Summary
applying APA to PTO decision granting petition for revival
Summary of this case from New York University v. Autodesk, Inc.Opinion
Case No. 04-CV-72260.
March 29, 2005
ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (DOCUMENT #10) AND DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (DOCUMENT #18)
INTRODUCTION
Before the court in this patent declaratory judgment action are motions for summary judgment filed by both parties. The court has held oral argument. Plaintiff Lawman Armor Corp., a Berwyn, Pennsylvania maker of automotive security devices, moves for summary judgment of patent invalidity due to defendant's abandonment of a patent application, which it claims was erroneously revived by the U.S. Patent and Trademark Office. Defendant David Simon opposes that request, and requests summary judgment dismissing plaintiff's defenses of invalidity and unenforceability which were asserted in response to defendant's counterclaims for patent infringement. Because plaintiff's arguments and authorities require a finding of abandonment, the patent is rendered invalid. The court, therefore, grants plaintiff's motion and denies that of the defendant, as set forth below.
BACKGROUND
Defendant Simon first applied for a patent covering a brake pedal lock design in 1993. That application was filed by patent attorney Donald Wood. Defendant asserts he was referred to Wood by his brother, Mark Simon, who had used attorney Wood for patent work associated with his business. Defendant also asserts that correspondence from Wood was routinely sent to Mark Simon, and that Mark Simon paid defendant's legal bills.Wood filed a "continuation-in-part" application on defendant's behalf on July 23, 1996, including both the 1993 design and a second brake pedal lock design. On February 13, 1998, the U.S. Patent and Trademark Office (USPTO) sent a final office action to Donald Wood, stating that four claims of the July 23, 1996 continuation-in-part application were allowable if certain conditions were met. That official action required a response no later than August 13, 1998 to avoid the application's abandonment. Donald Wood (whose bills had not been paid for some time, apparently) twice attempted unsuccessfully to get instructions from the defendant concerning this USPTO office action. On August 28, 1998, USPTO representative Gary Estremsky contacted Donald Wood, who confirmed that "no papers [had] been filed that would prevent Application from becoming abandoned." Exhibit S to Brief in Support of Plaintiff's Motion for Summary Judgment. The patent application was, therefore, determined to be abandoned, and the USPTO issued its Notice of Abandonment on August 31, 1998.
Approximately two years later, in the year 2000, during a trip to Sears, defendant noticed one of plaintiff's "Autolock" automobile security products. Defendant believed plaintiff's product incorporated the same invention contemplated by his then-abandoned patent application. Defendant purchased one of the products and took it to counsel Donald Wood, who confirmed the product was covered by the claims of the abandoned application. According to defendant, Wood told him there was nothing he could do to revive the abandoned application. It was not until October 2001 that defendant met with current counsel, who petitioned the USPTO for revival of the abandoned patent application. The application was revived in February 2002, and U.S. Patent No. 6,575,001 issued on June 10, 2003. A related patent, U.S. Patent No. 6,766,674, was issued to David Simon on July 27, 2004.
The cover page of this patent indicates, under the heading "Related U.S. Application Data," that this patent stemmed from a "[c]ontinuation of application No. 08/686,220, filed on Jul. 23, 1996, now Pat. No. 6,575,001, which is a continuation-in-part of application No. 08/112,555, filed on August 26, 1993, now Pat. No. 5,537,846."
Shortly thereafter, counsel for defendant sent a letter to plaintiff, asserting that Lawman Armor's Autolock products infringed Simon's U.S. Patent No. 6,575,001, entitled "Control Pedal Disabling Device." Plaintiff promptly filed its declaratory judgment action in the Eastern District of Pennsylvania, requesting that the court declare the `001 patent unenforceable due to its invalidity. Plaintiff now moves for summary judgment on these claims, addressed by the court below.
The case was transferred to this court upon defendant's motion to dismiss or transfer. Defendant filed an answer to the complaint on August 16, 2004, which included his counter-claims for patent infringement of both U.S. Patent No. 6,575,001 and No. 6,766,674 (issued July 27, 2004, addressed in the footnote above).
