CAFC Tells Gil Hyatt ‘GATT Bubble’ Application Properly Subject to Restriction Requirement

“Whether Mr. Hyatt’s actions are characterized as a failure to disclose or an act of withholding an entirely new species, it was that conduct of Mr. Hyatt that prevented the Examiner from entering a restriction requirement.” – CAFC

Federal CircuitInventor Gilbert Hyatt, who has been embroiled in litigation with the United States Patent and Trademark Office (USPTO) for decades, lost his latest case at the U.S. Court of Appeals for the Federal Circuit (CAFC) when the court ruled today that an examiner’s restriction requirement was permitted under 37 C.F.R. § 1.129 (“Rule 129”).

Caught in the GATT Bubble

The case relates to Hyatt’s U.S. Patent Application No. 08/435,938, which was filed on May 5, 1995, and falls within the so-called “GATT Bubble.” The GATT Bubble is the term applied to patent applications filed but not yet granted before the Uruguay Round Agreements Act (URAA), which amended the U.S. patent term to 20 years from the effective filing date, took effect on June 8, 1995.

The USPTO promulgated Rule 129 to govern these applications. Rule 129(b)(1)(ii) provides:

(1) In an application . . . that has been pending for at least three years as of June 8, 1995 . . . , no requirement for restriction . . . shall be made or maintained in the application after June 8, 1995, except where:
. . . .
(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 . . . .

In the present case, examination of Hyatt’s 1995 application was completed in 2003, but then was stayed along with many other of Hyatt’s applications pending litigation. In 2013, an examiner asked Hyatt to select a number of claims from the ‘938 application for examination. Hyatt reluctantly complied and selected eight out of the 200 claims, which an examiner issued a non-final rejection of in February 2015. In August 2015, Hyatt responded with “significant” claim amendments. The amendments shifted seven of the eight claims to a different species of computer systems and processes, so the examiner issued a restriction requirement, forcing Hyatt to prosecute the amended claims in a separate application that would be subject to the patent term under the URAA, rather than the pre-URAA term of 17 years from the date of grant.

Hyatt sued, alleging that the restriction requirement violated the Administrative Procedure Act (APA) “as arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law since restriction requirements are generally not permitted for transitional applications like the ’938 application and no exception to that rule applied.” But the district court ultimately granted the USPTO’s motion for summary judgment, explaining:

[Mr. Hyatt] failed to disclose claims to a separate invention and attempted to file them many years after 1995. Withholding these claims is an action by the applicant that falls within [Rule 129(b)(1)(ii)’s applicant-action] exception to the general rule prohibiting restriction requirements on transitional applications. The [Examiner] was thus within his authority to impose a restriction requirement under [that] exception . . . .

Actions Include Inactions

In its discussion on appeal, the CAFC rejected Hyatt’s argument that the term “actions” as used in the text of Rule 129(b)(1)(ii) “does not encompass ‘inactions.’” Furthermore, the court found that Hyatt’s failure to disclose the “species-altering amendments” earlier could be characterized as an act of “withholding”:

“And whether Mr. Hyatt’s actions are characterized as a failure to disclose or an act of withholding an entirely new species, it was that conduct of Mr. Hyatt that prevented the Examiner from entering a restriction requirement.”

The USPTO’s Manual of Patent Examining Procedure (MPEP) Section 803.03 includes several examples of inaction that it categorizes as falling under “action by the applicant,” including delays. “Although the MPEP does not have the force of law, it is entitled to judicial notice so far as it is an official interpretation of statutes or regulations with which it is not in conflict,” wrote the CAFC, citing Airbus S.A.S. v. Firepass Corp., 793 F.3d 1376, 1380 (Fed. Cir. 2015). Since the public has been on clear notice of the USPTO’s interpretation of “action,” via the MPEP, the CAFC said it could not see how the application of Rule 129(b)(1)(ii) could be deemed “arbitrary, capricious, an abuse of discretion, or contrary to law.”

