The Submarine Defense System Misfires: Prosecution Laches After Symbol Technologies

Christopher C. Smith*

TABLE OF CONTENTS

I. INTROD UCTION ...... 236 II. WHEN THE "SUBMARINE" ATACKS: THE PR OC ESS ...... 238 III. THE "SUBMARINE" DEFENSE SYSTEM IS PUT IN PLACE: U.S. SUPREME COURT PRECEDENT CITED IN SYMBOL TECINOLOGIESAND THE 1952 PATENT ACT ...... 24 1 A . W oodbridge v. United States ...... 241 B. Webster Elec. Co. v. Splitdorf Elec. Co ...... 242 C. Crown Cork & Seal v. Ferdinand Gutmann Co ...... 243 D. The Effect on Laches by The PatentAct of 1952 ...... 244 IV. RELOADING THE "SUBMARINE" DEFENSE SYSTEM: PROSECUTION LACHES REvISrrED IN THE FEDERAL CIRCUIT ...... 244 A. Symbol Technologies, Inc. v. Lemelson Med., Educ., & R esearch Found ...... 244 B . In re Stephen Bogese ...... 245 C. State of ProsecutionLaches After Symbol Technologies and In re B ogese ...... 247 V. THE "SUBMARINE" DEFENSE SYSTEM OFF-TARGET: THE DISTRICT COURTS TRY TO MAKE SENSE OUT OF SYMBOL TECHNOLOGIESAND IN RE B OGESE ...... 247 A. Current Confused State of ProsecutionLaches ...... 247 B. Third Circuit-IntuitiveSurgical, Inc. v. Computer Motion In c ...... 2 4 9 C. Seventh Circuit--Cummins-Allison Corp. v. Glory Ltd ...... 250 D . N inth C ircuit ...... 251 1. Symbol Technologies, Inc. v. Lemelson (Revisited) ...... 251 2. Digital Control,Inc. v. McLaughlin Mfg. Co ...... 252 3. Martin GardnerReiffen v. Microsoft Corp...... 253 4. Gen-Probe, Inc. v. Vysis, Inc...... 253

* B.S.E., 2002, University of Michigan, Ann Arbor: JD Candidate, May 2005, University of California, Los Angeles. As of September 2005, the author will be joining the law firm Christie, Parker and Hale, L.L.P. in Pasadena, CA. Special thanks to: Prof. Stephen Munzer, for his guidance in writing this paper, Robert Green, for helping me understand the intricacies of patent prosecution; Ann Byme, Jeff Goldman, and Thomas Smith for their editorial input; and Jeff Thennisch and Eric Dobrusin, for planting the "seed" which became this paper. GONZAGA LAW REVIEW [Vol. 40:1

VI. SIGHTING IN THE "SUBMARINE" DEFENSE SYSTEM: A PROPOSED STANDARD FOR PROSECUTION LACHES ...... 254 A. Intentional and UnreasonableDelay ...... 255 B. The Defendant's Rights Were Adversely Affected ...... 256 C. Clearand Convincing Burden of Proof ...... 257 VII. C ONCLUSION ...... 257

I. INTRODUCTION

Throughout history the law has emphatically protected the property rights of one person from the interference of another. The Framers integrated such protection into the Constitution for intellectual property rights when they authorized Congress "[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."' In exercising this power, Congress balanced the need to provide an incentive for people to invent with the desirability of retaining the long term benefits of these inventions for society. 2 Section 154 of the Patent Act 3further accomplishes this goal by limiting a patentee's exclusive rights to a fixed term. However, some patentees have delayed the issuance of their until the patent has greater commercial appeal.4 Experts refer to these patents as "submarine"

1. U.S. CoNsT.art , § 8, cl. 8. 2. See Pfaffv. Wells Elecs., Inc., 525 U.S. 55, 64-65 (1998). The Court stated that: Consistent with these ends, § 102 of the Patent Act serves as a limiting provision, both excluding ideas that are in the public domain from patent protection and confining the duration of the monopoly to the statutory term... [t]he patent laws therefore seek both to protect the public's right to retain knowledge already in the public domain and the inventor's right to control whether and when he may patent his invention. Id. 3. See 35 U.S.C. § 154(a)(2) (2000). Under § 154(a)(2) the term of a patent is: Subject to the payment of fees under this title, such grant shall be for a term beginning on the date on which the patent issues ending 20 years from the date on which the application for the patent was filed in the United States or, if the application contains a specific reference to an earlier filed application or applications under section 120, 121, or 365(c) of this title, from the date on which the earliest such application was filed. Id. 4. See Woodbridge v. United States, 263 U.S. 50, 53 (1923). The Court stated: In this case we have a delay of nine years and a half in securing a patent that might have been had at any time in that period for the asking, and this for the admitted purpose of making the term of the monopoly square with the period when the commercial profit from it would be highest Id.at 56. 2004/05] PATENT PROSECUTION LACHES patents.5 This practice can result in great inequities to third parties who continue to invent while another application covering the same subject matter of their inventions remains concealed at the Patent & Trademark Office (PTO).6 In response, the courts developed the equitable defense of prosecution laches that gives the accused infringer recourse when a patentee has unreasonably prolonged the issuance of his patent.7 Prosecution laches bars relief for infringement when the patentee has unreasonably delay has prejudiced the delayed asserting 8his patent rights and this unreasonable accused infringer. For many years, prosecution laches was an option for accused infringers.9 Recently, however, it had become unclear whether the courts still accept this defense. 10 As a result, the Federal Circuit revisited the question of whether laches still provides a viable defense for patent infringement cases in Symbol Technologies, Inc. v. Lemelson Medical, Education & Research Foundation."I In Symbol Technologies, the Federal Circuit held that the defense of prosecution laches was still a viable defense for those accused of patent infiingement." Unfortunately, the court failed to give any other guidance as to how the defense of laches is to be applied, thus leaving the district courts to develop their own application of the doctrine. 13 The district courts split in their interpretation of the doctrine, thus14 exposing Symbol Technologies' failure to develop a uniform standard for laches.

5. See Steve Blount, The Use ofDelaying Tactics to Obtain Submarine Patents andAmend Around a Patentthat a Competitorhas DesignedAround, 81 J. PAT. & TRADEMARK OFF. Soc'Y 11, 15 (1999). "Submarine patents work by keeping the afloat in the patent office through the use of continuing applications." Id 6. See Woodbridge, 263 U.S. at 56. The Court concluded that goals of the patent laws are not accomplished "if the inventor is allowed to conceal his invention to be brought forward in some after time to thwart and defeat a more diligent and active inventor, who has placed the benefit of his invention within the reach and knowledge of the public." Id (quoting In re Appeal of Mower, 15 App. D.C. 144, 152-53 (1899)). 7. See Dave Ghatt, Bogese Case Comment: An Examination of the Patent and Trademark Office's Authorty to Make Rejections Based on Prosecution History Laches, 85 J. PAT. & TRADEMARKOFF. Soc'Y 751,753 (2003) (discussing the early case law on patent prosecution history laches). 8. Id 9. See, e.g., Crown Cork & Seal Co. v. Ferdinand Gutmann Co., 304 U.S. 159 (1937); Webster Elec. Co. v. Splitdorf Elec. Co., 264 U.S. 463 (1924). 10. See, e.g., Ricoh Co. v. Nashua Corp., No. 97-1344, 1999 WL 88969, at *3 (Fed. Cir. Feb. 18, 1999); Bott v. Four Star Corp., Nos. 88-1117, 88-1118, 1988 WL 54107, at *1 (Fed. Cir. May 26, 1988). 11. 277 F.3d 1361, 1363 (Fed. Cir. 2002). 12. ld at 1366. 13. See, e.g., Intuitive Surgical, Inc. v. Computer Motion, Inc., No. CIV.A.01-203-SLR, 2002 WL 31833867, at *3 (D. Del. Dec. 10, 2002); Gen-Probe, Inc. v. Vysis, Inc., No. 99-CV-2668 H, 2002 U.S. Dist. LEXIS 25020, at *117 (S.D. Cal. Aug. 2, 2002). 14. Intuitive Surgical,2002 WL 31833867, at *5 n.4. GONZAGA LAW REVIEW [Vol. 40:1

