Opinion ID: 661830
Heading Depth: 2
Heading Rank: 2

Heading: Appellant's Argument of Abuse of Discretion

Text: 16 STG argues that the Board acted in inappropriate haste in granting judgment on the interferences without ... first allowing all interested parties a chance to take action. Appellant's Brief at 13. According to STG, as a result of the defective chain of title, it was unable to file any papers and protect its interests during the time for filing preliminary papers and even until the Board issued the default judgment. 17 STG is correct in its assertion that it was not permitted to communicate with the EIC before the October 14 deadline. Relying on 37 C.F.R. Sec. 1.32 (1992), the EIC would not accept a designation of attorney from STG while STG was not the assignee of record because only the assignee of record was entitled to participate in PTO proceedings to the exclusion of the inventor. 1 Thus, only the original attorneys of record who were not lawyers for STG were able to file papers in the PTO. 18 Nevertheless, STG was not completely powerless to protect its interests in the interference proceedings. Gould informed STG's attorney of the interference in the July 28 letter, so STG had actual notice of the interference early in the proceedings. In spite of this notice, STG states on appeal that it assumed that Dow would prosecute the interference based only on Dow's general commitment, made in the context of the sale to STG, to fully cooperate in patent matters after the sale. Because prosecution of an interference entails substantial proactive steps far exceeding mere cooperation, this explanation is insufficient to satisfy STG's responsibility to exercise due diligence in protecting its patent rights. Certainly an essential first step in doing so would have involved immediately initiating an explicit discussion of the matter with Dow to confirm that Dow's lawyers would prosecute the interferences for STG. This STG did not do. 19 Although STG could not communicate with the EIC before it became the assignee of record, it was free to do so after October 19. STG contends, however, that it could not act until January 4, 1993, when Dow corrected minor defects in the chain of title by executing an assignment to STG based on a corrected assignment from Abrutyn to Wickhen showing Wickhen as a Delaware corporation. 20 This contention rings false. First, by its own admission, STG became the assignee of record as of October 19. Therefore, it met the requirements of 37 C.F.R. Sec. 1.32 on that date. Moreover, the PTO records show that by the time of the default judgment STG's assignment from Dow, and Dow's assignment from Wickhen, had been properly recorded in the PTO. See Brief for Amicus Curiae Commissioner of Patents and Trademarks at 3-4. Finally, STG never recorded the January 4 assignment in the PTO, so it could not have affected STG's rights to participate in the interference proceedings before or after January 4. 21 Because the Board did not issue its default judgment for nearly two months after STG became the assignee of record, STG had ample time to protect its rights. An EIC has broad discretion to consider late filings submitted with a motion showing sufficient cause for delay. 37 C.F.R. Sec. 1.645(b) (1993). Accordingly, STG could have filed a preliminary statement with a Rule 1.645(b) motion, but it did not. We cannot say that the Board abused its discretion in entering judgment for Giovanniello in the face of STG's unexplained inaction for two months after becoming the assignee of record. 22 STG points out that although the EIC recognized that issues regarding the proper ownership of the Abrutyn patent existed, he took none of the available procedural steps to protect STG. The EIC did not issue an order to show cause why judgment should not be entered against Abrutyn as permitted under 37 C.F.R. Sec. 1.640(d)(2) (1993) when a junior party fails to file a preliminary statement. Neither did the Board hold a final hearing to allow STG to raise the new issue of its ownership, as permitted under 37 C.F.R. Sec. 1.655(b) (1993). But neither provision is mandatory on its face. Nor can we say that the EIC or Board had a duty to utilize either provision on the facts here. 23 We therefore conclude that it was not an abuse of discretion for the Board to enter judgment without the EIC or the Board having taken these actions on their own initiative. It was STG's responsibility to act diligently to protect its rights in an interference proceeding. Moreover, the Board delayed responding to the apparent default for nearly two months after STG became the assignee of record, giving STG sufficient time to act. Although in some circumstances the Board may be required to conduct a hearing or to see that the EIC has issued an order to show cause before it enters a default judgment, the facts here do not raise such a requirement. STG had actual notice, a recorded assignment and two months grace, but it did not file the overdue papers.