Court Opinion

ID: 9495360
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:01:05.767832+00
Date Added: 2024-06-11T17:56:58.724065
License: Public Domain

NEWMAN, Circuit Judge,
dissenting.
In Symbol Technologies, Inc. v. Lemelson Medical, Education & Research Foundation, 277 F.3d 1361, 61 USPQ2d 1515 (Fed.Cir.2002), this court established a new defense to the charge of patent infringement, holding that an inventor’s delay in obtaining his patent could bar enforcement of the patent in an infringement suit, by virtue of application of the equitable doctrine of laches. Although that holding now binds us, it is restricted to its facts and should be limited in availability to defendants in infringement suits. As I explained in dissent in Symbol Technologies, the placement of a limit on the filing of continuing applications has been consistently rejected by Congress and the technology community, as a separate question from whether the refiling caused undue delay or prejudice.
Even with “prosecution laches” available as a defense to the charge of infringement, based on a showing of prejudice, there is no basis on which to grant authority to the patent examination agency to impose its own non-statutory time limits for examination purposes, and to refuse to grant a patent on an otherwise patentable invention. Indeed, if such action by the patent examining staff is ultimately deemed appropriate, this authority cannot be arrogated at PTO initiative, but requires legislative authorization.
In the Bogese application the Patent and Trademark Office accomplishes what has been explicitly prohibited to it. The PTO does not have the right to adopt administratively a position that has been expressly denied by binding precedent. In In re Henriksen, 55 C.C.P.A. 1384, 399 F.2d 253, 158 USPQ 224 (CCPA 1968) the court held that “there is no statutory basis for fixing an arbitrary limit to the number of prior applications through which a chain of copendency may be traced to obtain the benefit of the filing date of the earliest of a chain of copending applications, provided applicant meets all the other conditions of the statute.” The patent examining process is a creature of statute, and operates on the premise that the inventor is entitled to a patent if the statutory requirements are met. 35 U.S.C. § 102 (“A person shall be entitled to a patent unless — .... ”). The court today extends to patent examiners a new power to deny a patent on the ground that the applicant dawdled too long in prosecution.
The examiner herein realized there was no statutory basis for this action, and purported to rely on “the equitable doctrine of laches.” Equitable determinations are generally reserved to the courts, which may on occasion depart from statute in order to reach a just result, in order to ameliorate an injustice flowing from the letter of the law. But it is rare indeed to invoke equitable considerations in order to punish someone who has not violated the law. The equitable power is intended to remedy harsh application of law, not to impose new penalties on those who abide by the law. Justice Story explained:
[Equitable relief] is not a matter of right in either party; but is a matter of discretion in the Court; not of arbitrary or capricious discretion, dependent upon the mere pleasure of the Judge, but of that sound, and reasonable discretion, which governs itself, as far as it may, by general rules and principles; but at the same time, which withholds or grants relief, according to the circumstances of *1371each particular case, when these rules and principles will not furnish any exact measure of justice between the parties.
Joseph Story, Equity Jurisprudence § 742 (1st ed. 1836). See, e.g., Hecht Co. v. Bowles, 321 U.S. 321, 329-330, 64 S.Ct. 587, 88 L.Ed. 754 (1944) (equity invokes “the qualities of mercy and practicality”); Rosario-Torres v. Hernandez-Colon, 889 F.2d 314, 321 (1st. Cir.1989).
Although courts have the judicial power to depart from the letter of the law when justice warrants, the panel majority errs in viewing the PTO’s power as “broader” than that of a court. This new agency power to eliminate the right to a patent, as a matter of the examiner’s equitable discretion, transcends the authority allocated to administrative agencies. Equitable remedies contrary to statute can not be created by an administrative agency as it goes along. Although I do not deny the PTO the authority to provide individual equitable relief from some particularly harsh application of an agency rule, when justice and good practice warrant, equitable discretion is available as a remedy to ameliorate unwarranted distress, not as a punishment of those who stayed within the letter of the law. Agency discretion to reheve an unintended harsh result may well be necessary in the modern administrative state, for the legislature cannot envision every possible situation to which the law may be applied. But all of the examples of administrative discretion of which I am aware involve relief of the regulated party from particularly dire consequences — not the converse. See, e.g., Shapiro, Administrative Discretion: The Next Stage, 92 Yale L.J. 1487 (1983) (identifying forms of administrative discretion available where strict application of the law would work a hardship or impose an unfair burden).
