Hyatt v. Hirshfeld

• Court: Court of Appeals for the Federal Circuit
• Decided: June 1, 2021
• Docket: 18-2390
• Status: Published

Opinion

Case: 18-2390 Document: 89 Page: 1 Filed: 06/01/2021

United States Court of Appeals for the Federal Circuit ______________________

GILBERT P. HYATT, Plaintiff-Cross-Appellant

v.

ANDREW HIRSHFELD, PERFORMING THE FUNCTIONS AND DUTIES OF THE UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR OF THE UNITED STATES PATENT AND TRADEMARK OFFICE, Defendant-Appellant ______________________

2018-2390, 2018-2391, 2018-2392, 2019-1038, 2019-1039, 2019-1049, 2019-1070 ______________________

Appeals from the United States District Court for the District of Columbia in Nos. 1:05-cv-02310-RCL, 1:09-cv- 01864-RCL, 1:09-cv-01869-RCL, 1:09-cv-01872-RCL, Sen- ior Judge Royce C. Lamberth. ______________________

Decided: June 1, 2021 ______________________

ANDREW M. GROSSMAN, Baker & Hostetler LLP, Wash- ington, DC, argued for plaintiff-cross-appellant. Also rep- resented by MARK W. DELAQUIL, JASON F. HOFFMAN.

THOMAS W. KRAUSE, Office of the Solicitor, United Case: 18-2390 Document: 89 Page: 2 Filed: 06/01/2021

States Patent and Trademark Office, Alexandria, VA, ar- gued for defendant-appellant. Also represented by ROBERT MCBRIDE, ROBERT J. MCMANUS, MOLLY R. SILFEN. ______________________

Before REYNA, WALLACH, and HUGHES, Circuit Judges. REYNA, Circuit Judge. The United States Patent and Trademark Office ap- peals a judgment of the United States District Court for the District of Columbia. Patent applicant Gilbert P. Hyatt filed an action under 35 U.S.C. § 145 against the Patent and Trademark Office to obtain four patents. The Patent and Trademark Office asserted affirmative defenses of prosecution laches and invalidity for anticipation and lack of written description. The district court first held a trial on prosecution laches and subsequently held trials on an- ticipation and written description. Following a Rule 52(c) motion at the first trial, the district court decided that the Patent and Trademark Office failed to carry its burden of proving prosecution laches. Following the patentability trials, the district court decided that certain claims were not invalid for anticipation or lack of written description and ordered the Patent and Trademark Office to issue pa- tents as to those claims. We hold that prosecution laches is a defense available to the Patent and Trademark Office in an action to obtain a patent under 35 U.S.C. §145. We further hold that the district court erred in concluding that the Patent and Trademark Office had failed to prove prosecution laches. Accordingly, consistent with the principles of fairness and due process, we vacate and remand the district court’s de- cision on prosecution laches for further proceedings con- sistent with this opinion and to provide Hyatt the opportunity to present evidence on that issue. We hold the remainder of the case in abeyance, retaining jurisdiction over the anticipation and written description issues. Case: 18-2390 Document: 89 Page: 3 Filed: 06/01/2021

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BACKGROUND Submarine Patents Prior to 1995, a patent’s term was measured as 17 years from the date of issuance. See, e.g., Gilead Scis., Inc. v. Natco Pharma Ltd., 753 F.3d 1208, 1211 (Fed. Cir. 2014). The fact that patent term was keyed to the date of issuance, rather than the date of filing, incentivized certain patent- ees to delay prosecuting their patents by abandoning appli- cations and filing continuing applications in their place. By doing so, patentees could obtain a patent at a financially desirable time when the accused product market had be- come suitably developed. See, e.g., Thomas J. Kowalski & Pamela G. Salkeld, The Impact of GATT on the United States Patent and Trademark Office, 11 ST. JOHN’S J. LEGAL COMMENT. 455, 456 (1996) [hereinafter Kowalski] (“Under the old law, United States patent applications could theoretically remain pending indefinitely through use of the ‘continuation’ procedure of refiling.”). This delay strategy has allowed some submarine patentees to specifi- cally target competitors’ new products. Mark A. Lemley & Kimberly A. Moore, Ending Abuse of Patent Continuations, 84 B.U. L. REV. 63, 76–78 (2004) [hereinafter Lemley]; see also Steve Blount & Louis S. Zarfas, The Use of Delaying Tactics to Obtain Submarine Patents and Amend Around a Patent That a Competitor Has Designed Around, 81 J. PAT. & TRADEMARK OFF. SOC’Y 11, 13, 28–30 (1999); John W. Schlicher, 2 Patent Law, Legal and Economic Principles § 13:11 (2d ed. 2015) [hereinafter Schlicher]. Critics of this practice have argued that it harms industries by upsetting the expectations of product manufacturers who have in- vested in manufacturing facilities. See, e.g., Lemley, 84 B.U. L. REV. at 80; see also Schlicher, 2 Patent Law, Legal and Economic Principles § 13:11. The ability to avoid pub- lication of an application offers further opportunity for abuse because it deprives the public of timely disclosure, which is a central goal of the patent system. Lemley, 84 B.U. L. REV. at 73. Case: 18-2390 Document: 89 Page: 4 Filed: 06/01/2021

Submarine patents have also added to the administra- tive burdens on the U.S. Patent and Trademark Office (“PTO”). Long chains of applications increase patent ex- aminers’ caseloads, which have long tended to be large. See, e.g., Eugene R. Quinn, Jr., The Proliferation of Elec- tronic Commerce Patents: Don’t Blame the PTO, 28 RUTGERS COMPUTER & TECH. L.J. 121, 123 (2002) (stating that “patent examiners are simply too overworked” to weed out “patents that ought not see the light of day”); John R. Thomas, The Question Concerning Patent Law and Pioneer Inventions, 10 HIGH TECH. L.J. 35, 100 (1995) (stating that examiners are “notoriously overworked”). Aware of this re- ality, some submarine patentees have employed the strat- egy of “wearing down” patent examiners over time and thereby obtaining a broader patent scope than warranted. See, e.g., Lemley, 84 B.U. L. REV. at 74–75. During negotiations of the Agreement on Trade-Re- lated Aspects of Intellectual Property (“TRIPS Agree- ment”) at the Uruguay Round of the General Agreement on Tariff and Trade (“GATT”), the U.S. sought to address the problem of submarine patents by agreeing to change the term of U.S. patents from 17 years following the date of issuance to 20 years following the filing date of the appli- cation or an earlier non-provisional application to which the subject application claims priority. TRIPS Agreement art. 33, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299, 33 I.L.M. 1197, https://www.wto.org/english/docs_e/le- gal_e/27-trips.pdf. Congress then enacted this change in patent term into law. Uruguay Round Agreements Act, Pub. L. No. 103-465, § 532, 108 Stat. 4809, 4984 (1994) (amending 35 U.S.C. § 154 to provide a patent term of 20 years); see also Supernus Pharms., Inc. v. Iancu, 913 F.3d 1351, 1353 (Fed. Cir. 2019). The U.S.’s change in patent term, which would become effective on June 8, 1995, triggered a patent application gold rush in the spring of 1995 often referred to as the Case: 18-2390 Document: 89 Page: 5 Filed: 06/01/2021

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“GATT Bubble.” See Hyatt v. Iancu, 332 F. Supp. 3d 113, 122 (D.D.C. 2018) (“Iancu”); Kowalksi, 11 ST. JOHN’S J. LEGAL COMMENT. at 456–57. Applicants filed a large num- ber of applications in the short period before the change in patent term. For example, in the nine days leading to June 8, 1995, the PTO reported that it received and pro- cessed over 50,000 applications—one-quarter of the entire year’s projected filings. PTO Applications, 50 PAT., TRADEMARK & COPYRIGHT J. 253 (July 13, 1995). The influx from the GATT Bubble was so large that the PTO hired hundreds of patent examiners in 1995 and 1996 to process it. See Kowalski, 11 ST. JOHN’S J. LEGAL COMMENT. at 457. Hyatt’s Applications As relevant to this appeal, Gilbert P. Hyatt is the named inventor on 399 patent applications, 381 of which he filed during the GATT Bubble. See Iancu, 332 F. Supp. 3d at 118; J.A. 31859. Hyatt bulk-filed the 381 applications, each one being a photocopy of one of 11 earlier parent applications. See, e.g., J.A. 29444, 31859, 29407, 18944; Iancu, 332 F. Supp. 3d at 118. When filed, the applications contained small claim sets, many of which were identical to each other. See, e.g., J.A. 29444, 29406– 07. This appeal specifically involves four of Hyatt’s GATT Bubble applications: U.S. Patent Application No. 08/457,211 (“’211 application”), U.S. Patent Applica- tion No. 08/456,398 (“’398 application”), U.S. Patent Appli- cation No. 08/472,062 (“’062 application”), and U.S. Patent Application No. 08/431,639 (“’639 application”). These four applications relate to various computer technologies 1 and claim priority to applications filed in the 1970s and 1980s,

1 The specifics of the disclosed technologies do not materially affect this opinion. Case: 18-2390 Document: 89 Page: 6 Filed: 06/01/2021

which pre-date the applications by a range of 12 to 25 years. 2 Hyatt’s GATT Bubble applications, including the four at issue here, are atypically long and complex. According to PTO data, a typical patent application contains about 20 to 30 pages. Iancu, 332 F. Supp. 3d at 124. In contrast, the ’211 and ’398 applications have 576 pages of text and 65 pages of figures; the ’062 patent includes 238 pages of text and 40 pages of figures; and the ’639 application includes 518 pages of text and 46 pages of figures. Id. On October 24, 1995, about five months after Hyatt filed his GATT Bubble applications, PTO group Director Nicholas Godici met with Hyatt to discuss the applications. Director Godici asked Hyatt, and Hyatt agreed, to focus each application’s claims on distinct subject matter. Id. at 128. Neither party memorialized the agreement at the time, but neither party disputes that it occurred. Id.; J.A. 41516, 29348 ll. 3–14. Between that meeting and 2003, Hyatt filed a series of amendments in his applications that grew the number of claims to a total of approximately 115,000, including ap- proximately 45,000 independent claims. See, e.g., J.A. 38154, 38161–62, 29555, 29444; Iancu, 332 F. Supp.

