Originally published 19 September
On September 9, 2005, in Symbol Technologies, Inc. v. Lemelson Medical, Education & Research Foundation, LP, the U.S. Court of Appeals for the Federal Circuit ("Federal Circuit") upheld a district court’s finding that the Lemelson Foundation’s widely asserted "machine vision" patents are unenforceable based upon the doctrine of prosecution laches. In delivering the unanimous panel decision, Judge Lourie agreed with the district court’s finding that the totality of the circumstances, including an 18 to 39 year time period between filing and issuance of the asserted patents, demonstrated an unreasonable and unexplained delay in prosecution and thus rendered the patents unenforceable.
The 14 patents asserted in the Symbol case are related to two patents that date back to 1954 and 1956. Through skillful use of the patent rules, the patents were continued over many years but were not made available to the public through notice. The Foundation implemented an aggressive licensing campaign in the 1990’s and many U.S. companies licensed the Lemelson patents.
Symbol filed a declaratory judgment action in 1998 after many of its customers received threatening letters from the Lemelson Foundation. In its action, Symbol sought judgment that the Lemelson patents were invalid, unenforceable, and not infringed. The Lemelson Foundation responded by filing a motion to dismiss asserting, among other things, that Symbol’s claims under the then antiquated doctrine of prosecution laches did not constitute a valid claim. The district court initially agreed with the Lemelson Foundation and Symbol took an interlocutory appeal to the Federal Circuit. The Federal Circuit reversed the district court’s ruling, holding that the doctrine of prosecution laches may be applied to bar enforcement of patent claims that issue after an unreasonable and unexpected delay in prosecution of the asserted patent(s).
On remand, the district court conducted a bench trial and found the Lemelson patents invalid for lack of enablement, unenforceable due to prosecution laches, and not infringed by Symbol’s products. Notably, the district court found that Lemelson’s lengthy and unreasonable delay in prosecuting the patents alone constituted a sufficient basis to render the patents unenforceable under a laches theory, regardless of whether Lemelson intended to gain some advantage by the delay. The Lemelson Foundation appealed to the Federal Circuit.
The Federal Circuit’s September 9 decision affirmed the district court. The Court listed several legitimate grounds for filing a continuation in a patent application, such as filing a continuation to support broader claims or re-filing rejected claims in order to present newly found evidence of patentability. However, the panel found that re-filing an application solely containing previously allowed claims for the business purpose of delaying their issuance can be considered an abuse of the patent system, and can constitute laches.
The Federal Circuit’s decision makes clear that the doctrine of prosecution laches is available to patent infringement defendants only under certain limited circumstances. Successful invocation of the doctrine does not require a showing of intentional delay, but rather that the delay was unreasonable and unexplained under the totality of the circumstances. Notwithstanding this possible lessening of the standard of proof necessary to establish laches, the Court was careful to note that the doctrine should only be applied sparingly in egregious cases of misuse of the patent system.
The Symbol decision calls into question the propriety of the Lemelson Foundation’s patent licensing system, which is reported to have earned in excess of $1.5 billion in licensing fees. The ruling will also affect hundreds of other patent infringement defendants involved in a number of stayed actions filed by the Lemelson Foundation and now pending before the U.S. District Court for the District of Arizona.
© 2005 Sutherland Asbill & Brennan LLP. All Rights Reserved.
This article is for informational purposes and is not intended to constitute legal advice.
