Hyatt v. Matal

MEMORANDUM OPINION, FINDINGS OF FACT AND CONCLUSIONS OF LAW. Signed by Judge Royce C. Lamberth on 7/31/18. (lsj) (Main Document 233 replaced on 8/2/2018) (zlsj).

District of Columbia, dcd-1:2005-cv-02310

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9 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA GILBERT P. HYATT, Plaintiff, Civil Action No. 05 - 2310 (RCL) Civil Action No. 09 - 1864 (RCL) Civil Action No. 09 - 1869 (RCL) Civil Action No. 09 - 1872 (RCL) ANDREI IANCU, Defendant. MEMORANDUM OPINION, FINDINGS OF FACT, AND CONCLUSIONS OF LAW I. BACKGROUND Before the Court is the defendant's asserted affirmative defense of prosecution laches in the four above - captioned cases. Prosecution laches is an equitable doctrine that can hold patents unenforceable when an applicant engages in unnecessary and unexplained delays in prosecuting a patent. See In re Bogese, 303 F. 3d 1362, 1367 (Fed. Cir. 2002); Symbol Technologies, Inc. v. Lemelson Medical, 277 F. 3d 1361, 1365 - 66 (Fed. Cir. 2002) (Symbol Techs. 1); Woodbridge v. United States, 263U.S. 50, 56 (1923) ("It is a case of forfeiting the right to a patent by designed delay .") . Plaintiff Gilbert P. Hyatt is a prolific inventor who has received more than 70 issued patents and has pending nearly 400 patent applications before the United States Patent and Trademark Office (PTO), the federal agency responsible for examining patent applications and for granting 9U.S. patents. 35U.S. C. § 1 et seq. Andrei Iancu is the named defendant in these matters in his official capacity as the Under Secretary of Commerce for Intellectual Property and the Director of the PTO. Because of the nature and lengthy history of the actions at - hand, throughout this opinion the Court refers to the defendant as " PTO. " Mr. Hyatt brought these actions pursuant to 35U.S. C. § 145 to obtain patents on four of his patent applications following decisions in the Board of Patent Appeals and Interferences, now known as the Patent and Trial Appeal Board (the " Board") . Section 145 allows an applicant dissatisfied with the decision of the Board to " have remedy by civil action " in district court, rather than taking an appeal directly to the Federal Circuit. ? See also Kappos v. Hyatt, 566U.S. 431 (2012) . In a series of opinions issued August 23, 2016, the Court found genuine disputes of ' material fact precluded summary judgment in these ' matters; 4 trials on the merits would be required with respect to claims in three of the four applications. After the Court resolved the summary judgment motions, the PTO moved to dismiss these actions for prosecution laches. Def. ' s Mot Dismiss, ECF No. 91. In that set of motions, PTO ec argued that Hyatt's conduct in prosecuting these four patent applications, as well as approximately 400 others, called for dismissal. Id. at * * 8 - 9 ("Mr. Hyatt's conduct in each application and across his roughly 400 applications has been unreasonable, inexcusable, and warrants dismissal of his pending claims under the equitable doctrine of prosecution laches .") . The PTO stressed that some of the applications claim priority to patents over 45 years old, id. at * 9, and that Hyatt bulk - filed | Andrei Iancu has been automatically substituted for Joseph Matal in these actions under Fed. R. Civ. P. 25 (d) . 2 Case number 05 - cv - 2310 relates to the 08 / 457, 211 application (the ' 211 application); No. 09 - cv - 1864 relates to the 08 / 456, 398 application (the ' 398 application); No. 09 - cv - 1869 relates to the 08 / 472, 062 application (the ' 062. application); and No. 09 - cv - 1872 relates to the 08 / 431, 639 application (the ' 639 application) . All docket citations herein are to 05 - cv - 2310 unless otherwise specified. 3 At the time Mr. Hyatt filed the present cases, venue lay by statute with the District Court of the District of Columbia. In 2011, Congress amended the venue provision of certain patent - related statutes, including $ 145, such that suits under those sections are henceforth to be filed in the Eastern District of Virginia. Pub. L. 112 - 29, 89 (Sept. 16, 2011) . 