Court Opinion

ID: 7838006
Source: CourtListenerOpinion
Date Created: 2022-09-08 15:00:40.384518+00
Date Added: 2024-06-11T15:54:33.202351
License: Public Domain

Case: 21-2324    Document: 37    Page: 1   Filed: 09/08/2022

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

                  GILBERT P. HYATT,
                   Plaintiff-Appellant

                            v.

   UNITED STATES PATENT AND TRADEMARK
     OFFICE, KATHERINE K. VIDAL, UNDER
       SECRETARY OF COMMERCE FOR
 INTELLECTUAL PROPERTY AND DIRECTOR OF
 THE UNITED STATES PATENT AND TRADEMARK
                   OFFICE,
              Defendants-Appellees
             ______________________

                        2021-2324
                  ______________________

    Appeal from the United States District Court for the
 Eastern District of Virginia in No. 1:20-cv-00487-CMH-
 IDD, Senior Judge Claude M. Hilton.
                  ______________________

                Decided: September 8, 2022
                  ______________________

     ANDREW M. GROSSMAN, Baker & Hostetler LLP, Wash-
 ington, DC, argued for plaintiff-appellant. Also repre-
 sented by MARK W. DELAQUIL.

    PETER JOHN SAWERT, Office of the Solicitor, United
 States Patent and Trademark Office, Alexandria, VA, ar-
 gued for defendants-appellees.   Also represented by
Case: 21-2324     Document: 37     Page: 2    Filed: 09/08/2022

 2                                               HYATT   v. PTO

 THOMAS W. KRAUSE, ROBERT MCBRIDE, AMY J. NELSON,
 FARHEENA YASMEEN RASHEED; JESSICA D. ABER, Office of
 the United States Attorney for the Eastern District of Vir-
 ginia, United States Department of Justice, Alexandria,
 VA.
                  ______________________

     Before MOORE, Chief Judge, PROST and HUGHES, Circuit
                           Judges.
 PROST, Circuit Judge.
      Following decades of patent-related litigation, patent
 applicant Gilbert P. Hyatt submitted significant claim
 amendments       for   his    U.S.    Patent    Application
 No. 08/435,938 (“the ’938 application”) in August 2015. A
 Patent and Trademark Office (“PTO”) examiner then is-
 sued a restriction requirement for seven of eight claims
 that Mr. Hyatt had selected for examination. Mr. Hyatt
 filed a complaint in the Eastern District of Virginia alleg-
 ing, among other things, that the restriction requirement
 was improper, such that the PTO violated 5 U.S.C. § 706.
 The district court disagreed; it determined that 37 C.F.R.
 § 1.129 (“Rule 129”) permitted the restriction requirement
 for Mr. Hyatt’s ’938 application. The district court accord-
 ingly granted the PTO’s motion for summary judgment and
 denied Mr. Hyatt’s competing motion. Mr. Hyatt appeals.
 We affirm.
                         BACKGROUND
                               I
     Congress passed the Uruguay Round Agreements Act
 (“URAA”) in part to amend the term of U.S. patent protec-
 tion: now, as of June 8, 1995, patent terms are 20 years
 from the effective filing date instead of 17 years from the
 grant date. Pub. L. No. 103-465, 108 Stat. 4809, 4984
 (1994) (codified at 35 U.S.C. § 154(a)(2)). The prior patent
 term, tied to the grant date, “incentivized certain patentees
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 HYATT   v. PTO                                              3

 to delay prosecuting their patents by abandoning applica-
 tions and filing continuing applications in their place.” Hy-
 att v. Hirshfeld, 998 F.3d 1347, 1351 (Fed. Cir. 2021). The
 URAA changed the incentives to promote timely disclosure
 of innovations by instead tying the patent term to the ef-
 fective filing date. See id. at 1352.
     But the change in law left a gap for so-called transi-
 tional applications—those filed but not yet granted before
 the URAA took effect. This “triggered a patent application
 gold rush in the spring of 1995” by applicants who wanted
 their patent claims to be governed under the pre-URAA pa-
 tent term. Id. “For example, in the nine days leading to
 June 8, 1995, the PTO reported that it received and pro-
 cessed over 50,000 applications—one-quarter of the entire
 year’s projected filings.” Id. at 1353. This gold rush is “of-
 ten referred to as the ‘GATT Bubble.’” Id. at 1352.
      URAA section 532 addresses those GATT Bubble tran-
 sitional applications. For transitional applications that
 had been pending for two years or longer as of June 8,
 1995, 1 it directs the PTO to “prescribe regulations to pro-
 vide for further limited reexamination of” those applica-
 tions. 108 Stat. at 4985. And for applications that had
 been pending for three years or longer as of June 8, 1995,
 it instructs the PTO to “prescribe regulations to provide for
 the examination of more than [one] independent and dis-
 tinct invention.” Id.
     Congress further instructed that then-President Clin-
 ton’s statement of administrative action (“SAA”) “shall be
 regarded as an authoritative expression by the United
 States concerning the interpretation and application of
 the” URAA “in any judicial proceeding in which a question

