USPTO Seeks Dismissal of Class Action Inventor Suit Filed Over SAWS Program

By Steve Brachmann
October 6, 2019

“Even assuming the confidential nature of the SAWS program may have prevented Plaintiffs from disputing the classification of their patent applications and pretermitting the delay and additional layers of review attendant to SAWS review, prosecution delay and additional quality checks are not ‘adverse determinations.’ At most, they are ‘adverse effects’ of SAWS materials remaining confidential.” – USPTO Motion to Dismiss

SAWS - https://depositphotos.com/99653136/stock-illustration-businessman-character-icons.htmlOn September 26, the U.S. Patent and Trademark Office filed a motion to dismiss a class action complaint  filed by two inventors alleging violations of the Privacy Act created by the agency’s handling of its Sensitive Application Warning System (SAWS). The USPTO is seeking a Rule 12(b)(6) dismissal for failure to state a claim, arguing that application flags under the SAWS program don’t concern individual patent applicants and that omission of those flags from patent application files isn’t the proximate cause of adverse determinations such as increased scrutiny holding up patent grants.

The case was first filed this June in the U.S. District Court for the District of Columbia by Paul Morinville and Gil Hyatt, two inventors who allege that they have filed patent applications on inventions that they believe to have been flagged by the SAWS program. Morinville is an inventor on nine patents who has had 26 patent applications pending at the USPTO since February 2000. Hyatt is listed as an inventor on 70 patent applications and has had patent applications pending at the agency since 1990. Hyatt was first informed that he had patent applications flagged by the SAWS system in June 2017, more than two years after the USPTO officially retired the SAWS program.

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SAWS Flags: A Scarlet Letter Worn by Patent Applications

“A SAWS flag served as a scarlet letter for patent applications, alerting PTO personnel that a flagged application was considered to be an abusive ‘submarine’ application or otherwise objectionable,’” the original complaint reads. Scrutiny under the SAWS program has led to delays in the issuance of patent grants on purported bases that have never been disclosed to patent applicants, rendering applicants unable to dispute the grounds on which their applications have been included in the SAWS program. By withholding documents pertaining to SAWS flags and reports from application files, plaintiffs allege that the USPTO has violated the Privacy Act’s mandate that federal agencies maintain records related to determinations made about individuals that are required to assure fairness to those individuals. Plaintiffs Morinville and Hyatt are representing the class of all patent applicants whose applications have been flagged by SAWS at any time since the program was developed in 1994 until it was retired in March 2015.

Inventors who have encountered the SAWS program’s impacts on their own patent applications have understandably been vexed by the situation. One inventor’s account published on this website in December 2014 explained that he was told by his patent examiner that a patent couldn’t be granted on his patent application because it was flagged by the SAWS program. Despite being told by USPTO officials that the flag only meant that his examiner was receiving help for applying examination standards on the flagged patent application, his patent examiner was receiving no such help. In fact, despite the examiner granting an allowance that was approved by that examiner’s supervisor, the USPTO rejected the patent application because of its inclusion in the SAWS program. Further digging into the reasons behind the SAWS flag indicated that the patent application was rejected because the claimed invention read on Apple’s iTunes Store despite the fact that the patent application claimed a priority filing date in 1999, several years before Apple introduced the iTunes Store service.

USPTO Refutes Inventors’ Privacy Act Claims

In its recent motion to dismiss, the USPTO noted that patent applications could be deemed “sensitive” under SAWS if they claimed subject matter that could be considered politically or ethically controversial. Reasons for shuttering the SAWS program included the facts that the SAWS program had only been “marginally utilized and provide[d] minimal benefit,” said the USPTO. The Office contends that Morinville and Hyatt have failed to state a claim because SAWS flags and reports provide information on the substance of patent applications, not the individual inventors themselves, and that the SAWS information itself, and not the omission of that information from patent applicant files, is what plaintiffs allege have caused the adverse determinations of patent grant delay and inability to receive patent grants.

