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Article 1, Section 8 of the Constitution states that “Congress shall have Power … to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Given the “Progress of Science and useful Arts” over the past 200 years, one could say that Congress has done a pretty good job at fulfilling this duty in regard to patents and copyrights.
There was one loophole, however, the area of “submarine” patents, which Congress didn’t close until 1994. These are patents which “remain ‘submerged’ during a long ex parte examination process and then ‘surface’ upon the grant of the patent,” allowing the patent holder to “demand high royalties from non-patent holders who invested and used the technology not knowing that patent would later be granted.” DiscoVision Assocs. v. Disc Mfg., Inc., 42 U.S.P.Q.2d 1749, 1756 n.11 (D. Del. 1997).
To address this problem, Congress in 1994 amended the patent laws so that a twenty-year time limit would start running at the earliest effective application filing date. It followed this up in 1999 with an amendment [Uruguay Round Agreements Act § 532(a), 35 U.S.C. § 154(a)(2)] requiring the disclosure of patent applications eighteen months after filing. (Both are subject to certain exemptions.)
But there still is the problem of patent applications which predate these changes. In January, however, the Court of Appeals for the Federal Circuit took steps to address this problem by allowing the claim of prosecution laches in the case Symbol Technologies v. Lemelson (00-1583).
The case involves certain patents covering “machine vision technology” originally filed by Jerome Lemelson in 1954 and 1956. Over the ensuing decades, Lemelson kept filing extensions on these applications and amending them to incorporate technology developed and marketed by others. By the time these patents finally issued between 1978 and 1994, bar-code devices had been developed and were in widespread use in retail establishments, in factories for inventory management and many other applications. Although Lemelson’s patents did not contribute to the development of these devices, and in fact were issued after these devices were broadly in use, under pre-1994 patent law he was able to take advantage of the 1954 and 1956 filing dates to claim his devices predated other patents.
He, and later his foundation, then proceeded to send out demand letters and sue hundreds of companies using bar code devices, not the manufacturers of these devices, for patent infringement, resulting in settlements totaling around $1.5 billion dollars to date.
To counter these activities, Symbol Technologies, Inc. and several other manufacturers of bar-code scanners sued the Lemelson Foundation seeking a declaratory judgment invalidating the patents. A key element of the complaint was prosecution laches Lemelson dragging out his patent applications for nearly forty years. [Laches - the legal doctrine that a legal right or claim will not be enforced or allowed if a long delay in asserting the right or claim has prejudiced the adverse party (hurt the opponent) as a sort of "legal ambush." - Law.com dictionary]. As the U.S. Chamber of Commerce described the matter in its amicus brief:
“To put it simply, it is inequitable to enforce patents which were obtained through unreasonable and inexcusable delay that cause injury to the defendant. Companies that actually produce products and provide services should not be forced to pay royalties to a party whose only contribution to the art, if any, was kept submerged in the Patent and Trademark Office.”
While the trial court rejected this argument, a Federal Circuit panel ruled that prosecution laches was a valid claim. On March 20, the court denied Lemelson’s petition for rehearing by the full court. The case is now back with the Nevada District Court for further proceedings.