Patlex Corp. v. Mossinghoff

• Decision Date: 07 March 1985
• Docket Number: No. 84-699,84-699
• Citation: 225 USPQ 243,758 F.2d 594
• Parties: PATLEX CORPORATION, et al., Appellants, v. Gerald J. MOSSINGHOFF, etc., et al., Appellees. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 594

758 F.2d 594

225 U.S.P.Q. 243

PATLEX CORPORATION, et al., Appellants, v. Gerald J. MOSSINGHOFF, etc., et al., Appellees.

Appeal No. 84-699.

United States Court of Appeals Federal Circuit.

March 7, 1985.

Alan J. Davis, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, Pa., for appellants. With him on brief was Jeffrey S. Saltz, Philadelphia, Pa.

John F. Pitrelli, Associate Sol., Arlington, Va., for appellee PTO. With him on brief were Joseph F. Nakamura, Sol. and John W. Dewhirst, Associate Sol., Washington, D.C.

Edward M. Posner, Drinker, Biddle & Reath, Philadelphia, Pa., for appellee Control Laser.

Before MARKEY, Chief Judge, and FRIEDMAN and NEWMAN, Circuit Judges.

PAULINE NEWMAN, Circuit Judge.

Appellants are Patlex Corporation and Gordon Gould. Appellees are Gerald J. Mossinghoff in his capacity as Commissioner of Patents and Trademarks; the United States Patent and Trademark Office; and intervenor Control Laser Corporation.

The issue is whether certain provisions of the patent reexamination statute and implementing regulations are in violation of: the due process clause of the Fifth Amendment to the Constitution; ¹ the jury trial guarantee of the Seventh Amendment; ² Article III which vests judicial power in the courts of the United States; or the statutory mandate of Congress. The issue arises from the retroactive effect of Public Law No. 96-517, Act of Dec. 12, 1980, 96th Cong., 2d Sess., 94 Stat. 3015 (codified at 35 U.S.C. Secs. 301-307 (1981)); of Patent and Trademark Office administrative rules 37 C.F.R. Secs. 1.26(c) and 1.530(a); and of Manual of Patent Examining Procedure (MPEP) Secs. 2240, 2244, and 2286 (5th ed. Aug. 1983); all expressly made applicable to patents granted before passage of the statute and adoption of the rules. Issues relating to the presumption of validity, 35 U.S.C. Sec. 282, are also raised.

The District Court for the Eastern District of Pennsylvania, Judge Cahn presiding, in an opinion that carefully analyzed the constitutional and statutory considerations, upheld the challenged provisions. Patlex Corp. v. Mossinghoff, 585 F.Supp. 713, 220 USPQ 342 (E.D.Pa.1983). We affirm the decision as it pertains to 35 U.S.C. Secs. 301-307 and 282 and MPEP Sec. 2286, and vacate for lack of justiciable controversy with respect to 37 C.F.R. Secs. 1.26(c) and 1.530(a) and MPEP Secs. 2240 and 2244.

I. Background

Appellants Patlex Corporation and Gordon Gould (Gould) are owners of the two United States patents that gave rise to this action. The patents pertain to laser technology and were granted before passage of the reexamination statute. On October 11, 1977 the Patent and Trademark Office (PTO) issued Patent No. 4,053,845 for Gordon Gould's basic invention of an optically pumped light (or laser) amplifier. On July 17, 1979 the PTO issued Patent No. 4,161,436 for Gordon Gould's invention of a method of energizing a material utilizing light amplifier apparatus. Both patents resulted from an application filed on April 6, 1959; the unusually long pendency periods were due to extensive and vigorously contested patent interferences. On October 19, 1977 Gould filed suit against the Control Laser Corporation in the United States District Court for the Middle District of Florida, asserting infringement of the '845 patent. Subsequent suits filed by Gould also involved the '436 patent, against Control Laser and others, in various forums.

Some three years after the Florida suit was filed Congress enacted Public Law No. 96-517. Under 35 U.S.C. Sec. 301, any person may call to the PTO's attention prior art that may have a bearing on the patentability of any claim. On the basis of that prior art, Sec. 302 provides that any person may request the PTO to reexamine any claim of the patent. Section 303 requires the PTO, within three months of such request, to determine whether the prior art raises "a substantial new question of patentability". If such a question is raised then the PTO will order that the patent be reexamined, in accordance with Secs. 304 and 305. Upon reexamination the PTO may confirm any patentable claim or cancel any unpatentable claim, and claims may be amended or added, as set forth in Sec. 307. Section 306 provides for appeals by a patentee dissatisfied with the result. The statute took effect on July 1, 1981, and by its terms applies to unexpired patents issued before as well as after that date. Pub.L. No. 96-517, Sec. 8(b), 94 Stat. 3015, 3027.