Mr. Bogese apparently took unusual advantage of the continuation application law, see 35 U.S.C. §§ 120-121, for he filed twelve continuations over a period of eight years. When he finally proceeded with substantive examination, the examiner denied his patent on the ground of undue delay. Nowhere, however, has an agency been authorized to impose, in its discretion, restrictions contrary to the statute that governs agency action. The potential for serious mischief is apparent from the many avenues whereby an applicant may extend prosecution; see, e.g., 37 CFR § 1.103 (request for suspension of prosecution); 37 CFR § 1.136 (request for extension of time to respond). An applicant’s recourse to authorized actions may hereafter tempt an examiner to hold, with retrospective force, that the applicant should not have delayed so long.
In Symbol Technologies the defendants raised issues of prejudice in the context of infringement litigation, presenting laches as an equitable defense personal to these defendants. Issues of laches in defense have been well defined. See A.C. Aukerman Co. v. R.L. Chaides Construction Co., 960 F.2d 1020, 1032, 22 USPQ2d 1321 (Fed.Cir.1992) (en banc):
It is, however, well settled that, to invoke the laches defense, a defendant has the burden to prove two factors: 1. the plaintiff delayed filing suit for an unreasonable and inexcusable length of time from the time the plaintiff knew or reasonably should have known of its claim against the defendant, and 2. the delay operated to the prejudice or injury of the defendant.
However, laches as an equitable remedy may be invoked only when the defendant comes before the court with clean hands, and is bound up in the relationship be*1372tween the parties and their history of dealing with each other. See, e.g., Fotta v. Trustees of the United Mine Workers of America, Health and Retirement Fund of 1974, 165 F.3d 209, 214 (3d Cir.1998) (“Because the remedy we recognize here is equitable in nature, its award involves an exercise of judicial discretion. And, like other equitable remedies, it is subject to equitable defenses ... ”). But patent examination is not litigation; there is no “defendant,” no prejudice, no issue of injury to the government or clean hands on its part. Of course there is a public interest in early disclosure of technical/scientific information, but with mandatory publication this interest will no longer be affected. Today’s holding relies on no more than that this applicant “worked” the system, and overworked it. The proposed remedy transcends the apparent wrong.
The majority remarks that the PTO has the right to promulgate rules for the prosecution of patent applications, and indeed it does. However, there was here no agency rule-making, no public notice and comment period. The avoidance of rulemak-ing procedures has been fairly criticized. See Comment, The Exceptions Process: The Administrative Counterpart to a Court of Equity and the Dangers it Presents to the Rulemaking Process, 30 Emory L.J. 1135,1165 (1981) (“Congress has demonstrated a sensitivity to the need for public participation in the development of law by agencies both in the APA and in the increasingly rigorous rulemaking standards imposed by recent statutes”)
If a change in the statutory rules of prosecution is deemed appropriate, it should be processed legislatively. An administrative ruling, applied retrospectively against those who complied with the law, is not appropriate. However egregious Mr. Bogese’s delays, he was operating within the law and within the rules. The already burdensome and expensive path to a patent does not benefit from the added encumbrance of an unguided bar that can be imposed as a matter of administrative discretion. The potential abuse in the administrative process appears to far transcend the wrong to be remedied. Amid the complex procedures of patent examination, statute-based rules are preferable to the “unbounded jurisdiction” of the patent examining corps relying on personal views of “equity”:
If, indeed, a Court of Equity in England did possess the unbounded jurisdiction, which has been thus generally ascribed to it, of correcting, controlling, moderating, and even superceding the law, and of enforcing all the rights, as well as the charities, arising from natural law and justice, and of freeing itself from all regard to former rules and precedents, it would be the most gigantic in its sway, and the most formidable instrument of arbitrary power, that could well be devised. It would literally place the whole rights and property of the community under the arbitrary will of the Judge, acting, if you please, arbitrio boni judiéis, and it may be, ex aequo et bono, according to his own notions and conscience; but still acting with a despotic and sovereign authority.
... What an uncertain measure would this be?
Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308, 332-33, 119 S.Ct. 1961, 144 L.Ed.2d 319 (1999) (quoting Joseph Story, 1 Commentaries on Equity Jurisprudence § 19, (13th. ed.1988)).
Such persistent, expensive, and burdensome refilings as indulged in by Bogese *1373are surely rare, and will be more so now that patent life runs from the first filing date, no matter how many times the case is refiled. The solution to such a rare situation is not to add a new ground of examiner discretion, fraught with uncertainty and potential abuse. This new power will simply increase the burden on all applicants, in order to punish a rare transgressor.
It may be that the patent-concerned communities will conclude, after thorough consideration, that there should be new limits imposed on patent prosecution. I would not be troubled by such a law, duly explored and enacted with appropriate guidelines, limits, and prospective effect. My concern is with this new authorization of discretionary action in the examiner, contrary to statute and rule, retrospectively applied to applicants after it is too late to avoid the consequences. From the court’s ratification of this action, I respectfully dissent.