Aristocrat Technologies v. Int’l Game Technology (IGT) decision.

I just read the US Court of Appeals opinion for the Aristocrat v. International Game Technology (IGT) case, and I want to mention that I am unhappy with the decision and I feel that the judge played semantics with the availability of defenses for patent infringement suits, although I do believe he properly applied the law on its face. My opinion is that the law in its present form is broken and needs a bit of revision.

To summarize the lower court’s decision, in short, when Aristocrat was prosecuting their gaming patent, they paid a fee one day late. While this is a minor oversight, bottom line, according to the rules, this is enough to have the USPTO determine that the patent was abandoned and they did. Now according to the law, the applicants can only revive the abandoned application by stating that the lateness and its resulting abandonment was unavoidable. Yes, there are provisions regarding fees that state the cost of reviving an abandoned patent under the “unintentional” standard, but reading the statute on its face only allows an abandoned patent to be revived under the higher “unavoidable” standard. Whether this should be changed is a moot issue for now. The applicants claimed that the abandonment was “unintentional,” the USPTO said okay and revived the application, which later issued into US 7,056,215. Aristocrat later filed a continuation patent which also issued into US 7,108,603.

The lower court held that because the USPTO revived the abandoned application under the “unintentional” standard, because this type of revival is not supported by the statute on its face, the ‘215 patent is invalid (as is its child, the ‘603 patent).

Here in the US Court of Appeals decision, the judge reversed the lower court opinion stating that regardless of whether the patent is valid or not, “improper revival” of an abandoned patent is NOT a valid defense in an infringement action. What?!? He then goes ahead citing weak proofs as to why certain defenses are defenses and why others are not, and because improper revival was not one of those defenses that were explicitly listed as a defense, the judge precluded its availability completely ignoring the catch-all provision of 35 USC s.282(4) “Any other fact or act made a defense by this title.”

Now here is the pickle. Judge Jenkins appears to be technically correct in that improper revival is not explicitly stated as a defense to an infringement action so it’s not so clear whether section 282(4) applies to improper revivals of abandoned actions. However, the USPTO improperly revived the application and issued a patent which it should not have because it went beyond the powers granted to it.

So what do we do here? The patent should NOT have been issued, so technically, it SHOULD be invalid, as should its child. But, the appellate court interpreted the issue of availability of a certain defense, not the issue of invalidity based on a procedural and/or legal defect in the prosecution.

My opinion is that IGT will likely appeal to the Supreme Court, but regardless of whether they hear the case, their decision will spark some legislative controversy. If the Supreme Court hears the case and determines that 35 USC section 282(4) applies to the defense of improper revival, people will ask “what else constitutes a defense?” In my opinion, this is not a bad thing. I believe that if an examiner makes an error in the prosecution and a patent issues which should not have issued, there is nothing wrong with a patent litigation attorney later “combing the file-wrapper” looking for procedural and/or legal reasons why the patent being asserted is invalid. This is and should continue to be an available method of invalidating a patent. In short, if a patent should not have been issued, it should not have been issued, period! The problem with this alternative is that the Supreme Court by invalidating the patent will loosely interpret section 282(4) and strictly read the provision requiring the higher “unavoidable” standard, and this would be a contradiction.

Alternatively, if the Supreme Court hears the case and determines that the Court of Appeals was correct, it will essentially provide the rule that “notwithstanding certain exceptions which we will deal with on a case-by-case basis, regardless of what error the USPTO examiner committed during prosecution, if a patent issues, it is valid.” In its essence, the Supreme Court would give the USPTO full power to act outside its legislated powers awarding patents which should be invalid and vice versa. This is not an acceptable option. The USPTO is bound by the laws just as any federal agency should be. It has no rights to interpret the laws to mean something that is contra to powers explicitly granted. Thus, if the Supreme Court hears the case and affirms the Court of Appeals’ decision, who will control the USPTO and its examiners who make incorrect decisions?

In sum, this is one more case of where the law should have written something that it didn’t, and like many others, it needs a revision to clarify Congress’ position of 1) whether the unintentional standard is enough to revive an abandoned patent, and 2)whether 35 USC s.282(4) should include other defenses not explicitly stated as being a defense.

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