Hyatt’s attempts to cite case law showing that “actions” cannot include “inactions” failed to persuade the CAFC as the cases he cited were not binding and addressed “materially different statutory contexts,” said the court. Hyatt also argued that application of the applicant-action exception to the ‘938 application violated the statement of administrative action (SAA), a statement promulgated by then-President Clinton that Congress said “shall be regarded as an authoritative expression by the United States concerning the interpretation and application of the” URAA “in any judicial proceeding in which a question arises concerning such interpretation or application.” Hyatt read the language to mean that the exception applies only when the applicant’s actions “prevent [the] PTO from taking any action in a given application,” but the CAFC said this “restricts it beyond its plain terms.” Instead, the SAA actually mirrors Rule 129, said the court.

“The SAA similarly instructs that that same general ban on restriction requirements ‘does not apply if . . . there has not been at least one [PTO] action due to actions by the applicant.’”

No Conflict with Other Provisions

Hyatt finally argued that even if the text of the applicant-exception could be interpreted to apply here, doing so would logically conflict with Rule 129(a) and Rule 129(b)(2). Under Rule 129(a), Hyatt said he is entitled to have his amendments considered as “continuation-type amendments” subject to the pre-URAA patent term. A restriction requirement would effectively swallow Rule 129(a), said Hyatt. And since Rule 129(b)(2) “recognizes that transitional applications may contain more than one independent and distinct invention, a restriction requirement for such an application—including the ’938 application—would be improper.” But both the district court and the CAFC disagreed, noting that Section 129(a) does not deal with restriction requirements and 129(b)(2) “applies only when ‘a requirement for restriction . . . cannot be made or maintained pursuant to this paragraph.’” Here, the applicant-action exception allows the USPTO to make the restriction requirement, so 129(b)(2) does not apply.




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Join the Discussion

8 comments so far.

  • [Avatar for George]
    September 21, 2022 02:53 pm

    Patents are now just a ‘cynical fraud’ perpetrated on naive inventors by the U.S. government! Shame on them! There will be consequences for this ‘evil’ treatment of America’s innovators and their ‘duping’ out of monies. That will include China & other countries ‘easily’ overtaking us and not even having to steal inventions anymore! The US is GIVING China American technology, every time it denies a ‘broad’ patent or a ‘breakthrough invention’ (it’s examiners just don’t understand). or whenever an inventor gives up in frustration (or they go broke) AFTER their application is already published! How many are those??? 30%? 40%? NO ONE has to pay for those. Those are now ‘public domain’ under the AIA! How STUPID is that? They should at least remain ‘trade secrets’. That’s why WE don’t allow publication unless by patent! That used to be the ‘social contract’ the Founders envisioned. They never expected inventors to just ‘give up’ their ideas & inventions to the government for free. They would have thought that ‘unfair’. Now we don’t (for some reason).

    . . . Oh, I know why now, we don’t have any ETHICS in America anymore. We used to, but not anymore! It’s now perfectly OK & even legal to ‘screw’ inventors now! What are they going to be able do about it – sue the government??? Sue the USPTO??? Being ‘unethical’ in America isn’t illegal (neither is lying). Anyone can be as unethical as they want in the U.S. – no consequences!

  • [Avatar for George]
    September 20, 2022 03:02 pm

    @ Pro Say

    You’re right. It IS all rigged now & the USPTO is basically ‘owned by’ big corporations & monopolies! Not what the Founders intended that’s for sure and probably unconstitutional too, but how can we ever find out, since cases such as Hyatt’s are never allowed to get far & Congress doesn’t seem to care either (because they are corrupt too???). With today’s rules, statutes and today’s ‘interpretations’ of those statutes, we’d never have had a Tesla, Edison, Bell, Wright or 100’s of others that helped MAKE America what it ‘once was’. Why can’t Congress SEE THAT? Those kinds of inventors will never exist again in our country! They will cease to exist, and already have! It’s an INSANE policy we have now, designed to totally ‘screw’ the little guy (and the big guys don’t really care about innovation, they just want to keep making money). We are now squandering our most valuable & important talents and assets this country has!.We’re showing ‘no respect’ or ‘regard’ at all for our most creative innovators. We’re telling them . . . “keep inventing for us, but don’t expect anything in return – join the ‘starving artists’ of the world (or become patent lawyers) – LOL!” – Signed: USPTO & Congress

  • [Avatar for George]
    September 20, 2022 02:44 pm

    It’s our opinion that the USPTO (perhaps even before the AIA) has become entirely corrupt and is now in bed with the big corporations & monopolies, who bought, paid for, and WROTE the AIA, in order to, once and for all, get rid of all competition and potential commercial threats from ‘pesky’ independent inventors & ‘upstarts’, especially up and coming startups. They have almost succeeded now! Most small entities ‘don’t stand a chance’ against the big guys who have unlimited resources to fight them, especially since the PTO is now always on their side and there to help them stay out of trouble.