4 See ECF No. 75 (05 - cv - 2310); ECF No. 71 (09 - cv - 1864); ECF No. 75 (09 - cv - 1869); ECF No. 72 (09 - cv - 1872) . 9 approximately 400 photocopies of eleven applications in the days leading up to the effective date of the General Agreement on Tariff and Trade (GATT) in June 1995. Id. It noted an October 24, 1995 meeting, during which Mr. Hyatt agreed to focus each application on a different invention, id, at 21, but that some twenty years later, in 2015, Mr. Hyatt revealed that he never had a " master plan " for amending all 400 applications. Id. at * * 30 - 31. Mr. Hyatt, on the other hand, argued that the PTO was responsible for extensive delay in adjudicating many of the applications, Pl. Mot. Dismiss, ECF No. 101 at * * 7 - 9, and made the case that he was entitled to discovery. Id. at * * 37 38. On March 16, 2017, the Court found that genuine disputes of material fact required treating the motions to dismiss as if they were for summary judgment, and denied them accordingly. ECF No. 116. With leave of Court, the PTO subsequently amended its answer's on leave of the Court to assert prosecution laches as an affirmative defense. ECF No. 123. The Court set the PTO's affirmative defense of prosecution laches across all four actions for a bench trial, which also would consider evidence relating to Mr. Hyatt's approximately 400 pending applications. ECF No. 150. The PTO, bearing the burden of proof on the affirmative defense of prosecution laches and upon agreement of the parties, presented its case - in - chief first. During the five trial days beginning October 6, 2017, during which the PTO presented its case in chief, the PTO presented the testimony of three witnesses: Robert A. Clarke, Gregory Morse, and Stephen Kunin, its expert witness. The parties also introduced a number of exhibits. Mr. Clarke has worked for the PTO for 27 years, and he is currently the editor of the Manual of Patent Examining Procedure ("MPEP '), a 3, 000 - page collection of guidance material for use by patent examiners in the examination of patent applications. Trial Tr. 75: 20 – 76: 14 (Oct. 6, 2017 s The Court has addressed the GATT in previous memorandum opinions. Information about GATT and its impact on patents is available in those opinions or at the websites of the PTO or WTO. 3 9 A. M. Session) . He also spent 9 years examining patent applications, wrote an article on patent procedure, taught more than 600 hours of classes to patent examiners, and served in the Office of Patent Legal Administration (which drafts examination guidelines), as Chief of Staff for the PTO, and as an Administrative Patent Judge. Trial Tr. 75: 15 – 78: 21, 81: 20 – 83: 16 (Oct. 6, 2017 A. M. Session) . Mr. Clarke has had no personal involvement in the examination of Mr. Hyatt's patent applications. In or around 2012, however, Mr. Clarke spent approximately three days reviewing the file histories of approximately 80 of Mr. Hyatt's patent applications that were then subject to an undue delay action brought by Mr. Hyatt in the United States District Court for the Eastern District of Virginia and offered a declaration attesting to certain facts about those patent applications. See Trial Tr. 55: 5 – 56: 14 (Oct. 6, 2017 P. M. Session) . Mr. Morse is currently Supervisory Patent Examiner ("SPE") of Art Unit 2615, which is assigned to examine Mr. Hyatt's pending patent applications. Mr. Morse has worked at the PTO since 1992 and has been supervising the examination of Mr. Hyatt's patent applications since March 2013. Trial Tr. 72: 19 – 75: 3 (Oct. 10, 2017 A. M. Session) . Before March 2013, Mr. Morse had no involvement in the examination of Mr. Hyatt's patent applications. Trial Tr. 47: 14 – 49: 5 (Oct. 11, 2017 P. M. Session) . Mr. Kunin, PTO's retained expert, testified as to PTO patent policy, practice, and procedure, and how the prosecution of the applications at - issue in these cases presented uniquely difficult circumstances for the PTO. Mr. Kunin, an attorney with an engineering background and over thirty years of service in the PTO, rose to very senior positions within the agency, including spending ten years as its Deputy Commissioner for Patent Examination Policy. In that position he provided administrative oversight to and coordinated the activities of several offices within the PTO, and was responsible for the promulgation of patent examination guidelines and training 9 materials. DX - 1486 at paras. 