     1   The URAA accounts for claims of priority to earlier-
 filed applications in determining how long a patent appli-
 cation has been “pending.” See 108 Stat. at 4984–85.
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 4                                                HYATT   v. PTO

 arises concerning such interpretation or application.”
 19 U.S.C. § 3512(d); see also H.R. Doc. No. 103-316 (1994)
 (SAA).
     The PTO promulgated Rule 129 pursuant to its author-
 ity provided by the URAA and informed by the SAA. In
 particular, Rule 129(b)(1)(ii) provides:
     (1) In an application . . . that has been pending for
     at least three years as of June 8, 1995 . . . , no re-
     quirement for restriction . . . shall be made or main-
     tained in the application after June 8, 1995, except
     where:
     ....
     (ii) The examiner has not made a requirement for
     restriction in the present or parent application
     prior to April 8, 1995, due to actions by the appli-
     cant . . . .
 37 C.F.R. § 1.129(b)(1)(ii) (emphasis added).
                               II
      Mr. Hyatt filed the ’938 application, which claims pri-
 ority to applications filed as early as 1983, during the
 GATT Bubble on May 5, 1995. The PTO completed an ini-
 tial examination of those claims in 2003, but from 2003 to
 2012, “the PTO stayed the examination of many of
 [Mr.] Hyatt’s applications pending litigation.”       Hyatt,
 998 F.3d at 1354.
      In October 2013, an examiner instructed Mr. Hyatt to
 select a number of claims from his ’938 application for ex-
 amination as part of the PTO’s efforts to manage Mr. Hy-
 att’s approximately 400 pending patent applications.
 Mr. Hyatt complied, under protest, and selected eight
 claims out of the approximately 200 in that application.
 The Examiner issued a non-final rejection of those claims
 in February 2015, and, in August of that year, Mr. Hyatt
 responded with significant claim amendments. By way of
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 HYATT   v. PTO                                               5

 example, Mr. Hyatt entirely rewrote one of the selected
 claims, sparing only the preambular terms “A” and “com-
 prising.”
     The Examiner determined that these claim amend-
 ments shifted seven of the eight selected claims to a differ-
 ent species of computer systems and processes. As a result,
 the Examiner issued a restriction requirement between the
 originally selected claims and the amended claims, still al-
 lowing Mr. Hyatt to prosecute his amended claims but forc-
 ing him to do so in a new, separate application. 2
     Mr. Hyatt filed a complaint in the Eastern District of
 Virginia. He alleged in relevant part that the PTO’s re-
 striction requirement violated the Administrative Proce-
 dure Act (“APA”) as arbitrary, capricious, an abuse of
 discretion, or otherwise not in accordance with law since
 restriction requirements are generally not permitted for
 transitional applications like the ’938 application and no
 exception to that rule applied. See J.A. 41 (citing 5 U.S.C.
 § 706); see also Hyatt v. U.S. Pat. & Trademark Off.,
 551 F. Supp. 3d 600, 605 (E.D. Va. 2021). Mr. Hyatt and
 the PTO filed competing motions for summary judgment.
 The district court granted the PTO’s motion and denied
 Mr. Hyatt’s motion. J.A. 14. As the district court ex-
 plained,
     [Mr. Hyatt] failed to disclose claims to a separate
     invention and attempted to file them many years
     after 1995. Withholding these claims is an action
     by     the    applicant      that    falls     within
     [Rule 129(b)(1)(ii)’s applicant-action] exception to
     the    general     rule    prohibiting     restriction

