Symbol Technologies, Inc. v. Lemelson Medical

277 F.3d 1361, 2002 WL 89019

• Court: Court of Appeals for the Federal Circuit
• Decided: January 24, 2002
• Docket: No. 00-1583
• Status: Published

Opinions

MAYER, Chief Judge.

Symbol Technologies, Inc., Accu-sort Systems, Inc., Intermec Technologies Corporation, Metrologic Instruments, Inc., PSC Inc., TeMogix Corporation, Zebra Technologies Corporation, (collectively “Symbol”), and Cognex Corporation (“Cog-nex”) appeal the judgment of the United States District Court for the District of Nevada dismissing various counts of their complaints for failure to state a claim. Symbol Tech., Inc., et al., v. Lemelson Med., Educ. & Research Found., Ltd. P’ship, 99 CV 0397 (D.Nev. Mar. 21, 2000). Because the district court incorrectly concluded that the defense of prosecution laches was unavailable as a matter of law, we reverse the judgment and remand the case.

Background

Lemelson Medical, Education & Research Foundation, Limited Partnership (“Lemelson”) claims to be the assignee of some 185 unexpired patents and many pending patent applications of Jerome H. Lemelson. The patents at issue generally involve machine vision and automatic identification technology and allegedly are entitled to the benefit of the filing date of two applications filed in 1954 and 1956.

Symbol and Cognex (collectively “plaintiffs”) design, manufacture, and sell bar code scanners and related products. In 1998, their customers began to receive letters from Lemelson stating that the use of the plaintiffs’ products infringed various Lemelson patents. Plaintiffs claim that they will be forced to indemnify these customers should any of the patents be found to be infringed.

Symbol brought a declaratory judgment action pursuant to 28 U.S.C. § 2201(a) (1994), against Lemelson, the owner of U.S. Patents 4,338,626; 4,969,038; 4,979,-029; 4,984,073; 5,067,012; 5,119,190; 5,119,205; 5,128,753; 5,144,421; and 5,351,078, seeking a judgment that the patents are invalid, unenforceable, and not infringed by Symbol or its customers. Symbol Tech., Inc., et al, v. Lemelson Med., Educ. & Research Found., Ltd. P’ship, 99-CV-0397. Cognex brought a similar action (CV-N-99-0533-PMP) adding U.S. Patents 4,118,730; 4,148,061; 4,511,918; 5,023,714; 5,249,045; and 5,283,641. Cognex Corp. v. Lemelson Med., Educ. & Research Found., Ltd. P’ship, 99-CV-0533. The gravamen of the complaints most pertinent to us is prosecution laches. The trial court consolidated the cases.

Lemelson moved for dismissal arguing that there was no case or controversy and that the plaintiffs’ cause of action for prosecution laches failed to state a claim upon which relief could be granted. The district court concluded that there was a sufficient case or controversy but dismissed plaintiffs’ laches claims. The sole issue on appeal is whether, as a matter of law, the equitable doctrine of laches may be applied to bar enforcement of patent claims that issued after an unreasonable and unexplained delay in prosecution even though the applicant complied with pertinent statutes and rules.

Discussion

In reviewing the propriety of decisions under Fed.R.Civ.P. 12(b)(6), we apply the rule of the regional circuit — in this case the United States Court of Appeals for the Ninth Circuit. Phonometrics v. Hospitality Franchise Sys., Inc., 203 F.3d 790, 793, 53 USPQ2d 1762, 1764 (Fed.Cir.2000). Therefore, consistent with the rule in the Ninth Circuit, we review the decision below de novo, and “[a]ll allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party.” O’Loghlin v. County of Orange, 229 F.3d 871, 874 (9th Cir.2000); accord Advanced Cardiovascular Sys., v. Scimed Life Sys. ., Inc., 988 F.2d 1157, 1160, 26 USPQ2d 1038, 1041 (Fed.Cir. 1993). We have jurisdiction pursuant to 28 U.S.C. § 1292(b) & (c).

