Rydeen v. Quigg

• Decision Date: 18 October 1990
• Docket Number: Civ. A. No. 88-1786.
• Citation: 748 F. Supp. 900,16 USPQ 2d 1876
• Parties: Robert J. RYDEEN, Plaintiff, v. Donald J. QUIGG, Commissioner of Patents and Trademarks, Defendant.
• Court: U.S. District Court — District of Columbia

748 F. Supp. 900

16 USPQ 2d 1876

Robert J. RYDEEN, Plaintiff, v. Donald J. QUIGG, Commissioner of Patents and Trademarks, Defendant.

Civ. A. No. 88-1786.

United States District Court, District of Columbia.

October 18, 1990.

Charles E. Bruzga, Cohen, Pontani & Lieberman, New York City, for plaintiff.

Fred E. McKelvey, Office of the Sol., Arlington, Va., for defendant.

MEMORANDUM OPINION

JOHN H. PRATT, District Judge.

I. Introduction

Plaintiff Robert J. Rydeen brings this action seeking review of a final decision of the defendant, Commissioner of Patents and Trademarks, refusing to accept late payment of a maintenance fee required to maintain plaintiff's patent in force. Defendant denied plaintiff's request for a waiver, finding that plaintiff's delay in paying the maintenance fee was not "unavoidable." 35 U.S.C. § 41(c)(1). Plaintiff also challenges the Commissioner's "no-timely-notice" interpretation of the statute in which the Commissioner declared that the Patent and Trademark Office ("PTO") has "no duty to notify patentees when their maintenance fees are due." Final Rules for Patent Maintenance Fees, 49 Fed.Reg. 34,722 (1984), reprinted in 1046 Official Gazette 34 (September 25, 1984). Presently before the Court are the parties' cross motions for summary judgment.

Upon review of the briefs and exhibits submitted by the parties,¹ the administrative record and the relevant law, and for the reasons stated below, we deny plaintiff's cross motion for summary judgment and grant defendant's motion for summary judgment.

II. Background

U.S. Patent No. 4,409,763, covering a particular type of post and beam construction, was issued to plaintiff on October 18, 1983. The patent application was filed on March 23, 1981, and was prosecuted by Attorney Charles E. Bruzga.

In 1980 Congress passed Public Law 96-517, providing that patentees would have to pay maintenance fees to keep their patents in force and that nonpayment would result in expiration. The effective date of that law was December 12, 1980, and it applied to all patent applications filed on or after that date. 35 U.S.C. § 41 (Historical and Revision Notes). Pursuant to 35 U.S.C. § 41(b), the first maintenance fee is due three (3) years and six (6) months after the grant of a patent, and the patent will expire unless payment of the maintenance fee is received in the PTO on or before the date the fee is due or within a six month grace period thereafter (four years from date of issue).²

The original patent grant was sent to Attorney Bruzga,³ who sent it to the inventor, Mr. Rydeen. It contained the following notice regarding maintenance fees on the inside cover:

If the application for this patent was filed on or after December 12, 1980, maintenance fees are due three years and six months ... after the date of this grant, or within the grace period of six months thereafter upon payment of a surcharge as provided by law. The amount, number and timing of the maintenance fees required may be changed by law or regulation.

According to plaintiff and Bruzga, they did not interpret this notice as a warning that they must set up a calendar system to remind them when the maintenance fees were due. They assumed that the PTO would send timely reminders and that they could rely on those reminders. Plaintiff's Cross-Motion for Summary Judgment ("Plaintiff's Motion") at 5.

On August 31, 1984, following a period for notice and comment, the Patent Office published "Final Rules for Patent Maintenance Fees," 49 Fed.Reg. 34716 (1984). The notice indicated that "under the statutes, the Patent and Trademark Office has no duty to notify patentees when their maintenance fees are due." This is the PTO's "no-timely-notice" interpretation of the maintenance fee statutes, 35 U.S.C. §§ 41(b) and 41(c), of which plaintiff complains. The notice in the Federal Register also alerted patent holders that:

the Patent and Trademark Office will, however, provide some notices as reminders that maintenance fees are due but the notices, errors in the notices, or the lack of notices, will in no way relieve a patentee from the responsibility to make timely payment of each maintenance fee to prevent the patent from expiring by operation of law. The notices provided by the Patent and Trademark Office will be merely courtesy in nature and intended to aid patentees. These notices, errors in these notices or lack of notices, will in no way shift the burden of monitoring the time for paying maintenance fees on patents from the patentee to the Patent and Trademark Office.