The USPTO’s arguments that the SAWS flags and reports aren’t “record[s] concerning an individual” are premised on two previous cases: Tobey v. NLRB, decided by the U.S. Court of Appeals for the District of Columbia Circuit in December 1994; and Fisher v. National Institutes of Health, decided by the District Court for the District of Columbia in August 1996. Under Tobey, the USPTO argues that “records” under the Privacy Act must be about an individual and contain that individual’s name “or other identifying particular.” Fisher further limited determinations regarding information “about an individual” when it held that annotations in medical literature databases maintained by the NIH were about the articles themselves and not their authors, even when those annotations indicated information about the authors themselves. Following this precedent, the USPTO alleged that patent application files are about the inventions and not the inventors themselves, thus they don’t constitute “records” under the Privacy Act. Although the USPTO includes a Privacy Act notice in the patent application files, the agency contends that the notice primarily relates to the inventor’s oath and excludes the scope of the other parts of the files that describe the claimed invention. Because the SAWS flags were issued due to the identity of the invention and not the inventor, the USPTO argues that the plaintiffs don’t have a Privacy Act claim, regardless if the reasons for an invention being flagged could be seen as pejorative to inventors.

The USPTO further alleges that, to make a claim for damages under the Privacy Act, a plaintiff must show that agency reliance on inaccurate records “was the proximate cause of an adverse determination;” the agency claims that the harm shown by Morinville and Hyatt neither amounts to the adverse determination nor was it caused by reliance on the patent application file without the SAWS flags and reports. Although the plaintiffs have numerous claims about how the SAWS program prejudiced the prosecution of their patent applications, the USPTO contends that they haven’t claimed that the lack of adequate records was itself the cause of an adverse determination. The agency notes that it’s plausible that plaintiffs could claim that the omission of SAWS information from the patent application files prevented them from contesting their classification as “sensitive,” but that the plaintiffs didn’t allege such determinations in their complaint but rather delays and procedural burdens in the prosecution process.

“Even assuming the confidential nature of the SAWS program may have prevented Plaintiffs from disputing the classification of their patent applications and pretermitting the delay and additional layers of review attendant to SAWS review, prosecution delay and additional quality checks are not ‘adverse determinations.’ At most, they are ‘adverse effects’ of SAWS materials remaining confidential.”

How Can an Inventor Adequately Challenge a Secret Determination?

That a SAWS flag creates serious adverse effects on a patentee is a fact that is little in doubt. Keeping such information confidential from prospective patentees renders them unable to challenge the SAWS determination, which can be fatal to their case if that determination is the reason why their patent application has been rejected. Morinville appealed the rejection of one of his patent applications that was likely targeted by SAWS to the U.S. Court of Appeals for the Federal Circuit. In July 2018, he filed an opening brief in which he noted that the patent at issue, first filed in December 2004, had survived nine prior rejections: once under Section 101; twice under Section 102; four times under Section 103; and twice under Section 112. Morinville appealed another Section 101 rejection, arguing that the patent examiner had already found an inventive concept to survive the earlier 101 rejection and that the invention logically couldn’t cover a “well-established business practice” if it survived Section 102 novelty and Section 103 obviousness challenges. This April, the Federal Circuit affirmed the Patent Trial and Appeal Board’s rejection of Morinville’s patent claims. Although it’s not confirmed that this particular patent application has been flagged by SAWS, the long delay in examination and questionable basis for rejection would seem to fit the fact pattern.

If the inability to challenge a SAWS determination is a detriment to patent owners, that issue is greatly exacerbated by the incredible delays caused by a process that becomes ever more expensive just to maintain a patent application that the USPTO doesn’t want to grant, as Morinville’s July 2018 opening brief at the Federal Circuit makes clear:

“To put this long and tortured prosecution history into real-world perspective, when I filed the ‘557 Application, my daughter had just started kindergarten. As of the date of this brief, my daughter has completed her first year as a freshman at Baylor University. I have spent more money on the prosecution and appeals of this patent application than I will spend on my daughter’s entire college education.”