Meanwhile, Gould's preparation for trial proceeded, and on June 2, 1982 the Florida district court set the case for jury trial beginning September 13, 1982. On September 7, 1982, with the assent of the district court, Control Laser submitted to the PTO a request under 35 U.S.C. Secs. 301-302 for reexamination of the '845 patent. On September 8, 1982 the Florida case was reassigned to another judge (for reasons unrelated to the reexamination request) and jury trial was rescheduled for November 1, 1982.

On October 6, 1982 Control Laser moved the Florida court for a continuance in view of the pending reexamination request. The court granted the motion on October 12, 1982, ruling that if the PTO decided to order reexamination in accordance with Secs. 303-304 trial would be postponed "until the decision of the Patent Office is considered final"; and that if the PTO denied the request for reexamination, trial would begin during the first quarter of 1983. Gould appealed that ruling to this court. We dismissed the appeal on the ground that the grant of a continuance is within the discretion of the trial court and is not an appealable order. Gould v. Control Laser Corp., 705 F.2d 1340, 217 USPQ 985 (Fed.Cir.), cert. denied, --- U.S. ----, 104 S.Ct. 343, 78 L.Ed.2d 310 (1983).

Gould also filed papers directly with the PTO, asking them not to proceed with Control Laser's request for reexamination nor with other subsequently filed reexamination requests ³ in view of the pending litigation and because reexamination was not, in Gould's view, warranted. Gould's efforts to communicate with the PTO were impeded, however, by 37 C.F.R. Sec. 1.530(a):

Except as provided in Sec. 1.510(e), no statement or other response by the patent owner shall be filed prior to the determinations made in accordance with Secs. 1.515 or 1.520. If a premature statement or other response is filed by the patent owner it will not be acknowledged or considered in making the determination.

Consistent with this rule the PTO issued "Decision(s) Returning Improper Paper" in response to Gould's several submissions.

On November 12, 1982 Gould petitioned the Commissioner to stay the reexamination proceeding in light of the extensive and completed preparations for trial. The Commissioner denied that request on December 8, 1982, holding that the petition was improper under 37 C.F.R. Sec. 1.530(a). In addition, the Commissioner noted that the issue was moot because the PTO had granted Control Laser's request for reexamination on November 16 and the Florida litigation had been stayed until the final reexamination decision. Gould includes 37 C.F.R. Sec. 1.530(a) in his constitutional challenge and also the provision of the MPEP on which the PTO relied. That provision, MPEP Sec. 2286, provides in pertinent part as follows:

In view of the statutory mandate to make the determination on the [reexamination] request within three months, the Office realistically has no choice but to make the determination on the request based on the record before the examiner without awaiting a decision by the Federal court.... If reexamination is ordered the reexamination will continue until the Office becomes aware that a trial on the merits has begun at which time the reexamination proceeding normally will be stayed, sua sponte by the examining group director unless a proper petition to stay has been filed which is not rendered moot by the sua sponte stay.

Thus, under MPEP Sec. 2286 Gould could not obtain from the PTO a stay of reexamination because the trial in the Florida proceeding had not "begun".

Gould then sued the Commissioner of Patents and Trademarks in the District Court for the Eastern District of Pennsylvania, ⁴ asking that court to enjoin the Commissioner from going forward with the reexamination, and raising the constitutional challenges now before us. The court granted Control Laser leave to intervene as a party defendant. Although there was conflicting evidence and argument on the extent and significance of the reexamination's adverse effect on Gould, the Commissioner and Control Laser moved for summary judgment. The court granted that motion on November 17, 1983, upheld the constitutionality of the reexamination statute including its retroactive impact on issued patents, and sustained the lawfulness and constitutionality of the challenged rules and regulations. ⁵

II. The Issues

The declaration that an Act of Congress is unconstitutional "is the gravest and most delicate duty that this Court is called on to perform", as Justice Holmes recognized in Blodgett v. Holden, 275 U.S. 142, 148, 48 S.Ct. 105, 107, 72 L.Ed. 206 (1927). Gould has challenged a major feature of the reexamination statute--whereby Congress made it applicable to the million or so of unexpired patents in order to achieve an immediate impact on the patent incentive for invention and innovation.

The fundamental questions are: Did Gould have vested property or other interests which are protected by the Fifth Amendment, the Seventh Amendment, or Article III, against the retrospective effect of patent reexamination? If so, did the provisions of Public Law 96-517 or any of its implementing regulations effect a deprivation of protected interests? If there was such a deprivation, what are its constitutional consequences? Gould also raises questions concerning the implementation and interpretation of the reexamination statute, and the validity of certain PTO regulations, rules, and practices.

A. The...