Will the Federal Circuit Finally Follow Supreme Court Holdings on the Unavailability of the Laches Defense?

The Federal Circuit has held in Symbol Techs. v. Lemelson Med. that the equitable doctrine of laches could be applied to bar enforcement of a patent that issued after applicant’s unreasonable and unexplained delay in prosecution. However, later Supreme Court decisions in Petrella v. Metro Goldwyn Mayer, Inc. and SCA Hygiene Prod. Aktiebolag v. First Quality Baby Prod., LLC render Symbol no longer viable.

In an excellent post “In Sonos v. Google, the Federal Circuit has a chance to fix its prosecution laches doctrine,” Gene Quinn reminded readers of a critical factor that limits the federal courts’ ability to exercise equitable powers of laches on timeliness in prosecuting patent applications at the U.S. Patent and Trademark Office (USPTO). As the Supreme Court has explained, laches “is a gap-filling doctrine, and where there is a statute [prescribing timeliness], there is no gap to fill.” SCA Hygiene, 137 S. Ct. at 961. So, where Congress has filled the gap by specifying the timeliness and context in which rights may be exercised, “applying laches…would give judges a ‘legislation-overriding’ role that is beyond the Judiciary’s power.” Id. at 960. This is so even though “the lack of a laches defense could produce policy outcomes judges deem undesirable.” Id. at 961 n.4. The Court thus explained that “we cannot overrule Congress’s judgment based on our own policy views.” Id. at 967.

The Patent Act Leaves No Gap in Governing Applicants’ Timeliness

As Gene indicated, the Patent Act specifies timeliness requirements, where applicants must respond to USPTO actions “within 6 months.” 35 U.S.C. § 133. However, as shown below, the Act contains many more timeliness provisions, clearly indicating that Congress fully entered the field to close any statutory timeliness gaps across all aspects of obtaining patents.

The Act prescribes that applications must be filed within one year of first publication or sale of the invention. 35 U.S.C. § 102(b). The Act further provides for the timeliness of continuing applications, requiring them to be “filed before the patenting or abandonment of or termination of proceedings on” a prior application in the priority chain. Id. § 120. It also requires the filing of the specification of the prior priority application within a set time. Id. § 111(c). The Act requires payment of fees at precise times to avoid abandonment, Id. §§ 41, 111(a); and upon allowance, applicants must pay the issue fee within a set time. Id. § 151. The Act also sets a specific patent term, during which maintenance fees are to be paid on specific times to maintain the patent. Id. §§ 41, and 154.

Importantly, Congress was mindful of, and specifically addressed, applicant delays in meeting these statutory deadlines. It authorized the USPTO to allow deviations from these deadlines in specific circumstances, such as “unintentional” or “unavoidable” applicant delay. See 35 U.S.C. §§ 27, 41(a)(7), 41(c)(1), 111(a)(4), 111(b)(3)(C), 119(a), 119(b)(2), 119(e)(1), 120, 365(b), and 387. The provisions of the Act “take[] account of delay,” Petrella, 572 U.S. at 677, leaving no room for the judiciary to insert itself as a policy maker.

Critics have alleged a “gap” in the statute—that it does not prevent what they deem “unreasonable delay” in prosecution through applicants’ repeated submissions. However, Congress left no such “gap,” as evident independently from each of the following provisions:

First, in the Uruguay Round Agreements Act, Pub. L. 103-465, 108 Stat. 4809 (1994), (URAA), Congress enacted application timeliness limit in 35 U.S.C. § 154(a)(2) for applications filed after June 8, 1995, which puts an end to the patent term at 20 years from the earliest priority application filing date. This provision prevents delaying the end of the patent term through continuing applications. For earlier long-pending applications, the URAA and the associated Statement of Administrative Action limited to two the number of submissions equivalent to continuing applications (37 C.F.R. § 1.129 submissions) so as to effect timely termination of prosecution in those applications. This demonstrates how Congress deliberately chose the modalities for limiting possible lengthening of prosecution due to continuing application practice in both categories of applications. The courts lack equitable powers to second-guess Congress on how it chooses to provide timeliness limits.

Second, as to regulating conduct of proceedings at the USPTO for preventing alleged “unreasonable and unexplained delay” in prosecution, the Act in 35 U.S.C. § 2(b)(2) is “gap-closing” as well. It authorizes the USPTO to “establish regulations, not inconsistent with law, which shall govern the conduct of proceedings in the Office.” Under this authority, the USPTO regulation on applicants’ prosecution and replies to Office Actions requires that the “reply must appear throughout to be a bona fide attempt to advance the application … to final action,” 37 C.F.R. § 1.111(b), which prevents delay. Moreover, PTO’s regulations governing applicants’ conduct provide that in every submission to the Office, applicant’s signature certifies that it “is not being presented … to cause unnecessary delay or needless increase in the cost of any proceeding before the Office.” Id., § 11.18(b)(2)(i). This regulation pursuant to § 2(b)(2) also provides that “violations of any of [these provisions] are, after notice and reasonable opportunity to respond, subject to such sanctions or actions as deemed appropriate by the [USPTO] Director, which may include, but are not limited to … [t]erminating the proceedings in the Office.” Id., § 11.18(c)(5). That is equivalent to forfeiture of the application.

