Aristocrat Technologies Australua v. Intern. Game

• Decision Date: 22 September 2008
• Docket Number: No. 2008-1016.,2008-1016.
• Citation: 543 F.3d 657
• Parties: ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LIMITED and Aristocrat Technologies, Inc., Plaintiffs-Appellants, v. INTERNATIONAL GAME TECHNOLOGY and IGT, Defendants-Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

543 F.3d 657

ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LIMITED and Aristocrat Technologies, Inc., Plaintiffs-Appellants, v. INTERNATIONAL GAME TECHNOLOGY and IGT, Defendants-Appellees.

No. 2008-1016.

United States Court of Appeals, Federal Circuit.

September 22, 2008.

Raphael V. Lupo, McDermott Will & Emery LLP, of Washington, DC, argued for plaintiffs-appellants. On the brief were Brian E. Ferguson, Natalia V. Blinkova, and Leonard D. Conapinski, of Chicago, IL; and Terrence P. McMahon, Anthony De Alcuaz, and Robert J. Blanch, Jr., of Palo Alto, CA.

Jeffrey W. Sarles, Mayer Brown LLP, of Chicago, IL, for defendants-appellees. With him on the brief were Brent A. Batzer, and Sarah E. Rauh. Of Counsel on the brief were Jeffrey S. Love and Garth A. Winn, Klarquist Sparkman, LLP, of Portland, OR. Of counsel was Andrea C. Hutchinson, Mayer Brown LLP, of Chicago, IL.

Mary L. Kelly, Associate Solicitor, United States Patent and Trademark Office of Arlington, Virginia, for amicus curiae Director of the Patent and Trademark Office. With her on the brief were James A. Toupin, General Counsel, Stephen Walsh, Acting Solicitor, and Joseph H. Piccolo, Associate Solicitor. Also on the brief was Anthony J. Steinmeyer, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC.

Seth M. Galanter, Morrison & Foerster LLP, of Washington, DC, for amicus curiae Neurotechnology Industry Organization. With him on the brief was Priya B. Viswanath.

Before NEWMAN, BRYSON, and LINN, Circuit Judges.

LINN, Circuit Judge.

The district court concluded that the U.S. Patent and Trademark Office "improperly revived" U.S. Patent No. 7,056,215 after it was abandoned during prosecution, and therefore held it (and the continuation patent that followed it) invalid on summary judgment. We conclude that "improper revival" is not a cognizable defense in an action involving the validity or infringement of a patent. Thus, we reverse the district court's grant of summary judgment and remand for proceedings consistent with this opinion.

I. BACKGROUND

Aristocrat Technologies Australia Pty, Ltd. and Aristocrat Technologies, Inc. (collectively, "Aristocrat") compete with International Game Technology and IGT (collectively, "IGT") in the market for electronic gaming machines. Aristocrat is the assignee of U.S. Patent Nos. 7,056,215 ("the '215 patent") and 7,108,603 ("the '603 patent"), both of which relate to a "slot machine game and system with improved jackpot feature." Prosecution of these patents began in Australia, when, starting on July 8, 1997, Aristocrat filed two provisional patent applications directed to the inventions embodied in the patents-in-suit. One year later, Aristocrat filed a Patent Cooperation Treaty application ("the PCT application") in Australia, claiming priority to the previously filed provisional applications. The PCT application was subsequently published. Pursuant to 35 U.S.C. § 371 and 37 C.F.R. § 1.495, Aristocrat was required to pay the fee for the U.S. national stage of the PCT application by January 10, 2000—thirty months after the filing date of the first Australian provisional application.

The U.S. Patent and Trademark Office ("PTO") did not receive Aristocrat's national filing fee until January 11, 2000—one day late. The PTO consequently mailed a notice of abandonment to Aristocrat, which stated, among other things, that Aristocrat "may wish to consider filing a petition to the Commissioner under 37 CFR 1.137(a) or (b) requesting that the application be revived." J.A. at 642. In lieu of filing a petition to revive the abandoned application, Aristocrat responded by filing a Petition to Correct the Date-In-that is, to correct the date on which the PTO received its national filing fee. The PTO denied the petition without prejudice, after Aristocrat failed to provide sufficient evidence to corroborate the date the filing fee was mailed. It is unclear when Aristocrat received the PTO's denial,¹ but it later filed a petition to revive the '215 patent application under 37 C.F.R. § 1.137(b), claiming that the delay in paying the national stage filing fee was "unintentional." Id. at 660-61. The PTO granted the petition to revive on September 3, 2002, after concluding that "[a]ll of the requirements of 37 CFR 1.137(b) ha[d] been met." Id. at 687. Following the PTO's revival, Aristocrat resumed prosecution of the '215 patent application, and later filed the '603 patent application as a continuation of the '215 patent application. The '215 patent issued on June 6, 2006, and the '603 patent issued on September 19, 2006.