This comment identifies and analyzes inconsistencies found in the application of laches by the district courts since Symbol Technologies. By then analyzing other Federal Circuit and U.S. Supreme Court precedent, the comment will finally propose a clear and definitive prosecution laches test. Part II describes the patent prosecution process and how applicants have been able to delay the issuance of their patents under the law. Part II discusses the seminal U.S. Supreme Court cases in the area of prosecution laches. Part IV analyzes the two most recent Federal Circuit cases on prosecution laches, Symbol Technologies15 and In re Bogese,16 and identifies the shortcomings of these decisions. Part V details various district court cases, and shows how these decisions compare with one another as well as with past precedent. Lastly, Part VI proposes a succinct method for applying the defense of laches to allow for a more equitable administration of the doctrine.

II. WHEN THE "SUBMARINE" ATTACKS: THE PATENT PROSECUTION PROCESS

Congress crafted patent laws to balance the interests of the patentee with the interest of the public.' 7 The Patent Act balances these competing interests by creating a limited duration monopoly for the patentee 18 in exchange for complete disclosure of the patented subject matter to the public.1 9 Those seeking a limited monopoly on their invention must go through a prosecution period during which the PTO determines if the application involves patentable subject matter.20 During prosecution, the PTO may reject certain claims of the patent, and the applicant may then amend these claims in an attempt to satisfy the PTO's concerns and ultimately obtain a patent for the invention.21

15. 277 F.3d 1361 (Fed. Cir. 2002). 16. 303 F.3d 1362 (Fed. Cir. 2002). 17. See Todd Martin, Patentabilityof Methods of Medical Treatment: A ComparativeStudy, 82 J. PAT, & TRADEMARK OFF. Soc'Y 381, 381 (2000). "A basic tenet of patent law is ownership and the ability to exclude as a reward for revealing an inventor's new technology." Id 18. See 35 U.S.C. § 154(a)(2) (2000). 19. See P. Kanagavel, Intellectual Property Rights: A Comprehensive Overview, 85 J. PAT. & TRADEMARK OFF. Soc'Y 663, 669 (2003). "A patent provides the right to exclude given by the government to the inventor(s) from making, using and selling the patented product/process for a limited period of time subject to the full disclosure of the invention." Id 20. See 35 U.S.C. § 131 (2000). "The Director shall cause an examination to be made ofthe application and the alleged new invention; and if on such examination it appears that the applicant is entitled to a patent under the law, the Director shall issue a patent therefor." Id 21. See 35 U.S.C. § 132(a) (2000). Thecode states: Whenever, on examination, any claim for a patent is rejected, or any objection or requirement made, the Director shall notify the applicant thereof, stating the reasons for such rejection, or objection or requirement, together with such information and references as may be useful in judging of the propriety of continuing the prosecution of his application; and if after receiving such notice, the applicant persists in his claim for a patent, with or without amendment, the application shall be reexamined. No amendment 2004/05] PATENT PROSECUTION LACHES

Typically, once an application has been filed with the PTO, a patentee is allowed two official actions by the PTO examiner. 22 For a fee, an applicant can purchase a continuation application, which extends the period of prosecution. 23 This additional prosecution time allows for a longer, more detailed dialogue between the PTO examiner and the applicant.24 Applicants are not allowed to broaden the scope of their claims 15through an extension, but they are granted the priority of their original application. In a similar procedure referred to as a "continuation-in-part," or CIP application, an applicant can add new subject matter to an existing application.26 An inventor usually files this type of application to add previously unclaimed subject matter to the existing application.27 However, any new subject matter added to the claims, as well as claims dependent upon the new subject matter, are entitled only to the priority of 28 the CIP. A third situation arises when a single application claims multiple independent and distinct inventions. 29 In these circumstances, the PTO typically forces the applicant to select only one of the claimed inventions for further prosecution in that 30 application. However, for a fee, an applicant can file a divisional application which31 allows for separate prosecution of all inventions claimed in the original application.

shall introduce new matter into the disclosure of the invention. 35 U.S.C. § 132(a). 22. See ROGER E. SCHECHTER & JOHN R. THOMAS, INTELLECTUAL PROPERTY THE LAW OF COPYRIGHTS, PATENTS AND TRADEMARKS § 19.2.4 (2003). 23. See id "Under the so-called 'file wrapper continuing' procedure, an applicant essentially purchases an additional period of prosecution." Id. 24. Id 25. See 35 U.S.C. § 120 (2000). The code states: An application for patent for an invention disclosed in the manner provided by the first paragraph of section 112 of this title in an application previously filed in the United States, or as provided by section 363 of this title, which is filed by an inventor or inventors named in the previously filed application shall have the same effect, as to such invention, as though filed on the date of the prior application, if filed before the patenting or abandonment of or termination of proceedings on the first application or on an application similarly entitled to the benefit of the filing date of the first application and if it contains or is amended to contain a specific reference to the earlier filed application. 35 U.S.C. § 120. 26. See ScHEcHTRr & THOMAS, supra note 22, § 19.2.4. 27. See id. 28. See id 29. See id § 19.2.5. 30. See id. 31. See SCHECHTER & THOMAs, supra note 22, § 19.2.5. GONZAGA LAW REVIEW (Vol. 40:1

If all proper procedures are followed, the applicant is allowed to keep the priority of the original application for the subsequent divisional applications.32 Once an original or continuing application has met all the statutory requirements, the PTO will issue a patent to the applicant.33 Most applications whose patents were issued by the PTO on or before June 8, 1995, were awarded a fixed term of seventeen years from the date of issuance.34 Due to the codification of the Uruguay Round Agreements Act (URAA), 35 patents issued after June 8, 1995 are awarded a term of up to twenty years from the date of filing, minus any time spent prosecuting the 36 patent. A "submarine" patent takes advantage of these various types of continuing and divisional applications by prolonging the issuance of the patent until a more desirable time.37 In such a situation, the applicant will manipulate the process by filing overly broad claims and then continually amending the claims until that point in time when the applicant actually wants to have the patent issued.38 Typically, an applicant will delay until the patent has reached its peak commercial value.39 After an extended delay, said patent will then surface without warning from the depths of the PTO, much like a submarine emerges from the depths of the ocean, to render other inventors' work unpatentable and infiinging.4°

