In re Yamazaki – Post-Grant & Prosecution Lessons

by Ryan Alley on December 20, 2012

in -, CAFC PTAB appeals

Case No. 2012-1086 (Lourie, Reyna, Krieger)

Lumps of coal for the patentee, but the Federal Circuit hands out several gifts to the rest of us in the form of practice lessons for terminal disclaimers, petitions, and reissues in In re Yamazaki. The case illustrates how nonstatutory double patenting rejections should be handled with care, lest a patent’s life be irretrievably cut short by a Ghost of Terminal Disclaimers Past. Also shown is the importance of making a list and checking it twice before paying issue fees in an allowed patent application.

Our story begins years ago when applicant Yamazaki (of Semiconductor Energy Labs) was prosecuting US Patent 6,180,991 as application 08/426,235. During prosecution in 1996, Yamazaki received an obviousness-type double patenting rejection over a grandparent patent that had issued thirteen years prior. Yamazaki filed a terminal disclaimer to overcome the rejection, which set the term of the ‘991 patent to expire in 2003 with the grandparent. Prosecution continued, claims were amended, and two-and-a-half years after filing it, Yamazaki decided the terminal disclaimer was no longer necessary and petitioned for its withdrawal. Problems ensured. . .

The USPTO never acted on the petition for withdrawal of the terminal disclaimer during prosecution. Over a year later, the application was allowed, and Yamazaki paid the issue fee without any inquiry or action (by any party) with regard to the petition. In early 2001 the ‘991 patent issued showing the recorded terminal disclaimer on its face. Several months later, the USPTO finally acted on the petition to withdraw, denying it because the ‘991 patent had already issued.

Yamazaki sough reissue of the ‘991 patent, identifying the issuance of the ‘991 patent with the terminal disclaimer, and the procedural snafus surrounding the same, as the error to be corrected through reissue. The USPTO rejected this as a defective basis for reissue, and after 7+ years of subsequent prosecution and appeal, an expanded Board twice affirmed this rejection (All Things Pros has good coverage of this Board decision). Yamazaki then appealed to the Federal Circuit, arguing that reissue was a suitable forum to correct an erroneously-entered (and not withdrawn due to nonfeasance) terminal disclaimer.

On appeal, the question focused on 35 U.S.C. § 251, which states that a patent can be reissued “for the unexpired part of the term of the original patent.” Yamazaki argued that the “term” in this statute referred to the basic 20-year term set out for all patents in § 154(a). Under this argument, a terminal disclaimer did not affect this term but merely made the patent expire before the term was complete. Thus, a patent could be reissued with the original 20-year term under the statutory language, regardless of any terminal disclaimer.

No, said the Federal Circuit. A terminal disclaimer properly recorded in an application effectively modifies the “term of the original patent,” because a terminal disclaimer is a part of the original patent. The court looked to § 253, which defines disclaimers as being “considered a part of the original patent” that “dedicate to the public the . . . terminal part of the term of the patent granted or to be granted.” As such, a terminal disclaimer defined the term of the original patent, which § 251 spelled out as a limitation on reissue. The panel was further unconvinced that terminal disclaimers merely set a new expiration date, because the statutory scheme of Title 35 never treated any change to a patent’s enforceable life as a change in expiration, but a change in term:

35 U.S.C. §§ 155, 155A, and 156 codify additional mechanisms for varying the “term” of an “original patent” relative to that provided under § 154(a). See, e.g., § 155 (“Notwithstanding the provisions of section 154, the term of a patent . . . shall be extended . . . and such [extension] shall be considered as part of the original patent . . . .”). To be sure, § 154(a) establishes a baseline term for original U.S. Patents, but Yamazaki’s contention that § 154(a) provides the sole basis for defining the “term” of a patent is undermined by the appearance of the same language in other statutes. Had Congress intended to distinguish the concept of patent “term” established in § 154(a) from the mechanisms for adjustment provided under §§ 155, 155A, 156, and 253, it surely could have done so—for example, by casting the latter statutes as affecting the expiration date rather than the term of affected patents. Instead, each of those statutes, like § 251, uses the word “term.” To hold that § 251 uses “term” in a sense consistent with § 154(a) but distinct from §§ 155, 155A, 156, and 253 would be to endorse an untenable reading of the statutory scheme, which we decline to do

Like the Grinch after stealing all the holiday trimmings, the court after taking away all potential life from the ‘991 patent had no sympathy for the “unfortunate” USPTO delays and mistakes in this case. The court noted that Yamazaki had failed to follow up on the Petition for Withdraw during initial prosecution and noted that even had the Office acted promptly in the reissue application, Yamazaki would still be left without an enforceable patent. But also like the Grinch, the court left some room for its heart to grow three sizes upon hearing from applicants who are in the right spirit of zealous prosecution:

We are also unpersuaded that reissue is made appropriate by the PTO’s failure to act on the Petition to Withdraw before the ’991 patent issued in the first place. The PTO surely could have responded to the Petition to Withdraw—whether affirmatively or otherwise—in the 22 months between its filing and the issuance of the ‘991 patent. But Yamazaki was similarly inattentive. Yamazaki simply paid the issue fee upon receiving the PTO’s Notice of Allowance and admittedly bypassed numerous opportunities to prevent the ’991 patent from issuing with his petition still unresolved. Yamazaki thus shares primary responsibility for allowing the ’991 patent to issue with the terminal disclaimer in place—but again, once it did, reissue was unavailable to remove that disclaimer. In short, “[s]ection 251 is not a panacea designed to cure every mistake which might be committed by an applicant or his attorney, and the case at bar exemplifies a mistake which this section cannot cure.” Orita, 550 F.2d at 1281.