In June 2006, Aristocrat filed suit against IGT for infringement of the '215 patent in the United States District Court for the Northern District of California. Aristocrat amended its complaint to assert infringement of the '603 patent when that patent issued. IGT answered and subsequently moved for summary judgment of invalidity. It argued that the '215 patent was invalid because, after it was abandoned, Aristocrat was required to show that its delay was "unavoidable" in order to revive the application, not merely that its delay was "unintentional." Thus, according to IGT, the PTO "improperly revived" the '215 patent application by requiring Aristocrat only to show "unintentional delay." IGT also argued that the '603 patent was invalid, contending that since the '215 patent application was not lawfully revived, it constituted prior art to, and thus anticipated, the '603 patent under 35 U.S.C. § 102(b).

The district court granted IGT's motion. It first concluded that the Patent Act permitted revival of an abandoned patent application only upon a showing of "unavoidable delay." Aristocrat Techs. Austl. Pty, Ltd. v. Int'l Game Tech., 491 F.Supp.2d 916, 924-29 (N.D.Cal.2008). Next, the district court found that IGT was permitted, pursuant to 35 U.S.C. § 282, to raise the PTO's alleged improper revival as a defense to infringement. Id. at 929-31. The district court also concluded, alternatively, that it possessed authority to review the PTO's revival of the '215 patent application under the Administrative Procedure Act, 5 U.S.C. § 701 et seq. ("APA"). Id. at 931-32. After concluding that Aristocrat abandoned the '215 patent application and failed to meet the more exacting "unavoidable delay" standard when attempting to revive it, the district court deemed the '215 patent invalid. Id. at 932-35. Finally, the district court also deemed the '603 patent invalid, under the rationale that if the '215 patent application was not properly revived, then it constituted invalidating prior art under 35 U.S.C. § 102(b). Id. at 935-36. Following its grant of summary judgment, the district court entered final judgment in favor of IGT. Aristocrat Techs. Austl. Pty, Ltd. v. Int'l Game Tech., No. 06-CV-3717 (N.D.Cal. Sept. 4, 2007).

Aristocrat timely appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

II. DISCUSSION

A. Standard of Review

Statutory interpretation is a question of law, which we review de novo. Imazio Nursery, Inc. v. Dania Greenhouses, 69 F.3d 1560, 1564 (Fed.Cir.1995). We also review a grant of summary judgment de novo, reapplying the standard that the district court employed. Rodime PLC v. Seagate Tech., Inc., 174 F.3d 1294, 1301 (Fed.Cir.1999). Drawing all reasonable inferences in favor of the nonmovant, "[s]ummary judgment is appropriate only when `there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law.'" Id. (quoting Fed.R.Civ.P. 56(c)).

B. Analysis

1. The '215 Patent

The threshold issue in this appeal is whether "improper revival" may be raised as an invalidity defense in an action involving the infringement or validity of a patent. The district court, relying on 35 U.S.C. §§ 282(2) and (4), decided that question affirmatively. The district court also found that the APA provided a separate basis upon which to review the PTO's revival of the '215 patent. We conclude that "improper revival" may not be raised as a defense in an action involving the validity or infringement of a patent.²

Section 282 of title 35 provides a catalog of defenses available in an action involving the validity or infringement of a patent:

(1) Noninfringement, absence of liability for infringement or unenforceability,

(2) Invalidity of the patent or any claim in suit on any ground specified in part II of this title as a condition for patentability,

(3) Invalidity of the patent or any claim in suit for failure to comply with any requirement of sections 112 or 251 of this title,

(4) Any other fact or act made a defense by this title.

The first and third enumerated categories are not asserted by IGT as bases for its invalidity defense. At issue are the second and fourth. We discuss each in turn.

Section 282(2) authorizes an invalidity defense based "on any ground specified in part II of this title as a condition for patentability." A defense falling under this section thus has two prerequisites: it must fall within part II of title 35 and it must be a "condition for patentability." The district court determined that "[b]ecause Section 133's six-month deadline for prosecuting an application is specified within part II of Title 35, it necessarily provides an available defense where a patentee has abandoned, and failed to lawfully revive, a patent application." Aristocrat, 491 F.Supp.2d at 930. What the district court failed to address, however, is whether the proper revival of an abandoned application is a "condition for patentability."

It has long been understood that the Patent Act sets out the conditions for patentability in three sections: sections 101, 102, and 103. See Graham v. John Deere, 383 U.S. 1, 12, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966) ("The [1952 Patent] Act sets out the conditions of patentability in three sections. An analysis of the structure of these three sections indicates that...