Tilt

October 15, 2008

In Aristocrat Technologies, Inc. v. International Game Technology, the accused infringer thought they'd hit the jackpot by convincing the district court to hold a patent invalid due to "Improper Revival" during patent prosecution.  The district court paid out on the defense and granted summary judgment on the defendant's behalf.  On appeal, the Federal Circuit invoked house rules and held that procedural irregularities in the prosecution of a patent just isn't in the hopper of defenses available under § 282 of the patent code--and took the win away.

The patents at issue in Aristocrat covered electronic slot machines technologies. During prosecution, the patent holder missed a payment by one day and the PTO mailed a notice of abandonment.  The patent holder filed a petition to revive the application, claiming that the delay was "unintentional."  The PTO granted the petition, the first patent issued, and then a related second patent subsequently issued. 

The patent holder sued for infringement of both patents.  The accused infringer argued that the patent holder had failed to show an "unavoidable delay" (required by the regulations) when it revived its patent.  It claimed this failure meant the patent application had been improperly revived and that the application should be deemed abandoned, thereby invalidating the first patent and anticipating the second one.  The district court agreed and entered its summary judgment ruling.

Reversing, the Federal Circuit held that an "Improper Revival" defense wasn't in the cards.  The Aristocrat court said that prosecution defects aren't available as an invalidity defense because such defenses are expressly limited to novelty, utility and non-obviousness, the "conditions of  patentability."  Nor could the defendants avail themselves of § 282's catch-all provision.  The court ruled that the provision--which  covers "any other fact or act made a defense by this title"--applied only to an action made a defense by the title, and nothing in the code expressly recognized Improper Revival of an abandoned application as a defense. 

The court emphasized that its ruling was not intended to excuse conduct rising to the level of prosecution laches or inequitable conduct, particularly when the conduct alleged includes any affirmative misrepresentation of material fact coupled with an intent to deceive.  Interestingly, the Federal Circuit expressly avoided the question of whether an "unintentional" delay amounts to an "unavoidable" delay under the code. 

For the Aristocrat court, the defendant's argument turned out to be no better than a wooden nickel.  The decision shows that to have a winning combination, creative requests to extend the law need to be grounded on a proper consideration of the entire statutory framework and the canons of statutory construction.  Aristocrat also shows the importance of not gaming the PTO system.  Here, there was ample evidence that the patent holder's failure to make the timely payment was an honest mistake--not an effort to get around procedural rules the Federal Circuit respects.  Other facts may have edged the court into a consideration of the equities involved--even in light of the court's recent decision in Star Scientific Inc. v. R.J. Reynolds Tobacco Co.

And all patent gamers should take note of what Aristocrat didn't decide.  Did the patentee's conduct truly satisfy the code?  Is something "unintentional" sufficiently "unavoidable" to satisfy the Patent's Office regulatory requirements?  These questions remain unanswered and a defense of "Improper Revival" may be available before the PTO, even if it isn't in district court.  This may give new impetus to reexamination proceedings as accused infringers may be willing to wager that "Improper Revival" will become patent law's latest one-armed bandit - at least in the right casino.