In accordance with its ruling herein, the court will not address defendant's opposing summary judgment motion.
STANDARD
Federal Rule of Civil Procedure 56(c) empowers the court to render summary judgment "forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." See FDIC v. Alexander, 78 F.3d 1103, 1106 (6th Cir. 1996). The Supreme Court has affirmed the court's use of summary judgment as an integral part of the fair and efficient administration of justice. The procedure is not a disfavored procedural shortcut. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986); see also Kutrom Corp. v. City of Center Line, 979 F.2d 1171, 1174 (6th Cir. 1992).The standard for determining whether summary judgment is appropriate is "`whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'"Winningham v. North Am. Resources Corp., 42 F.3d 981, 984 (6th Cir. 1994) (citing Booker v. Brown Williamson Tobacco Co., 879 F.2d 1304, 1310 (6th Cir. 1989)). The evidence and all inferences therefrom must be construed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Enertech Elec., Inc. v. Mahoning County Comm'r, 85 F.3d 257, 259 (6th Cir. 1996); Wilson v. Stroh Co., Inc., 952 F.2d 942, 945 (6th Cir. 1992). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact."Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); see also Hartleip v. McNeilab, Inc., 83 F.3d 767, 774 (6th Cir. 1996).
If the movant establishes by use of the material specified in Rule 56(c) that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law, the opposing party must come forward with "specific facts showing that there is a genuine issue for trial." First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 270 (1968); see also Adams v. Philip Morris, Inc., 67 F.3d 580, 583 (6th Cir. 1995). Mere allegations or denials in the non-movant's pleadings will not meet this burden. Anderson, 477 U.S. at 248. Further, the nonmoving party cannot rest on its pleadings to avoid summary judgment. It must support its claim with some probative evidence.Kraft v. United States, 991 F.2d 292, 296 (6th Cir.),cert. denied, 510 U.S. 976 (1993).
ANALYSIS
Plaintiff's motion for summary judgment
The USPTO revived defendant's patent application in February 2002, in response to an October 2001 petition for revival which was filed by defendant more than three years after the USPTO sent notice of its abandonment. Plaintiff's position is that the elapsed time between the abandonment and the petition was too long to allow revival of the application, and that ignoring this period represented an abuse of discretion by the agency, under applicable regulations and its own documented policy concerning revival of applications (see 37 CFR § 1.137(b), Manual of Patent Examining Procedure ("MPEP"), § 711.03(c)). By requesting that the court find defendant's `001 patent (as well as the later issued `674 patent) invalid and/or unenforceable due to abandonment, plaintiff is seeking a finding that the USPTO's decision to revive the patent application was erroneous and must be reversed.
A patent application is abandoned if no acts are taken by the applicant in furtherance of the application within six months of any USPTO action. 35 U.S.C. § 133. It is asserted by plaintiff, and not seriously disputed by defendant, that the court has the power to invalidate the USPTO's revival of the patent application. According to the Administrative Procedures Act,
Although that provision frames the possibility of revival only in terms of "unavoidable" delay, there is no dispute that the applicable regulations now allow revival for "unintentional" delays, applicable to this case, as discussed below.
To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall —
(1) compel agency action unlawfully withheld or unreasonably delayed; and
(2) hold unlawful and set aside agency action, findings, and conclusions found to be —
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
(B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute; or
(F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.
In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error.5 U.S.C. § 706. See Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560, 1564 (Fed. Cir. 1988).
In making its decision on revival of the subject patent application, the USPTO was required to follow the regulations set forth in 37 C.F.R. § 1.137. Relevant here is the section of that regulation addressing the revival of unintentionally abandoned patent applications:
(b) Unintentional. If the delay in reply by applicant or patent owner was unintentional, a petition may be filed pursuant to this paragraph to revive an abandoned application, a reexamination proceeding terminated under §§ 1.550(d) or 1.957(b) or (c), or a lapsed patent. A grantable petition pursuant to this paragraph must be accompanied by:
(1) The reply required to the outstanding Office action or notice, unless previously filed;
(2) The petition fee as set forth in § 1.17(m);
(3) A statement that the entire delay in filing the required reply from the due date for the reply until the filing of a grantable petition pursuant to this paragraph was unintentional. The Director may require additional information where there is a question whether the delay was unintentional; and
(4) Any terminal disclaimer (and fee as set forth in § 1.20(d) required pursuant to paragraph (d) of this section. (c) Reply. In a nonprovisional application abandoned for failure to prosecute, the required reply may be met by the filing of a continuing application.