32. See 35 U.S.C. § 121 (2000). The code states: If two or more independent and distinct inventions are claimed in one application, the Director may require the application to be restricted to one of the inventions. If the other invention is made the subject of a divisional application which complies with the requirements of section 120 of this title it shall be entitled to the benefit of the filing date of the original application. 35 U.S.C. § 121. 33. See 35 U.S.C. § 131 (2000). 34. Cf Uruguay Round Agreements Act, Pub. L. No. 103-465, § 534, 108 Stat. 4809, 4990 (1994) (allowing an inventor who filed an application prior to the date that was six months after the date of enactment for the Uruguay Round Agreements Act to select either a term of protection for seventeen years from the grant of the patent or twenty years from the date the application was filed). 35. Id. at 4809. 36. See 35 U.S.C. § 154 (c)(1) (2000). The code states: The term of a patent that is in force on or that results from an application filed before the date that is 6 months after the date of the enactment of the Uruguay Round Agreements Act shall be the greater of the 20-year term as provided in subsection (a), or 17 years from grant, subject to any terminal disclaimers. Id. 37. See Blount, supra note 5, at 15-16. 38. Id. at 13. 39. See id 40. See David L. Marcus, Comment, Is the Submarine Patent Torpedoed?: FordMotor Co. v. Lemelson and the Revival of ContinuationApplication Laches, 70 TEMP. L. REV. 521, 525 (1997). Marcus asserts: Because the PTO maintains patent applications in strict secrecy until they eventually issue 2004/05] PATENT PROSECUTION LACHES

As mentioned earlier, continuing applications whose parent applications were filed after June 8, 1995, enjoy a term of twenty years from the filing date of their parent application.4' Many patents were filed prior to June 8, 1995 and, thus, are entitled to the longer of seventeen years from issuance or twenty years from filing, making "them potential submarine candidates. '"2 In many of these cases, the patentee will file a terminal disclaimer on the continuation patent so that it will expire at the same time as the parent patent.43 However, even for applications filed after June 8, 1995, there is a risk of submarine patents. Technology improves so quickly that a delay of even a couple of years, followed by a term less than seventeen years, can critically damage the prospects of other inventors.4 Hence, even after the codification of the URAA, submarine patents continue to lurk in the waters of the 5 PTO waiting for the opportune time to attack." Trying to avoid this• inequitable46 outcome, the U.S. Supreme Court adopted the doctrine of prosecution laches.

II. THE "SUBMARINE" DEFENSE SYSTEM ISPUT IN PLACE: U.S. SUPREME COURT PRECEDENT CITED IN SYMBOL TECHNOLOGIES AND THE 1952 PATENT ACT

A. Woodbridge v. United States

In Woodbridge v. United States, the U.S. Supreme Court held that an unexplained delay of nine years constituted laches and invalidated the plaintiff's

as patents, an entire industry may develop around the subject matter of those applications without a single person-other than the applicant(s)-knowing that the applications are pending. Thus, a decade or more after the filing of the original application, a patent may "surface" from beneath the sea of applications pending before the PTO and catch an entire industry off guard. Id. 41. See 35 U.S.C. § 154 (a)(2). 42. See Blount, supranote 5, at 16. 43. Smith & Hopen, intellectual Property Glossary, at http://www.baypatents.com/glossary/defaultasp?IDGlossary--63 (last visited Aug. 12, 2004) (defining terminal disclaimer as "[a] statement that causes a second patent to expire on the same date as a first patent."). 44. Blount, supra note 5, at 16. Also, in some fast-moving technologies, usually the ones requiring the most innovation and producing some of the greatest economic value to our country, like computer technology, it is conceivable that it would be worth the trade of losing some years of a patent's life at its tail end to require a potential infringer to take out a license on the new technology before it becomes obsolete. Or, as one commentator has pointed out, if a submarine patent is kept submerged for 15 years, it can still wreak a lot of havoc in its remaining five. Id. 45. id. 46. Woodbridge v. United States, 263 U.S. 50,56 (1923). GONZAGA LAW REVIEW [Vol. 40:1 patent.47 The Court concluded that the plaintiff deliberately delayed the issuance of his patent "so that its term and monopoly would reach forward to include nearly ten more years of the future and cover a much more commercially lucrative period then if he had obtained his patent when he might and should have requested it.""8 The Court further reasoned that the plaintiff had failed to promote the spirit of the patent laws because his delay unfairly disadvantaged other inventors.49 The Court found that the plaintiff had unreasonably delayed the public's free right to enjoyment of his 50 invention. Subsequently, the Court held that the plaintiffs nine year delay was5 an unreasonable unexplained delay that constituted laches and invalidated his patent. 1

B. Webster Elec. Co. v. Splitdorf Elec. Co.

Only one year later, the Supreme Court revisited the issue of prosecution laches in Webster Elec. Co. v. SplitdorfEleC. Co. 51 In Webster, the Court concluded that the applicant had "simply stood by and awaited developments" for the eight years between his original application and his amended divisional application.53 The Court then stated, "[w]e have no hesitation in saying that the delay was unreasonable, and, under the circumstances ... constitutes laches, 5by4 which the petitioner lost whatever rights it might otherwise have been entitled to." In its analysis, the Court declared that a delay of more than two years carries with it a presumption of unreasonableness.55 The Court stated that "while no variable rule can be laid down, a delay of two years ... will be fatal unless excuse for a longer

47. See id 48. Id. at 58. 49. Id at 56. The Court stated: [n]ot until war or fear of war came was there likely to be a strong demand for rifled cannon and their improvement. Hence, the inventor, having put his order for the issue of a patent into the secret archives of the Patent Office in 1852, sat down and waited until after the Civil War came on in 1861 before seeking to avail himself of the patent, thus postponing the time when the public could freely enjoy it for nearly ten years. Meantime other inventors had been at work in the same field and had obtained patents without knowledge of the situation with respect to Woodbridge's invention. Id. 50. Id The Court stated that "[a]ny practice by the inventor ... through which he deliberately and without excuse postpones ... the beginning of the term of his monopoly, and thus puts off the free public enjoyment of the useful invention, is an evasion of the state and defeats its benevolent aim." Id. 5t. See Woodbridge, 263 U.S. at 56. 52. 264 U.S. 463 (1924). 53. Id at 465. 54. Id. at 466. 55. Id. at 468-69. 2004/05] PATENT PROSECUTION LACHES delay shall be made manifest by the special circumstances of the case."56 The Court also referred to the inequity of allowing one to delay the enforcement of the patent rights at the expense of other inventors."

C. Crown Cork & Seal v. Ferdinand Gutmann Co.

The Court wrestled with Webster's inflexible two year presumption of unreasonableness in Crown Cork & Seal Co. v. Ferdinand Gutmann Co.58 The Court held that in the absence of intervening rights, a two year delay cannot be prima facie proof of laches for divisional applications.59 The Court distinguished Crown from Webster by showing that the applicant in Webster had "stood by and awaited developments" of other inventors, while the applicant in Crown had not.60 The Court's holding did not overrule the decision in Webster, nevertheless it did severely weaken Webster's effect by adding an "intervening adverse rights" requirement to prove laches.6' On the same day Crown was decided, the Court in Gen. Talking Pictures Corp. v. Western Elec. Co. held that absent intervening rights, a delay of of laches.62 more than two years for continuation did not lead to a presumption Consequently, after Gen. Talking Pictures and Crown, the defense of laches was valid only when the patentee had both unreasonably delayed the issuance of the patent,63 and adversely affected the defending party.64