Clearly, a submission or a series of submissions causing “unreasonable and unexplained delay” in prosecution, are “being presented … to cause unnecessary delay,” thereby contravening Rule 11.18(b)(2)(i)—conduct that is punishable by forfeiture of the application. Therefore, there is no “gap” to fill, as the existing statutory scheme including its administrative components are already structured to produce the result that the doctrine of prosecution laches is purported to achieve through expanding the role of the judiciary. However, “[s]uch an expansive role careens away from understandings, past and present, of the essentially gap-filling, not legislation-overriding, office of laches.” Petrella v. Metro Goldwyn Mayer, Inc.  572 U.S. 663, 680 (2014).

The Patent Act Leaves No Gap in Protecting Intervening Rights

The gravamen of the prosecution laches defense is ostensibly the equitable relief from “material prejudice attributable to the delay, … , i.e., that … others invested in, worked on, or used the claimed technology during the period of delay.” Cancer Research Technology Ltd. v. Barr Laboratories, Inc., 625 F.3d 724, 729 (Fed. Cir. 2010) (cleaned up). Accordingly, material prejudice to such intervening rights holder must be identified, and “[f]inding an unreasonable and unexplained delay in prosecution includes a finding of prejudice.” Hyatt v. Hirshfeld, 998 F.3d 1347, 1360 (Fed. Cir. 2021) (cleaned up).

Here, too, Congress left no timeliness gaps to protect third parties from prejudice against their intervening rights—the only reason courts have previously applied the equitable doctrine of prosecution laches. This is clearly manifested by the express statutory protections of all recognized intervening rights in the Patent Act. This includes the provisions in 35 U.S.C. §§ 251, and 252, limiting the scope of a reissued patent so as to protect intervening rights in existence before the date of the reissue. Id. § 252. The Act also protects intervening rights acquired prior to post-issuance amendments of patents subject to reexamination, 35 U.S.C. § 307(b), inter partes reviews, 35 U.S.C. § 318(c), post grant reviews, 35 U.S.C. § 328(c); and in proceedings where patents have been reinstated after having lapsed for failure to pay maintenance fees. 35 U.S.C. § 41(c)(2).

Since the Patent Act of 1952, Congress protected intervening rights by defining the contours of prior user rights. 35 U.S.C. § 273. Congress also ensured express statutory protection of intervening rights arising when making patent law changes, protecting new infringers who had reasonably relied on the prior state of the law. It did so under laws enacted in 1984 (see 35 U.S.C. § 103 note, 1984 Amendment § (d)), in 1988 (see 35 U.S.C. § 271 note, 1988 Amendment § (b)), in 1994 (see 35 U.S.C. § 154(c)(2)(3)(1995)), and for legislative extension of the term of specific expired patents (see Pub. L. No. 103-179, § 8, 107 Stat. 2040, 2042 (1993) (providing intervening rights for those prejudiced by legislative renewal of three design patents belonging to the American Legion)).

Importantly, where Congress intends equitable powers to be used in protecting intervening rights, it does so explicitly by prescribing the proper mechanism, modality, degree, and scope of such protections. For example, in providing in the URAA that an intervening rights holder make a “payment of an equitable remuneration to the patentee,” 35 U.S.C. § 154(c)(3), Congress provided that such intervening rights do not constitute a defense to infringement, but rather limit the remedies available to patentees. Moreover, in recognizing intervening rights in 35 U.S.C. §§ 41(c), 252, and 307(b), as explained above, Congress prescribed specific modalities of relief and cabined the courts’ equitable powers by enumerating the equitable factors they must consider in protecting the intervening rights. See e.g., 35 U.S.C. § 252, ¶2.

Accordingly, the proposition that Congress exhaustively addressed protection of intervening rights in the Patent Act, but left a gap for such rights acquired during only some prosecution delays is simply untenable. Congress adequately covered by statute the manner in which the public would be protected from prejudice due to any continuing application. Where Congress intends courts to exercise their equitable powers in protecting intervening rights related to patents, it does so expressly by framing the modalities and setting the equitable factors by statute. It did not authorize courts to exercise equitable power over timeliness in prosecution.  This was best expressed by four Federal Circuit judges as follows: “Congress having considered the doctrine of intervening rights cannot have intended that the judiciary would develop a poor man’s version of the doctrine to account for the statute’s inadequate coverage.” Marine Polymer Techs., Inc. v. Hemcon, Inc., 672 F.3d 1350, 1377 (Fed. Cir. 2012) (Dyk, Gajarsa, Reyna, and Wallach, CJs, dissenting in part).

Listen to Judge Newman

It is time for the Federal Circuit to heed Judge Pauline Newman’s dissent in Symbol. She would ultimately be vindicated; as she said then:

“This judicial creation of a new ground on which to challenge patents that fully comply with the statutory requirements is in direct contravention to the rule that when statutory provisions exist they may be relied on without equitable penalty.”

Symbol Techs., Inc. v. Lemelson Med., 277 F.3d 1361, 1369 (Fed. Cir. 2002) (Newman, CJ., dissenting).

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