The defense of prosecution laches finds its origin in two Supreme Court cases: Woodbridge v. United States, 263 U.S. 50, 44 S.Ct. 45, 68 L.Ed. 159 (1923); and Webster Electric Co. v. Splitdorf Electrical Co., 264 U.S. 463, 44 S.Ct. 342, 68 L.Ed. 792 (1924). The Court first applied the doctrine in Woodbridge to render a patent unenforceable where there had been an unexplained nine-year delay. Pursuant to a statute in place at the time, the Patent Office agreed to delay the issuance of Woodbridge’s patent for one year. At the end of that time, the Patent Office neglected to issue the patent. Rather than inform the Patent Office of its error, Woodbridge waited nine years before requesting that the patent be issued. At the time of issuance, he sought to amend his specification and claims to encompass related innovations that had occurred in the intervening nine years. Woodbridge justified these actions on the ground that his invention had only recently become “pecuniarily” valuable. 263 U.S. at 51-53, 44 S.Ct. 45. The Court held that because of his delay, he had forfeited his rights to the patent. “In this case we have a delay of nine years and a half in securing a patent that might have been had at any time in that period for the asking, and this for the admitted purpose of making the term of the monopoly square with the period when the commercial profit from it would have been highest.... Meantime other inventors had been at work in the same field ... without knowledge of the situation with respect to Woodbridge’s invention .... This is not a case of abandonment. It is a case of forfeiting the right to a patent by designed delay.” Id. at 56, 44 S.Ct. 45.

The Court applied the doctrine in Webster a year later and held that an unreasonable eight-year delay rendered the claims at issue unenforceable. In that case, Kane filed a patent application in 1910 that ultimately issued in 1916. In 1915, while the original application was still pending, Kane filed a divisional application copying nine claims of a recently issued patent for the purpose of provoking an interference. After losing the interference, he filed two additional claims, claims 7 and 8, which issued in 1918 and were the subject of the litigation. These claims had not been involved in the earlier interference. “During all of this time the subject-matter [of the claims] was disclosed and in general use; and Kane and his assignee, so far as claims 7 and 8 are concerned, simply stood by and awaited developments.” 264 U.S. at 465, 44 S.Ct. 342. In holding claims 7 and 8 unenforceable, the Court stated, “[w]e have no hesitation in saying that the delay was unreasonable, and, under the circumstances shown by the record, constitutes laches, by which the petitioner lost whatever rights it might otherwise have been entitled to.” Id. at 466, 44 S.Ct. 342. The Court went on to say that a two-year delay was prima facie evidence of unreasonableness. Id. at 471, 44 S.Ct. 342.

The Supreme Court subsequently ratified prosecution laches as a defense to an infringement action involving new claims issuing from divisional and continuing applications that prejudice intervening adverse public rights. See Crown Cork & Seal Co. v. Ferdinand Gutmann Co., 304 U.S. 159, 58 S.Ct. 842, 82 L.Ed. 1265, 37 USPQ 351 (1938); Gen. Talking Pictures Corp. v. W. Elec. Co., 304 U.S. 175, 58 S.Ct. 849, 82 L.Ed. 1273, 37 USPQ 357 (1938). In Crown Cork, the Court held that the presumptive two-year time limit of Webster was dictum because it was “not directly applicable to the precise question of laches upon which the case turned.” 304 U.S. at 167, 58 S.Ct. 842, 82 L.Ed. 1265, 37 USPQ at 354. The Court continued: “It is clear that, in the absence of intervening rights, the decision in Webster Co. v. Splitdorf Co. does not mean that an excuse must be shown for a lapse of more than two years in presenting [a] divisional application.” Crown Cork at 167-68, 304 U.S. 159, 58 S.Ct. 842, 82 L.Ed. 1265, 37 USPQ at 354. By this, the court ratified the existence of the prosecution laches defense; it did not apply the defense there in the absence of intervening rights. Similarly, in General Talking Pictures, the Court rejected the defense of prosecution laches because there was no evidence of intervening public rights. “In the absence of intervening adverse rights for more than two years prior to the continuation applications, they were [filed] in time.” 304 U.S. at 183, 58 S.Ct. 849, 82 L.Ed. 1273, 37 USPQ at 360. This case likewise evinced the existence of prosecution lach-es. Indeed, the contemporary learned treatises confirmed the existence of the prosecution laches defense. See 2 Anthony William Deller, Walker on Patents §§ 183-184 (1937 and 1948 Supp.); Beirne Stedman, Patents § 111 (Michie Co.1939).