Rejection for improper reissue basis affirmed.

Lessons: Where to begin. First and foremost Yamazaki should be a strong lesson to conduct full due diligence on the file wrapper before paying an issue fee. Most practitioners have a checklist of things to look at and fix when a notice of allowance is received, and it’s worth adding a terminal disclaimer (TD) check and a petition status check to that list. Petition practice before the USPTO occurs in parallel with, and often without regard to, substantive examination. As seen in Yamazaki, a petition can be sitting undecided when a prosecution action comes due that moots or jeopardizes the petition. It’s worth checking the file wrapper for all submitted petitions at allowance, ensuring they were entered, and contacting the petitions branch if any petition is still pending. I have found the office of petitions often expedites decisions when contacted in a post-allowance situation, and the publications branch will often delay patent issuance for disposal of petitions. Despite these safeguards, I would still strongly consider filing a paper and/or withdrawing from issue if a petition is still pending after an issue fee has been paid. In dicta, the Yamazaki panel suggests that had the patentee been more proactive in trying to get the petition resolved before issuance, either USPTO relief or perhaps even reissue-based relief would have been available.

Second, on TD practice, Yamazaki is illustrative of what not to do. The patentee in Yamazaki submitted the TD in the middle of prosecution to obviate a double patenting rejection. This can be a tempting way to get rid of a rejection early and simplify prosecution, but there are reasons why you wouldn’t want to do this. As seen in Yamazaki, claims might anyway be amended in subsequent prosecution that would have killed the double patenting rejection anyway. Further, despite the fact that the opinion in Yamazaki makes it seem like TDs can be withdrawn simply by filing a petition under Rule 182 requesting the same, USPTO practice is not so clear. MPEP § 1490 specifically states that “[p]etitions seeking to reopen the question of the propriety of the double patenting rejection that prompted the filing of the terminal disclaimer have not been favorably considered.” Thus, even if you don’t amend the claims but just decide you want to instead argue the double patenting rejection, having already filed a TD might foreclose this option. (Also, I’ve never seen a TD withdrawal petition denied on this ground, but failure to petition within 2 months of the TD filing might be a basis for denial).

Instead, try to traverse double patenting rejections until they are the final and only rejections remaining and you know the claims are otherwise allowable. Then consider and file, if desired, the TD at the end of prosecution. Of course, part of this consideration should look at the lifespan of the reference patent and PTA available in the current application – remember that TDs also kill PTA (but not PTE, because Pharma is special).

If all else has failed and you did file a TD and can’t get it removed before issuance, filing a continuation and abandoning the app with the TD in it will stop the operation of the TD. (I wonder about the abandonment requirement; it’s from MPEP § 1490(VII)(A). What if you just filed a continuation with a statement disavowing the disclaimer from the parent without abandoning it?)

Third, on post-grant practice, don’t try to pursue reissue to remove a TD from a patent. Maybe if you tried really, really hard, punctually, and repetitively during prosecution to get the TD out but for some reason you were left with no options and the patent issued with the TD still in force, the Yamazaki opinion leaves some room for a future court to grant you relief through reissue or otherwise. Let me know how it goes. Finally, keep in mind that the USPTO already adopts the Yamazaki panel’s reasoning with regard to deletion of priority claims through reissue. While you can remove or correct an erroneous priority claim through reissue, it won’t give you any patent term back. So if you needlessly claimed priority to an ancient parent, remove that priority claim during prosecution, because once a patent issues with the priority claim, the (likely short or nonexistent) term is set and reissue will not help you.

Comment: The court I think got this one mostly right. The “for the term of the original patent” phrase in § 251 identically tracks the operation of a TD in § 253 as “a part of the original patent.” Moreover, § 251 seems to emphasize that the original patent is something different from the reissue patent, the latter having no bearing on the term of original.

Nonetheless, why force the TD to stay in the patent? TDs not only kill term but require co-ownership/assignment of the patents. Why not allow reissue to remove the TD for purposes of the co-assignment requirement (which is not an enlargement of term) but, similar to priority claim removal, make the reissue patent still expire on the same date as if reissue had not been pursued? This appears statutorily permissible (to me!), but Yamazaki seems to needlessly foreclose it.

PTAB Lurker December 21, 2012 at 5:31 pm

Hi Ryan – I just wanted to say Happy Holidays to you and thanks again for your posts! I always learn, or am reminded of, something useful in your lessons and commentary. I know a few other judges who like me especially like reading comments on appeals from the Board.

If I can lodge a reader request, it would be for more coverage of obviousness cases. They never get old.

Ryan Alley December 22, 2012 at 3:04 pm

Hey Thanks Lurker. I appreciate the feedback, and I’ll see if I can line up some 103 cases.

Karen G. Hazzah January 3, 2013 at 1:44 pm

>see if I can line up some 103 cases.

I vote for Zumbiel v. Kappos, a reexam case.

Ryan Alley January 6, 2013 at 2:08 pm

That’s a good one, Karen. I’ll make this one of the first posts for 2013 (hopefully *sometime* soon, or at least in January).

MaxDrei January 15, 2013 at 7:13 am

Ryan here’s another vote for Zumbiel. Karen already has 122 comments on her blog (ggod one Karen) and Dennis Crouch has 149 (good one Dennis). But many of the comments in those other two places are off-issue or even incomprehensible so if you can take over now from your two colleague bloggers, use their experience, and write something tight that keeps readers focussed, that would be great.

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