Paying For Your Delay: Application Of Prosecution Laches Can Render Issued Patents Unenforceable

• Published date: 19 August 2021
• Subject Matter: Intellectual Property, Food, Drugs, Healthcare, Life Sciences, Patent, Biotechnology & Nanotechnology
• Law Firm: Duane Morris LLP
• Author: Mr Thomas J. Kowalski, Deborah L. Lu, Ph.D. and Brandon A. Chan, Ph.D.

The patent examination process is inevitably lengthy from the time of the initial filing and examination to the allowance and issuance of the patent. As of May 2021, the USPTO estimates an average pendency of 17 months from filing to the mailing of a first Office Action. The lengthy pendency of patent applications can lead some applicants to take advantage of and exploit the patent system to unreasonably delay the prosecution of patent applications, and in some instances extend the patent term far beyond the lifetime of the original parent application?especially in patent applications filed before the USPTO's June 8, 1995, implementation of rules under the General Agreement on Tariffs and Trade (GATT) following the enactment of the Uruguay Round Agreements Act in 1994. Under GATT, patent terms expire 20 years from the filing date of the earliest application to which priority is claimed, instead of expiring 17 years from the issue date, which ultimately altered prosecution strategies.

To avoid unreasonable delays and to prevent applicants from exploiting the patent system to unreasonably delay the prosecution of applications that may prejudice the rights of others, an issued patent can be held unenforceable under prosecution laches?as in a recent case, Personalized Media Communications, L.L.C. v. Apple, Inc., No. 2:15-CV-01366-JRG (E.D. Tx. Aug. 5, 2021).

Personalized Media Communications (PMC), the assignee of U.S. Patent No. 8,191,091 ('091 patent), drawn to a "Signal Processing Apparatus and Methods," which was issued May 29, 2012, asserted the '091 patent against Apple, alleging Apple's digital rights management technology, FairPlay, infringed the patent. A jury found Apple liable for infringement and awarded PMC approximately $300 million in reasonable-royalty damages as a running royalty. The court held a bench trial on Apple's assertion of prosecution laches, an equitable defense against infringement.

A finding of prosecution laches requires the proof of two elements: (i) the patentee's unreasonable and unexplained delay in prosecution; and (ii) prejudice to the accused infringer or the public that is attributable to the delay. See Hyatt v. Hirshfeld, 998 F.3d 1347, 1360 (Fed. Cir. 2021). The accused infringer can establish prejudice through showing evidence of intervening rights such that "either the accused infringer or others invested in, worked on, or used the claimed technology during the period of delay." Cancer Rsch. Tech. Ltd. v. Barr...