2 The ’211 application was filed on June 1, 1995, and claims priority to an application filed 12 years earlier in 1983. J.A. 7606–07, 8705, 14397–98. The ’398 application was filed on June 1, 1995, shares the same specification as the ’211 application, and claims priority to the same 1983 application. J.A. 8705, 14397–98, 14560. The ’062 appli- cation was filed on June 6, 1995, and claims priority to an application filed 20 years earlier in 1975. J.A. 16071–73, 16453. The ’639 application was filed on May 1, 1995, and claims priority to an application filed 25 years earlier in 1970. J.A. 18097–101. Case: 18-2390 Document: 89 Page: 7 Filed: 06/01/2021

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3d at 124. Hyatt’s GATT Bubble applications therefore eventually contained, on average, 300 claims per applica- tion, which far exceeded the average number of claims in applications pending before the PTO. See Iancu, 332 F. Supp. 3d at 124. The four specific applications at issue here included a total of 1,592 claims, i.e., an average of 398 claims per application. See id. Mr. Hyatt’s claim amendments adding hundreds of claims per application on average meant that Hyatt had presented claims for examination between 12 and 28 years after their alleged priority dates. Specifically, Mr. Hyatt waited from 25 to 28 years to present his claims in the ’639 application, J.A. 18614–56, 18033–41, 17976–8022, 17889– 947, 17707–832; 12 to 16 years to present those in the ’211 application, J.A 9281–89, 8018–40, 7983–8015, 7825–49, 7640–719, 7539–93, 7019–111; 12 to 20 years to present those in the ’398 application, J.A. 15210–19, 14536–58, 14317–96, 14288–314, 14257–85, 14118–204, 13574–685, 13520–49, 47748; and 20 to 21 years to present those in the ’062 application, J.A. 16690–95, 16367–97, 16330–37, 16243–314. For these many years, Mr. Hyatt’s inventions were submerged. From 2003 to 2012, the PTO stayed the examination of many of Hyatt’s applications pending litigation. Hyatt’s applications have been involved in various cases before the federal courts whose outcomes were likely to affect PTO’s handling of most or all of his other applications. 3 See

3 Hyatt’s lawsuits have addressed a variety of issues, such as challenging examiners’ written description rejec- tions, Hyatt v. Dudas, 492 F.3d 1365 (Fed. Cir. 2007); chal- lenging the PTO’s ability to use representative claims in Board decisions, Hyatt v. Dudas, 551 F.3d 1307 (Fed. Cir. 2008); and challenging the PTO’s position that plaintiffs in § 145 actions may present new evidence only if it had no Case: 18-2390 Document: 89 Page: 8 Filed: 06/01/2021

J.A. 18944; Hyatt v. USPTO, No. 1:13-CV-1535, 2014 WL 2446176, at *1 (E.D. Va. May 29, 2014). The PTO’s Requirements In 2013, the PTO resumed examination of Hyatt’s ap- plications. Around that time the PTO created an art unit, comprised originally of 12 experienced examiners, dedi- cated to examining Hyatt’s applications. See Iancu, 332 F. Supp. 3d at 119; J.A. 29366, 29567–68. Initially the examiners took a compact prosecution approach, in which they prepared a fulsome set of rejections on the first office action so that the next action might become final. J.A. 29433, 29569. The examiners took approximately four to five months to write their first office actions, each of which spanned hundreds of pages. See, e.g., J.A. 29567–69, 38187 n.7. In contrast, a typical examination took 20 hours, or two to three business days, of examiner time. J.A. 29570. To facilitate the examination process, from August to October 2013, the PTO issued 11 notifications to Hyatt called “Requirements.” See, e.g., J.A. 31856–96, 32885– 923, 33585–645, 33646–73, 36310–47, 36565–93, 36705– 38, 37031–69, 37837–72, 38094–150, 38151–96. Each Re- quirement corresponded to a set of applications that shared a common specification belonging to one of the GATT Bub- ble applications’ 11 parent applications. See, e.g., J.A. 31860–62. These Requirements were designed to so- licit information from Mr. Hyatt that would streamline prosecution of his applications. The PTO first described the challenges that Hyatt’s ap- plications had created. For example, the PTO could not reasonably ascertain the priority dates of the claimed in- ventions because the applications claimed priority to nu- merous applications. See, e.g., J.A. 31863–64 (listing the

reasonable opportunity to present it to the PTO in the first instance, Kappos v. Hyatt, 566 U.S. 431 (2012). Case: 18-2390 Document: 89 Page: 9 Filed: 06/01/2021

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43 applications filed from 1969 to 1983 to which one group of applications claimed priority). The length of the appli- cations, as well as the length of the priority applications, also hindered examiners’ ability to determine compliance with 35 U.S.C. § 112. See, e.g., J.A. 31865–66. The PTO further explained that the number of claims, and their mul- tiplication through amendments since 1995, also posed a significant hurdle to processing the applications. See, e.g., J.A. 31869–72. The PTO also pointed out a large amount of repetition and redundancy of claims across applications. J.A. 31872–85. Because of these factors, the PTO esti- mated it would take 532 years of examiner time at its then- current rate to process Hyatt’s applications. J.A. 31886 & n.14. The PTO therefore instructed Hyatt to (i) select no more than 600 total claims to pursue for each of the 11 specifications; (ii) identify the priority date and support for that date with respect to each chosen claim; and (iii) submit a clean copy of the claims. See, e.g., J.A. 31888–91. Examination and Review by the Board The four Hyatt applications’ claims were finally re- jected and reviewed on appeal by the Board of Patent Ap- peals and Interferences (“Board”), which affirmed rejections of certain claims in each application. Iancu, 332 F. Supp. 3d at 124–26. Specifically, during examina- tion of the ’639 application, an examiner rejected all pend- ing claims for lack of written description or obviousness. J.A. 626–27. The Board affirmed in part and reversed in part, placing some claims in condition for allowance. J.A. 715–16. On rehearing, the Board withdrew only cer- tain additional rejections. J.A. 762. During examination of the ’211 application, an exam- iner rejected all but a small number of claims for lack of written description, lack of enablement, and obviousness, and the Board reversed certain non-enablement and obvi- ousness rejections. J.A. 207, 213, 262–63. On rehearing, Case: 18-2390 Document: 89 Page: 10 Filed: 06/01/2021

the Board denied Hyatt’s request to withdraw additional rejections. J.A. 280. Further, an examiner rejected all claims in the ’398 ap- plication for lack of written description and some of those claims for obviousness or anticipation. J.A. 285. The Board affirmed in part and found a new ground for rejec- tion under § 101. J.A. 286, 383–84. On rehearing, the Board withdrew certain additional written description and prior art-based rejections. J.A. 554. As for the ’062 application, an examiner rejected all claims for lack of written description and enablement, as well as for obviousness-type double patenting. J.A. 557, 564. The Board affirmed certain § 112 rejections and the double patenting rejection for one claim and reversed rejec- tions as to other claims. J.A. 601. On rehearing, the Board withdrew its written description rejection with respect to one claim. J.A. 624. Hyatt’s § 145 Actions On November 18, 2005, Hyatt filed a § 145 action 4 in the U.S. District Court for the District of Columbia seeking issuance of a patent from the ’211 application. J.A. 60284–

4 An applicant may appeal an adverse decision by the Board directly to this court or may file a civil action in district court under 35 U.S.C. § 145 to obtain a patent. 35 U.S.C. § 145; Hyatt v. Kappos, 625 F.3d 1320, 1322 (Fed. Cir. 2010), overruled on other grounds by Kappos v. Hyatt, 566 U.S. 431 (2012). We have explained that the § 145 ac- tion is a hybrid action. Hyatt, 625 F.3d at 1322. It is unlike an appeal because the plaintiff can present new evidence. Id. However, if the applicant presents no new evidence, then the district court reviews the action on the adminis- trative record, id., and the district court reviews de novo any issue for which the applicant presents new evidence, id. at 1336. Case: 18-2390 Document: 89 Page: 11 Filed: 06/01/2021

