As the economic power of patents continues to grow, time-honored beliefs in the virtues of the patent system and the rights of patent holders have come under increasing scrutiny, and accusations of abuses of the patent system are increasingly prevalent. The latest example appears in a recent decision by the Court of Appeals for the Federal Circuit, the nation's leading patent court. This decision gives its approval to a new way of challenging a patent – by asserting that the applicant caused the application to remain pending for an unreasonable length of time to the detriment of the industry.
The Lemelson Case
The case involved several patents issued to Jerome H. Lemelson, an inventor who has received more US patents than any other individual. Lemelson's patents, which date from the early 1960s to after his death in 1997, are in machine vision and bar-code technology. His estate estimates that there are now 185 unexpired Lemelson patents plus numerous applications still pending. By licensing these patents to companies in the semiconductor, software, and computer and retail industries, Lemelson's estate has already collected more than $1 billion in royalties, and numerous lawsuits for more revenue are pending. As part of their defense, the companies named as defendants in these lawsuits argued that Lemelson and his attorneys kept his patent applications pending before the PTO for so long that technological advancement in the field was severely hindered. The defense is referred to as "laches," a legal term which means that a legal claimant has delayed filing a lawsuit without good reason, and that the delay has been great enough that the party against whom the claim was ultimately made has suffered negative economic consequences. Prior to the Lemelson case, this theory has never been applied to delays in the PTO caused by the patent applicant.
The delay that was complained of in the Lemelson case was caused by repeated refilings of the patent applications, mostly as "continuations," each one extending the pendency period. Patent attorneys often file continuations to allow the examiner more time to consider certain patentability issues after the examination has reached a stage where further argument is not permitted. Continuations are also filed to submit new claims to inventions that were disclosed in the earlier application but for some reason not actually claimed. Continuations can be filed at any time before the previous application issues as a patent or is abandoned, without losing the benefit of the original filing date. If the applicant files a succession of continuations, each one shortly before its predecessor issues or is abandoned, the gap between the effective filing date and the issue date of the patent can be extended considerably. The effective filing date serves as a reference point for determining the novelty, and hence the patentability, of an invention.
An example of Lemelson's filing strategy is one that began with an application filed in 1953. The application remained pending until 1963, when a succession of refilings began, each one filed toward the end of the pendency period of its predecessor, many issuing as patents and all claiming inventions that were disclosed in the 1953 application. One of the patents issued in 1992 as the last of a chain of 11 refilings that included 6 continuations, all carrying over a filing date benefit from the 1953 application. The patent thus issued almost 40 years after its effective filing date. Other patents were obtained after similar delays.
A magistrate's opinion rendered in 1996 reviewed this filing strategy and concluded that long after the first application was filed, Lemelson was "looking at products currently on the market and drafting new claims within the nomenclature of the early application so he can get new patents which encompass existing technology." Lemelson admitted this but characterized it as "commercial gamesmanship."
Despite the magistrate's opinion, the lower courts threw out the defense, reasoning that regardless of whether the delays were unreasonable, the laches theory cannot be based on repeated refilings of patent applications as long as no PTO regulations were violated. The Federal Circuit has now reached the opposite conclusion and holds that excessive refilings can indeed be grounds for a laches defense. The case has therefore been returned to the trial court to hear the defense and actually decide it.
Delays as extreme as the one in this case would be unlikely today, since patents issuing on applications that are now being filed expire 20 years from their initial filing dates, regardless of the number of intervening refilings. Any applicant-caused delay therefore reduces the patent term. Nevertheless, delays can now be scrutinized for reasonableness, and unreasonable delays can provide infringers with a new defense to a charge of patent infringement.