United States Court of Appeals for the Federal Circuit
2008-1016
ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LIMITED
and ARISTOCRAT TECHNOLOGIES, INC.,
Plaintiffs-Appellants,
v.
INTERNATIONAL GAME TECHNOLOGY and IGT,
Defendants-Appellees.
Raphael V. Lupo, McDermott Will & Emery LLP, of Washington, DC, argued for
plaintiffs-appellants. On the brief were Brian E. Ferguson, Natalia V. Blinkova, and Leonard
D. Conapinski, of Chicago, Illinois; and Terrence P. McMahon, Anthony De Alcuaz, and
Robert J. Blanch, Jr., of Palo Alto, California.
Jeffrey W. Sarles, Mayer Brown LLP, of Chicago, Illinois, for defendants-appellees.
With him on the brief were Brent A. Batzer, and Sarah E. Rauh. Of ounsel on the brief were
Jeffrey S. Love and Garth A. Winn, Klarquist Sparkman, LLP, of Portland, Oregon. Of
counsel was Andrea C. Hutchinson, Mayer Brown LLP, of Chicago, Illinois.
Mary L. Kelly, Associate Solicitor, United States Patent and Trademark Office of
Arlington, Virginia, for amicus curiae Director of the Patent and Trademark Office. With her
on the brief were James A. Toupin, General Counsel, Stephen Walsh, Acting Solicitor, and
Joseph H. Piccolo, Associate Solicitor. Also on the brief was Anthony J. Steinmeyer,
Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice,
of Washington, DC.
Seth M. Galanter, Morrison & Foerster LLP, of Washington, DC, for amicus curiae
Neurotechnology Industry Organization. With him on the brief was Priya B. Viswanath.
Appealed from: United States District Court for the Northern District of California
Judge Martin J. Jenkins
United States Court of Appeals for the Federal Circuit
2008-1016
ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LIMITED and ARISTOCRAT
TECHNOLOGIES, INC.,
Plaintiffs-Appellants,
v.
INTERNATIONAL GAME TECHNOLOGY and IGT,
Defendants-Appellees,
Appeal from the United States District Court for the Northern District of California in
case no. 06-CV-3717, Judge Martin Jenkins.
__________________________
DECIDED: September 22, 2008
__________________________
Before NEWMAN, BRYSON, and LINN, Circuit Judges.
LINN, Circuit Judge.
The district court concluded that the U.S. Patent and Trademark Office
“improperly revived” U.S. Patent No. 7,056,215 after it was abandoned during
prosecution, and therefore held it (and the continuation patent that followed it) invalid on
summary judgment. We conclude that “improper revival” is not a cognizable defense in
an action involving the validity or infringement of a patent. Thus, we reverse the district
court’s grant of summary judgment and remand for proceedings consistent with this
opinion.
I. BACKGROUND
Aristocrat Technologies Australia Pty, Ltd. and Aristocrat Technologies, Inc.
(collectively, “Aristocrat”) compete with International Game Technology and IGT
(collectively, “IGT”) in the market for electronic gaming machines. Aristocrat is the
assignee of U.S. Patent Nos. 7,056,215 (“the ’215 patent”) and 7,108,603 (“the ’603
patent”), both of which relate to a “slot machine game and system with improved jackpot
feature.” Prosecution of these patents began in Australia, when, starting on July 8,
1997, Aristocrat filed two provisional patent applications directed to the inventions
embodied in the patents-in-suit. One year later, Aristocrat filed a Patent Cooperation
Treaty application (“the PCT application”) in Australia, claiming priority to the previously
filed provisional applications. The PCT application was subsequently published.
Pursuant to 35 U.S.C. § 371 and 37 C.F.R. § 1.495, Aristocrat was required to pay the
fee for the U.S. national stage of the PCT application by January 10, 2000—thirty
months after the filing date of the first Australian provisional application.
The U.S. Patent and Trademark Office (“PTO”) did not receive Aristocrat’s
national filing fee until January 11, 2000—one day late. The PTO consequently mailed
a notice of abandonment to Aristocrat, which stated, among other things, that Aristocrat
“may wish to consider filing a petition to the Commissioner under 37 CFR 1.137(a) or
(b) requesting that the application be revived.” J.A. at 642. In lieu of filing a petition to
revive the abandoned application, Aristocrat responded by filing a Petition to Correct the
Date-In—that is, to correct the date on which the PTO received its national filing fee.