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89. On September 25, 2009, he filed three additional § 145 actions in the same court with respect to the ’398, ’062, and ’639 applications. J.A. 60291–304. In each complaint, Hy- att alleged that the PTO had made factual errors and failed to comply with the law in refusing to issue patents from these applications. See J.A. 60284–304. On August 23, 2016, the district court issued a series of orders on the parties’ motions for summary judgment. The court denied Hyatt’s motions, and granted the PTO’s motions in part. J.A. 195, 47210–11, 55447–70, 56065–82. The district court explained that factual issues precluded summary judgment on certain issues, including written de- scription, anticipation, and obviousness-type double pa- tenting. J.A. 55449–70, 56067–82. The next month, the PTO filed a motion to dismiss each case on prosecution laches grounds. Iancu, 332 F. Supp. 3d at 117–18; J.A. 134–35, 155–56, 176–77, 196–97, 18891– 941. The PTO argued that Hyatt had engaged in a “pattern of delay in prosecuting his nearly 400 patent applications from 1969 through the present day.” J.A. 18902. Accord- ing to the PTO, that was true even disregarding the period from 2003 to 2012—which the PTO did not rely on—when the PTO suspended prosecution of most of Hyatt’s applica- tions due to pending litigation. Iancu, 332 F. Supp. 3d at 124, 129, 133 n.14. The PTO argued that Hyatt forfeited his patent rights by, for example, claiming priority to ap- plications more than 45 years old; bulk-filing about 400 photocopies of 11 applications in the days before the U.S.’s patent term changed on June 8, 1995; and agreeing to focus each application on a different invention but not doing so and later revealing that he never had a “master plan” for demarcating the applications. Id. at 117–18. Hyatt responded that his prosecution of applications other than the four at issue was legally irrelevant; that the PTO itself engaged in extensive delays in administering his applications; that the PTO did not warn him, as allegedly Case: 18-2390 Document: 89 Page: 12 Filed: 06/01/2021

required, that he was in jeopardy of losing his patent rights; and that the PTO failed to prove intervening rights as necessary to establish prosecution laches. J.A. 19289. Hyatt also argued that his delays were explainable be- cause, for example, PTO rules permitted Hyatt to add and amend claims, and Hyatt did so to correctly capture his in- ventions and steer clear of prior art. See, e.g., Pl.’s Opp. to Def.’s Mot. to Dismiss for Prosecution Laches at 10, Hyatt v. Matal, No. 1:05-cv-02310-RCL (D.D.C. Jan. 9, 2017), ECF No. 101. 5 The court treated the PTO’s motions to dis- miss as motions for summary judgment and denied them because genuine issues of material fact existed. Iancu, 332 F. Supp. 3d at 118. In October 2017, the district court held a five-day, con- solidated bench trial on whether prosecution laches barred the issuance of patents from the ’211, ’398, ’062, and ’639 applications. Id. The PTO presented three witnesses: (i) Robert Clarke; (ii) Gregory Morse; and (iii) Stephen Ku- nin. Id. at 118–19. Mr. Clarke testified on behalf of the PTO about its pa- tent examination procedures. Mr. Clarke served as the ed- itor of the Manual of Patent Examining Procedure (“MPEP”) and had previously held other high-level posi- tions at the PTO, including Chief of Staff and Director of the Office of Patent and Legal Administration. J.A. 29185. He testified, for example, that Director Godici met with Hy- att on October 24, 1995, and asked Hyatt to demarcate his applications. See J.A. 29348, 41516. Mr. Clarke further testified that the PTO’s practice is to bring prosecution to a close as quickly as possible. J.A. 29320. He also testified

5 Hyatt filed apparently identical oppositions in the other three cases, No. 1:09-cv-01864-RCL (regarding the ’398 application); No. 1:09-cv-01872-RCL (regarding the ’639 application); and No. 1:09-cv-01869-RCL (regarding the ’062 application). Case: 18-2390 Document: 89 Page: 13 Filed: 06/01/2021

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that “it’s possible” that the PTO could have devoted more resources to Hyatt’s applications. J.A. 29320–21. Mr. Morse served as the supervisor of Group Art Unit 2615, the unit dedicated to Hyatt’s applications. J.A. 29363–64; Iancu, 332 F. Supp. 3d. at 119. Mr. Morse’s tes- timony focused on the history and nature of Hyatt’s appli- cations, the unique challenges they posed to the PTO, and the PTO’s handling of the applications. See, e.g., J.A. 29363–67, 29399–486, 29543–620, 29639–50, 29657, 29807, 29823. According to Mr. Morse, the complexity, number, size, and overlap of Hyatt’s applications and claims made it difficult, if not impossible, for examiners to determine the claims’ priority dates for purposes of identi- fying the relevant body of prior art, to determine whether the claims satisfy the written description requirement, and to identify double patenting issues. See, e.g., J.A. 29368, 29417–26, 18944. Further complicating the examiners’ task was their need to find not only disclosures of individ- ual claim elements, but more specifically disclosures of in- terconnections between those elements. J.A. 29435–36. Hyatt’s tendency to rewrite claims in whole or in signifi- cant part midway through prosecution effectively restarted prosecution for the newly rewritten claims. J.A. 29464–66, 19471–72. When asked whether Hyatt had been forthcom- ing about priority dates before the PTO issued its Require- ments in the fall of 2013, Mr. Morse responded, “No. That has been a persistent issue across this entire family of ap- plications.” J.A. 29429. Mr. Kunin testified as an expert witness regarding the PTO’s patent policy, practice, and procedure. Mr. Kunin opined, in summary, that “Mr. Hyatt’s pattern of conduct unreasonably and unexplainably delayed prosecution, re- sulting in needlessly increased examiner time and its asso- ciated costs to the USPTO to conclude examination of his applications.” J.A. 39235–83; see also J.A. 30200, 29990. Mr. Kunin pointed to several factors in support. For exam- ple, Hyatt had delayed years and sometimes multiple Case: 18-2390 Document: 89 Page: 14 Filed: 06/01/2021

decades after his alleged priority dates to submit claims. J.A. 30201. According to Mr. Kunin, unreasonable and un- explainable delay also resulted from Hyatt’s pattern of con- duct during prosecution, including (i) dramatically increasing, i.e., unduly multiplying, the number of claims 6 contrary to 37 C.F.R. 1.75(b); (ii) rewriting, i.e., shifting, claims in large portions or in their entirety contrary to 37 C.F.R. § 1.145; (iii) presenting numerous duplicate or patentably indistinct claims across applications without in- forming the PTO contrary to MPEP §§ 2001.06(b), 2004(9); and (iv) failing to identify written description support for claims contrary to MPEP §§ 714.02, 2163.06. See, e.g., J.A. 30201; see also J.A. 39238. Mr. Kunin pointed to additional specific instances of prosecution conduct that evinced the unreasonableness of Hyatt’s prosecution conduct, namely (i) filing claims that Hyatt had already lost in interference proceedings without informing the examiner; (ii) failing to take allowed claims but rather refiling them years after their allowance in a separate application; and (iii) failing to prosecute district court actions under § 145. See, e.g., J.A. 30202. At the close of the PTO’s case-in-chief on prosecution laches, Hyatt moved for judgment on partial findings pur- suant to Rule 52(c) of the Federal Rules of Civil Procedure. 7 Iancu, 332 F. Supp. 3d at 119. Hyatt argued that the PTO

6 Mr. Kunin also testified that fewer than 0.02% of all applications filed from 1995 to 2013 included 299 or more claims. J.A. 39243. 7 Rule 52(c) provides that, in a nonjury trial, if a party has been fully heard on an issue and the court finds against the party on that issue, “the court may enter judg- ment against the party on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue.” FED. R. CIV. P. 52(c). Case: 18-2390 Document: 89 Page: 15 Filed: 06/01/2021

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failed to prove prosecution laches because the PTO (i) did not show it provided Hyatt with adequate warnings of laches rejections; (ii) did not prove intervening rights; (iii) never issued laches rejections for the four applications at issue; and (iv) failed to meet its burden of proving un- reasonable and unexplained delay by a preponderance of the evidence. Id. In the months following the prosecution laches trial, the district court conducted additional bench trials on the patentability of the four applications’ claims. See J.A. 140– 43, 160–63, 182–83, 202–04. The District Court’s Decisions On August 1, 2018, the district court issued a series of orders resolving the issues in the four cases. First, it dis- missed the case with respect to the ’062 application because the parties no longer disputed claim 45, the only claim that remained after the court’s summary judgment orders. J.A. 120. The court issued a separate order pursuant to Rule 52(c) of the Federal Rules of Civil Procedure conclud- ing that prosecution laches did not bar issuance of patents from the ’211, ’398, ’062, and ’639 applications. See Iancu, 332 F. Supp. 3d at 131, 138. The central thrust of the dis- trict court’s analysis was that the PTO had failed to take the actions necessary to advance the prosecution of Hyatt’s applications. See id. at 131–38. At the outset, the court explained that it would only consider delay up to 2002 in its analysis because (i) the PTO “shoulders responsibility” for suspending prosecution of Hyatt’s applications pending litigation from 2003 to 2012, and (ii) after 2012, the rele- vance of Hyatt’s delays in prosecuting applications other than the four at issue “is so circumspect that the [c]ourt must decline to consider it here.” Id. at 131–32. The district court reasoned that the uniqueness of Hy- att’s voluminous applications “required [the PTO] to Case: 18-2390 Document: 89 Page: 16 Filed: 06/01/2021