56. d at 469. 57. Webster, 264 U.S. at 467. The Court stated that laches disables a party "who seeks to revive a right which he has allowed to lie unclaimed, from enforcing it to the detriment of those who have, in consequence, been led to act as though it were abandoned." Id 58. 304 U.S. 159 (1938). 59. Id at 167-68. Referring to the proof required to successfully assert the defense of laches, the Court stated that "in the absence of intervening adverse rights, the decision in Webster... does not mean that an excuse must be shown for a lapse of more than two years in presenting the divisional application." Id 60. Id. at 166. 61. Id. at 167. 62. Gen. Talking Pictures Corp. v. W. Elec. Co., 304 U.S. 175, 183 (1938) (referencing continuation applications filed by the applicant, the Court stated "[i]n the absence of intervening adverse rights for more than two years prior to the continuation applications, they were in time"); see also Michael T. Hawkins, Comment, Prosecution Laches in the Wake of Symbol Technologies: What is "Unreasonableand Unexplained" Delay?, 87 MINN. L. REv. 1621, 1636 (2003). 63. See Ghatt, supranote 7, at 753. 64. See Gen. Talking Pictures Corp., 304 U.S. at 183; Hawkins, supra note 62, at 1636. GONZAGA LAW REVIEW [Vol. 40:1I

D. The Effect on Laches by the Patent Act of 1952

Congress had remained relatively silent about judicially created doctrines such as laches prior to enactment of the Patent Act of 1952.65 With this act, Congress intended to codify the existing patent laws.66 The Act was the first major patent legislation since 1874.67 All indications were that Congress intended to preserve the defense of laches. 68 As a result, the defense of laches was able to survive and live on into the modem era of patent law. IV. RELOADING THE "SUBMARINE" DEFENSE SYSTEM: PROSECUTION

LACHES REVISITED IN THE FEDERAL CIRCUIT

A. Symbol Technologies, Inc. v. Lemelson Med., Educ., & Research Found.

In the years following the 1952 Patent Act, the defense of prosecution laches fell out of fashion. In fact, it was unclear whether prosecution laches was still a viable defense. 69 These issues were resolved in Symbol Technologies, where the Federal 70 Circuit held that prosecution laches was still a viable defense. In its initial discussion, the court addressed the pre-1952 U.S. Supreme Court case law which had shaped the doctrine of prosecution laches.71 The court referred to Woodbridge and Webster as the two Supreme Court cases responsible for introducing the defense of patent prosecution laches.72 In its discussion of Crown Cork and Gen. Talking Pictures, the court emphasized that evidence of adverse intervening rights

65. See ScHEcHTER & THOMAS, supra note 22, § 13.2.6. Prior to 1952 the Supreme Court had developed a propensity to strike down patents, thus "[t]he drafters of the Patent Act of 1952 sought to reverse this antipatent trend ... Among the innovations of the 1952 Act were the codification of the nonobviousness standard and the curtailing of ." Id. 66. See P.J. Federico, Commentary on the New Patent Act, 75 J. PAT. & TRADEMARK OFF. Soc'Y 161, 169 (1993). 67. See S. REP. No. 82-1979, at 1 (1952), reprintedin 1952 U.S.C.C.A.N. 2394,2395. "The present patent laws consist of about 60 sections of the Revised Statutes of 1874, together with a large number of acts of Congress passed since that date revising various sections of the Revised Statutes or making new enactments not related to any section of the Revised Statutes." Id 68. See A.C. Aukerman Co. v. RL. Chaides Constr. Co., 960 F.2d 1020, 1029 (Fed. Cir. 1992) (stating that "[tihe commentary of one of the drafters of the revised patent statute confirms the intention to retain the defense of laches"); see also Hawkins, supra note 62, at 1637-38; Marcus, supra note 40, at 537-38. 69. See Bott v. Four Star Corp., No. 88-1117, 88-1118, 1988 WL 54107, at *1 (Fed. Cir. May 26, 1988) (refusing to embrace the defense of prosecution laches). 70. Symbol Techs., Inc. v. Lemelson Med., Educ. & Research Found., 277 F.3d 1361, 1365-66 (Fed. Cir. 2002). 71. Id. at 1364. 72. Id. 2004/05] PATENT PROSECUTION LACHES was required to prove laches.73 Even so, the court failed to address whether or not adverse intervening rights were still required to prove laches today.74 The majority concluded that the defense of prosecution laches was still an applicable merely 75 defense. In her dissenting opinion, Chief Judge Newman argued that her colleagues in the majority had over-stepped their bounds, because statutes were already in place that limited the duration of patent prosecution.76 Judge Newman was perplexed that the court had adopted a doctrine that could invalidate a patent that had been properly obtained by following the applicable patent statutes.77 She wrote, "[t]he long- standing rule, until today, is that when the statutory requirements for continuing' 78 applications are met, patents are not subject to attack on non-statutory grounds. Judge Newman was also concerned because the adoption of laches would allow patentees who had followed the applicable laws at the time of their applications to retroactively lose their patent rights.7 9 She wrote that "authorized acts of patent prosecution [should not] be forever tainted by the potential defense that they should have been done sooner than the statute required.'8

B. In re Stephen Bogese

Later that year, in In re Bogese, the Federal Circuit was faced with the question of whether the PTO could apply prosecution laches to render a patent unenforceable.8 1 The court saw no reason why the PTO should not be able to apply the holding of Symbol Technologies to pending applications.82 In fact, the court stated that "the PTO's authority to sanction undue delay is even broader than the authority of a district court to hold a patent unenforceable. ' 83 Since the PTO is an

73. Id. at 1365 (discussing Crown Cork & Seal Co., the court stated that "the Court ratified the existence of the prosecution laches defense; it did not apply the defense there in the absence of intervening rights. Similarly, in General Talking Pictures, the Court rejected the defense of prosecution laches because there was no evidence of intervening public rights."). 74. Id at 1363. 75. Symbol Techs., Inc., 277 F.3d at 1363. 76. Id. at 1369 (Newman, J., dissenting). 77. Id. 78. Id But see A-C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1030 (Fed. Cir. 1992) (concluding that litigation laches was an applicable defense even if the patentee had followed all the applicable statutes in bringing suit). 79. See Symbol Techs., Inc., 277 F.3d at 1369 (Newman, J., dissenting). 80. Id. at 1371. 81. 303 F.3d 1362, 1366-67 (Fed. Cir. 2002). 82. Id at 1367. 83. Id. GONZAGA LAW REVIEW [Vol. 40:1

administrative agency, and most administrative agencies are allowed to4 impose reasonable deadlines, the court reasoned that the PTO also has such power.8 In her dissenting opinion, Judge Newman argued that there was "no basis on which to grant authority to the [PTO] ...to impose its own non-statutory time limits for examination purposes."85 Just as she had inSymbol Technologies, Judge Newman continued to attack the majority's adoption of a rule that punishes someone who has fulfilled all statutory requirements. 86 Newman argued, "equitable discretion is available as a remedy to ameliorate unwarranted distress, not as a punishment of those who stayed within the letter of the law.''87 Her position was that it is the place of the judiciary to make equitable determinations, 8and agencies had no business superseding "the statute that governs agency action."'8 In contrast to the majority opinion, Judge Newman emphasized that laches89 requires a showing of both unreasonable delay and prejudice to the defendant. Thus, she argued that it would be improper for the PTO to apply laches in a non- litigation situation because there was no "relationship between the parties... [or a] history of dealing with each other." 90 She explained that "patent examination is not litigation; there is no 'defendant,' no prejudice, no issue of injury to the government or 9 1 clean hands on its part." Judge Newman conceded that there was a public92 interest in early disclosure, which could be adversely affected in this scenario. Nevertheless, she concluded that this potential93 danger had been all but eliminated by the requirement of mandatory publication.

