A Little Background on Columbus

First, a little background on Backgrounds. 37 CFR 1.77(b)(7) suggests that an application should contain a “background of the invention.” However the MPEP is ambiguous as to its content:

Experienced practitioners know that the Background is just another opportunity to make a mistake. From calling it a “BACKGROUND OF THE INVENTION” rather than simply “BACKGROUND,” to admitting admitting prior art that is not prior art, or otherwise limiting the scope of the claims, ther seems little to be gained and much to be lost with a carelessly drafted background. While patent applications continue to include Backgrounds, they are getting shorter and less detailed.

An interesting example of an old-school background, particularly apropos on Columbus Day, is the Background in U.S. Patent No. 5,802,513:

The drafter probably should have stopped right here, and today probably would have stopped right here. A hint about the subject matter of the invention, and the problems it addresses, without admitting anything in particulary is prior are, and without saying anything that might otherwise limit the scope of the claims.

Complying with All Rules and Paying $7 Million in Fees Can Still Constitute Prosecution Laches

In Hyatt v Hirshfeld, [2018-2390, 2018-2391, 2018-2392, 2019-1038, 2019-1039, 2019-1049, 2019-1070] (June 1, 2021), the Federal Circuit vacated and remanded the district courts determination that the Patent and Trademark Office failed to prove prosecution laches, retaining jurisdiction over anticipation and written description issues.

Appellant Hyatt is the named inventor on 399 patent applications, 381 of which he filed during the “GATT Bubble” the period before the changes in law changed the term of a patent from 17 years from issuance to 20 years from filing. At issue were four of Hyatt’s applications relating to various computer technologies, and claiming priority to applications filed in the 1970s and 1980s. On October 24, 1995, about five months after Hyatt filed his GATT Bubble applications, PTO group Director Nicholas Godici met with Hyatt to discuss the applications. Director Godici asked Hyatt, and Hyatt agreed, to focus each application’s claims on distinct subject matter. As a result. Hyatt’s the number of claims in Hyatt’s application grew to 115,000, including approximately 45,000 independent claims. The four specific applications at issue included a total of 1,592 claims (an average of 398 claims per application). From 2003 to 2012, the PTO stayed the examination of many of Hyatt’s applications pending litigation. In 2013, the PTO resumed examination of Hyatt’s applications, and created an art unit, comprised originally of 12 experienced examiners dedicated to examining Hyatt’s applications.

To facilitate the examination process, from August to October 2013, the PTO issued 11 notifications to Hyatt called “Requirements,” one for each of the 11 parent applications of Hyatt’s Gatt Bubble applications. The PTO instructed Hyatt to (i) select no more than 600 total claims to pursue for each of the 11 specifications; (ii) identify the priority date and support for that date with respect to each chosen claim; and (iii) submit a clean copy of the claims. The applications were eventually finally rejected, Hyatt appealed to the PTAB, making some progress, and in 2005 initiated actions under 35 USC 145 in the U.S. District Court for the District of Columbia on some of the applications, and additional 145 actions on the remaining applications in 2009. After cross motions for summary judgement, the USPTO filed motions to dismiss for prosecution laches. The PTO argued that Hyatt had engaged in a “pattern of delay in prosecuting his nearly 400 patent applications from 1969 through the present day — even disregarding the 9 years when the USPTO stayed Hyatt’s applications.

The PTO argued that Hyatt forfeited his patent rights by, for example, claiming priority to ap-plications more than 45 years old; bulk-filing about 400 photocopies of 11 applications in the days before the U.S.’s patent term changed on June 8, 1995; and agreeing to focus each application on a different invention but not doing so and later revealing that he never had a “master plan” for demarcating the applications.

Hyatt responded that his prosecution of applications other than the four at issue was legally irrelevant; that the PTO itself engaged in extensive delays in administering his applications; that the PTO did not warn him, as allegedly required, that he was in jeopardy of losing his patent rights; and that the PTO failed to prove intervening rights as necessary to establish prosecution laches. Hyatt also argued that his delays were explainable be-cause, for example, PTO rules permitted Hyatt to add and amend claims, and Hyatt did so to correctly capture his inventions and steer clear of prior art.