employ and embrace atypical procedures for addressing” his applications. See id. at 133. The court faulted the PTO for trying to “fit the large proverbial square peg of Hyatt’s applications into the rounded-out and well-trodden hole of its 3,000 page practice manual.” Id. According to the court, the PTO’s refusal to adopt “atypical procedures” made a finding of prosecution laches “[un]warrant[ed].” Id. The district court then found the PTO’s efforts to ad- vance prosecution—including the October 1995 meeting between Hyatt and Director Godici—were so informal and inadequate as to preclude a finding of prosecution laches. Id. at 134–37. The court faulted the PTO for not using “spe- cific and formal” measures up to 2002 to obtain the infor- mation it needed from Hyatt to successfully administer his applications. Id. at 134. According to the court, the PTO should have used formal measures “rather than await Mr. Hyatt’s help, which, it appears obvious, was not forthcom- ing.” Id. The court stated that “it would seem to have been in Mr. Hyatt’s interest to assist examination when invited to do so, if he had indeed prioritized having his applied-for patents issue at the earliest possible date.” Id. The court further found that the PTO’s non-use of more formal measures to seek information and amendments deprived Hyatt of an “opportunity to amend or cancel claims to avoid rejections.” Id. at 134–35. If the PTO had used such measures, the court reasoned, “[i]t is entirely likely that Mr. Hyatt could have been more helpful during the exami- nation process.” Id. at 135 (quotation omitted). The court explained that it was “left with no choice but to conclude that the PTO itself ignored for 20 years the details of what- ever informal agreement Mr. Hyatt and Mr. Godici had.” Id. The PTO “cannot have it both ways here,” the court explained, by “lament[ing] decades of allegedly outrageous conduct” while arguing its own inaction is irrelevant. Id. at 136. The district court made various additional determina- tions in a section at the end of its order titled “Other Case: 18-2390 Document: 89 Page: 17 Filed: 06/01/2021

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Matters.” Id. at 137. First, the district court assigned little weight to the fact that the PTO spent more than $10 mil- lion in the last five years examining claims in Hyatt’s GATT Bubble applications whereas Mr. Hyatt had only paid about $7 million in fees. Id. Second, the court concluded that Mr. Hyatt’s “claim shifting”—or amending claims so significantly “as to effec- tively create a new claim”—did not warrant a finding of prosecution laches. Id. at 137–38. The district court again faulted the PTO for “accept[ing] the amendments and con- tinu[ing] examination” in such cases. Id. at 137. The court “appreciate[d] the challenge that faced the PTO in pro- cessing these unusual applications,” but nevertheless stated it could not bar the patents for prosecution laches because “the PTO itself did nothing to police the conduct they now complain of for the better part of two decades.” Id. The court next found insufficient the PTO’s evidence that Hyatt had re-introduced claims in the applications at issue even though he had previously lost them in interfer- ence proceedings. Id. at 138. The court found Hyatt’s con- duct “was not reasonable,” and that the PTO is entitled to assume that an application is not claiming an invention he already lost. Id. But nevertheless, the court reasoned, Hy- att’s “unreasonable conduct as to four allegedly illustrative claims does very little to move the ball in consideration of the totality of Mr. Hyatt's conduct across approximately 115,000 claims.” Id. That same day, August 1, 2018, the district court is- sued another order addressing the patentability of the four applications’ claims at issue. See J.A. 71–113, 144, 165, 184, 205. The court concluded certain claims in the ’211, ’398, and ’639 applications met the written description, non-obviousness and novelty requirements for patentabil- ity and ordered the PTO to issue patents for those claims. See id. at 85–113. Case: 18-2390 Document: 89 Page: 18 Filed: 06/01/2021

The PTO appeals the district court’s decision on prose- cution laches, written description, and novelty, and chal- lenges the district court’s authority to order the PTO to issue a patent. See Appellant’s Br. 5–6. Hyatt cross-ap- peals the district court’s decision not to enter judgment on claims for which the Board reversed the examiner’s rejec- tions and that the PTO failed to dispute in court. Appel- lee’s Br. 87–88. We have jurisdiction under 28 U.S.C. § 1295(a)(4). STANDARD OF REVIEW We review the district court’s factual findings for clear error and its legal conclusions de novo. Intellectual Ven- tures I LLC v. Symantec Corp., 838 F.3d 1307, 1312 (Fed. Cir. 2016). We review a district court’s determination of prosecution laches for abuse of discretion. Cancer Research Tech. Ltd. v. Barr Lab’ys Inc., 625 F.3d 724, 728–29 (Fed. Cir. 2010). “‘We may find an abuse of discretion on a show- ing that the court . . . exercised its discretion based upon an error of law or clearly erroneous factual findings.’” Si- Onyx LLC v. Hamamatsu Photonics K.K., 981 F.3d 1339, 1349 (Fed. Cir. 2020) (quoting Innogenetics, N.V. v. Abbott Lab’ys, 512 F.3d 1363, 1379 (Fed. Cir. 2008)). DISCUSSION Prosecution Laches A The doctrine of laches is an equitable affirmative de- fense. Cancer Research, 625 F.3d at 728. Prosecution laches may “render a patent unenforceable when it has is- sued only after an unreasonable and unexplained delay in prosecution that constitutes an egregious misuse of the statutory patent system under a totality of the circum- stances.” Id. (quotation and citation omitted). Finding an unreasonable and unexplained delay in prosecution “in- cludes a finding of prejudice[.]” Id. at 729. Case: 18-2390 Document: 89 Page: 19 Filed: 06/01/2021

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The prosecution laches defense originates from two Su- preme Court cases in the early 1900s. See Woodbridge v. United States, 263 U.S. 50 (1923); Webster Elec. Co. v. Splitdorf Elec. Co., 264 U.S. 463 (1924). In Woodbridge, the Court applied the doctrine to render a patent unen- forceable based on a nine-year delay in prosecution. 263 U.S. at 53. The PTO had agreed with Woodbridge’s re- quest to delay the issuance of his patent for one year. Id. at 52. At the end of the year, the PTO neglected to issue the patent. Id. at 53. Woodbridge waited an additional eight-and-a-half years before sending a letter to the PTO calling attention to the application and explaining that he had waited because the delay enabled him to best avail himself of the patent’s value. Id. He then sought to amend the specification and claims to capture related innovations that arose during the course of the delay. Id. The Court held that, by delaying to “mak[e] the term of the monopoly square with the period when the commercial profit from it would have been highest,” Woodbridge “forfeit[ed] the right to a patent by designed delay.” Id. at 56. The Court rea- soned that [a]ny practice by the inventor and applicant for a patent through which he deliberately and without excuse postpones beyond the date of the actual in- vention, the beginning of the term of his monopoly, and thus puts off the free public enjoyment of the useful invention, is an evasion of the statute and defeats its benevolent aim. Id. at 56. The next year, in Webster Electric, the Court similarly held that an unreasonable delay of eight years rendered a patent unenforceable. 264 U.S. at 465, 471. The applicant filed a patent application in 1910. Id. at 464. In 1915, to provoke an interference against a separate, recently issued patent, the applicant filed a divisional application copying the patent’s claims. Id. The applicant lost the interference Case: 18-2390 Document: 89 Page: 20 Filed: 06/01/2021

and then amended the divisional application by adding two new claims, claims 7 and 8, which issued in 1918 and were the subject of the litigation. Id. at 464–65. The Court ex- plained that it was not until 1918 that the applicant in- tended to assert claims 7 and 8, which were broader than any he previously sought. Id. at 465–66. Meanwhile, “[d]uring all of this time the subject matter was disclosed and in general use, and [the applicant] and his assignee, so far as claims 7 and 8 are concerned, simply stood by and awaited developments.” Id. at 465. The Court held claims 7 and 8 unenforceable, noting it had “no hesitation in say- ing that the delay was unreasonable, and, under the cir- cumstances shown by the record, constitutes laches, by which the petitioner lost whatever rights it might other- wise have been entitled to.” Id. at 466. We have observed that, in enacting the Patent Act of 1952, Congress intended the prosecution laches defense to remain available. Symbol Techs., Inc. v. Lemelson Med., Educ. & Research Found., LP, 277 F.3d 1361, 1365–66 (Fed. Cir. 2002). P.J. Federico, an original drafter of the Act, explained in a renowned series of lectures following the Act’s enactment that § 282 incorporated the defenses to infringement that were available at that time, including laches, such that they remained available to accused in- fringers. Pub. L. No. 82-593, 66 Stat. 792, 812; see also 35 U.S.C. § 282; P.J. Federico, Commentary on the New Pa- tent Act (West 1954), reprinted in 75 J. PAT. & TRADEMARK OFF. SOC’Y 161, 215 (1993) (referring to defenses that may be raised in an action involving the validity or infringe- ment of a patent and stating “this would include . . . equi- table defenses such as laches, estoppel, and unclean hands”). Nearly eighty years after Webster Electric, we con- firmed that prosecution laches, as a matter of law, is an available defense to patent infringement. Symbol Techs., 277 F.3d at 1363, 1366–68. Soon after that we applied the doctrine for the first time, concluding that a patentee had Case: 18-2390 Document: 89 Page: 21 Filed: 06/01/2021