49 Fed.Reg. 34723 (August 31, 1984). The first maintenance fee payment for the patent at issue in this action became due on April 18, 1987 and was payable within a six month grace period expiring on October 19, 1987. For a number of reasons that plaintiff discusses at length, Attorney Bruzga did not receive a reminder notice until October 19th, the last day of the six month grace period, and did not act upon that notice until the next day.⁴

Under 35 U.S.C. § 41(c)(1), the Commissioner may accept late payment of a maintenance fee if the delay is shown to the satisfaction of the Commissioner to have been "unavoidable." 35 U.S.C. § 41(c)(1). Plaintiff petitioned the PTO to accept his late filed fee and to reinstate his patent. On December 16, 1987, defendant denied plaintiff's petition on the ground that failure to receive timely notice from the PTO cannot serve as the basis of "unavoidable delay." Defendant heard plaintiff's request for reconsideration, but in a decision dated June 1, 1988, 7 U.S.P.Q.2d 1798, did not alter its initial determination.⁵ In denying plaintiff's request for reconsideration the PTO held that: 1) mailing of the fee reminder notices is merely a courtesy; 2) under the statutes and regulations the PTO has no duty to inform patentees when their maintenance fees are due; 3) the lack of a reminder notice will not shift the burden of monitoring the time for paying a maintenance fee from the patentee to the PTO; and 4) plaintiff did not sustain his burden of proving "unavoidable delay" pursuant to 35 U.S.C. § 41(c)(1).

Plaintiff brings this civil action seeking judicial review of the Commissioner's "no-timely-notice" that the PTO has no statutory duty to provide patent owners with notice when their patent maintenance fees are due, and reversal of the PTO's adjudicatory decision based on that interpretation.

III. Discussion

A. Action under the Administrative Procedure Act

One of the grounds upon which plaintiff challenges the Commissioner's no-timely-notice interpretation and adjudicatory decision is the Administrative Procedure Act ("APA"), 5 U.S.C. § 551 et seq. Plaintiff argues that this Court should find under its reviewing authority of 5 U.S.C. §§ 706(2)(A) and (C) that the Commissioner went beyond the scope of his authority in interpreting the statute, that his interpretation was incorrect, and that, consequently, the Commissioner incorrectly denied plaintiff's petition to accept late maintenance fee payments. For the reasons set forth below, this Court finds that the Commissioner's actions were valid under the standards of the Administrative Procedure Act.

1. Record on Review

As a preliminary matter, plaintiff argues that he should be able to augment the record and have the Court consider affidavits of Mr. Rydeen and Mr. Bruzga that were not before the Commissioner in the agency proceedings below. In regard to plaintiff's APA claims,⁶ plaintiff's only argument for admitting the additional affidavits is that 5 U.S.C. § 706(2)(F) authorizes de novo review. The Court first points out that none of plaintiff's substantive arguments rest on § 706(2)(F). Moreover, the Supreme Court has made it clear that such de novo review is limited to two specific circumstances: (1) when the action is adjudicatory in nature and the agency's fact finding procedures are inadequate, and (2) when issues that were not before the agency are raised in a proceeding to enforce nonadjudicatory agency action. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 415, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971). This case falls into neither of those categories.

The APA provides that in reviewing the validity of agency action, "the court shall review the whole record or those parts of it cited by a party." 5 U.S.C. § 706(2). Such review is generally limited to the administrative record presented by the agency to the reviewing court. Florida Power & Light Co. v. Lorion, 470 U.S. 729, 743-44, 105 S.Ct. 1598, 1606-07, 84 L.Ed.2d 643 (1985); Camp v. Pitts, 411 U.S. 138, 142, 93 S.Ct. 1241, 1244, 36 L.Ed.2d 106 (1973); Overton Park, 401 U.S. at 420, 91 S.Ct. at 825. Thus, in regard to plaintiff's APA claims, the Court refuses to consider the new affidavits that were not before the Commissioner during the administrative adjudications in plaintiff's case.

2. Standard of Review

The APA provides that agency action may be set aside if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," 5 U.S.C. § 706(2)(A), or "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right," 5 U.S.C. § 706(2)(C). It is well established that "the scope of review under the `arbitrary and capricious standard' is narrow and a court is not to substitute its judgment for that of the agency." Motor Vehicle Mfrs Ass'n. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2866, 77 L.Ed.2d 443 (1983). Similarly, reviewing an agency's interpretation of statutes and regulations to make sure they are not "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right," also involves deference to the administrative determinations, unless they are plainly erroneous or inconsistent with the relevant statutes. Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965); Gulf Oil Corporation v. Hickel, 435 F.2d 440, 444-45 (D.C.Cir.1970); ...