Lemelson argues that the defense is not available here for three reasons: 1) the rule espoused in Webster and its progeny is limited to claims arising out of interference actions; 2) the plain language and legislative history of the Patent Act of 1952 forecloses the application of prosecution laches; and 3) two of our non-prece-dential opinions reject the prosecution laches defense and should be binding upon us under the reasoning of Anastasoff v. United States, 223 F.3d 898 (8th Cir.2000), vacated as moot, 235 F.3d 1054 (8th Cir.2000) (en banc). We address each argument in turn.

1. Quoting 4 Donald S. Chisum, Patents § 11.05[1] at 11-264 (1996), Lemelson argues that prosecution laches has been limited to claims arising out of interference proceedings: “Possible implications of Webster Electric outside the interference context were dispelled by the Supreme Court in Crown Cork & Seal Co. v. Ferdinand Gutmann Co.” We find no support for this view. As discussed above, the claims at issue in Webster were not the subject of an interference proceeding. The Court was more concerned with the reasonableness of the delay between the initial fifing of the application and the subsequent filing of claims 7 and 8 than it was with the interference. Nothing suggests that Webster was limited to cases involving an interference. Crown Cork validated prosecution laches and did not limit it to cases involving interferences. Rather it took aim at the bright-line rule established by Webster that a two-year delay is prima facie unreasonable and eliminated it.

2. Lemelson argues that the passage of the 1952 Patent Act, specifically 35 U.S.C. §§ 120 and 121, entitling continuation and divisional applications respectively to the filing dates of their parents, foreclosed the application of laches. Section 120 provides that if “[a]n application for patent for an invention disclosed in the manner provided by the first paragraph of section 112 of this title in an application previously filed in the United States ... by the same inventor shall have the same effect, as to such invention, as though filed on the date of the prior application ...” 35 U.S.C. § 120 (1994). Section 121 provides that “a divisional application which complies with the requirements of section 120 of this title [ ] shall be entitled to the benefit of the filing date of the original application.” Id. § 121. These sections provide the backbone for the modern continuation and division practice.

Lemelson asserts that by passing these two sections, especially allowing the continuation practice, Congress abrogated the defense of prosecution laches. But the legislative history and commentary from the authors of the 1952 Act suggest no such intent. Prior to 1952, continuation practice was governed by common law rather than statute. “Section 120 appeared in the statutes for the first time in the Patent Act of 1952. Prior to 1952, continuing application practice was a creature of patent office practice and case law, and § 120 merely codified the procedural rights of an applicant with respect to this practice.... The legislative history of Section 120 does not indicate any Congressional intent to alter the Supreme Court’s interpretation of continuing application practice.” Transco Prods. Inc. v. Performance Contracting, Inc., 38 F.3d 551, 556-57, 32 USPQ2d 1077, 1081 (Fed.Cir.1994). This practice was in existence when the Supreme Court decided Webster and Crown Cork; thus the defense of prosecution laches and the continuation practice coexisted. See Thomas G. Eshweiler, Ford v. Lemelson and Continuing Application Laches Revisited, 79 J. Pat. & Trademark Off. Soc’y 457 (1997).

