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PTO’s Allegedly Improper Revival of Abandoned Patent Application Is Not a Defense to Patent Infringement

September 22, 2008

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Last Month at the Federal Circuit - October 2008


Newman, Bryson, Linn (author)

[Appealed from: N.D. Cal., Judge Jenkins]

In Aristocrat Technologies Australia Pty Ltd. v. International Game Technology, No. 08-1016 (Fed. Cir. Sept. 22, 2008), the Federal Circuit reversed the district court’s finding that U.S. Patent Nos. 7,056,215 (“the ’215 patent”) and 7,108,603 (“the ’603 patent”) were invalid, holding that the PTO’s “improper revival” of an abandoned patent application was not available as an invalidity defense in an infringement action. The Federal Circuit remanded the case for further proceedings.

Aristocrat Technologies Australia Pty Limited (“Aristrocat”) filed a PCT application in Australia. Under the relevant statute, Aristocrat had to pay the fee for the U.S. national stage of the PCT application by January 10, 2000, but the PTO did not receive that fee until January 11—one day late. The PTO consequently mailed a notice of abandonment to Aristocrat. In an attempt to revive the ’215 patent application, Aristocrat filed a petition under 37 C.F.R. § 1.137(b), claiming that the delay in paying the national stage filing fee was “unintentional.” The PTO granted the petition after concluding that all of the requirements of 37 C.F.R. § 1.137(b) had been met. Following the PTO’s revival, Aristocrat resumed prosecution of the ’215 patent application, later filing the ’603 patent application as a continuation of the ’215 patent application.

Shortly after the ’215 patent issued, Aristocrat brought an infringement action against International Game Technology (“IGT”). Once the ’603 patent issued, Aristocrat amended its complaint to assert infringement of that patent as well. IGT moved for SJ of invalidity, arguing that the ’215 patent was invalid because the PTO revived the patent application based on Aristocrat’s showing that its delay was “unintentional,” whereas the standard set forth in 35 U.S.C. §§ 133 and 371 is the stricter “unavoidable” standard. Because the ’215 patent application was, according to IGT, “improperly revived,” it anticipated the ’603 patent under 35 U.S.C. § 102(b). The district court found that IGT properly raised its invalidity argument under 35 U.S.C. § 282 and that, alternatively, it could review the PTO’s decision to revive the ’215 patent application under the APA. Concluding that the PTO improperly revived the patent application by using the incorrect standard, the district court found both patents invalid.

The heart of the Federal Circuit’s opinion was that § 282, which enumerates defenses available in an action involving the validity or infringement of a patent, does not incorporate §§ 133 or 371, which served as the bases of IGT’s argument that the PTO’s revival of the ’215 patent application was improper. Specifically, the Court determined that §§ 133 and 371 do not fall within the category of invalidity defenses authorized by § 282(2), which authorizes an invalidity defense based “on any ground specified in part II of this title as a condition for patentability.” The Court noted that §§ 101, 102, and 103 are the only provisions of title 35 that set out conditions for patentability. Accordingly, the Court concluded that § 282(2) does not encompass defenses based on the alleged improper revival of a patent application.

The Court then moved on to the catch-all provision of § 282(4), which recognizes that a party may rely on “[a]ny other fact or act made a defense by this title” to form an invalidity defense to infringement. IGT argued that under § 282(4), any provision of title 35 may constitute a defense in an action involving the validity or infringement of a patent. The Court disagreed, noting that in construing statutory language, a court should give meaning to every word in a statute. In accordance with that principle, the requirement that the fact or act be “made a defense by [title 35]” was critical for, without those words, § 282(4) could refer to all provisions of title 35, making the other three subsections of § 282 redundant. The Court noted that some provisions of title 35, such as §§ 185 and 273, expressly state that they can act as a defense to infringement. As those sections exemplify, “Congress made it clear in various provisions of the statute when it intended to create a defense of invalidity or noninfringement, but indicated no such intention in the statutes pertaining to revival of abandoned applications.” Slip op. at 8. The provisions relied on by IGT— §§ 133 and 371—are part of the latter category, as they “merely spell out under what circumstances a patent application is deemed abandoned during prosecution and under what circumstances it may be revived” and are not “made a defense” by title 35. Id. at 9.

Having found that the propriety of the PTO’s revival of a patent application falls under neither § 282(2) nor (4), the Court held that “improper revival may not be asserted as a defense in an action involving the validity or infringement of a patent.” Id. The Court found further support for this position in its earlier cases that established that minor prosecution irregularities or procedural lapses during examination are largely irrelevant after a patent issues, as they only affect the patentee’s right to exclude if they involve inequitable conduct. As for IGT’s arguments under the APA, with which the district court had agreed, the Court summarily dismissed those arguments as providing no relief to IGT under the circumstances.

The Court went on to note that § 282 is not the exclusive source of defenses in the Patent Act, as it had previously stated in Quantum Corp. v. Rodime, PLC, 65 F.3d 1577 (Fed. Cir. 1995) (holding that improperly broadening claims during reexamination, in violation of 35 U.S.C. § 305, subjected the patentee to a defense of invalidity). The Court, however, distinguished that case on policy grounds, observing that an opposite result in Quantum would have encouraged noncompliance with the statute, whereas there is “no legitimate incentive for a patent applicant to intentionally abandon its application, much less to attempt to persuade the PTO to improperly revive it.” Slip op. at 12.

Having found that the ’215 patent could not be held invalid under § 282, the Court concluded that the ’215 patent was per se not § 102(b) prior art to the ’603 patent. As a result, the Court reversed the district court’s grant of SJ and remanded the case.