     2   This meant, at a minimum, that Mr. Hyatt’s
 amended claims would be subject to the new patent term—
 20 years from the effective filing date. See Appellant’s Br. 5
 n.1.
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 6                                               HYATT   v. PTO

     requirements on transitional applications. The
     [Examiner] was thus within his authority to im-
     pose a restriction requirement under [that] excep-
     tion . . . .
 Hyatt, 551 F. Supp. 3d at 605–06. Mr. Hyatt appeals. We
 have jurisdiction under 28 U.S.C. § 1295(a)(1).
                         DISCUSSION
      We review the district court’s grant of summary judg-
 ment de novo. Star Fruits S.N.C. v. United States, 393 F.3d
 1277, 1281 (Fed. Cir. 2005). Summary judgment is appro-
 priate where “there is no genuine dispute as to any mate-
 rial fact and the movant is entitled to judgment as a matter
 of law.” Fed. R. Civ. P. 56(a). The APA provides that
 agency actions are unlawful if they are “arbitrary, capri-
 cious, an abuse of discretion, or otherwise not in accordance
 with law.” 5 U.S.C. § 706(2)(A).
     Mr. Hyatt contests the application of Rule 129(b)(1)(ii)
 to his ’938 patent application. He argues that the appli-
 cant-action exception to the general ban on restriction re-
 quirements cannot apply to the ’938 application for two
 primary reasons: (I) he argues that the applicant-action ex-
 ception cannot apply based on the text of Rule 129(b)(1)(ii);
 and (II) he asserts that applying the applicant-action ex-
 ception in this case contradicts Rule 129(a) and
 Rule 129(b)(2). Addressing each in turn, we find neither
 persuasive.
                               I
     Rule 129(b)(1)(ii) permits restriction requirements for
 transitional applications when “[t]he examiner has not
 made a requirement for restriction in the present or parent
 application prior to April 8, 1995, due to actions by the ap-
 plicant.” Mr. Hyatt argues that this applicant-action ex-
 ception to the general ban on restriction requirements
 cannot apply to his ’938 application based on its text. Ap-
 pellant’s Br. 20. He asserts that “actions,” as used in the
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 HYATT   v. PTO                                             7

 applicant-action exception, does not encompass “inactions.”
 As a result, he contends that his first arguable action
 within the meaning of Rule 129 was in August 2015 when
 he filed the claim amendments that prompted the re-
 striction requirement. That filing, Mr. Hyatt argues, also
 does not permit a restriction requirement for his ’938 ap-
 plication because an effect cannot precede its cause: a lack
 of a restriction requirement in 1995 cannot be said to be
 caused by his decades-later August 2015 filing.
      Mr. Hyatt made similar arguments at the district
 court, but the district court found them unpersuasive. The
 court determined that Rule 129(b)(1)(ii) could and did ap-
 ply to Mr. Hyatt’s ’938 application because Mr. Hyatt
 “failed to disclose claims to a separate invention and at-
 tempted to file them many years after 1995.” Hyatt,
 551 F. Supp. 3d at 605. And since “[w]ithholding these
 claims is an action by the applicant that falls within” the
 applicant-action exception, the Examiner was “within his
 authority to impose a restriction requirement under [that]
 exception.” Id. at 605–06. We agree with the district court.
     As a threshold matter, we first note that Mr. Hyatt’s
 failure to disclose his species-altering amendments can
 also be accurately characterized as an act of withholding.
 See id. (“[Mr. Hyatt] failed to disclose claims to a separate
 invention . . . . Withholding these claims is an action by
 the applicant . . . .”). And whether Mr. Hyatt’s actions are
 characterized as a failure to disclose or an act of withhold-
 ing an entirely new species, it was that conduct of Mr. Hy-
 att that prevented the Examiner from entering a
 restriction requirement.
     In any case, as the PTO observes, the Manual of Patent
 Examining Procedure (“MPEP”) section 803.03 provides
 examples of inaction—including delays—that it catego-
 rizes as falling under the “actions by the applicant”
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 8                                                   HYATT   v. PTO

 exception. 3 “Although the MPEP does not have the force of
 law, it is entitled to judicial notice so far as it is an official
 interpretation of statutes or regulations with which it is
 not in conflict.” Airbus S.A.S. v. Firepass Corp., 793 F.3d
 1376, 1380 (Fed. Cir. 2015) (cleaned up). And here, the
 MPEP demonstrates that “the public has been on clear no-
 tice of the [PTO]’s interpretation” of the applicant-action
 exception. Appellees’ Br. 21. In light of the circumstances
 of this case, we fail to see how the application of
 Rule 129(b)(1)(ii) due to Mr. Hyatt’s so-called inaction was

