Attorney Delinquence Excuses 7-Year Delay in Reviving Expired Patent

SprinGuard Technology Group Inc. v USPTO, No. 08-12119 (D. Mass., January 21, 2010, Order)

SprinGuard brought an action under the Administrative Procedure Act (“APA”) to seek judicial review of decisions of the Director of the PTO denying SprinGuard’s petitions to reinstate its Patent, which granted in 1999, but expired in 2003 for failing to pay a required maintenance fee.

After the patent issued, the PTO mailed a letter in 2002 to SprinGuard’s attorney stating that the first maintenance fee was past due; it received no response. The fee was not paid, and the patent expired on January 27, 2003. SpringGuard was not notified that it had failed to pay the fee, nor given notice that the Patent had expired. It did not learn of the Patent’s expiration until almost four years later, in 2006, during a due diligence review by a third-party licensee.

During this time period, SprinGuard’s patent lawyer had allowed his registration with the PTO to lapse. The PTO had removed the attorney from the Register of Patent Attorneys and Agents on December 9, 2002, pursuant to regulation due to the attorney’s failure to respond to routine correspondence. He was not reinstated until March 23, 2004. The PTO never notified SprinGuard that its attorney had been
removed from the register.

Upon learning of the Patent’s expiration in 2006, SprinGuard immediately paid the maintenance fee, and took steps (including hiring a private investigator) to locate its attorney. For some unknown reason, the lawyer became incommunicado and was not heard from again.  SprinGuard then filed a petition to reinstate its Patent on the ground that the delay in paying the first maintenance fee, due in 2003, was “unavoidable.”  The PTO denied the petition because it concluded that SprinGuard "failed to adduce sufficient evidence that it took reasonable steps to ensure that the maintenance fee would be paid on time."

The district court ruled the PTO acted arbitrarily in violation of the APA:

As a general matter, the PTO . . . has taken the position that reliance on the fact that one has hired an attorney without further diligence is insufficient; rather, patent holders have an affirmative obligation to exercise reasonable care that maintenance fees are paid  . . . However, the PTO has itself excused late payment where the attorney completely abandoned the attorney/client relationship.  Here, given counsel’s complete abandonment of his client, including his total refusal (or inability) to cooperate or communicate, plaintiff was precluded from producing competent evidence of such due diligence. In this unique circumstance, SprinGuard has met the standard.

In addition, it is significant that SprinGuard’s lawyer had been removed from the list of registered patent attorneys at the time the ‘529 Patent expired for failure to pay the maintenance fee. While he could technically make the payment, as he had not been formally suspended or disbarred from the register, he was no longer able to act as SprinGuard’s patent attorney. Moreover, SprinGuard was not given notice that its patent counsel had been de-registered. The PTO has allowed delayed payment in several such cases . . . Moreover, the PTO sent notice of SprinGuard’s failure to pay the maintenance fee, as well as notice of the ‘529 Patent’s expiration, to counsel, who was then no longer registered with the PTO — not to SprinGuard.

Given the unique circumstances of this case, and the decisions of the PTO in favor of patent holders in similar circumstances, I conclude the PTO’s decision was arbitrary and otherwise contrary to law.

Read/download a copy of the order here (link)