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forfeited his right to a patent. In re Bogese, 303 F.3d 1362, 1363 (Fed. Cir. 2002). In Bogese, between 1987 and 1995, the applicant engaged in “deliberate and consistent course of conduct that has resulted in an exceptional delay in ad- vancing the prosecution and the issuance of a patent.” Id. at 1365. Specifically, he filed 12 continuation applications without amendment or addressing the reasons for the re- jection and each time abandoned the previous application. Id. at 1363–65. The patent examiner ultimately rejected all pending claims on the grounds that the applicant’s ac- tions “deliberately postponed meaningful prosecution, de- liberately postponed the grant of any patent to which he may be entitled, and deliberately postponed the free public enjoyment” of the claimed inventions, evading the patent statute and defeating its benevolent aim. Id. at 1365. On review, the Board agreed with the examiner’s deci- sion, calling the applicant’s actions “so egregious in defeat- ing the policy of the patent laws of promoting science and the useful arts as to be presumed unreasonable.” Id. at 1366. The harm caused by the applicant, the Board ex- plained, was not only the delayed disclosure of his inven- tion, but also the “deliberate delay of the term of any monopoly granted by a patent” until a time “when the in- dustry has developed and matured to such a point as to be more financially beneficial to the applicant and hence more harmful or prejudicial to the public.” Id. Bogese appealed to this court, challenging the PTO’s exercise of authority to require him to advance the prose- cution of his patent application. Id. at 1369. We held that that the PTO’s sanction for undue delay under the doctrine of prosecution laches was not arbitrary, capricious, or con- trary to law under the Administrative Procedure Act, 5 U.S.C. § 706. Id. at 1366–69. Since Bogese, we have affirmed a prosecution laches de- termination one other time. See Symbol Techs., Inc. v. Lemelson Med., Educ. & Research Found., LP, 422 Case: 18-2390 Document: 89 Page: 22 Filed: 06/01/2021

F.3d 1378, 1385 (Fed. Cir. 2005) (“Symbol Technologies II”). In Symbol Technologies II, the patentee’s delays re- sulted in 18- to 39-year time periods between the filing of applications to the issuance of the patents in suit. See id. at 1386. The district court found that the patentee’s pa- tents ranked in the “‘top thirteen positions’ for the longest prosecutions” for the period from 1914 to 2001. Id. (citation omitted). On appeal, we explained that this type of delay “is not what is contemplated by the patent statute when it provides for continuation and continuation-in-part applica- tions,” and that such delay creates an “adverse effect on businesses that [are] unable to determine what [is] pa- tented from what [is] not patented.” Id. In Symbol Technologies II, we provided examples of both reasonable and unreasonable delay. Id. at 1385. Three examples of reasonable delay include: (i) filing a di- visional application in response to a restriction require- ment, even if the filing occurs immediately before issuance of the parent application; (ii) refiling an application to pre- sent new evidence of an invention’s unexpected ad- vantages; and (iii) refiling an application “to add subject matter in order to attempt to support broader claims as the development of an invention progresses.” Id. We clarified that these examples are not exhaustive and that an appli- cant could reasonably refile an application where that re- filing “is not unduly successive or repetitive.” Id. In contrast, we explained, unreasonable delays involve repetitive refilings that demonstrate unjustifiable prosecu- tion delay, for example, “refiling an application solely con- taining previously-allowed claims for the business purpose of delaying their issuance.” Id. (citations omitted). We rea- soned that the determination of unreasonable delay is not limited to the circumstances surrounding the particular application at issue; instead, “an examination of the total- ity of the circumstances, including the prosecution history of all of a series of related patents and overall delay in is- suing claims, may trigger laches.” Id. at 1385–86. Case: 18-2390 Document: 89 Page: 23 Filed: 06/01/2021

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In Cancer Research Technology Ltd. v. Barr Laborato- ries, Inc., we expanded the requirements for prevailing on a prosecution laches defense to infringement. 625 F.3d 724 (Fed. Cir. 2010). Specifically, we held that prosecution laches requires proving two elements: (a) that the pa- tentee’s delay in prosecution was unreasonable and inex- cusable under the totality of circumstances, and (b) that the accused infringer suffered prejudice attributable to the delay. Id. at 728–29. To establish prejudice, we explained, an accused infringer must show evidence of intervening rights, that is, that the accused infringer or others “in- vested in, worked on, or used the claimed technology dur- ing the period of delay.” 8 Id. at 729. Because the defendant had not proven prejudice, we reversed the district court’s judgment that the patent at issue was unenforceable for prosecution laches. Id. at 726, 731–32. Although Woodbridge, Webster Electric, Bogese, Sym- bol Technologies II, and Cancer Research provide guidance on the application of laches in certain circumstances, we now address for the first time the PTO’s assertion of a pros- ecution laches defense in a civil action brought by a pa- tentee under 35 U.S.C. § 145 to obtain a patent. B Before turning to the merits of prosecution laches, we address the threshold issue of whether the PTO can assert the defense of prosecution laches in a § 145 action. We hold that it can. As we have explained, the PTO has the author- ity to deny patent issuance on prosecution laches grounds. Bogese, 303 F.3d at 1367 (“It necessarily follows that the PTO has the authority to reject patent applications for pa- tents that would be unenforceable” for prosecution laches.).

8 See, e.g., John Bean Techs. Corp. v. Morris & As- socs., Inc., 988 F.3d 1334, 1338 (Fed. Cir. 2021) (discussing intervening rights). Case: 18-2390 Document: 89 Page: 24 Filed: 06/01/2021

The PTO also has the right to defend, in appeals before this court, its rejections of patent claims based on prosecution laches. See id. Further, the language of § 282 demon- strates Congress’s desire to make affirmative defenses, in- cluding equitable ones such as prosecution laches, broadly available. See 35 U.S.C. § 282 (making available affirma- tive defenses, including “any other fact or act made a de- fense by this title,” “in any action involving” patent validity); P.J. Federico, Commentary on the New Patent Act (West 1954), reprinted in 75 J. PAT. & TRADEMARK OFF. SOC’Y 161, 215 (1993) (explaining that Congress intended to incorporate equitable defenses including laches into the Patent Act of 1952). Defendants may accordingly assert the prosecution laches defense in district court infringe- ment cases. See Symbol Techs., 277 F. 3d at 1363. These factors point to the conclusion that the PTO should be per- mitted to assert the prosecution laches defense in a § 145 action. In our view it would make little sense for the PTO to have the authority to use prosecution laches as a basis for denying a patent, but to lack the authority to defend against issuance of a patent in a § 145 action on the same basis. Hyatt articulates no principled reason why we should adopt such an approach, and we are not otherwise aware of one. Further, the PTO may assert the prosecution laches de- fense in a § 145 action even if it did not previously issue rejections based on, or warnings regarding, prosecution laches during the prosecution of an application that is at issue in the § 145 action. In Kappos v. Hyatt, the Supreme Court concluded that “there are no limitations on a patent applicant’s ability to introduce new evidence in a § 145 pro- ceeding beyond those already present in the Federal Rules of Evidence and the Federal Rules of Civil Procedure.” 566 U.S. 431, 445–46 (2012). Following Kappos, we held that new evidence may be admitted “without regard to whether the issue was raised before the Board.” Troy v. Samson Mfg. Corp., 758 F.3d 1322, 1325 (Fed. Cir. 2014). Under Case: 18-2390 Document: 89 Page: 25 Filed: 06/01/2021

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these holdings, § 145 actions open the door to new evidence and arguments. Fairness dictates that the door must also remain open for the PTO to assert its meritorious defenses under the circumstances, including prosecution laches. Moreover, reserving the prosecution laches determination for infringement actions, but not § 145 actions, would harm the public’s interest by allowing a patentee to enforce a pa- tent that could have been barred for prosecution laches in an earlier § 145 action. While the PTO’s failure to previ- ously warn the applicant or reject claims based on prosecu- tion laches may be considered as part of the totality of the circumstances in determining prosecution laches, it does not bar the PTO from asserting the defense in a § 145 ac- tion. C We turn next to the district court’s decision on prosecu- tion laches. We conclude that the district court misapplied the legal standard for prosecution laches in several re- spects. We address each in turn. Totality of the Circumstances The district court failed to properly consider the total- ity of the circumstances. The court stated that “th[e] total- ity principle does not apply in a manner as to require this Court to account for the entirety of the prosecution history of each related application from its inception to final dispo- sition.” Iancu, 332 F. Supp. 3d at 131. The district court then focused predominantly on the PTO’s role in the pros- ecution of Hyatt’s four applications at issue and repeatedly discounted or ignored evidence showing that Hyatt’s con- duct caused unreasonable and unexplained delay. See Iancu, 332 F. Supp. 3d at 122–39. For example, the district court ignored evidence of Hy- att’s pattern of rewriting or shifting claims midway through prosecution in applications other than the four at issue in this case because that claim shifting “long Case: 18-2390 Document: 89 Page: 26 Filed: 06/01/2021

postdate[d] the close of prosecution” of the four applications at issue here. Id. at 129–30. The court later concluded that the PTO’s claim shifting evidence failed to meet the PTO’s burden because “it is ‘not unusual to see a few claims re- written’” and because “the PTO accepted the amendments and continued examination” of the applications in ques- tion. Id. at 137 (citation omitted). The court also refused to consider evidence of Hyatt’s pattern of prosecution conduct after 2012, when the PTO resumed prosecution of Hyatt’s applications. Id. at 132. It explained that it “ascribe[d] no weight to the subsequent prosecution history of other applications not before the Court following the onset of litigation in these matters.” Id. The district court likewise reasoned, “That the PTO finally, in 2015, got fed-up enough with the difficulties of examin- ing Mr. Hyatt’s claims that it began issuing prosecution laches rejections, does not itself have any relevance to this Court’s treatment of the applications’ respective prosecu- tion histories through 2002.” Id. at 136–37. The district court also discounted evidence of Hyatt’s October 1995 agreement with Director Godici because the parties “did not reach any agreement that the Court can now enforce.” Id. at 135. The district court further gave “little weight” to the fact that, in recent years, the PTO has spent more than $10 million administering Hyatt’s appli- cations whereas Hyatt has spent approximately $7 million in fees. Id. at 137. In addition, the court discounted evidence that Hyatt had filed four claims that he had already lost in interfer- ence proceedings. The court explained that this “unreason- able conduct as to four allegedly illustrative claims does very little to move the ball in consideration of the totality of Mr. Hyatt’s conduct across approximately 115,000 claims.” Id. at 138. These examples of discounting or ignoring evidence— indeed swaths of evidence in certain situations—regarding Case: 18-2390 Document: 89 Page: 27 Filed: 06/01/2021