     3   Section 803.03 lists the following examples as “ac-
 tions by the applicant”:
     (A) applicant abandoned the application and con-
     tinued to refile the application such that no [PTO]
     action could be issued in the application,
     (B) applicant requested suspension of prosecution
     under 37 CFR [§] 1.103(a) such that no [PTO] ac-
     tion could be issued in the application,
     (C) applicant disclosed a plurality of independent
     and distinct inventions in the present or parent ap-
     plication[] but delayed presenting claims to more
     than one of the disclosed independent and distinct
     inventions in the present or parent application
     such that no restriction requirement could be made
     prior to April 8, 1995, and
     (D) applicant combined several applications, each
     of which claimed a different independent and dis-
     tinct invention, into one large ‘continuing’ applica-
     tion, but delayed filing the continuing application
     first claiming more than one independent and dis-
     tinct invention such that no restriction require-
     ment could be made prior to April 8, 1995.
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 HYATT   v. PTO                                               9

 arbitrary, capricious, an abuse of discretion, or contrary to
 law.
     This also does away with Mr. Hyatt’s cause-and-effect
 argument because there is no cause after an effect here. As
 the PTO describes, and Mr. Hyatt does not rebut, Mr. Hy-
 att “did act prior to April 8, 1995 to actively withhold” his
 claim amendments. 4 Id. at 24. So Mr. Hyatt’s action pre-
 ceded (and resulted in) a lack of restriction requirement be-
 fore April 8, 1995, making the applicant-action exception
 applicable.
      In this regard, Mr. Hyatt makes two primary argu-
 ments that Rule 129’s “actions” cannot include “inactions.”
 Both are unpersuasive. First, he cites cases like Defenders
 of Wildlife v. Andrus, 627 F.2d 1238 (D.C. Cir. 1980), and
 Western Watersheds Project v. Matejko, 468 F.3d 1099
 (9th Cir. 2006), in an attempt to distinguish action from in-
 action. Appellant’s Br. 22. But, as the PTO observes, these
 cases are not only not binding, but they also address mate-
 rially different statutory contexts. Appellees’ Br. 25–26;
 see Defs. of Wildlife, 627 F.2d at 1243–44 (interpreting

     4    We also agree with the district court that Mr. Hy-
 att’s interpretation disjoins the rule’s “April 8, 1995” date
 from its antecedent subject. The applicant-action excep-
 tion allows a restriction requirement when “[t]he examiner
 has not made a requirement for restriction . . . prior to
 April 8, 1995, due to actions by the applicant.” 37 C.F.R.
 § 1.129(b)(1)(ii). As the district court explained, “[t]he date
 refers to the examiner’s [lack of] action”—i.e., the absence
 of a restriction requirement before April 8, 1995. Hyatt,
 551 F. Supp. 3d at 606 (emphasis added); see also Appel-
 lees’ Br. 24 (“The specified date clearly refers to the time of
 the restriction requirement by the Examiner . . . .”). And
 there is no dispute that the Examiner did not issue a re-
 striction requirement for the ’938 application before that
 date.
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 10                                             HYATT   v. PTO

 “agency action” as used in 42 U.S.C. § 4332(C)); W. Water-
 sheds, 468 F.3d at 1106–08 (interpreting “agency action” as
 used in 16 U.S.C. § 1536(a)(2)).
     Second, Mr. Hyatt seemingly contends that applying
 the applicant-action exception to the ’938 application con-
 tradicts the SAA. 5 Although Mr. Hyatt fails to explicitly
 direct us to the SAA language he refers to, he appears to
 rely on the SAA’s statement that the general ban on

