Summary
**Prosecution Laches; Unreasonable Delay; Prejudice; Intervening Rights.** The Federal Circuit affirmed a district court's finding that U.S. Patent No. 8,191,091 was unenforceable due to prosecution laches. The court held that the patentee's deliberate strategy of serial prosecution, filing hundreds of GATT-bubble applications, and using a consolidation agreement to extend examination constituted an egregious misuse of the patent system, causing unreasonable and inexcusable delay. The court also found that Apple established prejudice attributable to the delay because Apple began developing the accused FairPlay technology during the period of delay. The dissent argued that Apple failed to prove prejudice occurred during the period of unreasonable delay, as required by *Cancer Research Technology Ltd. v. Barr Laboratories Inc.*
Topics
Practice areas
Questions Presented
- Whether the district court abused its discretion in finding that PMC's prosecution delay was unreasonable and inexcusable under the totality of circumstances.
- Whether the district court abused its discretion in finding that Apple suffered prejudice attributable to the delay.
Holdings
- The district court did not abuse its discretion in finding that PMC's delay was unreasonable and inexcusable under the totality of circumstances.
- The district court did not abuse its discretion in finding that Apple suffered prejudice attributable to PMC's delay.
Key quotations
“A method of enabling a programming presentation at a receiver station, said method comprising the steps of: receiving an information transmission from at least one of a local source and a remote source, said information transmission including disabled information; detecting the presence of an instruct-to-enable signal, said instruct-to-enable signal designating enabling information; passing said instruct-to-enable signal to a processor; modifying a fashion in which said receiver station locates said enabling information in response to said instruct-to-enable signal; locating said enabling information based on said step of modifying a fashion; enabling said disabled information based on said step of locating said enabling information; and outputting said programming presentation based on said step of enabling said disabled information.” (at 7)
“A method of decrypting programming at a receiver station, said method comprising the steps of: receiving an information transmission from at least one of a local source and a remote source, said information transmission including encrypted information; detecting the presence of an instruct-to-enable signal, said instruct-to-enable signal designating enabling information; passing said instruct-to-enable signal to a processor; determining a fashion in which said receiver station locates said enabling information in response to a first decryption key by processing said instruct-to-enable signal; locating said enabling information based on said step of determining; decrypting said encrypted information based on said step of locating said enabling information using said first decryption key; and outputting said programming presentation based on said step of decrypting.” (at 7)
“reserve its patent till the trade independently develops, and then pounce upon it for a full term.” (at 16)
“An applicant must ... not only comply with the statutory requirements and PTO regulations but must also prosecute its applications in an equitable way.” (at 11)
Factual background
PMC filed 328 GATT-Bubble patent applications in 1995, derived from two earlier applications from 1981 and 1987. PMC had an express strategy of serial prosecution to delay issuance and extend patent terms. In 2003, PMC amended claims in the '145 application to add encryption and decryption limitations for the first time. PMC entered into a Consolidation Agreement with the PTO allowing an A/B application examination scheme. The '091 patent issued in 2012, set to expire in 2027—40 years after its 1987 priority date. Apple began developing its FairPlay technology in the early 2000s and launched it in 2003. A jury found that Apple's FairPlay infringed claim 13 of the '091 patent.
Procedural history
In 2015, PMC sued Apple for infringement of claim 13 of U.S. Patent No. 8,191,091. A jury found infringement and awarded over $308 million in damages. The district court then held a bench trial on remaining equitable issues and found the patent unenforceable due to prosecution laches. PMC appealed the laches determination.