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Hyatt’s prosecution conduct as a cause for delay illustrate that the district court failed to follow this court’s guidance on considering the totality of the circumstances. We have explained that “an examination of the totality of the cir- cumstances, including the prosecution history of all of a se- ries of related patents and overall delay in issuing claims, may trigger laches.” Symbol Technologies II, 422 F.3d at 1386. Rather than consider the relevant evidence of con- duct causing delay across Hyatt’s GATT Bubble applica- tions—which overlapped, for example, in subject matter, claim scope, and priority disclosures, and were filed to- gether as photocopies of a small group of applications—the district court erred in considering only the period up to 2002 and erred insofar as it focused its analysis on the four specific applications at issue in this case to the exclusion of Hyatt’s other GATT Bubble applications. The district court did not appreciate the PTO’s evidence as that of a con- sistent pattern of conduct across an enormous body of sim- ilar applications. The district court’s review of the evidence did not, therefore, encompass the totality of the circum- stances. Undue Emphasis on the PTO’s Conduct The district court further applied an incorrect legal standard in a way that affected its entire decision: Rather than analyze the evidence to determine whether Hyatt’s conduct warrants a finding of prosecution laches, the court repeatedly placed blame on the PTO for the slowness with which Hyatt’s applications were prosecuted. We have explained that “a delay by the PTO cannot ex- cuse the appellant’s own delay.” Bogese, 303 F.3d at 1369. Although the district court gave lip service to this principle, it effectively used the “totality of the circumstances” stand- ard as a vehicle for blaming the PTO for the prosecution delays. See, e.g., Iancu, 332 F. Supp. 3d at 122 (stating that “under the totality of circumstances test[, the] PTO’s ac- tions and omissions can likewise be considered in Case: 18-2390 Document: 89 Page: 28 Filed: 06/01/2021

determining the reasonableness of any delay actually at- tributable to the applicant”); see also id. at 132 (stating that the totality of circumstances includes “the greater context of his interactions with PTO, and the agency’s actions or failures to act, of which the near-decade of suspended ex- amination is but one example”). Notably, the district court cited no legal authority supporting its emphasis on the PTO’s actions and inactions. Specifically, the district court faulted the PTO for using its normal procedures when examining Hyatt’s applica- tions. Id. at 132–33. The court reasoned that the atypical nature of Hyatt’s GATT Bubble applications “required [the PTO] to employ and embrace atypical procedures for ad- dressing the challenge before them.” Id. at 133. There is no legal requirement, the court explained, for the PTO to be “wedded” to its policy of using compact prosecution. Id. The court placed responsibility squarely on the PTO for the fact that processing Hyatt’s applications was like trying to fit a “large proverbial square peg” into “the rounded-out and well-trodden hole of its 3,000 page practice manual.” Id. at 134. The district court also erroneously found that the PTO is solely responsible for the suspension of prosecution from 2003 to 2012—which the PTO did not rely on to prove de- lay. See id. at 131. It reasoned that the PTO’s stipulation on that score “functions as an admission that the PTO shoulders responsibility for the delay during that period.” Id. But the PTO’s stipulation, which was offered by the PTO but not ultimately agreed upon by the PTO and Hyatt, was an attempt by the PTO to streamline the trial. Appel- lant’s Br. 17 n.4. The PTO argues, persuasively, that the “period was directly attributable to Mr. Hyatt’s numerous challenges to USPTO procedures because, depending on the outcome of those cases, time the USPTO spent examin- ing roughly 400 pending applications could have been ren- dered meaningless.” Id. Case: 18-2390 Document: 89 Page: 29 Filed: 06/01/2021

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The court also faulted the PTO for not taking actions that it could have taken during the restricted period the court considered, i.e., up to 2002. It pointed out that the “PTO had ample opportunity over many years to act to re- solve its difficulties through formal means” instead of “await Mr. Hyatt’s help, which, it appears obvious, was not forthcoming.” Iancu, 332 F. Supp. 3d at 134. Because it did not use more “formal means,” the district court ex- plained, the PTO failed to give Hyatt adequate notice and opportunity to cure “the allegedly offensive conduct.” Id. The district court also relied on the fact that the PTO did not “take action to enforce compliance with the informal agreements it now argues it had with Mr. Hyatt.” Id. at 135. Summing up, the court stated that “the PTO itself did nothing to police the conduct they now complain of for the better part of two decades.” Id. at 137. While faulting the PTO in the ways described above, the district court repeatedly emphasized the broad latitude and discretion that applicants including Mr. Hyatt have in prosecuting their applications as they choose within the law and PTO regulations. See, e.g., id. at 134 (stating that Hyatt had “discretion as to how to prosecution [his] claims”). According to the court, Hyatt would have assisted the PTO if it were “in Mr. Hyatt’s interest to” do so, and Hyatt should not be penalized for choosing “instead to pur- sue his own private enterprise while the bureaucracy ful- fills its duties to the applicant and to the public.” Id. Similarly, the court explained that, although Hyatt “‘could have’ been more helpful during the examination process,” “there is no abstract requirement for a citizen to tailor his conduct in pursuit of his constitutional right to a patent, to conform to what is ‘feasible’ for the agency.” Id. at 135. However, the doctrine of prosecution laches itself—the sub- ject of the district court’s analysis—is one example of an obligation to tailor prosecution conduct in pursuit of patent rights. Case: 18-2390 Document: 89 Page: 30 Filed: 06/01/2021

In the above ways, the district court erred by improp- erly focusing the analysis on the PTO’s conduct rather than Hyatt’s conduct. It is not the case that an applicant may prosecute his patents however he or she wishes within the statute and PTO regulation, because the doctrine of prose- cution laches places an additional, equitable restriction on patent prosecution conduct beyond those imposed by stat- ute or PTO regulation. An applicant must therefore not only comply with the statutory requirements and PTO reg- ulations but must also prosecute its applications in an eq- uitable way that avoids unreasonable, unexplained delay that prejudices others. See Cancer Research, 625 F.3d at 729. Further, the PTO’s conduct may be considered in the totality of circumstances, but its delay “cannot excuse the [applicant’s] own delay” in prosecution. Bogese, 303 F.3d at 1362. Indeed, the patent statute already deals with de- lay by the PTO when it provides for patent term adjust- ment to account for that delay. See 35 U.S.C. § 154(b); Supernus, 913 F.3d at 1353. The PTO’s delay therefore provides a weak reason to negate prosecution laches, which asks a separate question of whether the patent should is- sue, or if issued is enforceable, in light of the applicant’s prosecution conduct. Nor does the PTO’s failure to adopt special procedures to accommodate extreme prosecution conduct negate pros- ecution laches. The PTO is entitled to adopt rules and prac- tices to efficiently administer the patent examination system set up by the patent statute. Requiring the PTO to adopt tailored approaches to make sure that each applicant that delays, is unresponsive, or is otherwise outside normal prosecution conduct successfully progresses through pros- ecution would impose obligations on the PTO not contem- plated by the statute. The applicant is in the driver’s seat and must take care to avail itself of the PTO’s beneficial patent examination process as it stands and in a way that avoids undue delay leading to prejudice imposed on others. Case: 18-2390 Document: 89 Page: 31 Filed: 06/01/2021