Of course, in the USPTO’s view, an interminable delay in the issue of a patent grant is a reality that any patent applicant must be prepared to handle. “There is no legal right to a decision on patentability within a certain time frame, or to a particular set of PTO procedures in the review of patent applications,” the USPTO argued in its motion to dismiss. The agency noted that Hyatt himself had previously failed on similar arguments in a separate case on unreasonable examination delays that was brought under the Administrative Procedures Act. “The Court explained that ‘PTO is under no legal obligation to cause an expeditious—or even an efficient— examination of a patent application,’” the USPTO’s motion reads.

Image Source: Deposit Photos
Vector ID: 99653136
Copyright: quarta 

The Author

Steve Brachmann

Steve Brachmann is a freelance journalist located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He writes about technology and innovation. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients and is available for research projects and freelance work.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 23 Comments comments. Join the discussion.

  1. Night Writer October 6, 2019 12:44 pm

    >>“The Court explained that ‘PTO is under no legal obligation to cause an expeditious—or even an efficient— examination of a patent application,’”

    Wow. I’d like some discovery on the emails exchanged about these applications.

  2. B October 6, 2019 4:44 pm

    GREAT ARTICLE, but who really believes SAWS is dead?

  3. Anon October 6, 2019 6:14 pm

    That the USPTO would actually have the gall to put that in its brief to the court is rather astounding.

    But I would put it to the USPTO that it IS under a legal obligation to have examination ONLY be on the written record (and the shadow programs simply do not — and CANNOT — qualify to meet that legal obligation.

  4. Anon October 6, 2019 6:19 pm

    Worth noting:

    Reasons for shuttering the SAWS program included the facts that the SAWS program had only been “marginally utilized and provide[d] minimal benefit,” said the USPTO.

    When the USPTO came out (finally) and admitted to the existence of the shadow program, they ALSO stated that SAWS was but one of many such programs.

    SAWS itself may be “technically” shuttered, but make NO mistake that shadow work continues to this day.

  5. David Boundy October 6, 2019 6:57 pm

    Only the PTO could write such a sentence:

    PTO is under no legal obligation to cause an expeditious—or even an efficient— examination of a patent application.

    What about 5 U.S.C. §?555(b)? “With due regard for the convenience and necessity of the parties or their representatives and within a reasonable time, each agency shall proceed to conclude a matter presented to it.”

    Why does the PTO jump up and down about the Administrative Procedure Act when the APA favors an agency, and hides it head in the sand when the APA protects the public from agency overreach?

    The PTO Solicitors Office is populated with double standard cheaters.

  6. David Boundy October 6, 2019 7:14 pm

    Only the PTO could write this sentence —

    “PTO is under no legal obligation to cause an expeditious—or even an efficient— examination of a patent application”

    What about 5 U.S.C. §?555(b)? “With due regard for the convenience and necessity of the parties or their representatives and within a reasonable time, each agency shall proceed to conclude a matter presented to it.” Every other agency thinks this gives an obligation to be reasonably efficient… Courts thinks so too.

    Why does the PTO Solicitor so consistently play a game of double standards? When the Administrative Procedure Act favors an agency, the Solicitor is happy to seek the protection of the APA. But when the APA protects the public from agency overreach, the Commissioner for Patents and Solicitor are both happy to tell the law to go fly a kite.

  7. David Boundy October 6, 2019 7:16 pm

    Only the PTO would make this argument —

    Reasons for shuttering the SAWS program included the facts that the SAWS program had only been “marginally utilized and provide[d] minimal benefit,”

    “We only broke the law for a few people. No matter how badly we screwed them, it doesn’t matter if there were only a few of them.”

  8. angry dude October 7, 2019 12:10 am

    Why couldn’t they appoint a Special Prosecutor to investigate and prosecute all of the wrongdoings by the USPTO and other agencies ?
    They did it for other ridiculous purposes like investigating plausible Russian fraud in US Presidential elections…
    But to save the integrity of the US Patent System ? … NO !

    The guillotine is coming…

  9. Curious October 7, 2019 8:13 am

    GREAT ARTICLE, but who really believes SAWS is dead?
    Who needs SAWS when the USPTO has the combination of KSR and Alice/Mayo?