The Prosecution laches defense originates from two Supreme Court cases: In Woodbridge v. United States, 263 U.S. 50 (1923), the PTO agreed with Woodbridge’s request to delay the issuance of his patent for one year, but at the end of the year, the PTO neglected to issue the patent. Woodbridge waited an additional eight-and-a-half years before sending a letter to the PTO calling attention to the application and explaining that he had waited because the delay enabled him to best avail himself of the patent’s value. Woodbridge then sought to amend the specification and claims to capture related innovations that arose during the course of the delay. The Court held that, by delaying to make the term of the monopoly square with the period when the commercial profit from it would have been highest, Woodbridge forfeited the right to a patent by designed delay. The Court said:

[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, and thus puts off the free public enjoyment of the useful invention, is an evasion of the statute and defeats its benevolent aim.

In Webster Elec. Co. v. Splitdorf Elec. Co., 264 U.S. 463 (1924), the applicant filed a patent application in 1910. In 1915, to provoke an interference against a separate, recently issued patent, the applicant filed a divisional application copying the patent’s claims. The applicant lost the interference but then amended the divisional application by adding two new claims, claims 7 and 8, which issued in 1918 and were the subject of the litigation. The Court held claims 7 and 8 unenforceable, noting it had “no hesitation in saying that the delay was unreasonable, and, under the circumstances shown by the record, constitutes laches, by which the petitioner lost whatever rights it might other-wise have been entitled to.”

The Federal Circuit recognized the doctrine of prosecution laches in Symbol Techs., 277 F.3d at 1363, 1366–68, and applied it for the first time in In re Bogese, 303 F.3d 1362, 1363 (Fed. Cir. 2002), where the patent owner had engaged in “deliberate and consistent course of conduct that has resulted in an exceptional delay in advancing the prosecution and the issuance of a patent,” filing twelve continuation applications without amendment or addressing the reasons for the rejection and each time abandoned the previous application.

The Federal Circuit concluded that the district court misapplied the legal standard for prosecution laches in several respects. First, the Federal Circuit said that the district court failed to properly consider the totality of the circumstances. The district court stated that the totality principle does not apply in a manner as to require this Court to account for the entirety of the prosecution history of each related application from its inception to final disposition. In addition, the district court then focused predominantly on the PTO’s role in the prosecution of Hyatt’s four applications at issue and repeatedly discounted or ignored evidence showing that Hyatt’s conduct caused unreasonable and unexplained delay.

Second the Federal Circuit said that rather than analyze the evidence to determine whether Hyatt’s conduct warrants a finding of prosecution laches, the court repeatedly placed blame on the PTO for the slowness with which Hyatt’s applications were prosecuted. The Federal Circuit has said that “a delay by the PTO cannot excuse the appellant’s own delay. The Federal Circuit concluded that the district court erred by improperly focusing the analysis on the PTO’s conduct rather than Hyatt’s conduct.

The Federal Circuit concluded that the PTO’s prosecution laches evidence and arguments presented at trial are enough to shift the burden to Hyatt. Beyond merely the magnitude of Hyatt’s delay in filing his claims, The Federal Circuit found that Hyatt adopted an approach to prosecution that all but guaranteed indefinite prosecution delay. The Federal Circuit thus remanded the case to the district court for the limited purpose of affording Hyatt the opportunity to present evidence on the issue of prosecution laches, consistent with the standards set forth in this opinion.

The Federal Circuit added that to carry his burden, Hyatt must show by preponderance of evidence that Hyatt had a legitimate, affirmative reason for his delay, and quipped that it could “divine no reason in the record currently before the court that would suffice, but Hyatt is entitled as a matter of fairness to present evidence and be heard on this issue.”