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Here, the PTO’s instructions to, for example, provide writ- ten description support and priority date support, its in- structions to demarcate the applications, its creation of a new art unit, and its issuance of atypical Requirements demonstrate that the PTO did not stand back and do noth- ing, but rather it notified Hyatt of its own obligations and requirements and thereby gave him the opportunity to avoid prosecution laches. Prosecution laches does not strictly require formalized notice, warnings, or office ac- tions, although those may well lend support to a prosecu- tion laches finding. In sum, the district court’s restricted view of the record, as well as its overemphasis on the PTO’s actions and inac- tions and its repeated excuse of Hyatt’s prosecution con- duct, amounted to a misapplication of the legal standard governing prosecution laches. We clarify, consistent with the above discussion and our past precedent, that prosecu- tion laches considers the totality of circumstances, Symbol Technologies II, 422 F.3d at 1386, and that the PTO’s delay does not excuse an applicant’s delay, Bogese, 303 F.3d at 1369. D We turn to the question of whether the PTO’s prosecu- tion laches evidence and arguments presented at trial are enough to shift the burden to Hyatt. We hold that they are. Unreasonable and Unexplained Delay Whether an applicant’s delay is unreasonable depends on the specific circumstances. A.C. Aukerman Co. v. R.L. Chaides Const. Co., 960 F.2d 1020, 1032 (Fed. Cir. 1992), overruled on other grounds by SCA Hygiene Prods. Aktie- bolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954 (2017); see also Advanced Cardiovascular Sys., Inc. v. Scimed Life Sys., Inc., 988 F.2d 1157, 1162 (Fed. Cir. 1993) (“The reasonableness of the behavior of the person against Case: 18-2390 Document: 89 Page: 32 Filed: 06/01/2021

whom laches is asserted depends on the facts of the partic- ular case.”). As described above, the trial record shows that Hyatt filed 381 applications during the GATT Bubble—the most of any filer. Each application was a photocopy of one of 11 earlier parent applications, and each had a small set of claims, many of which were identical to each other. Simply put, Hyatt’s applications were placeholders. Director God- ici then met with Hyatt instructing Hyatt to focus each ap- plication on a separate invention, and Hyatt agreed. Since then, Hyatt has expanded his claim count to at least 115,000, an average of about 300 per application. The magnitude of Hyatt’s delay in presenting his claims for prosecution suffices to invoke prosecution laches. On multiple occasions, the Supreme Court has found pa- tents unenforceable based on eight- and nine-year prosecu- tion delays. See, e.g., Woodbridge, 263 U.S. at 53, 56 (nine- and-a-half-year delay); Webster Electric, 264 U.S. at 465 (eight-year delay); see also Bogese, 303 F.3d at 1369 (eight- year delay). The PTO presented evidence establishing that Hyatt’s four applications at issue claimed priority to appli- cations filed in the early 1970s and 1980s, meaning that Hyatt delayed between 12 to 28 years to present his claims for prosecution. In fact, the PTO presented additional evi- dence that Hyatt had delayed similar amounts across all his GATT Bubble applications. The following table pre- sented at trial, for example, demonstrates Hyatt’s delay across all pertinent applications: Case: 18-2390 Document: 89 Page: 33 Filed: 06/01/2021

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J.A. 30211. 9 Hyatt disputes that the claims at issue were delayed 12 to 28 years. Relying on the latest possible priority dates, Hyatt argues that he delayed only seven to 11 years to file the four applications at issue and between 10 and 19 years before presenting the claims now in dispute. See Appellee’s Br. 27; Appellant’s Response and Reply Br. 7. Even accept- ing Hyatt’s arguments on this score, these quantities of time are enough to trigger prosecution laches. See, e.g., Woodbridge, 263 U.S. at 53, 56; Webster Electric, 264 U.S. at 465; Bogese, 303 F.3d at 1369. Beyond merely the magnitude of Hyatt’s delay in filing his claims, Hyatt adopted an approach to prosecution that all but guaranteed indefinite prosecution delay. The PTO

9 This table includes the four Hyatt applications at issue in this case: the ’639 application is in family 8; the ’211 and ’398 applications are in family 10; and the ’062 application is in family 12. Case: 18-2390 Document: 89 Page: 34 Filed: 06/01/2021

presented evidence at trial demonstrating that multiple characteristics of Hyatt’s application and claim web, when combined, made it effectively impossible for the PTO to pro- cess them. For one, the applications claim priority to a large num- ber of earlier applications, creating a large number of pos- sible priority dates. This reality frustrated the examiners’ ability to take the preliminary step of identifying the rele- vant body of prior art for purposes of examining the claims. E.g., J.A. 29425–26. Exacerbating this problem was the length and com- plexity of both the specifications themselves and those of the priority applications. As Mr. Morse testified, it was not enough for an examiner to merely find a claim element or group of claim elements in a claimed priority reference; in- stead, the examiner had to identify the particular intercon- nection of elements claimed, which was extraordinarily difficult and time consuming. J.A. 29435–36, 29544, 29570–71. Notably, the PTO did not digitize its files until 2003, so before that point examiners needed to wade through large stacks of paper to determine, for example, written description or the priority date. J.A. 29419–20 (“You would have 30-foot high stacks you would be compar- ing against each other looking for double patenting.”). Even in determining written description long after the doc- uments became digitized, the district court noted that it took “many weeks of trial,” relying “heavily upon the new evidence presented at trial, in the form of expert testi- mony,” to make the written description findings. J.A. 87 n.22. Despite these challenges’ obvious effect of delaying prosecution, Hyatt went many years failing to identify written description support for his claims. See, e.g., J.A. 36700–01. Hyatt also engaged in a pattern of filing amendments adding hundreds of claims to each application, effectively starting examination from the beginning. See, e.g., Case: 18-2390 Document: 89 Page: 35 Filed: 06/01/2021

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J.A. 31869–72. Many of these claims were not unique; in- stead Hyatt repeatedly filed identical or patentably indis- tinct claims across different applications. See, e.g., J.A. 31874–84. Hyatt further frustrated examiners by en- gaging in a pattern of rewriting claims entirely or in signif- icant part midway through prosecution, thereby, again, restarting examination. E.g., J.A. 29550–51. All of the above patterns of prosecution conduct created a perfect storm that overwhelmed the PTO. See, e.g., J.A. 29981–83. It was virtually impossible for examiners to perform a double patenting analysis. See, e.g., J.A. 29912. The same was true, as already mentioned, with respect to determining priority dates and identifying written description support. The PTO’s witnesses testified that Hyatt’s approach to prosecution was unique and cre- ated an “extreme situation” at the PTO. E.g., J.A. 29417– 21, 29467–68, 29471–73, 29893, 29980–81. The PTO also showed that Hyatt had engaged in spe- cific, exemplary acts during prosecution that were patently unreasonable. For example, Hyatt filed claims that he had previously lost in interference proceedings. Iancu, 332 F. Supp. 3d at 138. Whether Hyatt did so purposely is not material because these actions suggest, at a minimum, that his prosecution approach had overwhelmed even his own ability to manage his applications and claims. We also conclude that no reasonable explanation has been shown to justify Hyatt’s prosecution approach. As the record shows, Hyatt agreed with Director Godici in October 1995 to demarcate his applications, but he then did pre- cisely the opposite to an extreme degree. Twenty years later, Hyatt acknowledged he lacked a “master plan” for demarcating his applications. Iancu, 332 F. Supp. 3d at 132 n.12; J.A. 204921. Any goal Hyatt may have had of, for example, correctly capturing his inventions or steering clear of prior art, as Hyatt argued at the dismissal stage, could not come close to justifying the particular, multi- Case: 18-2390 Document: 89 Page: 36 Filed: 06/01/2021

faceted approach he took to prosecution when viewed in its entirety. See, e.g., Pl.’s Opp. to Def.’s Mot. to Dismiss for Prosecution Laches at 12, Hyatt v. Matal, No. 1:05-cv- 02310-RCL (D.D.C. Jan. 9, 2017), ECF No. 101. Nor can the contention that some or all of Hyatt’s conduct was not literally violative of law or PTO regulation provide an ade- quate explanation under these circumstances. See id. Hy- att’s conduct—including his delay in presenting claims, his creation of an overwhelming, duplicative web of applica- tions and claims, and his failure to cooperate with the PTO—was a clear abuse of the patent system, even if it did not literally violate regulations or statutory provisions. When the above circumstances are considered in their totality, we believe the conclusion is inescapable that the PTO satisfied its burden of proving that Hyatt engaged in unreasonable and unexplainable delay, as prosecution laches requires. Hyatt’s pattern of conduct resembles, but goes well beyond, Bogese’s consistent pattern of receiving a rejection on an application, filing a continuation applica- tion without any amendments, and abandoning the origi- nal application. Bogese, 303 F.3d at 1364–65. Hyatt’s time-wasting process obstructed the PTO from examining not only Hyatt’s four applications at issue, but nearly all of his GATT Bubble applications. Prejudice 10 This case requires us to address the prejudice require- ment of prosecution laches for the first time in a case where

10 Although the parties briefed the prejudice element of prosecution laches during the district court action, the district court did not squarely address the issue in its order on prosecution laches. See generally Iancu, 332 F. Supp. 3d at 113–39; see also Def.’s Mot. to Dismiss for Prosecution Laches at 41–43, Hyatt v. Matal, No. 1:05-cv-02310-RCL Case: 18-2390 Document: 89 Page: 37 Filed: 06/01/2021

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the PTO asserts the defense in a § 145 action. Our prece- dent to date establishes that, to prove prosecution laches in the context of an infringement action, an accused in- fringer must prove prejudice attributable to the patentee’s delay. Cancer Research, 625 F.3d at 729. Proving preju- dice in that context requires proving intervening rights, i.e., “that either the accused infringer or others invested in, worked on, or used the claimed technology during the pe- riod of delay.” Id. In the context of laches, we have held that a delay of more than six years raises a “presumption that it is unrea- sonable, inexcusable, and prejudicial.” Wanlass v. Gen. Elec. Co., 148 F.3d 1334, 1337 (Fed. Cir. 1998). That pre- sumption shifts the burden to the patentee to prove that “either the patentee’s delay was reasonable or excusable under the circumstances or the defendant suffered neither economic nor evidentiary prejudice.” Id. Presumptions of fact such as this “have been created to assist in certain cir- cumstances where direct proof of a matter is for one reason or another rendered difficult.” Panduit Corp. v. All States Plastic Mfg. Co., 744 F.2d 1564, 1581 (Fed. Cir. 1984), over- ruled on other grounds by Richardson-Merrell, Inc. v. Koller, 472 U.S. 424 (1985). Presumptions “arise out of con- siderations of fairness, public policy, and probability, and are useful devices for allocating the burden of production of evidence between the parties.” Id. Hyatt argues that the district court’s decision should be affirmed because the PTO did not adequately prove in- tervening rights. Appellee’s Br. 56. The PTO responds that the intervening rights requirement does not apply to the PTO in the context of a § 145 action to obtain a patent. Appellant’s Response and Reply Br. 36–37. Consistent

