Earlier this month, the Federal Circuit heard oral argument in Personalized Media Communications, LLC v. Apple Inc., a patent case we have been tracking because it attracted amicus briefs. In this case, Personalized Media Communications appeals a district court’s decision to overturn a jury verdict. While the district court applied the “equitable doctrine of prosecution latches,” PMC claims the district court committed legal error and abused its discretion in ruling that PMC engaged in an “egregious misuse” of the patent system. This is our argument recap.
Kevin Martin argued for PMC. He began by asserting that “an applicant can avoid prosecution laches by cooperating with the [Patent and Trademark Office] to advance its applications.” Martin then argued that PMC cooperated with the PTO because it grouped its applications by subject matter, assigned them definite priority dates, reduced their number pursuant to a consolidation agreement, agreed to comply with administrative requirements, and offered terminal disclaimers. Moreover, Martin asserted, the district court committed legal error by dismissing PMC’s cooperation as “not material” and abused its discretion in finding laches under the totality of circumstances.
One judge asked Martin to explain the difference between this case and one of the court’s primary precedential cases on the topic of prosecution laches. Martin reiterated PMC’s cooperation and contrasted it with the actions of the inventor in the other case, saying the inventor was engaged in activity that “seemed designed to delay things for delay’s sake.”
Judge Chen then asked about a situation where a patent applicant delayed its patents for fifteen years and then made a good faith effort to advance prosecution in the most recent five years. Martin argued the hypothetical hinges on whether intervening rights developed during the period of delay. If intervening rights did develop, Martin argued, then prosecution laches is an appropriate defense.
Next, Judge Chen asked if a long period of delay in a previous case was sufficient to find unreasonable delay. Martin answered no because the court in that case remanded the case with specific instructions for the inventor to explain his delays.
Martin went on to point out that PMC’s patent claims were initially filed with broad language and have narrowed over time. He asked the court to conclude that Apple put in no evidence that any later claim was broader than the earlier claims.
John O’Quinn appeared for Apple. O’Quinn began by arguing that, as a matter of equity, prosecution laches should apply to the extreme facts of this case. He asserted that PMC has not invented anything since 1987 and that the magnitude of delay can be enough to trigger laches.
One of the judges pointed out a possible distinction between the primary precedential case and the present case. In the precedential case, there was a presumption of laches because it was an ex parte case. The current case, however, is inter parte, pointed out the judge, and so it is incumbent on the defendant to prove there was prejudice. O’Quinn claimed Apple met its burden with respect to applying the presumption here because a presumption applies after six years of delay in all cases.
Judge Chen asked if someone files a continuation application eight years after an initial application, whether that person is subject to prosecution laches, pointing out that litigation takes time. O’Quinn answered by claiming PMC deliberately made a “long-range plan” to account for developments in the marketplace.
The questioning then shifted to intervening rights. O’Quinn claimed PMC delayed prosecution until at least 2003, which prejudiced Apple because Apple had already begun development of its relevant product. In response, one of the judges asked what PMC did after 2003 that was abusive of the patent application process. O’Quinn pointed out that PMC had a six-month delay in clarifying its claims to the Patent Office and that there were an unusually large number of references disclosed in its application, thirty-two pages worth.
In rebuttal, Martin argued that if prosecution laches is meant to address “egregious conduct,” there should not be a “trial by ambush.” He said that “egregious conduct” should be conduct that “leaps off the page.” He also asserted that, once the suspension for reexaminations was lifted in 2009, PMC immediately continued examination with the PTO and received dozens of applications granted within a year with even more in the years to follow.
We will continue monitoring this case.