84. Id at 1367-68; see also Ghatt, supra note 7,at 753. The court failed to give the PTO the proper guidelines and procedure for making proper rejections based on prosecution laches. In re Bogese, 303 F.3d at 1372 (Newman, J.,dissenting). 85. In re Bogese, 303 F.3d at 1370 (Newman, J., dissenting). 86. Id 87. Id.at 1371. 88. Id.Judge Newman wrote: Equitable determinations are generally reserved to the courts, which may on occasion depart from statute inorder to reach a just result, in order to ameliorate an injustice flowing from the letterof the law. But itis rare indeed to invoke equitable considerations inorder to punish someone who has not violated the law. The equitable power isintended to remedy harsh application of law,not to impose new penalties on those who abide by the law. Id.at 1370. 89. Id. at 1370-71. 90. In re Bogese, 303 F.3d at 1371-72 (Newman,J., dissenting). 91. Id.at 1372. 92. Id. 93. Id. 2004/05] PATENT PROSECUTION LACHES

C. State of ProsecutionLaches After Symbol Technologies and In re Bogese

Symbol Technologies and In re Bogese revived the dormant defense of prosecution laches as a viable defense for patent infiingers. 94 In addition, the doctrine of laches was broadened to allow the PTO to invalidate unexplained unreasonably delayed patent applications.95 Still, one aspect of the doctrine left unclear was whether a defendant must assert "intervening adverse rights" to successfully invoke the defense of laches.96 In Symbol Technologies, the Federal Circuit pointed out that the Supreme Court doctrine required "intervening adverse rights.' 9 7 However, the court's holding makes no mention of this second element. Furthermore, in In re Bogese, the Federal Circuit allowed the PTO to apply laches during the prosecution process before anyone's rights had been harmed.98 Thus, at least in the case of the PTO, and quite likely in all laches cases, the court appears to have eliminated the requirement of adverse intervening rights. The court left many lingering questions in its wake. 99 Such questions as the burden of proof required to establish prosecution laches along with what sort of delay is unreasonable remained unanswered.100 Consequently, with little direction, the district courts were left to grapple with the challenge of developing an equitable standard for applying the doctrine of prosecution laches.

V. THE "SUBMARINE" DEFENSE SYSTEM OFF-TARGET: THE DISTRICr COURTS TRY TO MAKE SENSE OUT OF SYMBOL TECHNOLOGIES AND IN RE BOGESE

A. CurrentConfused State of ProsecutionLaches

After the controversial decision in Symbol Technologies, many questions were raised as to how to apply the doctrine of prosecution laches.10 1 With the resurrection of the laches defense in Symbol Technologies, accused infringers raised the issue in various district courts, where uncertainty about how the doctrine should be applied resulted in varied interpretations of the doctrine. 10 2 This has led to even more confusion.

94. Symbol Techs., Inc. v. Lemelson Med., Educ. & Research Found., 277 F.3d 1361, 1365-66 (Fed. Cir. 2002); In reBogese, 303 F.3d at 1364-65. 95. In reBogese, 303 F.3d at 1367. 96. See Symbol Techs., Inc., 277 F.3d at 1364-65 (quoting Gen. Talking Pictures Corp. v. W. Elec. Co., 304 U.S. 175, 183 (1938)). 97. See id. 98. See In re Bogese, 303 F.3d at 1370 (Newman, J.,dissenting). 99. See Hawkins, supra note 62, at 1647-48. 100. See id.at 1646-48. 101. Id.at 1648. 102. See, e.g.,Intuitive Surgical, Inc. v. Computer Motion, Inc., No. CIV.A.01-203-SLR, GONZAGA LAW REVIEW (Vol. 40:1

As the following cases illustrate, the various courts in different districts, as well as different courts in the same district, are evenly divided on whether or not to require adverse intervening rights in order to prove laches. At one end of the spectrum are those courts that eliminated intervening rights and tended to base their conclusions on the notion that the policy of laches is to protect the public's right to timely disclosure. ° 3 Following this line of reasoning, the public is adversely affected in any situation where delay is unreasonable. 104 On the other hand are the district courts that require intervening rights and base their decisions on Supreme Court precedent and laches decisions which emphasize a need for a named defendant in equity claims.105 Furthermore, there is some dispute over what the burden of proof should be for laches. Most of the courts continue to apply the preponderance of the evidence burden, which is typically applied in equity cases. 106 Contrarily, reasoning that a defendant should be held to a higher burden when seeking to render one's patent rights unenforceable, some courts have 0adopted7 a clear and convincing burden of proof requirement for prosecution laches. In the past two years, some interesting conclusions have been reached by district courts in several circuits. For example, in the third circuit the district court in Intuitive Surgical focused on reasonableness and whether the plaintiff's delay in prosecution was explained.10 8 Whereas in Cummins-Allison Corp., the Seventh Circuit focused on the additional factor that the delay must have prejudiced the defendant' 09 The district courts in the ninth circuit provide more creative conclusions. In Gen-Probe the court required that a delay be deliberate and unreasonable, 10 forcing the defendant to Vprove that the plaintiff had some wrongful state of mind associated with the delay." Unlike the laches standards applied by the Federal Circuit and other district courts, according to the Gen-Probe decision, a plaintiff who is merely

2002 WL 31833867, at *3 (D. Del. Dec. 10, 2002); Gen-Probe, Inc. v. Vysis, Inc., No. 99-CV-2668 H, 2002 U.S. Dist. LEXIS 25020, at *117 (S.D. Cal. Aug. 2,2002). 103. See, e.g., Reiffin v. Microsoft Corp., 270 F. Supp. 2d 1132, 1154 (N.D. Cal. 2003) (stating that "[i]f prosecution laches is a doctrine that may be invoked both by officers of the PTO during the application process and by defendants in patent infringement litigation, then the doctrine must exist to a support a policy or policies other than the protection of particular competitors of a patent applicant who might be harmed by undue delay."). 104. See id 105. See, e.g., Cummins-Allison Corp. v. Glory Ltd., No. 02-C-7008, 2003 WL 355470, at *40-41 (N.D. Ill. 2003). 106. See, e.g., Symbol Techs., Inc. v. Lemelson Med., Educ. & Research Found., Ltd., 301 F. Supp. 2d 1147, 1155 (D. Nev. 2004); Intuitive Surgical,Inc., 2002 WL 31833867, at *4 n.4. 107. See, e.g., Gen-Probe Inc., 2002 U.S. Dist. LEXIS 25020, at *43. 108. 2002 WL 31833867, at *3. 109. 2003 WL 355470, at *40. 110. 2002 U.S. Dist. LEXIS 25020, at * 119. 111. See id. 2004/05] PATENT PROSECUTION LACHES negligent in prosecuting their patents would not have those patents rendered unenforceable. 112 Thus, the Gen-Probe standard would make it more difficult for a defendant to establish laches. Another unusual ruling came out of the ninth circuit in Digital Control, Inc., v. McLaughlin Mfg. Co., Inc., which held that intervening adverse rights are not required to prove laches for continuation applications. 1 3 The court explained that because a patent specification does not change in a continuation application, potential infiingers will not be adversely affected by any amended claims.' 1 4 This holding is erroneous because infringement suits are based on the claims of a patent and not the specification."15 In theory, product designers (potential infiingers) will look at the patent's claims to determine if its product will infringe. It follows that a continuation application's changed claims could very well bring a potential infringer's product into the realm of inflingement. This newly anointed infringer would not only have to pay exorbitant legal fees for defending a patent litigation suit, but would also likely lose much of the investment that was made developing his now infiinging product. Such a financial loss definitely falls under the category of "intervening adverse rights. 116