(D.D.C. Nov. 22, 2016), ECF No. 91; Pl.’s Opp. to Def.’s Mot. to Dismiss for Prosecution Laches at 27–29, Hyatt v. Matal, No. 1:05-cv-02310-RCL (D.D.C. Jan. 9, 2017), ECF No. 101. Case: 18-2390 Document: 89 Page: 38 Filed: 06/01/2021

with both Cancer Research and Wanlass, we now hold that, in the context of a § 145 action, the PTO must generally prove intervening rights to establish prejudice, but an un- reasonable and unexplained prosecution delay of six years or more raises a presumption of prejudice, including inter- vening rights. Applying these principles, we conclude that the PTO’s demonstration of an unreasonable and unex- plained delay by Hyatt, which exceeds six years by any measure, shifts the burden to Hyatt to prove lack of preju- dice. We further hold that, where a patent applicant has committed a clear abuse of the PTO’s patent examination system, the applicant’s abuse and its effects meet the prej- udice requirement of prosecution laches. A clear abuse of the patent system occurs when, for example, the appli- cant’s conduct unduly increases the administrative burden on the PTO and thereby effectively taxes everyone using the system. Such abuse also demonstrates a dangerous likelihood that the applicant is harming the public’s inter- ests more broadly, diminishing the patent system’s benev- olent nature, and stifling innovation and creativity in the useful arts. In rare circumstances like these, an appli- cant’s conduct and its effects on the PTO can alone suffice to prove prejudice for purposes of the prosecution laches defense in a § 145 action. We conclude that the PTO has carried its burden of proving that Hyatt engaged—intentionally or not—in a clear abuse of the PTO’s patent examination system that contributed to delay in the four applications at issue. Bar- ring significant evidence to the contrary from Hyatt, the PTO has therefore demonstrated material prejudice. Hy- att’s approach to prosecuting his GATT Bubble applica- tions made it impossible for the PTO to process them using its normal compact prosecution procedures. The PTO cre- ated an art unit to deal specifically with his applications and began using atypical procedures to ascertain the infor- mation needed to process the applications. The PTO spent Case: 18-2390 Document: 89 Page: 39 Filed: 06/01/2021

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approximately $10 million administering Hyatt’s applica- tions over a period of about five years—during which Hyatt paid only $7 million in fees. Iancu, 332 F. Supp. 3d at 137. The new art unit was capable of examining about 900 typ- ical applications per year but could not come close to that number when examining Hyatt’s applications. J.A. 31885. According to PTO data, a typical examiner could prepare an office action for a typical application in two to three days, but each office action for Hyatt’s applications took ap- proximately four months. J.A. 31885–86. The PTO there- fore estimated that it would take 532 years of examiner time to complete the prosecution of his roughly 400 appli- cations, during which it could complete over 40,000 typical applications. J.A. 31886. 11 These exemplary figures, com- bined with the details surrounding Hyatt’s pattern of pros- ecution conduct, show that the PTO has carried its burden of proving that Hyatt’s prosecution of his applications clearly abused the PTO’s patent examination system and that that clear abuse contributed to the delay that occurred with respect to the four applications at issue. Under our holdings above, this abuse may establish prejudice for pros- ecution laches purposes. DISPOSITION In certain circumstances this court and our sister cir- cuits have retained jurisdiction over appeals and held them in abeyance pending resolution of a limited issue. See, e.g.,

11 The PTO’s expert additionally opined, based on PTO data, that the average GATT Bubble application un- dergoes three office actions, while Hyatt’s have undergone on average 15.7 office actions. J.A. 39279. He also opined that comparing each of Hyatt’s 115,000 pending claims to each other to determine double patenting would require 6.6 billion comparisons, and that, assuming one minute per comparison, that analysis would take over 12,000 years. J.A. 39280. Case: 18-2390 Document: 89 Page: 40 Filed: 06/01/2021

Tempur-Pedic Mgmt., Inc. v. FKA Distrib. Co., 481 F. App’x 615 (Fed. Cir. 2012); Endo Pharms. Inc. v. Teva Pharms. USA, Inc., 729 F. App’x 936, 938 (Fed. Cir. 2018); Patel v. Haro, 443 F. App’x 17, 18 (5th Cir. 2011) (“We re- tain jurisdiction over the appeal except for the purposes of the limited remand.”); Sickle v. Torres Advanced Enter. Sols., LLC, 653 F. App’x 763, 764 (D.C. Cir. 2016) (“[T]his case will be held in abeyance pending resolution of the lim- ited jurisdictional question on remand.”); United States v. Hinojosa-Bencomo, 7 F.3d 1045 (10th Cir. 1993) (“We re- tain jurisdiction over the balance of this case and hold in abeyance our judgment pending resolution of United States v. Nichols.”); Hayden v. Pataki, 449 F.3d 305, 371 (2d Cir. 2006); Carnegie Mellon Univ. v. Schwartz, 105 F.3d 863, 867 (3d Cir. 1997). Consistent with this precedent, and given the potential for the prosecution laches issue to re- solve the entire case at hand, we retain jurisdiction over the appeal with respect to the anticipation and written de- scription issues, and we remand to the district court for the limited purpose of affording Hyatt the opportunity to pre- sent evidence on the issue of prosecution laches, consistent with the standards set forth in this opinion. See Int’l Un- ion, United Auto., Aerospace & Agric. Implement Workers of Am., UAW v. Mack Trucks, Inc., 917 F.2d 107, 110–11 (3d Cir. 1990) (“[A] defendant moving for a directed verdict retains the right to present evidence against the plaintiff's case whether its motion is denied at the trial or appellate level.”). On remand, the district court should bear several points in mind. First, regarding the unreasonable and un- explained delay requirement of prosecution laches, the rec- ord shows that Hyatt has already proffered a number of reasons for his delay, including that he timely completed examination four applications at issue; that his conduct during prosecution of his other GATT Bubble applications is irrelevant to the prosecution laches analysis; that he filed his GATT Bubble applications to cover a number of Case: 18-2390 Document: 89 Page: 41 Filed: 06/01/2021

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inventions he believed he had made; and Hyatt met statu- tory requirements and followed the PTO’s rules in prose- cuting his applications. We conclude that, under the circumstances of this case, these reasons without more are insufficient as a matter of law to negate that Hyatt’s delay was unreasonable and unexplained. To carry his burden, Hyatt must show by preponderance of evidence that Hyatt had a legitimate, affirmative reason for his delay. Such a reason must operate to excuse Hyatt from responsibility for the sizable undue administrative burden that his applica- tions have placed on the PTO in its efforts to process Hy- att’s applications, which the record before us demonstrates to be extreme. More specifically, any satisfactory reason must, at a minimum, justify Hyatt’s decision to ignore Di- rector Godici’s instruction to demarcate his applications in 1995; justify his decision to adopt the specific prosecution approach that he did—unique in its scope and nature—as detailed in the PTO’s Requirements; and justify his failure to develop a plan for demarcating his applications over at least the 20 year period from 1995 to 2015, see, e.g., J.A. 204921. Any reasons that fall short of justifying those decisions or omissions fail to negate that his delay has been unreasonable and unexplained. We can divine no reason in the record currently before the court that would suffice, but Hyatt is entitled as a matter of fairness to present evi- dence and be heard on this issue. In determining whether Hyatt’s delay has caused prej- udice, the district court should bear in mind that, as we explain above, Hyatt’s delay of more than six years, by any measure, shifts the burden to Hyatt to prove that Hyatt’s delay has not caused the PTO or any third party material prejudice. The district court should also bear in mind our conclusion above that the PTO has carried its burden of proving that Hyatt’s prosecution conduct amounted to a clear abuse of the PTO’s patent examination system, which may alone suffice to satisfy the prejudice requirement of prosecution laches. The record before us shows, for Case: 18-2390 Document: 89 Page: 42 Filed: 06/01/2021

example, that the PTO has created a distinct art unit for Hyatt’s applications; that the PTO has recently spent mil- lions more dollars processing Hyatt’s applications than Hy- att has paid in fees; that examiners have spent inordinate amounts of time preparing office actions; and that the PTO has resorted to special, customized procedures involving its Requirements to process Hyatt’s applications. We again cannot guess what might negate this evidence of prejudice. But be that as it may, we recognize that Hyatt is entitled to present evidence that his delay did not cause prejudice. CONCLUSION The PTO carried its burden of proving prosecution laches, and the district court erred in granting Hyatt’s Rule 52(c) motion for judgment on partial findings. We vacate the district court’s grant of the motion, and we remand for the district court to conduct further proceedings, as promptly as possible consistent with principles of fairness, affording Hyatt the opportunity to present evidence on prosecution laches. We hold in abeyance this appeal with respect to the issues of anticipation and written description pending the district court’s remand decision on prosecution laches. We have considered the parties’ remaining argu- ments and do not find them persuasive or do not reach them. For the above reasons, we vacate-in-part and re- mand for further proceedings consistent with this opinion. VACATED-IN-PART AND REMANDED COSTS No costs.