SDNY Finds PTO Acted Unlawfully in Reviving "Unintentionally Abandoned" Application

New York University v. Autodesk, Inc. (06 Civ. 5274) July 13, 2007

NYU asserted two patents against Autodesk, which traced back to a parent application (the '799 Application). During prosecution of the parent application, the file was in the process of being transferred from one law firm to another. A Final Office Action was issued by the PTO, and no response was received by the 6 month date. When the PTO called the new firm, the responsible attorney (who left the new firm weeks later) confirmed abandonment, and the confirmation was recorded by the examiner.

Some six months later, a petition to revive was filed, where the petition only stated that "Applicant's failure to file a response was unintentional." The petition was subsequently granted by the PTO, without further comment.

During litigation, Judge Rakoff ruled that the abandonment was not "unintentional," and that the patent should have never issued. According to Rakoff, once a deliberate act is made towards abandonment, without anything more, an application is dead for good:

Examiner Burwell’s note directly contradicts NYU’s statement. The note suggests that as of December 5, 1997, if not earlier, [the prosecuting attorney] and NYU were on notice that the PTO had deemed the ‘799 application abandoned and that some action would be necessary to revive the application. In light of that notice, without more, no reasonable factfinder could find that NYU’s decision not to take action –- and instead to “delay” seeking revival –- for the entire period between July 14, 1997 and November 4, 1998 was “unintentional” under 37 C.F.R. § 1.137(b)(3).

Also, since the PTO "entirely failed to consider" the examiner's file when reviving the application, Rakoff ruled that the agency's actions were "arbitrary and capricious":

Here, the PTO’s decision more than meets these criteria for arbitrary and capricious action. The PTO “entirely failed to consider” Examiner Burwell’s note in the PTO’s own records, which was an “important aspect of the problem” because it directly contradicted NYU’s claim of unintentional delay. Further, the PTO’s “explanation for its decision” –- that it was relying on NYU’s statement in the petition to revive –- “runs counter” to NYU’s confirmed abandonment, evidenced by Examiner Burwell’s note, and does not remotely constitute the “satisfactory explanation” that State Farm requires.

Accordingly, the PTO’s decision to revive the ‘799 application was arbitrary and capricious and is hereby “h[e]ld unlawful and set aside.” 5 U.S.C. § 706(2)(A). Further, because neither the ‘053 patent nor the ‘132 patent should have issued . . . NYU’s Complaint alleging infringement of these patents must be dismissed.

This case now joins at least two other district court cases which held that confirming abandonment is a deliberate act, which negates the possibility of reviving "unintentionally" abandoned applications without a satisfactory explanation:

Lawman Armor Corp. v. Simon, 2005 WL 1176973 (E.D. Mich. 2005)

Field Hybrids, LLC v. Toyota Motor Corp., 2005 WL 189710 (D. Minn. 2005)

Also, it is interesting that the district court did not consider remanding the case to the PTO for further findings. Lee Thomason from the ISinIP Blog makes the following comments:

In the typical APA review case, the lack of support for the agency’s decision always leads to a remand, not a final decision by in the District Court. “If that finding is not sustainable on the administrative record made, then the Comptroller’s decision must be vacated and the matter remanded to him for further consideration.” Camp v. Pitts, 411 U.S. 138 (1973) and Vt. Yankee, 435 U.S. at 549. Where the agency’s lack of a sufficient explanation overwhelms the district court’s review, then remand is typical under the APA. “If the record before the agency does not support the agency action, if the agency has not considered all relevant factors, or if the reviewing court simply cannot evaluate the challenged agency action on the basis of the record before it, the proper course, except in rare circumstances, is to remand to the agency for additional investigation or explanation.” Florida P. & L. Co. v. Lorion, 470 U.S. 729, 744 (1985).

View/download the opinion here (link)