The PTO denied the petition without prejudice, after Aristocrat failed to provide sufficient
evidence to corroborate the date the filing fee was mailed. It is unclear when Aristocrat
2008-1016 2
received the PTO’s denial, 1 but it later filed a petition to revive the ’215 patent
application under 37 C.F.R. § 1.137(b), claiming that the delay in paying the national
stage filing fee was “unintentional.” Id. at 660-61. The PTO granted the petition to
revive on September 3, 2002, after concluding that “[a]ll of the requirements of 37 CFR
1.137(b) ha[d] been met.” Id. at 687. Following the PTO’s revival, Aristocrat resumed
prosecution of the ’215 patent application, and later filed the ’603 patent application as a
continuation of the ’215 patent application. The ’215 patent issued on June 6, 2006,
and the ’603 patent issued on September 19, 2006.
In June 2006, Aristocrat filed suit against IGT for infringement of the ’215 patent
in the United States District Court for the Northern District of California. Aristocrat
amended its complaint to assert infringement of the ’603 patent when that patent
issued. IGT answered and subsequently moved for summary judgment of invalidity. It
argued that the ’215 patent was invalid because, after it was abandoned, Aristocrat was
required to show that its delay was “unavoidable” in order to revive the application, not
merely that its delay was “unintentional.” Thus, according to IGT, the PTO “improperly
revived” the ’215 patent application by requiring Aristocrat only to show “unintentional
delay.” IGT also argued that the ’603 patent was invalid, contending that since the ’215
patent application was not lawfully revived, it constituted prior art to, and thus
anticipated, the ’603 patent under 35 U.S.C. § 102(b).
The district court granted IGT’s motion. It first concluded that the Patent Act
permitted revival of an abandoned patent application only upon a showing of
1
The parties dispute when Aristocrat received notice of the denial.
Because this dispute is unimportant to our analysis, we do not discuss it further here.
2008-1016 3
“unavoidable delay.” Aristocrat Techs. Austl. Pty, Ltd. v. Int’l Game Tech., 491 F. Supp.
2d 916, 924-29 (N.D. Cal. 2008). Next, the district court found that IGT was permitted,
pursuant to 35 U.S.C. § 282, to raise the PTO’s alleged improper revival as a defense to
infringement. Id. at 929-31. The district court also concluded, alternatively, that it
possessed authority to review the PTO’s revival of the ’215 patent application under the
Administrative Procedure Act, 5 U.S.C. § 701 et seq. (“APA”). Id. at 931-32. After
concluding that Aristocrat abandoned the ’215 patent application and failed to meet the
more exacting “unavoidable delay” standard when attempting to revive it, the district
court deemed the ’215 patent invalid. Id. at 932-35. Finally, the district court also
deemed the ’603 patent invalid, under the rationale that if the ’215 patent application
was not properly revived, then it constituted invalidating prior art under 35 U.S.C. §
102(b). Id. at 935-36. Following its grant of summary judgment, the district court
entered final judgment in favor of IGT. Aristocrat Techs. Austl. Pty, Ltd. v. Int’l Game
Tech., No. 06-CV-3717 (N.D. Cal. Sept. 4, 2007).
Aristocrat timely appealed. We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(1).
II. DISCUSSION
A. Standard of Review
Statutory interpretation is a question of law, which we review de novo. Imazio
Nursery, Inc. v. Dania Greenhouses, 69 F.3d 1560, 1564 (Fed. Cir. 1995). We also
review a grant of summary judgment de novo, reapplying the standard that the district
court employed. Rodime PLC v. Seagate Tech., Inc., 174 F.3d 1294, 1301 (Fed. Cir.
1999). Drawing all reasonable inferences in favor of the nonmovant, “[s]ummary
2008-1016 4
judgment is appropriate only when ‘there is no genuine issue as to any material fact and
. . . the moving party is entitled to a judgment as a matter of law.’” Id. (quoting Fed. R.
Civ. P. 56(c)).
B. Analysis
1. The ’215 Patent
The threshold issue in this appeal is whether “improper revival” may be raised as
an invalidity defense in an action involving the infringement or validity of a patent. The
district court, relying on 35 U.S.C. §§ 282(2) and (4), decided that question affirmatively.