    When is the last time you heard of an independent inventor winning 100’s of millions from a large corporation? Or even a startup being able to do that? Just doesn’t happen anymore. It CAN’T happen anymore. The AIA made sure of that! Only lawyers are still allowed to get rich of of patents (and especially ‘patent disputes’). That sure won’t bode well for the future of the American economy and it’s future in innovation. Believe it or not, inventors don’t like getting duped either! They will become extinct soon.

    Inventors don’t want to spend $1000’s or $10,000s or even $100,000s (along with years of creative effort), only to get bills but no rewards for their work. They’re not THAT naive! They’ll soon realize the ‘system is rigged’ just to get them to ‘spill the beans’ (i.e. publish), without getting anything (of value) in return. Most patents are now legally ‘garbage’ and ‘legally worthless’ . . . they CAN’T be enforced (but CAN be legally ‘stolen’ now).

    The government is not there to help PROTECT American inventors or to ‘promote’ their ideas , at all. Patents don’t even come with ‘legal insurance’, despite all the huge fees that inventors now have to pay (unlike 100 years ago, when even ex-slaves could afford to get one & DEFEND it).

    America’s Inventors are ‘getting screwed’ every time they file for ‘IP protection’ from their government, while China ends up getting tons of new concepts & technologies FOR FREE. China doesn’t have to ‘steal’ tech from U.S. anymore, the USPTO just ‘hands them” 50% of our new ideas, via ‘post-publication’ PTO denials & inventor abandonments (while patent attorneys keep cleaning up)! Even they don’t seem to care that all those abandoned applications are just ‘gifts’ to China and other countries, much less ‘unscrupulous’ and unethical domestic competitors. They don’t care if inventors GIVE UP trying to become successful inventors in America. They & the USPTO just assume there’ll always be ‘suckers’ down the road & that the flow of new ideas will continue forever, just like their employment will! They have faith in THEIR job security, even if all the independent inventors in America become extinct (which I predict will be in less than 20 years, once word gets around that our IP system is ‘corrupt’, but even lawyers & Congress are too afraid of the PTO & their ‘best customers’, to do anything about it). Once it becomes clear that inventors aren’t REALLY considered as being part of the innovation economy & that they are just being ‘exploited’ by our government, as a form of free labor, then the jig will be up. Thank goodness for social media now, to help get the word out! It won’t be a ‘secret’ much longer. You can only dupe inventors for so long.

    We will be going more & more with trade secrets & trademarks now and will INSIST that any applications for patents (if any) will ‘not be published’, so they’ll remain as ‘pending’ and ‘trade secrets, until and unless, ‘good’, ‘strong’, ‘broad’ and ‘enforceable’ patents are allowed us. No patents – no new technology ‘disclosures’! F#*@ the USPTO!

  • [Avatar for Pro Say]
    Pro Say
    September 9, 2022 05:26 pm

    Why no justice for one of America’s greatest inventors?

    Four small words: The. Fix. Is. In.

    Edison wouldn’t have stood a chance with today’s Congress, SCOTUS, CAFC and Patent Office.

    Not. A. Chance.

  • [Avatar for Grim]
    September 9, 2022 11:11 am

    Agree, this is fine. Separate and distinct inventions, capable of sustaining a separate patent, may be subject to restrictions. Species of inventions subject to election, with possibility of rejoinder, upon the finding of allowable subject matter.

  • [Avatar for Night Writer]
    Night Writer
    September 9, 2022 06:40 am

    I’d need to see the claims. But seems really weird to me given that they he had to present only 8 claims out of 200.

  • [Avatar for Loozap]
    September 8, 2022 05:09 pm

    This is fine

  • [Avatar for Model 101]
    Model 101
    September 8, 2022 04:26 pm

    Mr Hyatt

    Indeed, you are the greatest inventor of the computer era.

    All of us look up to you and your honesty and integrity.

    The big tech crooks have infiltrated the patent system and influenced the judges to become themselves crooks .

    Keep fighting the good fight.

    You can’t give up now.