“It appears [from Hyatt v. Hirshfeld] that if the time between a filing of a U.S. or PCT priority application and filing of a continuing application exceeds six years, it is presumed that prosecution laches applies…. What are the potential impacts of this framework?”
Laches is an equitable defense that may be raised in a patent-related proceeding. If a defending party can show that a patent holder exhibited unreasonable delay that caused prejudice to the defending party, the patent holder may be barred by laches from asserting the right.
The delay may relate to how long it took for a patent holder to file a lawsuit. Further, “prosecution laches” may bar an applicant from asserting a patent. For example:
- In 1923, the Supreme Court held that laches applied when an Applicant waited nine years before contacting the U.S. Patent and Trademark Office (USPTO) about a delayed issuance and further – at that time – sought to amend the claims and specification. (Woodbridge v. United States, 263 U.S. 50 (1923)).
- In 1924, the Supreme Court held that laches applied when an applicant filed a divisional application with claims identical to those in a parent – thereby provoking an interference. After the interference proceeding, the applicant added two new claims, which were held to be unenforceable. (Webster Elec. Co. v. Splitdorf Elec. Co., 264 U.S. 463 (1924)).
- In 2002, the Federal Circuit held that laches applied when an applicant filed 12 continuation applications instead of arguing rejections or amending claims. (In re Bogese, 303 F.3d 1362, 1363 (Fed. Cir. 2002)).
- In 2005, the Federal Circuit provided three examples of reasonable delay: (1) filing a divisional application as late as right before a parent application’s issuance; (2) refiling an application to present new evidence of non-obviousness; and (3) refiling an application to include additional content to support broader claims. Meanwhile, an example provided of unreasonable delay was repeatedly “refiling an application solely containing previously allowed claims for the business purpose of delaying their issuance” (Symbol Techs., Inc. v. Lemelson Med., Educ. & Research Found., LP, 422 F.3d 1378, 1385 (Fed. Cir. 2005)).
While the examples of “reasonable” and “unreasonable” delay provided in Symbol Techs. are informative (as are the fact-specific analyses from the other cases), a bright-line test for “unreasonable delay” had yet to be established in the prosecution laches context. That is, until the June 2021 decision of Gil Hyatt v. Hirshfeld (Fed. Cir. 2021). This case pertained to the laches defense raised by the USPTO when Hyatt filed an action under 35 U.S.C. § 145 to obtain four patents subsequent to receiving an affirmance of rejections of various claims at the Patent Trial and Appeal Board (PTAB).
Specifics of this case are summarized here, but the present article focuses on two sentences from the decision:
In the context of laches, we have held that a delay of more than six years raises a “presumption that it is unreasonable, inexcusable, and prejudicial.” Wanlass v. Gen. Elec. Co., 148 F.3d 1334, 1337 (Fed. Cir. 1998). That presumption shifts the burden to the patentee to prove that “either the patentee’s delay was reasonable or excusable under the circumstances or the defendant suffered neither economic nor evidentiary prejudice.” Id. (Emphasis added.)
Thus, the Federal Circuit relied upon Wanlass for supporting the presumption that laches applies when a delay of more than six years has occurred. In Wanlass, the patent holder initially approached General Electric (GE) about licensing the patent in the year that the patent issued and GE replied that they did not believe that the patented technology was new. Eighteen years after issuance of the patent, the patent owner sued GE for infringement (relying on tests of a GE product conducted by the patent owner 15 years after issuance of the patent). Because 35 U.S.C. 286 specifies that infringement recovery is only permitted when the infringement was committed within six years prior to filing of the complaint, the Federal Circuit defined a “critical date” as six years prior to the Complaint filing. It was held that the patent holder should have known about the infringement before this critical date, and thus, it was presumed that laches applied.
Notably, the basis for conducting an analysis in Wanlass using the six-year threshold was because a statute specifically identified this threshold as being applicable to infringement contexts. Further, the time period assessed in Wanlass is rather clearly defined: it begins when a patent holder should have known about patent infringement (a date of constructive or actual knowledge) and ends when a Complaint was filed.
In Hyatt, the Federal Circuit held that laches was presumed to apply (thereby shifting the burden to Hyatt to overcome the presumption) based on “Hyatt’s conduct—including his delay in presenting claims, his creation of an overwhelming, duplicative web of applications and claims, and his failure to cooperate with the PTO”. The alleged “delay in presenting his claims” was based on the time that elapsed between the filing dates of priority applications and the filing dates of the applications at issue (and of other applications in Hyatt’s portfolio).
Thus, it appears as though the logic behind this decision indicates that if the time between a filing of a U.S. or Patent Cooperation Treaty (PCT) priority application and filing of a continuing application exceeds six years, it is presumed that prosecution laches applies and that the continuing patent cannot be enforced. What are the potential impacts of this framework?
Delving Into the Data
To investigate, priority data for all U.S. patents issued in 2019 was obtained from GreyB Services. Each patent was characterized as being an “original” patent (that may claim priority to one or more provisional applications but not to any other U.S. or PCT application), a “national phase” patent (that claims priority to a PCT application but not to any non-provisional U.S. application), or a “continuing” patent (that claims priority to at least one non-provisional U.S. patent application). For each patent, an earliest priority date was defined to be the date of the earliest PCT or non-provisional U.S. application in the priority chain for national phase and continuing patents and was defined to be the filing date for the patent for original patents. The issue date and art unit were further identified.
The data set represented 354,401 patents, of which 50% were original patents, 21% were national phase patents, and 29% were continuing patents. Across all patents, the average time between the priority date and filing was 1.45 years; the average time between filing and issuance was 2.53 years; and the average time between the priority date and issuance was 3.98 years.
FIG. 1 shows the percentage of patents for which various time periods exceeded six years. Of highest relevance with respect to the laches-presumption analysis presented in Hyatt is the percentage of patents for which a time between a priority date and a filing date exceeded six years (which would seemingly mean are presumed to have laches apply). Unsurprisingly, none of the original or national phase patents had priority-to-filing durations that exceeded six years. However, the priority-to-filing duration did exceed six years for 18.1% or 18,858 of the continuing applications, which amounted to 5.3% of all of the patents issued in 2019.
FIG. 2 shows, for each technology center, the percentage of 2019 patents with priority-to-filing durations that exceeded six years. This percentage was highest for patents from Technology Center 1600 (Biotechnology and Organic fields) at 11.7% and was lowest for patents from Technology Center 2800 (Semiconductors, Electrical and Optical Systems and Components) at 2.9%.
So, does Hyatt mean that laches is presumed to apply to 5% of patents that are issued? Bright?line rules can be very useful. However, it is important to carefully consider the potential impacts before any such rule is defined.
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