  10. AAA JJ October 7, 2019 8:35 am

    Not caring about what the law actually is and being ready, willing, and able to carry the powers-that-be’s water is a sure fire path to promotion, raises, bonuses, awards, and an even bigger do-nothing job at the PTO. Exhibit A: Andrew Faile.

  11. Night Writer October 7, 2019 8:49 am

    I am pretty sure one of the applications I prosecuted was under SAWS. It had been in prosecution for over 10 years and it was transferred to me. It was from a major technology company and the claims were ground breaking.

    The examiner was promoted to be a SPE and I got the junior examiner. He was brand new and I called him on the phone. He said, I agree that your arguments are correct that the references don’t render the claims obvious (no amendment), but it doesn’t matter there will be new references. He said my supervisor told me that this will never be allowed and that I am just to keep finding new references no matter what.

  12. EG October 7, 2019 8:56 am

    The judge in this case should promptly deny this motion, as well as jump all over the USPTO for such an illegal and “off the books” program such as SAWS.

  13. night stalker October 7, 2019 11:07 am

    secret process is a violation of due process and equal protection.

    how is a patent with priority over Apple “politically” sensitive? A politicized IP system is ripe for corruption.

  14. night stalker October 7, 2019 11:09 am

    time to file foia suits on the secret processes.

  15. AAA JJ October 7, 2019 12:54 pm

    “Why does the PTO Solicitor so consistently play a game of double standards?”

    It’s more likely that the PTO’s lawyers are just as ignorant of administrative law as they are of patent law.

    Never assume malfeasance when incompetence will suffice as an explanation.

  16. BP October 7, 2019 1:34 pm

    People thought Freddie, Jason, and others were long gone too. For Halloween, USPTO officially launches SAWS II, your patent application eviscerated, deep-sixed, . . ., your PTAB win, poof, evaporated into thin air. A poorly kept secret, SAWS II has been operating in the dark for quite some time. SAWS programs are the “brainchild” of someone, I’d like to see that person exposed.

  17. Anon October 7, 2019 1:55 pm

    Sanctions….?

  18. different anonymous October 7, 2019 3:20 pm

    For those above talking about the quote “The Court explained that ‘PTO is under no legal obligation to cause an expeditious—or even an efficient— examination of a patent application,”

    remember that courts have upheld the similar notion that the police are under no obligation to protect you.

  19. Paul Morinville October 7, 2019 6:30 pm

    AAA JJ. “Never assume malfeasance when incompetence will suffice as an explanation.”

    Good advice…. Unless of course there is a long-term pattern of similar actions. Errors all pointing in the same direction are not errors. After a while, everyone knows it is intended.

  20. angry dude October 7, 2019 9:38 pm

    Paul Morinville @19

    “Errors all pointing in the same direction are not errors. After a while, everyone knows it is intended.”

    Exactly

    Like a cashier at cafeteria making small and apparently innocent mistakes giving you change… and apologizing if you count it and confront her … after a while you discover that she always gives you LESS money.. so it is intended.. not a random human error

    USPTO and Scotus and Congress and CAFC and various district courts have ALWAYS extracted money from American inventors over the last decade or so

    So everyone knows it is INTENDED

  21. ghostndragon October 8, 2019 10:08 am

    angry dude @8

    As invested as I am in the US patent system, and as much as I would like someone to crack down on the foolishness that calls itself examination there, I think obstruction of justice, corruption, and even possible treason might trump the need to get a special investigator for the USPTO. But then, why not do both. We’re all capable of walking and chewing gum at the same time, right?

  22. night stalker October 8, 2019 10:33 am

    The first thing to bear in mind is that the US Patent System is run by the British. A private British company runs the USPTO.

    i am all over supporting a series of FOIA suits to gather the basis for a full investigation of the USPTO.

  23. PTO-Indentured October 11, 2019 9:10 am

    Question: Is there are way (or new FOIA-request path?), available to inventors to confirm that a given patent application had been ‘held up’ / stonewalled secretly by SAWS? Paul, would a confirmed secret SAWS stonewalling (intentional delaying prosecution) of one or more of your a patent applications be grounds sufficient for a patent term adjustment being made, equal to a SAWS delayed period?

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