The Applicant-Action (Or Inaction) Exception

| Raina PatelHans L. Mayer


Before Moore, Prost, and Hughes. Appeal from the District Court for the Eastern District of Virginia

Summary: For a patent application filed but not yet granted before the Uruguay Rounds Agreement Act (which changed patent terms to be 20 years from the effective filing date instead of 17 years from the grant date), a patentee’s failure to disclose species-altering amendments for decades triggered the applicant-action exception. Therefore, the Examiner was within his authority to impose a restriction requirement under that exception.

The term for U.S. patent protection was amended to 20 years from the effective filing date instead of 17 years from the grant date by the Uruguay Rounds Agreement Act (URAA). The change in law left a gap for “transitional” applications – those filed but not yet granted before the URAA took effect on June 8, 1995. USPTO Rule 129 addressed that situation, and in particular, states that no restriction requirements may be made or maintained for transitional applications after June 8, 1995, “except where … the examiner has not made a requirement for restriction in the present or parent application prior to April 8, 1995, due to actions by the applicant.” (emphasis added).

Hyatt’s Application was transitional. The PTO completed an initial examination of the Application’s claims in 2003, but stayed examination until 2012, due to pending litigation. When examination resumed, the Examiner issued a non-final rejection. Hyatt responded with significant claim amendments, in some instances, rewriting the entire claim apart from the preambular “A” and “comprising.” The examiner determined that the amendments shifted claims to a different species and issued a restriction requirement.

Hyatt filed a complaint in the Eastern District of Virginia protesting this restriction requirement, arguing that it violated the Administrative Procedures Act since restriction requirements are generally not permitted for transitional applications under Rule 129. The district court granted the PTO’s motion for summary judgment, determining that Hyatt’s withholding of claims to a separate invention that was not disclosed prior to the April 8, 1995 cut-off date constituted an action that brought the Application under the applicant-action exception to Rule 129.

On appeal, Hyatt’s argued that his withholding was not an “action” as used in the applicant-action exception, but an “inaction.” The Federal Circuit rejected this argument and affirmed the district court’s decision that the restriction requirement was appropriate. It held that the applicant-action exception was applicable because “whether Hyatt’s actions are characterized as a failure to disclose or an act of withholding an entirely new species, it was that conduct of Mr. Hyatt that prevented the Examiner from entering a restriction requirement.”

Editor: Paul Stewart