continuation practice.

24. Legislative History of 120-21 • The opinion relies on Federico lectures and commentary on the 1952 Patent Act, which mention “equitable defenses such as laches, estoppel and unclean hands.” 75 J. Pat & Tm. Office Soc. 161, 215 (1993) (reprint of Federico’s 1954 post Patent Act article). • Decision extrapolates from this quote to the conclusion that the drafters (and thus Congress) intended to maintain the defense despite not including prosecution laches in section 282.

25. Lemelson’s arguments: • Webster and following cases are limited to interferences. • But Crown Cork and General Talking Pictures are not interference cases. • The plain language and legislative history of the 1952 Patent Act foreclose the defense of prosecution laches. • Federico ex post facto lectures indicated that laches was preserved (but it doesn’t say what kind of laches, and isn’t actual legislative history).

26. The Three Sources of Law for the Federal Circuit’s Decision • Supreme Court “precedent.” • 1952 Patent Act’s application on that Supreme Court precedent. • Prior unpublished Federal Circuit opinions.

27. Previous unpublished opinions reject the laches defense? • Bott v. Four Star Corp., 848 F.2d 1245 (Fed. Cir. 1988) (Bissell, Archer and Mayer). Argument rejected was based on the two-year reissue limitation from Webster. • “Accordingly, we are not persuaded…that this court should adopt equitable safeguards to limit continuation applications when the Congress gave no indication that it intended to so do.” Id. at *1 (citing In re Hogan, 559 F.2d 595, 604 n. 13 (CCPA 1977) and In re Henrikson, 399 F.2d 253, 262 (CCPA 1968)).

28. Previous unpublished opinions reject the laches defense? • Ricoh Co., Ltd. v. Nashua Corp., 185 F.3d 884 (Fed. Cir. 1999). Rejects Nashua’s argument that it is entitled to intervening rights on grounds similar to Bott. • Cites Kingsdown Medical Cons., Ltd. v. Hollister, Inc., 863 F.2d 867, 874 (Fed. Cir. 1988), approving claims specifically added to cover competitor’s product.

29. Lemelson’s arguments: • Webster and following cases are limited to interferences. • But Crown Cork and General Talking Pictures are not interference cases. • The plain language and legislative history of the 1952 Patent Act foreclose the defense of prosecution laches. • Federico ex post facto lectures indicated that laches was preserved (but it doesn’t say what kind of laches, and isn’t actual legislative history). • Unpublished decisions reject laches • These decisions are not precedent and can be ignored (and are actually distinguishable, since they do not directly address laches).

30. The Omitted Fed. Cir. Opinion • Studiengesellschaft Kohle mbH v. Northern Petrochemcial Co., 784 F.2d 351 (Fed. Cir. 1986) (per curium) (Newman, Cowan, Bissell) • Upholds finding of no “laches or other inequitable delay.” Id. at 356. • “[O]n the record before us we discern no error in the conclusion that SGK had not delayed inequitably and that the prolonged period period of pendency was due to the PTO and not the applicants.” Id.

31. Judge Newman’s Dissent

32. Newman: Let Congress Do It • “[T]he court should not intervene in equity where Congress has not.” citing district court and Northwest Airlines Inc. v. Transport Workers Union of Am., 451 U.S. 77, 97 (1981). • Cites CCPA cases (Henrikson and Hogan) where equitable changes to the 1952 Patent Act’s continuation practice scheme were rejected. • Overland Motor contains almost identical language!

33. Conflict in Precedent Ignored • Both CCPA and Court of Claims address the legislative history of the 1952 Patent Act, and hold that it is for Congress to impose equitable limitations on 120-21. • Pratt & Whitney Co. v. United States, 345 F.2d 838 (Ct. Cl. 1965) holds claims invalid due to laches citing Webster. Id. at 843-44. • The structure of Federal Circuit predecessor Courts make this a conflict.

34. Resolution of Conflict? • Both CCPA and Court of Claims decisions are precedential. South Corp. v. United States, 690 F.2d 1368 (Fed. Cir. 1982). • Resolution of conflict between the two require en banc consideration. UMC Elec. Co. v. United States, 816 F.2d 647 (Fed. Cir. 1987).

35. The Impact of Symbol Techs. • Oxaal v. IPIX, 2002 WL 485704 *2 (N.D.N.Y March 27, 2002): “It appears clear from a review of the Symbol Technologies decision that it marked a significant change in the law.” • In re Bogese, 303 F.3d 1362 (Fed. Cir. 2002). Patent not issued because of laches.

36. Conclusion: Considerations for Prosecutors and Litigators

37. Potential Prosecution Issues: • Continuation or divisional claims that are broader than the original claims. • Claims added to cover competing products in the market place. • Prosecutions that are unusually long. 20 year term may not excuse this. • Deciding which claims to file, and when to file them.

38. Potential Litigation Issues • Opinion gives no guidance on application of prosecution laches. • May open the door to testimony about the internal operations of the PTO. (Special circumstances?) • Tension with Kingsdown will complicate the application of the defense.

39. Symbol Technologies: Questions