B. Third Circuit-Intuitive Surgical, Inc. v. Computer Motion, Inc.

In Intuitive Surgical, Inc. v. Computer Motion, Inc., the court held that a four year delay did not amount to prosecution laches as a matter of law. 117 The court defined laches to be an "unreasonable and unexplained delay in prosecution.""' 8 The court extracted this definition from Symbol Technologies, but emphasized that "neither Congress nor the Federal Circuit has provided any further guidance on the legal standards applicable to the prosecution laches defense."'' 19 "[T]he court rel[ied] on two fundamental precepts as its analytical framework.' 120 First, the court

112. See id. 113. 225 F. Supp. 2d 1224, 1228-29 (W.D. Wash. 2002). 114. Id 115. See DONALD S. CHISUM, CHISUM ON PATENTS GI-3 (2004) ("An applicant for a patent must include in his application one or more claims which set forth the parameters of the invention. These claims measure the invention for determining patentability both during examination and after issuance when validity is challenged. They also determine what constitutes infringement"). 116. See Symbol Techs., Inc. v. Lemelson, 277 F.3d 1361, 1365 (Fed. Cir. 2002) (quoting Gen. Talking Pictures Corp. v. W. Elec. Co., 304 U.S. 175, 183 (1938)). To determine whether a party has been prejudiced "[t]he courts must look for a change in the economic position of the alleged infringer during the period of delay." A.C. Aukerman Co. v. RIL. Chaides Constr. Co., 960 F.2d 1020, 1033 (Fed. Cir. 1992). 117. No. CIV.A.01-203-SLR, 2002 WL 31833867, at *5 (D. Del. Dec. 10,2002). 118. Id at *3 (citing Symbol Techs., Inc., 277 F.3d at 1361). 119. Id 120. ld GONZAGA LAW REVIEW [Vol. 40:1 conducted a threshold inquiry into the reasonableness of any delays. 2 ' Second, while conducting this inquiry, the court kept in mind that "prosecution laches is an equitable tool which has been used sparingly in only the most egregious of cases.' 22 Because of the plaintiffs experience in patent matters, the Intuitive Surgical court reasoned that the plaintiff should have been able to identify and remedy the issues at the PTO in less time. 12 3 Nonetheless, the court emphasized that an unreasonable delay would not amount to laches if it was explained.124 The court concluded that the PTO's misplacement of the application was a partial explanation for the four year delay. 125 Holding that "without further guidance from the Federal Circuit, [this] court is not persuaded that the facts of record are sufficiently egregious 126 to warrant application of prosecution laches."'

The court pointed out that "one of the many unsettled questions of law regarding127 prosecution laches is the burden of proof required to establish prosecution laches.' Various cases were cited, some of which held that a clear and convincing burden of proof was required, 128 while others held that a party only had to provide a preponderance of the evidence. 129 It was determined that a preponderance of the evidence standard should be applied to prosecution laches in the Intuitive Surgical decision. 3 °

C. Seventh Circuit-Cummins-Allison Corp. v. Glory Ltd.

In Cummins-Allison Corp. v. Glory Ltd., the seventh circuit defined laches as an "unreasonable and unexplained delay" that causes the alleged infringer to suffer prejudice. 131 The plaintiff argued that prosecution laches was not applicable to the patent in this case because it was filed after the General Agreement on Tariffs and Trade treaty (GAT-f) came into effect.132 The plaintiff contended that GATT's

121. Id. 122. Intuitive Surgical,Inc., 2002 U.S. Dist. LEXIS 24808, at *3. 123. Id. at*4-5. 124. Id at*5. 125. Id. at *4. 126. Id. at*5. 127. Intuitive SurgicalInc., 2002 WL 31833867, at *5 n.4. 128. See id. (quoting Gen-Probe, Inc. v. Vysis, Inc., No. 99-CV-2668 H, 2002 U.S. Dist. LEXIS 25020, at *119 (S.D. Cal. Aug. 2, 2002). 129. Id. (citing A.C. Auckerman v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1044-45 (Fed. Cir. 1992)). 130. Id. 131. No. 02-C-7008, 2003 WL 355470, at *40 (N.D. 111. 2003). 132. Id The GATIT Treaty is the General Agreement on Tariffs and Trade Uruguay Round Agreement Act. Id. Itprovides for the continuation of patent applications filed after June 8, 1995. Id Under the GATT Treaty, "the patent expires 20 years after the effective filing date of the 2004/05] PATENT PROSECUTION LACHES twenty year limitation on the life of a patent, regardless of the length of prosecution, eliminated the need for laches.133 The court disagreed, refusing to "disregard... precedent recognizing the doctrine of prosecution laches, in the absence of a clear legislative directive that it no longer applies. 134 The plaintiff argued that the delay in question could not be unreasonable because it had complied with all applicable statutes. 135 The seventh circuit applied a two- prong test for prosecution laches,'. reiterating that "compliance with the continuation process does not automatically immunize [the plaintiff] from the prosecution laches defense. '' 137 Regarding adverse rights, it was concluded that the period during which the defendant manufactured and sold its product without knowledge of the plaintiffs intention to patent the subject matter, could be found as an adverse effect on the defendant's rights. 138 Finally, the court held that the plaintiff had failed to establish a likelihood that it would overcome the defense of laches. 3 9

D. Ninth Circuit

1. Symbol Technologies, Inc. v. Lemelson (Revisited)

On remand, the Ninth Circuit District Court in Nevada decided Symbol Technologies,Inc. v. Lemelson. 4 Referring to other district court cases, the court concluded that "the holder of a valid patent may nonetheless be barred from enforcing it if there was an unreasonable and unexplained delay in prosecuting the14 1 , and the alleged infiringer has suffered prejudice as a result."' Applying a preponderance of the evidence standard of proof, the court concluded that Lemelson's eighteen to thirty-nine year delay among the pending patents was

application." Id 133. Id.at *40 (according to the plaintiff, the enactment of GATT meant that "the fundamental purpose of the prosecution laches doctrine to prevent an applicant from achieving the advantage of extending the life of the patent by delaying the prosecution" was unnecessary because GATf inherently accomplished this purpose). 134. Id at *41. 135. Id. at *42. 136. Cummins-Allison Corp., 2003 WL 355470, at *40. ("m[The holder of a valid patent nonetheless may be barred from enforcing it if there was an unreasonable and unexplained delay in prosecuting the patent claim, and the alleged infringer has suffered prejudice as a result."). 137. Id. 138. Id. at *43. 139. Id. at *44. 140. See 301 F. Supp. 2d 1147 (D. Nev. 2004). 141. Id. at 1155. GONZAGA LAW REVIEW [Vol. 40:1 unreasonable and unjustified. 14 2 Thus, Lemelson's claims were rendered 143 unenforceable by the prosecution laches doctrine. The ninth circuit further concluded that laches was warranted based on strong evidence that Lemelson had adversely interfered with the rights of the defendants, as well as the public.' 44 The court emphasized that one of the purposes of patent law is to protect the public's right to a timely disclosure. 145 By delaying the issuance of his patents, Lemelson had impermissibly infringed on the public's rights. 46