There is nothing in the legislative history to suggest that Congress did not intend to carry forward the defense of prosecution laches as well. To the contrary, a careful reading of the history and commentary on the 1952 Act shows an intent to maintain the defense. Shortly after the passage of the Act, P.J. Federico, one of its original drafters, gave a series of lectures across the country to educate patent groups about the new Act. The lectures were transcribed, edited, and published. P.J. Federico, Commentary on the New Patent Act, 75 J. Pat. & Trademark Off. Soc’y 161 (1993) (reprinted from 35 U.S.C.A.1954 ed.). Prior to publication, Federico “submitted drafts of the commentary to [Henry] Ashton and the Drafting Committee for suggestions ...” Paulik v. Rizkalla, 760 F.2d 1270, 1277 (Fed.Cir.1985) (en banc) (Rich, J., concurring). The Drafting Committee consisted of Judge Giles S. Rich, late of this court, and Paul Rose. See Giles S. Rich, Congressional Intent — Or, Who Wrote the Patent Act of 1952, in Patent Procurement and Exploitation (BNA 1963), reprinted in Nonobvi-ousness — The Ultimate Condition of Pat-entability (John F. Witherspoon ed., 1980). Federico’s commentary is an invaluable insight into the intentions of the drafters of the Act.

The defenses available to an accusation of infringement were incorporated into section 282 of the then new Act. “The defenses which may be raised in an action involving the validity or infringement of a patent are specified in general terms, by the second paragraph of section 282, in five numbered items. Item 1 specifies ‘Noninfringement, absence of liability for infringement, or unenforceability’ (the last word was added by amendment in the Senate for greater clarity); this would include the defenses such as that the patented invention has not been made, used, or sold by the defendant; license; and equitable defenses such as laches, estoppel and unclean hands.” Commentary on the New Patent Act, 75 J. Pat. & Trademark Off. Soc’y at 215. See Mylan Pharm. Inc., v. Thompson, 268 F.3d 1323, 1331, 60 USPQ2d 1576 (Fed.Cir.2001) (citing J.P. Stevens & Co. v. Lex Tex Ltd., 747 F.2d 1553, 1561, 223 USPQ 1089, 1093 (Fed.Cir.1984) (Section 282 incorporates equitable defenses)). It is apparent from this that the drafters thought the defense of laches would be available. And precedent has since recognized the prosecution form of laches. See Pratt & Whitney Co. v. United States, 170 Ct.Cl. 829, 345 F.2d 838, 843-44 (Ct.Cl.1965) (applying Webster to hold claims unenforceable).

3. Finally, Lemelson argues that we are bound by two of our non-precedential opinions under the reasoning in Anastasoff v. United States, 223 F.3d 898. Anastasoff held that Eighth Circuit Rule 28A(i) providing that unpublished decisions are not precedent and, therefore, not binding on future panels of that court violates Article III of the Constitution. It declared that the doctrine of precedent was “well-established” when the Framers drafted the Constitution and any exercise of the “judicial Power” is binding upon future panels because to depart from it would be “an approach to tyranny and arbitrary power, to the exercise of mere discretion, and to the abandonment of all the just checks upon judicial authority.” 223 F.3d at 904. “A more alarming doctrine could not be promulgated by any American court, than that it was at liberty to disregard all former rules and decisions, and to decide for itself, without reference to the settled course of antecedent principles.” Id.

However, we subscribe to the comprehensive, scholarly treatment of the issue in refutation of Anastasoff set out in Hart v. Massanari, 266 F.3d 1155, 1160 (9th Cir.2001).

* Article III of the Constitution does not contain an express prohibition on issuing non-precedential opinions, nor can we discern one from the existence of the state of the law when the Framers drafted it.