* * * * *
37 C.F.R. §§ 1.137 (b), (c). Plaintiff is asserting that the patent office erroneously failed to "require additional information where there [was] a question whether the delay was unintentional;" Id. (at § 1.137 (b)(3)). Prior to oral argument, plaintiff brought the case of Field Hybrids, LLC v. Toyota Motor Corp., No. 03-4121 (D. Minn., Jan. 27, 2005) to the court's attention, which found that the relevant inquiry in determining whether a delay is intentional is whether the course of action resulting in the delay was intentional. Id. at 13 (emphasis added). Plaintiff also points to the MPEP, § 711.03(c) at 28, and asserts that in a revival petition that is filed more than a year after the application was declared abandoned, the "applicant bears the burden of making a showing of due care and diligence in prosecuting the application."
The court accepts this last statement of plaintiff. However, it disagrees with plaintiff's emphasis that the patent office acted in direct contravention of its own policies in failing to require more information from the defendant. Plaintiff asserts that the MPEP states that the Office " will require further information . . ." (emphasis added) when a revival petition is filed more then one year after the date of abandonment. However, concerning petitions asserting unintentional (rather than unavoidable) delays, the MPEP actually states that "the Office may require further information as to the cause of the delay . . ." MPEP § 711.03 (emphasis added). As that manual itself states, discussing the applicant's duty of candor and good faith,
For that reason, the court does not find plaintiff's precedents persuasive, which stand for the proposition that the patent office's failure to act in accordance with the MPEP is an abuse of discretion, ie. In re Kaghan, 387 F.2d 398 (CCPA 1967); Suntiger, Inc. v. Telebrands Advertising, Inc., No. Civ. A. 97-423-A, 1997 WL 855581 (E.D. Va. July 11, 1997).
[i]n addition, providing an inappropriate statement in a petition under 37 C.F.R. § 1.137(b) to revive an abandoned application may have an adverse effect when attempting to enforce any patent resulting from the application. See Lumenyte Int'l Corp. v. Cable Lite Corp., Nos. 96-1011, 96-1077, 1996 U.S. App. LEXIS 16400, 1996 WL 383927 (Fed. Cir. July 9, 1996) (unpublished) (patents held unenforceable due to a finding of inequitable conduct in submitting an inappropriate statement that the abandonment was unintentional).
However, regardless of whether the patent office acted in accordance with applicable regulations and policies in granting the petition for revival, the court agrees with plaintiff that defendant's abandonment of the application was not "unintentional," and that reviving the application was arbitrary, capricious, and abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. § 706(2)(A).
Of all the authorities cited by the parties and those found by the court, it is the Lumenyte case which most appropriately guides the disposition of the case sub judice. In that case, the United States Court of Appeals for the Federal Circuit affirmed the district court's dismissal of Lumenyte's pending infringement claims, based on its finding that the patents-in-suit were unenforceable because of inequitable conduct in connection with revival petitions. In that case, it appears the district court's decision was rendered following a trial, during which the court had occasion to weigh the credibility of certain witnesses (see, e.g., Lumenyte, 92 F.3d at 1206). Unlike the Lumenyte case, this case is appropriate for disposition on a summary judgment motion. Here, the court finds there is no question of material fact regarding whether defendant's abandonment of the patent application in question was unintentional, for the following reasons.
