American IPA

When the Federal Circuit issued its ruling in Tafas v. Doll, it held (among other holdings) that Final Rule 114 governing RCEs was a valid exercise of the rulemaking power of the USPTO.  However, the Court expressly stated at the end of the opinion that “[t]his opinion does not decide…whether any of the Final Rules, either on their face or as applied in any specific circumstances, are arbitrary and capricious.”

Final Rule 114 conflicts with McKesson, makes it impossible for applicants to meet their obligations under that binding Federal Circuit precedent, and therefore is arbitrary and capricious on its face.   McKesson, in short, requires the applicant to submit in a particular application references from all related applications, as well as office actions from those cases if the claims therein are sufficiently similar to those in the particular application.  McKesson imposes no time limit on these obligations, nor does it define how similar two applications must be in order to be related.  At a minimum, related applications would include any case (US or foreign) that claims priority to the particular application at issue.

Therein lies the arbitrary and capricious rub.  A marginally relevant or even irrelevant reference may be cited in a foreign country five or six years after filing of a U.S. application – and this usually happens right after receiving a notice of allowance.  Or, a set of references barely relevant (if not irrelevant altogether) to the claims in a particular application turn up in the first office action in a co-pending continuation or divisional application.  Under McKesson, the practitioner is obligated to submit those references, regardless of their relevance.  The applicant’s hands are tied.  If the applicant has used up an RCE already to deal with an unreasonable rejection, or to submit art cited in a different related application, then the applicant can no longer – of right – comply with the binding precedent of McKesson.  Instead, the applicant must beg the USPTO for permission to file an RCE – permission that the USPTO has indicated will rarely if ever be given.  The fact that Final Rule 114 may put an applicant in a position where he or she is denied permission to follow the bright-line requirements of Federal Circuit law is the epitome of arbitrariness and capriciousness.

In Bruno Independent Living Aids, Inc. v. Acorn Mobility Services, Ltd., 394 F.3d 1348 (Fed. Cir. 2005), the Federal Circuit found that a 510(k) submission for a medical device was material prior art to a patent application filed for that medical device.  The rationale, in part, was that the 510(k) included a section entitled “Substantial Equivalence,” in which the filer stated that the medical device in question was “similar in design and function” to a competitor’s product.  However, this rationale ignored the fact that the FDA looks at “equivalence” at a much different way than does the Patent Office.

Happily, at least one panel of the Federal Circuit may finally understand that difference.  Last week, the Federal Circuit stated that “FDA equivalence is irrelevant to patent law because it involves fundamentally different inquiries.”  (Johns Hopkins University v. Datascope Corp., 2007-1530 (Fed. Cir. 2008, footnote 3)). This is certainly true, in that “substantial equivalence” in FDA parlance refers to a 50,000 foot view of the two products, and relates as much to efficacy as to structure, in my understanding.  For example, the FDA would consider the great majority of bare metal stents as “substantially equivalent” to one another.  But from a patent standpoint, there are literally thousands of stent patents dealing with improvements on and variations in bare metal stents, because “equivalence” from a prior art standpoint during examination is governed by 35 USC 102 and 103 and not by the sections of the US Code that govern the FDA. 

Footnote 3 is dicta, and fails to mention Bruno.  But that footnote is perhaps a harbinger of a decision to come in which Bruno may be overruled at least in part, or at least isolated and distinguished on its facts.  That would be good news indeed for medical device patent prosecution.

Earlier this week, the Federal Circuit decided Aristocrat Technologies Australia Pty Ltd. v. International Game Technology.  Aristocrat had revived an abandoned application on the grounds of unintentional, not unavoidable, delay.  IGT contended that Aristocrat was required to revive on the grounds of unavoidable delay, and by failing to do so rendered the patent invalid.  (The opinion does not set forth the fact pattern or IGT’s argument – likely because they were ultimately irrelevant.  That’s too bad, because I’m very curious about IGT’s legal theory.)  The Court held that “improper revival” – revival of an abandoned application that occured contrary to procedure, regulation or law – is not a defense in an action “involving the validity or infringement of a patent.”

Here comes the irony: One reason why “improper revival” was held not to be a defense is: “If any prosecution irregularity or procedural lapse, however minor, became grist for a later assertion of invalidity, accused infringers would inundate the courts with arguments relating to every minor transgression they could comb from the file wrapper.”  I thought that sentence pretty much summed up the current state of patent litigation in the US!

Of course, there’s always an exception for inequitable conduct: “We wish to stress, however, as we did in Magnivision, that where the procedural irregularity involves an ‘affirmative misrepresentation of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive,’ it may rise to the level of inequitable conduct, and is redressible under that framework.” 

So Aristocrat holds that there’s no such thing as “improper revival,” until it’s improper enough to be inequitable, and then there may be such a thing as “improper revival.”  Give yourself the weekend to wrap your head around that.