The district court also found that the APA provided a separate basis upon which to
review the PTO’s revival of the ’215 patent. We conclude that “improper revival” may
not be raised as a defense in an action involving the validity or infringement of a
patent. 2
Section 282 of title 35 provides a catalog of defenses available in an action
involving the validity or infringement of a patent:
(1) Noninfringement, absence of liability for infringement or
unenforceability,
(2) Invalidity of the patent or any claim in suit on any ground specified
in part II of this title as a condition for patentability,
(3) Invalidity of the patent or any claim in suit for failure to comply with
any requirement of sections 112 or 251 of this title,
(4) Any other fact or act made a defense by this title.
2
Because it is on this basis that we decide the appeal, we do not reach the
parties’ alternative arguments, including those relating to whether the Patent Act permits
revival for “unintentional”—as opposed to “unavoidable”—delay.
2008-1016 5
The first and third enumerated categories are not asserted by IGT as bases for its
invalidity defense. At issue are the second and fourth. We discuss each in turn.
Section 282(2) authorizes an invalidity defense based “on any ground specified
in part II of this title as a condition for patentability.” A defense falling under this section
thus has two prerequisites: it must fall within part II of title 35 and it must be a “condition
for patentability.” The district court determined that “[b]ecause Section 133’s six-month
deadline for prosecuting an application is specified within part II of Title 35, it
necessarily provides an available defense where a patentee has abandoned, and failed
to lawfully revive, a patent application.” Aristocrat, 491 F. Supp. 2d at 930. What the
district court failed to address, however, is whether the proper revival of an abandoned
application is a “condition for patentability.”
It has long been understood that the Patent Act sets out the conditions for
patentability in three sections: sections 101, 102, and 103. See Graham v. John Deere,
383 U.S. 1, 12 (1966) (“The [1952 Patent] Act sets out the conditions of patentability in
three sections. An analysis of the structure of these three sections indicates that
patentability is dependent upon three explicit conditions: novelty and utility as articulated
and defined in § 101 and § 102, and nonobviousness, the new statutory formulation, as
set out in § 103.”). These conditions are included in Chapter 10 of the Patent Act,
entitled “Patentability of Inventions,” and the titles of the sections themselves make
clear that they relate to fundamental preconditions for obtaining a patent. Section 101,
relating to utility and patent eligibility, 3 is entitled “Inventions Patentable.” Likewise,
3
Although the Supreme Court in Graham referred only to the utility
requirement aspect of section 101, as we often do, it is beyond question that section
2008-1016 6
sections 102 and 103, relating to novelty and nonobviousness, respectively, are
explicitly entitled “[c]onditions for patentability.”
While there are most certainly other factors that bear on the validity or the
enforceability of a patent, utility and eligibility, novelty, and nonobviousness are the only
so-called conditions for patentability. For example, section 112 unquestionably provides
certain additional requirements for a patent to be valid, one of which, for instance, is that
the patented invention be enabled by the specification. 35 U.S.C. § 112, ¶ 1. But the
requirements in section 112 are not conditions for patentability; they are merely
requirements for obtaining a valid patent. Indeed, section 282 itself draws a distinction
between invalidity based “on any ground specified in part II of this title as a condition for
patentability,” 35 U.S.C. § 282(2), and invalidity “for failure to comply with any
requirement of sections 112 or 251,” 35 U.S.C. § 282(3). See Sextant Avionique, S.A.
v. Analog Devices, Inc., 172 F.3d 817, 829 (Fed. Cir. 1999). Section 282(3), relating to
invalidity under section 112, would be redundant if the requirements in section 112 were
conditions for patentability because, if so, that defense would fall within the boundaries
of section 282(2). Section 282(2), by virtue of its applicability to “condition[s] for
patentability,” relates only to defenses of invalidity for lack of utility and eligibility,
novelty, and nonobviousness, and does not encompass a defense based upon the
alleged improper revival of a patent application.
The district court also found that improper revival was an available defense under
section 282(4), the catch-all provision of section 282, which provides a defense for
101’s other requirement, that the invention be directed to patentable subject matter, is
also a condition for patentability.
2008-1016 7
“[a]ny other fact or act made a defense by” title 35. After reciting this statutory
language, the district court concluded, “A fortiori, Section 282(4) must therefore
incorporate Section 133 and 371(d).” Aristocrat, 491 F. Supp. 2d at 929-30. The error
in the district court’s analysis, however, is that it pretermits the fundamental requirement
of the subsection—namely, that the act or fact is “made” a defense by the title. This is
not a trivial detail—if omitted, any provision in title 35 would provide a defense under
section 282(4), and there would thus be no reason for the inclusion of sections 282(1)
through (3). If, as IGT suggests, Congress truly intended to permit any provision of title
35 to constitute a defense in an action involving the validity or infringement of a patent,
it could have simply said, in one paragraph rather than four, that a defense lies in “any
section of this title.” Consistent with our obligation to give meaning to all of the words in
the statute, see Duncan v. Walker, 533 U.S. 167, 174 (2001) (“It is our duty to give
effect, if possible, to every clause and word of a statute. We are thus reluctant to treat
statutory terms as surplusage in any setting.” (internal quotation marks and citations
omitted)), we decline to read the statute in this manner and therefore require that the
asserted defense actually be “made a defense.”