The concept of precedent could not have been incorporated into Article III because case reporters printing accurate versions of issued opinions were not first published until the middle of the nineteenth century. Anastasojfs restrictive view of the Framer’s notions of precedent is far greater than was even possible at the relevant time period. Published opinions were rare and case reporters were often entrepreneurs who scribbled notes as the opinion was issued by the judge or assembled case reports from secondhand sources. See Hart, 266 F.3d at 1166, citing Robert C. Berring, Legal Research and Legal Concepts: Where Form Molds Substance, 75 Cal. L.Rev. 15, 18-19 (1987). Reporters were even known to alter or suppress cases they felt were wrongly decided. Id. at 1167, citing R.W.M. Dias, Jurisprudence, 33 (2d ed.1964). Thus, rehable, accurate renditions of judicial decisions were not available when Article III was drafted.

Moreover, non-precedential opinions existed even before 1787 and the Framers reasonably could have contemplated the concept. As the volume of reported cases increased, commentators advised not reporting cases that did not contribute to the law for fear of an exponential growth in case law and the requirement to maintain it. Over three centuries ago, Sir Francis Bacon recommended to King James I that cases of “merely iteration and repetition” be omitted from the case reports; and Lord Coke had similarly complained about the existence of too much precedent at a time when there existed an estimated thirty volumes of cases. See Kirt Shuldberg, Digital Influence: Technology and Unpublished Opinions in the Federal Courts of Appeals, 85 Cal. L.Rev. 531, 545 (1997), citing John J. O’Connell, A Dissertation on Judicial Opinions, 23 Temp. L.Q. 13, 14 (1949); and Edward H. Warren, The Welter of Decisions, 10 Ill. L.Rev. 472 (1916).

This foretold a more modern lament over the sheer volume of reported cases. “The law library of the future staggers the imagination as one thinks of multitudes of shelves which will stretch away into the dim distance, rank upon rank, and tier upon tier, all loaded with their many volumes of precious precedents. One shrinks from the contemplation of the intellectual giants who will be competent to keep track of the authorities and make briefs in those days; they, as well as the judges who pass upon the briefs, must needs be supermen indeed.” Shuldberg, 85 Cal. L.Rev. at 545, citing John B. Winslow, The Courts and the Papermills, 10 Ill. L.Rev. 157, 158 (1915). The Judicial Conference of the United States has confirmed this fear:

In view of the rapidly growing number of published opinions of the courts of appeals and of the district courts of the United States, and the ever increasing practical difficulty and economic cost of establishing and maintaining accessible private and public law library facilities, the Committee presented the following resolution which was approved by the Conference:

Resolved: That the judges of the courts of appeals and the district courts authorize the publication of only those opinions which are of general prece-dential value and that opinions authorized to be published be succinct.

Report of the Proceedings of the Judicial Conference of the United States, 11 (1964). Thereafter, the Judicial Conference in 1972 requested that all circuits develop an opinion publication plan. Report of the Proceedings of the Judicial Conference of the United States, 33 (1972). The result was the approval of “unpublished” decisions.

Unpublished, or as this court calls them, nonprecedential decisions do not give the judiciary free will to reinvent the law; they merely permit a judgment about whether a case contributes significantly to the body of law. See Fed. Cir. R. 47.6(b). They allow panels to determine if future panels and subordinate tribunals are to be bound by the ruling; the panel is still obligated to follow controlling precedent. This is a far cry from turning our back on precedent. Courts contribute to the growing imprecision, uncertainty and unpredictability of the law by issuing repetitive opinions on subjects that have been thoroughly irrigated. In our view, ideally once a principle has been established, it is up to the courts thereafter to apply it in cases coming before them and at most to explain their decisions to the parties, not to add to the explosion of legal opinions.** Accordingly, we decline to consider the nonprece-dential cases cited by Lemelson.

Conclusion

Accordingly, the judgment of the United States District Court for the District of Nevada is reversed and the case is remanded for further proceedings consistent with this opinion.

REVERSED AND REMANDED

Because Judge Kozinski's opinion for the Hart court is so thorough, we need do little more than signal our agreement with it by synopsiz-ing the main points.

This court is in its twentieth year. In that time the reported decisions of the courts of appeals have filled 575 volumes of the Federal Reporter.