Patent’s Prosecution History Informs the Meaning of the Claim Language, Saving them from Invalidity

Kaken Pharmaceutical Co., Ltd. v. Iancu, [2018-2232] (March 13, 2020), the Federal Circuit   reversed the PTAB’s claim construction, and vacated its determination that the challenged claims of U.S. Patent No. 7,214,506 on a method for treating onychomycosis were unpatentable as obvious.

Kaken proposed that the phrase “treating a subject having onychomycosis” means “treating the infection at least where it primarily resides in the keratinized nail plate and underlying nail bed.” The Board rejected Kaken’s construction as too narrow, concluding that “the express definition of onychomycosis includes superficial mycosis, which in turn is expressly defined as a disease that lies in the skin or visible mucosa.

The Federal Circuit found that the prosecution history—which includes, specifically, statements made by Kaken to overcome a rejection and the examiner’s statements explaining withdrawal of the rejection based on those statements — provides decisive support for limiting the claim phrase at issue to a plate-penetrating treatment of an infection inside or under the nail plate.  A patent’s prosecution history can “inform the meaning of the claim language by demonstrating how the inventor understood the invention and whether the inventor limited the invention in the course of prosecution, making the claim scope narrower than it would otherwise be.  Particularly useful are “express representations made by or on behalf of the applicant to the examiner to induce a patent grant,” which include “arguments made to convince the examiner that the claimed invention meets the statutory requirements of novelty, utility, and nonobviousness.”  The Federal Circuit said that Kaken’s statements during prosecution, followed by the examiner’s statements, make clear the limits on a reasonable understanding of what Kaken was claiming.

The Federal Circuit thus reversed the Board’s claim construction, and vacated the determination of obviousness based upon the erroneous construction.

Prosecution History Doesn’t Have to Rise to the Level of Disclaimer to Inform the meaning of the Disputed Claim Term

In Personalized Media Communications, LLC, v. Apple Inc., [2018-1936] (March 13, 2020), the Federal Circuit reversed the Board’s construction of a claim term of U.S. Patent No. 8,191,091 ON methods for enhancing broadcast communications, vacating the anticipation and obviousness determinations of the corresponding claims, and affirmed the remainder of the Board’s determinations of anticipation and obviousness.

The Federal Circuit noted that the prosecution history, in particular, may be critical in interpreting disputed claim terms because it contains the complete record of all the proceedings before the Patent and Trademark Office, including any express representations made by the applicant regarding the scope of the claims.  Accordingly, even where prosecution history statements do not rise to the level of unmistakable disavowal, they do inform the claim construction.

At issue was the meaning of “an encrypted digital information transmission including encrypted information,” and in particular whether this term is limited to digital information or can also include analog information.  The Federal Circuit began its analysis with the claim language, noting that the claims use the adjective “digital” to describe the “information transmission,” thus supporting the view that the information is, in fact, digital. On the other hand, the Federal Circuit added, the claims do not say “entirely digital.”

Although the Federal Circuit agreed that with the Board that the specification’s broad definition of “programming” could encompass analog signals, it did not agree that it necessarily requires them. Instead, the definition is largely agnostic to the particular technology employed.

The Federal Circuit turned to the specification, finding some relevant statements, but noting that they are not definitional; instead, they are merely illustrations that use open-ended, permissive phrases such as “usually,” “for example,” and “with capacity for.” And when considered in the context of the more than 280 columns of text in the specification of the ’091 patent, these two passages fall far short of defining the relevant terms through repeated and consistent use.

Finally, the Federal Circuit turned to the prosecution history.  While the Board found the prosecution history inconclusive, the Federal Circuit disagreed, noting that even where prosecution history statements do not rise to the level of unmistakable disavowal, they do in-form the claim construction.  The Federal Circuit said an applicant’s repeated and consistent remarks during prosecution can define a claim term—especially where, as here, there is no plain or ordinary meaning to the claim term and the specification provides no clear interpretation.  The Federal Circuit found that the Board erred by effectively requiring the prosecution history evidence to rise to the level of a disclaimer in order to inform the meaning of the disputed claim term, adding the prosecution history provides persuasive evidence that informs the meaning of the disputed claim phrase and addresses an ambiguity otherwise left unresolved by the claims and specification.