The salient question, then, is whether improper revival is “made a defense” by
title 35. We think that it is not. Congress made it clear in various provisions of the
statute when it intended to create a defense of invalidity or noninfringement, but
indicated no such intention in the statutes pertaining to revival of abandoned
applications. For example, 35 U.S.C. § 273 is entitled “Defense to infringement based
on earliest inventor” and expressly provides that the provision “shall be a defense to an
action for infringement.” Similarly, 35 U.S.C. § 185 states that a patent issued to a
2008-1016 8
person who has violated the secrecy provisions of section 184 “shall be invalid,” except
under certain circumstances. Section 272 of title 35 provides that the temporary
presence of a patented invention in the United States, if used exclusively for the needs
of a vessel, aircraft, or vehicle, “shall not constitute infringement.” The list goes on.
What is important to note is simply that sections 133 and 371, relied upon by IGT,
provide none of the signals that Congress has given in other circumstances to indicate
that these sections provide a defense to an accused infringer. Rather, these provisions
merely spell out under what circumstances a patent application is deemed abandoned
during prosecution and under what circumstances it may be revived. See 35 U.S.C. §
133 (“Upon failure of the applicant to prosecute the application within six months . . .,
the application shall be regarded as abandoned . . . .”); id. § 371 (“Failure to comply with
these requirements shall be regarded as abandonment of the application . . . .”).
Because the proper revival of an abandoned application is neither a fact or act made a
defense by title 35 nor a ground specified in part II of title 35 as a condition for
patentability, we hold that improper revival may not be asserted as a defense in an
action involving the validity or infringement of a patent.
Our conclusion that improper revival is not a defense comports with the approach
we took in Magnivision, Inc. v. Bonneau Co., 115 F.3d 956 (Fed. Cir. 1997), which we
continue to believe is a sound one. In that case, we concluded that “[p]rocedural lapses
during examination, should they occur, do not provide grounds of invalidity. Absent
proof of inequitable conduct, the examiner’s or the applicant’s absolute compliance with
the internal rules of patent examination becomes irrelevant after the patent has issued.”
Id. at 960; see also id. (“Imperfection in patent examination, whether by the examiner or
2008-1016 9
the applicant, does not create a new defense called ‘prosecution irregularities’ and does
not displace the experience-based criteria of Kingsdown[ Medical Consultants, Ltd. v.
Hollister, Inc., 863 F.2d 867 (Fed. Cir. 1988)].”). There is good reason not to permit
procedural irregularities 4 during prosecution, such as the one at issue here, to provide a
basis for invalidity. Once a patent has issued, the procedural minutiae of prosecution
have little relevance to the metes and bounds of the patentee’s right to exclude. 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. This
deluge would only detract focus from the important legal issues to be resolved—
primarily, infringement and invalidity. 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. See
Innogenetics, N.V. v. Abbott Labs., 512 F.3d 1363, 1378 (Fed. Cir. 2008) (citations
omitted); cf. Ferguson Beauregard/Logic Controls v. Mega Sys., LLC, 350 F.3d 1327,
1343-44 (Fed. Cir. 2003) (holding that accused infringer did not state valid claim for
4
We take this opportunity to point out that “prosecution irregularities” is
distinct from “prosecution laches.” Prosecution laches stems not from any procedural
lapse or irregularity during prosecution, but rather from an abuse of statutory provisions
that results, as a matter of equity, in “an unreasonable and unexplained delay in
prosecution.” Symbol Techs., Inc. v. Lemelson Med., Educ. & Research Found., 422
F.3d 1378, 1385 (Fed. Cir. 2005). Moreover, the legislative history of 35 U.S.C. § 282
suggests that it was intended to incorporate preexisting equitable defenses, including
prosecution laches. Symbol Techs., Inc. v. Lemelson Med., Educ. & Research Found.,
277 F.3d 1361, 1366 (Fed. Cir. 2002).
2008-1016 10
relief for “improper revival” following non-payment of maintenance fee where it failed to
plead inequitable conduct).