7 - 13. Mr. Kunin offered no opinion as to whether prosecution laches should be applied to Mr. Hyatt's cases. At the close of the PTO's case - in - chief, Hyatt moved for judgment pursuant to Federal Rule of Civil Procedure 52 (c) . Hyatt argued four bases for his motion: 1) the PTO did not prove that it provided Mr. Hyatt with adequate warnings of impending laches rejections; 2) the PTO failed to prove any intervening rights of third - parties in the technologies claimed in the present applications; 3) although the PTO may issue laches rejections, no such rejections are at issue in these cases and the Patent Act displaced the equitable remedy of prosecution laches in the context of a $ 145 action; and 4) assuming that an affirmative defense of prosecution laches is available in a $ 145 action, the PTO failed to meet its burden of proving unreasonable and unexplained delay. Upon consideration of the evidence and arguments presented during trial and the entire records in these cases, and review of the relevant case law, the Court found the PTO failed to prove unreasonable and unexplained delay that supports a finding of prosecution laches, and accordingly Unreas granted Mr. Hyatt's motion on his fourth proffered ground. The present opinion, including the Court's findings and conclusions, is issued pursuant to Federal Rule of Civil Procedure 52 (a) (1) . II. LEGAL STANDARD a. Rule 52 (c) Federal Rule of Civil Procedure 52 (c) permits the Court to enter judgment against a party fully heard " on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue. " Fed. R. Civ. P. 52 (c) . In determining a Rule 52 (c) In a separate Order, the Court granted PTO's Motion for Leave to File its Corrected Response to Plaintiff's Proposed Findings of Fact and Conclusions of Law [ ECF No. 214 ] . The Court therefore treats ECF No. 214 - 1 as the PTO's operative Responsive filing. 9 motion, " a district court may not draw any special inferences in favor of the non - movant. " Burke m On - m v. Record Press, Inc ., 951 F. Supp. 2d 26, 31 (D. D. C. 2013) . However, if the party with the burden of proof has failed to meet that burden by the conclusion of its case - in - chief, the district court is to grant the motion against it. Cf. id. b. Patent Prosecution Laches ernn Although the government has asserted prosecution laches administratively, see, e. g ., In re Bogese, 303 F. 3d 1362 (Fed. Cir. 2002), and both the government and private party litigants have done so in, e. g ., infringement actions, see, e. g ., Woodbridge v. United States, 263U.S. 50 (1923); Symbol Techs. I, 277 F. 3d 1361 (Fed. Cir. 2002), these four cases are the first in which the PTO has asserted prosecution laches in actions before a district court under 35U.S. C. $ 145. " Prosecution laches is an equitable defense. " Cancer Research Tech. Ltd. V. Barr Labs ., Inc ., 625 F. 3d 724, 728 (Fed. Cir. 2010) . In its traditional articulation, the doctrine stands for the proposition that an already issued patent " may be rendered unenforceable if it was obtained after an unreasonable and unexplained delay in prosecution. " In re Bogese, 303 F. 3d at 1367 (citing Symbol Techs. I, 277 F. 3d at 1365 - 66) . A pair of Federal Circuit opinions in 2002 concerning prosecution laches, and a 2012 Supreme Court case articulating district courts ' duties under $ 145, Kappos v. Hyatt, 566U.S. 431 (2012), make clear the Court can consider the PTO's affirmative defense of prosecution laches here, where the PTO has issued neither a patent nor any laches warnings. In Symbol Techs. I, the Federal Circuit u