Infringement Case Dismissed Because of Patent Office Typo

A federal court in Oklahoma has dismissed a plaintiff’s patent infringement claims because of a typo made by the US Patent and Trademark Office (USPTO or PTO).

The case is SIPCO, LLC v. JASCO Prods. Co.

In 2019, Plaintiff SIPCO, LLC sued Defendant Jasco Products Company, LLC. for alleged infringement of four of SIPCO’s patents.

Jasco moved to dismiss claims related to SIPCO’s ‘304 and ‘425 patents. The parties agreed about the ‘425 patent, so the issue remaining before the court was the ‘304 patent.

As the court noted,

By all accounts, the ’304 patent has a somewhat unique and complicated history. The patent application eventually giving rise to the ’304 patent was initially filed with the United States Patent and Trademark Office (“PTO”) in July of 2008. On October 20, 2010, the PTO issued an office action rejecting the application due to obviousness-type double patenting—a doctrine that “prohibit[s] a party from obtaining an extension of the right to exclude through claims in a later patent that are not patentably distinct from claims in a commonly owned earlier patent.” The office action stated that certain claims in the ’304 patent application were “not patentably distinct” from claims in several pre-existing patents, including the ’267 patent. The PTO, however, offered Plaintiff a way out of the obviousness-type double patenting issue. “A timely filed terminal disclaimer,” the office action explained, “may be used to overcome actual or provisional rejection based on a nonstatutory double patenting ground provided the conflicting . . . patent is shown to be commonly owned with this application.”

In 2011, Plaintiff filed its response to the office action. In it, Plaintiff explained that it would submit terminal disclaimers “to overcome the nonstatutory double patenting rejection,” as the patents identified by the office action, including the ’267 patent, were “commonly owned by the present Applicant.”

On the same day in 2011, Plaintiff filed its terminal disclaimer to the ’267 patent, agreeing that “any patent so granted on the [’304 patent] application shall be enforceable only for and during such period that it and the [’267] patent are commonly owned.”

A year and a half later, in reliance on the terminal disclaimers, the USPTO issued the ’304 patent.

However, the court noted that Plaintiff’s statement in 2011 that it owned the ’267 patent wasn’t true. It didn’t and had never owned the ’267 patent.

Both the Plaintiff and the Defendant believed that the USPTO simply made a mistake. The plaintiff does (and did) own the ’268 patent.

As the court noted,

Unlike the ’267 patent, the ’268 patent is “in the same family as the ’304 patent application and the other patents cited in the rejection and does relate to the subject matter of the ’304 patent application.” The reference to the ’267 patent in the 2010 office action was likely nothing more than a “transcribing error.” An error that Plaintiff compounded when, in response to the office action, it represented to the PTO that it indeed owned the ’267 patent.

Plaintiff first attempted to correct the error in 2016 with a petition requesting the withdrawal of the ’267 terminal disclaimer and its replacement with a new ’268 terminal disclaimer.

The USPTO dismissed the petition in 2017, finding that, pursuant to an update to the Manual of Patent Examining Procedure (MPEP), “withdrawal of the terminal disclaimer would not be warranted even if the error in the terminal disclaimer consisted of a transposition error.”

Under the new guidance, the USPTO wouldn’t withdraw terminal disclaimers in issued patents with inadvertent errors but would allow patentees to file an explanation of the error along with additional terminal disclaimers disclaiming the correct patents.

The USPTO gave Plaintiff two months to request reconsideration of the dismissal decision. Instead, however, Plaintiff filed a new stand-alone ‘268 terminal disclaimer in 2018. (By this time, the ‘304 patent had already expired pursuant to another terminal disclaimer.)

In the current action, Defendant moved to dismiss Plaintiff’s claims relating to the ’304 patent on the grounds that the ’267 terminal disclaimer and the lack of shared ownership rendered the ’304 patent unenforceable throughout its life.

The court noted that the primary purpose of the doctrine of obviousness-type double patenting and the use of terminal disclaimers is to prevent a patentee from enjoying an improper extension of the prior patent term.

Plaintiff argued that no such risk ever existed between the ’267 and ’304 patents because they concern different subject matter.

Plaintiff argued that no prejudice resulted from the ’267 terminal disclaimer, because the transcription error of ’268 to ’267 would be clear to anyone looking at the ’304 patent file.

The court disagreed:

Given that Plaintiff itself did not notice the error during prosecution or for several years thereafter, this assertion is hard to credit. Second, and relatedly, Plaintiff argues that there would be no prejudice to third parties to now find the ’267 terminal disclaimer ineffective and substitute in the ’268 disclaimer. Possibly so, though the Court may not lightly assume that no member of the public previously relied on the patent file, including the ’267 terminal disclaimer.

The Court found that the ’267 terminal disclaimer rendered the ’304 patent unenforceable upon issuance:

The precise issue of erroneous terminal disclaimers is, if not a matter of first impression, at least a matter with scant legal explication. However, a substantial body of regulation and Federal Circuit precedent supports the Court’s conclusion that Plaintiff must be held to the promise it made to the PTO in order to secure issuance of the ’304 patent.

Said the court,

The public has a right to rely on a patent’s file to understand the full scope of the monopoly granted by an issued patent. To further that end, 35 U.S.C. § 253 makes clear that any terminal disclaimer “shall thereafter be considered as part of the original patent,”35 while 37 C.F.R. § 1.321 spells out detailed requirements for the form and content of terminals disclaimers. That same section states that “[s]uch terminal disclaimer is binding upon the grantee and its successors or assigns.”