2. DigitalControl, Inc. v. McLaughlin Mfg. Co.

In Digital Control, Inc. v. McLaughlin Mfg. Co., the court grappled with the effects of the GATT Treaty on the defense of prosecution laches. 47 To determine the validity of the defendant's laches claim, the court adopted the Federal Circuit's definition of laches as an "unreasonable and unexplained delay. ' 148 However, the court also pointed out that "the Federal Circuit's laches defense, and what action constitutes an 'unreasonable and unexplained delay,' has yet to be fleshed out through application.'' 149 The plaintiff argued that the GATT Treaty eliminated the need for laches for all applications filed after its enactment1 ° The plaintiff further argued that for all applications filed prior to GATT's enactment, the filing of a terminal disclaimer causing those pre-GAT continuation and divisional applications to expire along with the parent application, eliminated the need for laches.' 51 Nevertheless, the court held that "[a]lthough GATT and terminal disclaimer process may reign in abuse, a reasonable fact-finder might find that certain calculated delays in filing continuation applications ...constitute an unreasonable and unexplained 152 delay.' Additionally, the court determined that intervening adverse rights are not required to prove laches in cases where the infringed patent was issued from a 153 continuation application. The court stated that "[i]ntervention rights arise when1 5a4 reissue patent covers a prior-existing device not disclosed in the original patent"'

142. Id. 143. Id. 144. Id.at 1156. 145. Symbol Techs., Inc., 301 F. Supp. 2d at 1153. 146. Id.at 1157. 147. See generally 225 F. Supp. 2d 1224 (W.D. Wash. 2002). 148. Id.at 1226. 149. Id. 150. See id.at 1227. 151. See id.at 1227-28. 152. DigitalControl, Inc., 225 F. Supp. 2d at 1228. 153. See id.at 1229. 154. Id. 2004/05] PATENT PROSECUTION LACHES

Because a continuation application covers the same subject matter as the parent patent, intervening rights could never arise.' 5 Accordingly, the court was "not convinced that an examination of intervening adverse rights . . . [was] a useful concept in prosecution laches when addressing continuation applications."1 56

3. Martin GardnerReffin v. Microsoft Corp.

In Reiffin v. Microsoft Corp., the ninth circuit defined laches as an unreasonable delay in prosecution that cannot be reasonably explained.' 57 Reasoning that because of laches' unique goal to protect the public from unreasonable delay, the court held that intervening rights were not necessary to establish such a defense.'58 The court explained that whether an applicant had reasonably prosecuted his patent "depends on whether any delay in the prosecution of a patent application can be explained by reference to the legitimate considerations and/or expectations of a reasonable patent applicant."' 159 Pointing out that a preponderance of the evidence burden is typically all that is required for other equitable defenses,16 0the court held that a preponderance of the evidence burden applied to laches as well.

4. Gen-Probe,Inc. v. Vysis, Inc.

In Gen-Probe,Inc. v. Vysis, Inc., the court held that a delay of eleven years did not amount to laches.16 1 Acknowledging that the Federal Circuit had provided scant guidance, the ninth circuit looked to U.S. Supreme Court precedent to formulate a standard for prosecution laches. 62 The court concluded that "[p]rosecution laches

155. Id 156. Id 157. 270 F. Supp. 2d 1132, 1153 (N.D. Cal. 2003). 158. Id.at 1147. 159. Id.at 1155, The court cited the following considerations to determine whether a delay was reasonable: [whether] (1) the prosecution history of plaintiff's patents was typical of patents in that field or patents generally; (2) any unexplained gaps exist in the prosecution history; (3) plaintiff took any unusual steps to speed or delay the application process; (4) the PTO or other reviewing body took any unusual steps to speed or delay the application process; (5) plaintiff took any steps to limit public awareness of his pending applications or the inventions he sought to patent over the course of the prosecution; (6) any changes in plaintiff's prosecution of the application coincide with or directly follow evolutions in the field that relate to the claimed invention; and (7) legitimate grounds can be identified for the abandonment of prior applications. Id.at 1155. 160. Id 161. No. 99-CV-2668 H, 2002 U.S. Dist. LEXIS 25020, at *120-22 (S.D. Cal. Aug. 2,2002). 162. Id at*117. GONZAGA LAW REVIEW [Vol. 40:1 apply where the patent applicant delays deliberately, unreasonably and without excuse the issuance of his patent so as to prejudice the intervening rights of another party."1'63 Contrary to its reasoning in Reiffin, here the court decided that because prosecution laches renders a patent unenforceable, laches must be proven with clear and convincing evidence.' 64 Applying this standard, the court held that the defendant had not proven by clear and convincing evidence that the plaintiff's delay amounted to laches. 165 It emphasized that the defendant was asking the court to "infer an intent to delay" on the part of the plaintiff.166 The court seemingly construed "deliberately" to be synonymous with "intentional" when it developed its standard. Hence, the court seems to have expanded the precedent by adding "intent to delay" as a requirement to prove laches.

VI. SIGHTING IN THE "SUBMARINE" DEFENSE SYSTEM: A PROPOSED STANDARD FOR PROSECUTION LACHES

When looking at the various district court cases as a whole, one glaring problem is apparent: The courts are unsure which standard should be used to establish prosecution laches. As a result, the courts have adopted several different tests to decide the validity of prosecution laches defenses,' 67 leaving patent applicants in the dark as to what constitutes laches. This is a problem because only the Federal Circuit and U.S. Supreme Court can set precedent for patent law,168 and for the most part, the Supreme Court has left that job to the Federal Circuit. 16 9 In order to bring some order to conflicting district court interpretations of patent law, the Federal Circuit must set standards for the lower courts to apply. In the case of prosecution laches, there have been conflicting interpretations from the district courts. 170 This is why the Federal Circuit must be called upon to set out a clear standard for prosecution laches.

163. Id.at*119. 164. Id. 165. Id.at *122. 166. Gen-Probe, Inc., 2002 U.S. Dist. LEXIS 25020, at * 121. 167. See, e.g.,Intuitive Surgical, Inc. v. Computer Motion, Inc., No. CIV.A.01-203-SLR, 2002 WL 31833867, at *3 (D. Del. Dec. 10, 2002); Gen-Probe, Inc., 2002 U.S. Dist. LEXIS 25020, at * 119. 168. See HERBERT F. SCHWARTZ, PATENT LAW AND PRACTICE 36 (2nd ed. 1995) ("The federal courts have. . . jurisdiction over all cases arising under the patent laws since 1836."). 169. Warner-Jenkinson Co. v. Hilton Chem. Co., 520 U.S. 17,40 (1997). 170. See, e.g., Intuitive Surgical, Inc., 2002 WL 31833867, at *3; Gen-Probe, Inc., 2002 U.S. Dist. LEXIS 25020, at * 119. 2004/05] PATENT PROSECUTION LACHES

Given the high stakes of today's patent cases, inconsistent application of prosecution laches amongst the district courts is especially troubling.' 7 1 In the troubled waters of patent litigation, defendants are likely to assert every possible defense in hopes of rendering the patent unenforceable. Patentees need, and deserve, to know what effect their actions could have on the validity of their patents. The Federal Circuit must adopt a standard for prosecution laches that explicitly defines what types of behavior evidence are required to render a patent unenforceable. A defendant should be required to offer clear and convincing proof that the plaintiff intentionally and unreasonably delayed the issuance of its patent, thereby prejudicing the defendant.

