Opinion ID: 661830
Heading Depth: 2
Heading Rank: 3

Heading: The PTO's Position

Text: 24 The Commissioner of Patents and Trademarks, while maintaining that the EIC omissions were not improper, nevertheless requests that these interferences be remanded so that the Board may vacate its default judgment and proceed with the interferences on the merits. According to the Commissioner, the Board would now decide this case differently in light of guidance provided in Gerritsen. Brief for Amicus Curiae Commissioner of Patents and Trademarks at 10. 25 We decline to grant the Commissioner's request for two reasons. First, absent a determination that the Board abused its discretion in entering the default judgment we cannot properly vacate the Board's judgment and remand these interferences simply because the Board may have a change of heart. The PTO is not a party here. Its recommendation, even if workable, cannot control. Although the Commissioner and STG agree that the Board's default judgment should be vacated, Giovanniello vehemently disagrees. He is entitled to a fair evaluation of the Board's decision under the usual standard of review. As explained above, we hold that no abuse of discretion occurred here. 26 Secondly, Gerritsen does not require a different result. Nor does it even support a conclusion that the Board abused its discretion in this instance. The Board sanctioned interference party Gerritsen and Aerts because they did not comply with 37 C.F.R. Sec. 1.662(b). That regulation requires that a patentee involved in an interference who files a reissue application must file a preliminary motion to add the reissue application to the interference or show good cause why that motion could not have been filed. Gerritsen, 979 F.2d at 1529-30, 24 USPQ2d at 1916-17. The Board, we held, did not abuse its discretion in determining that Gerritsen and Aerts' failure to comply was sanctionable. Id. at 1531, 24 USPQ2d at 1918. Nevertheless, we did hold that the Board abused its discretion in selecting as the sanction an order that Gerritsen and Aerts were not entitled to the reissue patent claims. We did so because the fact findings underlying the Board's selection of this sanction were clearly erroneous. 2 Id. at 1532, 24 USPQ2d at 1918. 27 In contrast to Gerritsen, the Board's decision here is not based on erroneous fact findings. Indeed, here the critical facts are undisputed. That STG knew of the interference in late July and that STG became the assignee of record two months before judgment was entered support the Board's actions. Moreover, under 37 C.F.R. Sec. 1.616 the Board undeniably had discretionary authority to enter judgment for Giovanniello when STG failed to comply with the rules governing interferences and, therefore, committed no legal error by doing so. Therefore abuse of discretion based on unreasonableness is the only infirmity that can even be argued here. 28 Although agreeing that the EIC and the Board neither committed legal error nor abused their discretion, the Commissioner nevertheless argues that we should vacate the Board's judgment because loss of a patent is a harsh penalty for the minor procedural misstep here. It is true that loss of patent rights, like dismissal with prejudice of a civil action, is a sanction which may sound the death knell for important rights and interests. Id. at 1532 n. 12, 24 USPQ2d at 1918 n. 12. As we noted in Gerritsen, such dismissals should be used as a weapon of last, rather than first, resort. Id. at 1532, 24 USPQ2d at 1918 (quoting Maggette v. Dalsheim, 709 F.2d 800, 803 (2nd Cir.1983)). Before sustaining a dismissal order, appellate courts have consistently required a showing of egregious behavior, such as willful misconduct, bad faith, or fraud, and have often considered less severe sanctions. Id., 979 F.2d 1524, 24 USPQ2d at 1918 (citations omitted). Therefore, we suggested, in analogous situations the Board should consider other sanctions and their possible sufficiency to protect the particular interests involved. But that is not to say, however, that default must be shown to be the only sufficient sanction before it can be imposed. Indeed, discretion implies a range of permissible choices. As long as the tribunal's choice falls within a reasonable range, it cannot constitute an abuse of discretion. 29 Therefore, we will not overturn the selection of a sanction, permissible in fact and law, unless it is clearly unreasonable. Gerritsen gives guidance as to what is unreasonable. In view of the inaction of STG in this case and Giovanniello's legitimate business interest in seeing resolution of his potential patent rights, and given that the PTO and the public have a real and legitimate interest in expediting interference proceedings according to the orderly application of PTO regulations, we cannot say that the default judgment entered by the Board here is so unreasonable that it amounts to an abuse of discretion. STG's failure to take any appropriate action for two months after the deadline and after becoming the assignee of record, in further view of STG's early knowledge of the interference proceedings, cannot be characterized as a minor procedural misstep or an inadvertent omission. The Board could have reasonably concluded that STG's deliberate inaction was egregious behavior which made appropriate imposition of a default judgment for Giovanniello because lesser sanctions would not have effectively protected the PTO's interests. Those interests include creating sufficient deterrence for like cases in the future. 30 Thus, the Board's judgment was not clearly unreasonable. We therefore decline to accept the Commissioner's suggestion that the interferences be reopened.