Plaintiff cites to cases such as In re Maldague, 10 U.S.P.Q. 2d 1477, and In re Application of G, 11 U.S.P.Q. 2d 1378, for the proposition that the failure of a patent applicant, acting through his or her representative, to file a required response to a patent office action is a deliberate decision to allow an application to become abandoned, and is not subject to revival under 37 C.F.R. § 1.137(b). Although defendant emphasizes his attorney's inability to contact him, despite multiple mailings, the court notes defendant made a choice to assign a representative to represent him before the USPTO. As plaintiff points out, the USPTO mails correspondence only to the correspondence address or the attorney/agent of record. 37 C.F.R. §§ 1.33(a), (c). That representative confirmed to the USPTO that no steps had been taken to respond to a final office action. The court agrees these were deliberate acts, and cannot be considered unintentional.
Plaintiff cites to Link v. Wabash Railroad Company, 370 U.S. 626, 633 (1962) (citing Smith v. Ayer, 101 U.S. 320, 326), and Irwin v. Department of Veterans Affairs, 498 U.S. 89, 93, for the proposition that a party is bound by the acts of his or her agent/lawyer.
Even if abandonment could be considered unintentional in the context of such an affirmative act by an applicant's representative, the underlying circumstances barred revival of the application, as discussed below. Excessive periods of time elapsed on two different occasions in this case. The first period ran from abandonment of the application until the defendant saw a product at Sears which he believed incorporated the claims in his abandoned application. The defendant does not dispute that it was only then, after seeing his invention in the marketplace, that he regained interest in his by then abandoned patent application. This period was approximately two years, and there has been no representation made by defendant that he even attempted to contact his attorney, or let him know of a change of address, during that period. Furthermore, there has been no dispute that there was a large balance owing to Donald Wood for his work on the application to that date. These facts alone leave no question of material fact that defendant had made a decision not to pursue the prosecution of his patent application.
The court agrees with plaintiff's argument that renewed interest in an abandoned patent application only after the invention surfaces in the marketplace is the "antithesis of an unintentional delay," and notes that this fact, along with the other circumstances involved in the delays, bolsters a finding that the delay was not unintentional.
If there were any question left as to the deliberate nature of defendant's action, the second period of delay unquestionably confirms the deliberate nature of defendant's actions. After attorney Donald Wood (who, the court has noted, had not been paid by defendant and with whom defendant was out of touch) indicated there was no possibility of reviving a deliberately abandoned patent application, the defendant took over one additional year to file a petition for revival. Although, as the court notes above, the patent office has no absolute requirement to look behind these periods of delay, the abandonment letter sent out by petitions examiner Andrea Coram reflected the policy of the USPTO: as set forth in the MPEP, the USPTO relies on the petitioner's "duty of good faith," and states that it is the petitioner's responsibility to inquire into the intentions behind the delay.
The defendant was, therefore, put on notice that a statement to the USPTO in the application for revival which was not in synch with what actually took place would put him at risk of a later finding of abandonment. The fact that defendant took no action for at least two years (indeed, much more time than two years elapsed between his last contact with attorney Donald Wood and his discovery of the Autolock products) between abandonment and petitioning for revival, in combination with the undisputed facts in this case, mandates that this court declare the patents-in-suit unenforceable due to abandonment.
For instance, Simon's representation in his petition for revival, concerning the final office action, that "[he] never received it or notice of it," does not acknowledge that his attorney received the notice, and attempted to contact Simon, and certainly does not acknowledge that attorney Wood's certified letter to David Simon, mailed to him at his mother's house, was signed for by his mother.
CONCLUSION
For the foregoing reasons, because the court has found that there is no question of material fact as to whether the abandonment of the subject patent application was intentional, the plaintiff's motion for summary judgment is hereby GRANTED and U.S. Patent Nos. 6,575,001 and 6,766,674 are declared invalid. Judgment will enter for the plaintiff in accordance with this ruling, which renders moot the remaining claims in the complaint, as well as defendant's counterclaims for infringement of the patents. Defendant's motion for summary judgment is, accordingly, DENIED.
The court notes plaintiff's summary request in its motion that the court also hold the `674 patent invalid because "it is based on the `001 patent." Because the `674 patent, on its face, indicates it stemmed from a continuation of the application resulting in the `001 patent, this ruling is appropriate.
IT IS SO ORDERED.