A. Intentionaland UnreasonableDelay

In addition to an unreasonable delay, a wrongful intent element should be added to the first prong of the laches standard. In other equitable defenses which render patents unenforceable, wrongful intent is required. For example, to prove inequitable conduct, a wrongful intent element is required in addition to proving that the patentee failed to fully disclose material information, such as previous relevant artwork.172 It seems strange to require wrongful intent to assert inequitable conduct when the patent statutes are violated, while allowing mere negligence to suffice for laches when no statute has been violated. In order to make it reasonably possible to establish intent by the patentee, the73 court should find implied intent based on the patentee's actions during prosecution. One way that a defendant could establish implied intent would be to show that the delay was not a result of PTO actions, but instead resulted from plaintiff's actions. Valid proof of delay resulting from the plaintiff's actions would shift the burden of explaining the delay to the plaintiff. Without a valid explanation of the delay, courts could find that the actions of the plaintiff implied intent to delay. Furthermore, this standard would allow a plaintiff to explain a delay by proving that the delay was a result of the PTO's negligence. With respect to what constitutes an "unreasonable delay," the court should set a length of delay that would create a presumption of unreasonableness. Because of the

171. See Joseph E. Walsh, Jr. & Mark E. Hoffman, Injunctive and Damages Remedies Available in a Patent Infringement Case, at http://www.bamsl.org/archived/bajour/fall20/walsh_.htm (last visited Aug. 11, 2004) ("Given the dependence of many businesses upon their patents and the high stakes and large sums of money that fi-equently attend patent disputes..."). 172. See, e.g., Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1256 (Fed. Cir. 1997) (explaining that "[ilnequitable conduct resides in the failure to disclose material information with an intent to deceive or mislead the PTO"). 173. See id at 1256 ('[]ntent may be inferred from the surrounding circumstances (citation omitted). For example, intent may be inferred where a patent applicant knew, or should have known GONZAGA LAW REVIEW [Vol. 40:1 increased complexity in the subject matter of patent applications, 174 the period of delay should be longer than the two year presumption in Webster.1 75 The court should adopt a three or four year presumption of unreasonableness that can only be rebutted through a valid explanation by the plaintiff. Obviously, if an intent element was also adopted, a plaintiff could escape the first prong of the laches test by proving that the delay was not intentional.

B. The Defendant 's Rights Were Adversely Affected

To prove prosecution laches, a defendant should be required to show the adverse effects that the plaintiff's delay had on prosecution. Beyond the fact that prejudice to the defendant has historically been required to show laches, 176 the very nature of equitable defenses requires the party claiming inequitable action come before the court with clean hands and evidence of prejudice suffered. 17 7 In the case of general laches defenses, courts have, more often than not, required that "the defendant's asserted prejudice must be caused by or result from the complainant's delay in '178 pursuing a claim.' One way that a defendant could prove adverse effects is to demonstrate economical harm caused by the plaintiff's delay.'79 This could be shown through evidence that the defendant, because of the plaintiff's delay, reasonably assumed that the plaintiff was done filing continuation applications, and because of this assumption, invested in the development of products that would not infringe the plaintiff's original claims.'8 If after the extended delay, the plaintiff filed a continuation application claiming the subject matter of the defendant's product, a strong presumption of economic prejudice to the defendant for the monies spent in the product's development would be appropriate. 81

174. See James B. Kobak, Jr., The Federal Circuitay a CompetitionLaw Court, 83 . PAT. & TRADenwx OFF. Soc'Y 527, 528 (2001) ("lilt is notable that in the usual course of patent prosecution many choices are made, recognizing the complexity of inventions, the virtually unlimited sources of information, and the burdens of patent examination."). 175. Webster Elec. Co. v. SplitdorfElec. Co., 264 U.S 463,471 (1924). 176. See, e.g, A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1029 (Fed. Cir. 1992). 177. See id.at 1030 (stating that "[l]aches ... invoke the discretionarypower of the district court to limit the defendant's liability for infringement by reason of the equities between the particular parties'); see also Fona v. Trustees of the United Mine Workers of America, Health and Ret. Fund of 1974, 165 F.3d 209,211-12 (3d Cir. 1998). 178. 27AM.JUm 2DEquity§ 179(2003). 179. See A.C Aukerman Co., 960 F.2d at 1033 (stating that "courts must look for a change in the economic position of the alleged irfinger during the period of delay"). 180. See id. at 1028. 181. Seeidat1033. 2004/05] PATENT PROSECUTION LACHES

C. Clear and Convincing Burden of Proof

Prosecution laches can render one's patent unenforceable even if patent statutes were followed. 182 As a result, a defendant must clearly show that the plaintiffs delay was one of those "most egregious of cases."'1 83 Preponderance of the evidence "generally occurs when the factfinder is satisfied that the fact is more likely true than not true."'1 84 That standard requires only that the defendant's evidence be slightly more convincing than the plaintiff's. 185 On the other hand, clear and convincing evidence is satisfied when a party persuades "the jury that the proposition is highly probable."'186 Thus, under a clear and convincing evidence requirement, a defendant asserting laches would have to present evidence that strongly supports a conclusion that the patentee unreasonably delayed the issuance of 87 his patent.1 Requiring a higher burden of proof will ensure that only those patentees who have blatantly taken advantage of the patent system will be punished. This is good policy that should preserve the incentives typically associated with securing a patent 188 for the majority of patent holders whose behavior is perhaps unjustifiably suspicious but not to the level of the "most egregious 89 cases."1

VII. CONCLUSION

In 2002 the Federal Circuit breathed new life into the doctrine of prosecution laches. Unfortunately, the court failed to offer specific guidelines for how to apply prosecution laches. As a result, the subsequent district court cases have applied wide-ranging standards when determining whether laches is present. These varying standards have the possibility of severely handicapping potential patent applicants because of the difficultly in predicting the reasoning and standards each individual district court will apply to determine the

182. See Symbol Techs., Inc. v. Lemelson Med, Educ. & Research Found., 277 F.3d 1361, 1369 (Fed. Cir. 2002) (Newman, J., dissenting). 183. See Intuitive Surgical, Inc. v. Computer Motion, Inc., No. CIV.A.01-203-SLR, 2002 WL 31833867, at *3 (D. Del. Dec. 10, 2002). 184. 29 AM. JUR. 2DEvidence § 157 (2003). 185. See id. 186. Id 187. See, e.g., Gen-Probe, Inc. v. Vysis, Inc., No. 99-CV-2668 H, 2002 U.S. Dist. LEXIS 25020, at *119 (S.D. Cal. Aug. 2, 2002). 188. See John W. Schlicher, The Law, History,and Policy ofProsecutionHistory Estoppel in Patent Actions in the U S Supreme Court-Implicationsfor Festo (Part 1), 84 J. PAT. & TRADEMARK OFF. Soc'Y 581,615-16 (2002) ("Patents exist to increase the incentives for people to invest time and money engaging in research and development, rather than in some other activities."). 189. See Intuitive Surgical,Inc., 2002 WL 31833867, at *3. 258 GONZAGA LAW REVIEW [Vol. 40:1 applicability of a laches defense. Thus, the Federal Circuit should revisit the topic of laches and adopt a detailed test so it is clear to all district courts which standard to apply. This will result in a uniform standard of prosecution laches allowing patent applicants to better curb their activities in prosecution so the question of prosecution laches never gives rise to infringement suits. The standard that should be adopted by the Federal Circuit consists of the two-prong test that establishes laches when, (1) during prosecution the patentee intentionally and unreasonably delayed the issuance of the patent; and (2) as a result of the delay, the defendant was adversely affected. Furthermore, the Federal Circuit should adopt a clear and convincing burden of proof to force defendants to prove with clear and convincing evidence that the patentee's behavior amounts to laches. This proposal should help filter out weak claims of laches and protect the rights of the patent holder in all cases except those very egregious circumstances where the patentee has clearly taken advantage of the patent system.