      5  Mr. Hyatt maintained—both in his briefs and at
 oral argument—that the PTO never rebutted this argu-
 ment. Mr. Hyatt characterizes this as a statutory dispute
 against which the PTO forfeited a response. Oral Arg.
 at 4:55–5:05, No. 21-2324, https://oralarguments.cafc.usco
 urts.gov/default.aspx?fl=21-2324_07072022.mp3. The PTO
 reasonably responded during oral argument that it did not
 understand Mr. Hyatt to raise a “facial challenge” to Rule
 129 at the district court or on appeal. Id. at 13:35–58. The
 PTO added that, even if Mr. Hyatt preserved that argu-
 ment, it fails on its merits because Rule 129 is consistent
 with the SAA. Id. at 13:58–14:40. Since we also struggled
 to ascertain the bounds of this SAA-based argument, we
 decline to find that the PTO forfeited a response. See also
 Appellant’s Br. 23–24 (asserting that “[t]he URAA . . . for-
 bade the PTO from entering ‘a requirement for restriction,’
 subject to two exceptions not even arguably applicable
 here” (citing H.R. Doc. No. 103-316, at 1006, without fur-
 ther elaboration)). In any event, we are not required to ac-
 cept Mr. Hyatt’s legal arguments even if the PTO did not
 respond. See Kamen v. Kemper Fin. Servs., Inc., 500 U.S.
 90, 99 (1991) (“When an issue or claim is properly before
 the court, the court is not limited to the particular legal
 theories advanced by the parties[] but rather retains the
 independent power to identify and apply the proper con-
 struction of governing law.”).
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 HYATT   v. PTO                                            11

 restriction requirements for transitional applications does
 not apply “if there has not been at least one [PTO] action
 due to actions by the applicant.” H.R. Doc. No. 103-316,
 at 1006. His argument seems to depend on reading this
 SAA language as saying that the applicant-action excep-
 tion applies only when the applicant’s actions “prevent
 [the] PTO from taking any action in a given application.”
 Appellant’s Br. 22–23 (emphasis in original). And under
 this reading, in Mr. Hyatt’s view, the applicant-action ex-
 ception cannot apply here because the PTO issued several
 actions in examining Mr. Hyatt’s ’938 application prior to
 making the restriction requirement.        See Oral Arg.
 at 24:04–30.
     Mr. Hyatt’s reading of that SAA language, though, re-
 stricts it beyond its plain terms. The SAA does not say that
 the general ban on restriction requirements for transi-
 tional applications does not apply only if there has been no
 PTO action due to actions by the applicant. The SAA
 simply says that the general ban does not apply if the ap-
 plicant’s actions prevent “at least one [PTO] action.” H.R.
 Doc. No. 103-316, at 1006. And like the PTO, we see no
 inconsistency between the applicant-action exception and
 the SAA. 6 That the PTO “has not made a requirement for
 restriction,” as described in the applicant-action exception,
 is an example of “one [PTO] action” that has not been
 taken, as stated in the SAA.

     6    Following oral argument, Mr. Hyatt submitted a
 Rule 28(j) letter in an attempt to clarify this SAA-based ar-
 gument. This letter was improper. Rule 28(j) is not a ve-
 hicle for seeking to substantively improve an answer to a
 question asked of a party at oral argument, and it is cer-
 tainly not a vehicle for attempting to supplement briefing
 with four new paragraphs of argument and citations to five
 new cases that Mr. Hyatt could have identified previously.
 Fed. Cir. R. Prac. 28(j); see Oral Arg. at 5:11–9:40.
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 12                                                 HYATT   v. PTO

     Indeed, rather than point to an inconsistency, the por-
 tion of the SAA that Mr. Hyatt seemingly relies on appears
 to mirror Rule 129. Rule 129(b)(1)(ii) states that the appli-
 cant-action exception applies when “[t]he examiner has not
 made a requirement for restriction . . . due to actions by the
 applicant.” 37 C.F.R. § 1.129(b)(1)(ii) (emphasis added).
 The SAA similarly instructs that that same general ban on
 restriction requirements “does not apply if . . . there has
 not been at least one [PTO] action due to actions by the ap-
 plicant.” H.R. Doc. No. 103-316, at 1006 (emphasis added).
 And as previously discussed, the Examiner was unable to
 issue a restriction requirement for the ’938 application
 within the relevant time frame “due to” Mr. Hyatt’s “ac-
 tions.”
                                II
     Mr. Hyatt next argues that even if the applicant-action
 exception could apply based on its text, it still cannot apply
 to his ’938 application as a matter of logic due to surround-
 ing regulations. Mr. Hyatt contends that applying the ap-
 plicant-action exception would conflict with Rule 129(a)
 and Rule 129(b)(2).
      Rule 129(a) provides that
      [a]n applicant in an application . . . that has been
      pending for at least two years as of June 8,
      1995, . . . is entitled to have a first submission en-
      tered and considered on the merits after final rejec-
      tion . . . . A submission as used in this paragraph
      includes . . . an amendment to the . . . claims . . . .
 37 C.F.R. § 1.129(a). According to Mr. Hyatt, Rule 129(a)
 entitles him to have his species-altering amendments con-
 sidered on the merits as “continuation-type amendments,”
 which would be subject to the pre-URAA patent term. Ap-
 pellant’s Br. 18–19, 32–34, 36–37. Mr. Hyatt contends that
 such continuation-type consideration would be incon-
 sistent with a restriction requirement here because
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 HYATT   v. PTO                                              13