Because the Federal Circuit concluded that the disputed claim term was limited to all-digital signals, it reversed the Board’s unpatentability determination for those claims.

Goldilocks Prosecution

The rules of claim drafting are numerous and arcane.  Even after years of prosecution experience, however, it seems there are more to discover.

While the wording of claims is obviously important, recently, several office actions revealed the criticality of the spacing of claims.  You don’t want the spacing to be too much:

nor can it be too little.

the spacing needs to be just right.

A §145 Action May Not Be As Appealing as a Trip to the Federal Circuit

In Nantkwest, Inc. v. Matal, [2016-1794] (June 23, 2017), the Federal Circuit reversed the denial of attorneys fees to the USPTO in successfully defending civil action under 35 USC §145 brought by a patent applicant.  The statute provides that the applicant must pay “[a]ll of the expenses of the proceeding . . . regardless of the outcome.” The district court held that “expenses” did not include attorneys fees.

The Federal Circuit found that the ordinary meaning of “expenses” as defined in dictionaries and the Supreme Court’s interpretation of this term lend significant weight to the conclusion that when Congress used the phrase “all expenses,” it meant to include attorneys’ fees.  Accordingly, the Federal Circuit held “[a]ll expenses of the proceedings”
under § 145 includes the pro-rata share of the attorneys’ fees the USPTO incurred to defend applicant’s appeal.

The Federal Circuit remanded the case for the district court to enter an additional award of $78,592.50 in favor of the Director.

Although it may seem unfair that an applicant losing an appeal has to pay the Office’s cost in successfully defending the appeal of a rejection, as the Federal Circuit pointed out, this is how Congress chose to allocate the cost of an appeal to the district court.  What is unfair, however, is that this is how Congress chose to allocate the cost of an applicant’s successful appeal of an improper rejection as well.  Thus, an applicant faced with an improper rejection who brings an action under §145 and wins, is still on the hook for the Patent Office’s attorneys fees.  This unfair result alone might suggest that Congress did not intent to include attorneys’ fees in “expenses,” otherwise Congress is putting a high price on justice.

So why would an applicant chose to take a PTAB decision to district court, rather than appeal to the Federal Circuit?  The principal reason is that the PTAB may have pointed out an evidentiary defect in the applicant’s case.  If the applicant appeals to the Federal Circuit the record is fixed, and if the PTAB was correct about the defect, the Federal Circuit will simply affirm the PTAB.  However, in an action under §145 the applicant can introduce additional evidence, for example a declaration by the inventor, or by an expert, or perhaps even evidence of objective indicia of non-obviousness.  This could allow the applicant to obtain a patent, when an appeal would otherwise be futile.  Depending upon the importance of the invention, this might well be worth an additional $78,000 or so.

However is a §145 action the only way to obtain this result?  Perhaps not.  One might assume that if you do not appeal the PTAB decision that it becomes final and res judicata will prevent the application from ever getting the claims that the were the subject of the appeal. This would be a good reason to pursue the §145 action.  However, the underlying assumption may be wrong.  In In re Donohue, 226 USPQ 619 (Fed. Cir. 1985), the Federal Circuit held that the Patent Office should not apply res judicata where the applicant made a different record, for example by supplying a new affidavit or declaration:

Appellant has made a record different from that in Donohue I by submitting the Fields affidavit. This new record presents a new issue of patentability with respect to whether the previously sustained anticipation rejection can still be maintained. In view of this new issue, the PTO properly declined to make a formal res judicata rejection . . .

226 USPQ 621.  As long as Donohue remains good law, a patent applicant can file an RCE or even a continuation, supplement its records, and continue to prosecute claims whose rejection was affirmed by the PTAB (and not have to spend $80,000 on the the USPTO’s expenses in a §145 action.

It is still unfair that a successful applicant in a §145 action has to pay for the unsuccessful efforts of the USPTO in defending an improper rejection, but at least the applicant has an alternative route to continue to pursue the claims after an unsuccessful appeal to the PTAB.