We acknowledge that section 282 is not the only source of defenses in the
Patent Act. See Quantum Corp. v. Rodime, PLC, 65 F.3d 1577, 1584 (Fed. Cir. 1995)
(“Section 282 does not state that the list of invalidity defenses contained therein are the
only ones available; the statute merely says ‘[t]he following shall be defenses.’ The
express words of section 282 therefore allow for the existence of other invalidity
defenses.”). To be sure, we have held, on occasion, that a provision of the Patent Act
not falling within the literal scope of section 282 may nevertheless provide a defense of
noninfringement or invalidity. In Quantum, for example, we held that a patentee who
improperly enlarged the scope of its claims during reexamination, in violation of 35
U.S.C. § 305, subjected itself to a defense of invalidity, because any other result would
“render[] the prohibition [against broadening claims] in section 305 meaningless.” Id.
We explained:
If the only penalty for violating section 305 is a remand to the PTO to have
the reexamined claims narrowed to be commensurate in scope with what
the applicant was only entitled to in the first place, then applicants will
have an incentive to attempt to broaden their claims during reexamination,
and, if successful, be able to enforce these broadened claims against their
competitors. . . . The likelihood that improperly broadened claims will be
held invalid will discourage applicants from attempting to broaden their
claims during reexamination.
Id. (internal citations omitted). 5
5
We also point out that since section 282(3) provides an invalidity defense
for failure to comply with section 251, which in turn prohibits the broadening of claims in
reissue applications after two years, 35 U.S.C. § 251 ¶ 4, the result in Quantum mirrors
the statutory framework set out for the analogous reissue context. Cf. Quantum, 65
F.3d at 1583.
2008-1016 11
The analysis and result in Quantum are inapposite to this appeal. Even if we
assume that the Patent Act permits revival of an application only upon a showing of
unavoidable delay, a question that we expressly decline to reach in this appeal, none of
the considerations that led us to the rule enunciated in Quantum compels a similar
result here. A primary concern in Quantum was that failure to impose invalidity for
violation of the statute would encourage noncompliance. That concern is simply not
present here, as we discern no legitimate incentive for a patent applicant to intentionally
abandon its application, much less to attempt to persuade the PTO to improperly revive
it. Because patents filed after enactment of the Uruguay Round Agreements Act, like
the patents at issue here, generally have a term that runs twenty years from the filing
date (instead of seventeen years from issue), cf. Merck & Co. v. Hi-Tech Pharmacal
Co., 482 F.3d 1317, 1319 (Fed. Cir. 2007), abandoning the application would only serve
to shorten the applicant’s right to exclude.
We have considered IGT's arguments attempting to bolster the district court's
decision under the APA, but find them unpersuasive. Under the circumstances of this
case, the APA provides no relief to IGT.
2. The ’603 Patent
The district court’s conclusion with respect to the ’215 patent ordained the fate of
the ’603 patent. Once it was determined that the ’215 patent application was improperly
revived, the ’603 patent application, which was filed as a continuation application of the
’215 patent application, was no longer able to claim priority to that application’s effective
filing date. As a result, the ’215 patent application became prior art to the ’603 patent.
On this basis, the district court granted summary judgment that “the ’603 Patent is
2008-1016 12
necessarily invalid [under 35 U.S.C. § 102(b)] because it was described in the published
’215 PCT Application more than one year prior to its date of application.” Aristocrat, 491
F. Supp. 2d at 936. Aristocrat argues that if the ’215 patent application was properly
revived, then the ’603 patent retains priority to the ’215 patent application’s effective
filing date, and therefore the ’215 patent application is not prior art to the ’603 patent.
Thus, Aristocrat contends that if we reverse the district court’s grant of summary
judgment on the ’215 patent, the district court’s grant of summary judgment with respect
to the ’603 patent must also be reversed. IGT concedes the point, Appellees’ Br. at 60
(“[I]t is undisputed that the validity of the ’603 patent rests on the validity of the ’215
patent . . . .”), and we agree. Because we have concluded that “improper revival” is not
a cognizable defense and have reversed the district court’s summary judgment in that
regard, we also reverse the district court’s grant of summary judgment of anticipation
with regard to the ’603 patent.
III. CONCLUSION
For the reasons discussed above, we reverse the district court’s grant of
summary judgment and remand for proceedings consistent with this opinion.
2008-1016 13