 imposing a restriction requirement effectively “swallow[s]”
 Rule 129(a). Id. at 33.
     Rule 129(b)(2), for its part, states that an “applicant
 will be . . . notified and given a time period” to take certain
 actions if the applicant’s transitional application “contains
 more than one independent and distinct invention and a
 requirement for restriction . . . cannot be made or main-
 tained pursuant to this paragraph.”                 37 C.F.R.
 § 1.129(b)(2). Mr. Hyatt asserts that, since Rule 129(b)(2)
 recognizes that transitional applications may contain more
 than one independent and distinct invention, a restriction
 requirement for such an application—including the ’938
 application—would be improper. Appellant’s Br. 34–36.
     Mr. Hyatt levied similar arguments at the district
 court, and the court rejected them. The district court ex-
 plained there was no inconsistency in applying the appli-
 cant-action exception in the face of either Rule 129(a) or
 Rule 129(b)(2). Specifically, the court said “[n]othing in
 [Rule 129(a)] references restriction practice or otherwise
 overrides the more specific provisions of [the applicant-ac-
 tion exception].” Hyatt, 551 F. Supp. 3d at 606. And as for
 Rule 129(b)(2), that section “applies only when a require-
 ment for restriction . . . cannot be made . . . . In this case,
 however, the [applicant-action exception] applies” and per-
 mits a restriction requirement. Id. (cleaned up). We agree
 on both counts. Applying the applicant-action exception to
 Mr. Hyatt’s ’938 application is not inconsistent with either
 Rule 129(a) or Rule 129(b)(2).
      Rule 129(a) does not speak to restriction requirements;
 it provides no limitations on applying the applicant-action
 exception. This means that applying the applicant-action
 exception to the ’938 application does not “swallow”
 Rule 129(a), as Mr. Hyatt suggests. Appellant’s Br. 33. As
 the PTO observes, the “submission of amendments under
 [Rule 129(a)] does not immunize those amendments from
 the normal course of examination, including restriction
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 14                                              HYATT   v. PTO

 under [the applicant-action exception] as appropriate.” Ap-
 pellees’ Br. 32.
     Rule 129(b)(2) is also not inconsistent with the applica-
 tion of the applicant-action exception in this case. Indeed,
 Rule 129(b)(2) specifically makes room for the applicant-
 action exception. By its text, Rule 129(b)(2) “applies only
 when ‘a requirement for restriction . . . cannot be made or
 maintained pursuant to this paragraph.’”               Hyatt,
 551 F. Supp. 3d at 606 (emphasis added) (quoting 37 C.F.R.
 § 1.129(b)(2)). So, as the district court noted, applying the
 applicant-action exception to Mr. Hyatt’s application “is
 not inconsistent” with Rule 129(b)(2) because that excep-
 tion allows the PTO “an opportunity to issue a restriction
 requirement” here. Id. This means a requirement for re-
 striction can be made, so Rule 129(b)(2) is of no import in
 this case.
                          *   *   *
    Because the district court correctly concluded that the
 applicant-action exception can and did apply in this case,
 we affirm its determination that the restriction require-
 ment for Mr. Hyatt’s ’938 application was proper.
                        CONCLUSION
      We have considered Mr. Hyatt’s remaining arguments
 but find them unpersuasive. For the foregoing reasons, we
 affirm the district court’s judgment.
                        AFFIRMED