No room for courts to displace Congress’s policy on timeliness: Supreme Court

No room for courts to displace Congress’s policy on timeliness: Supreme Court

Cites Petrella vs Metro-Goldwyn-Mayer and SCA Hygiene Prods vs First Quality Baby Prods cases as pointers

The Supreme Court has rejected the equitable defenses of laches in infringement suits while reasoning that by enacting a statute of limitation, Congress left no statutory ‘gap’ for equitable judgments on timeliness.

Citing Petrella v. Metro-Goldwyn-Mayer (2014), and SCA Hygiene Prods. v. First Quality Baby Prods (2017) cases, it stated that the precedential holdings should have also governed the U.S. Court of Appeals for the Federal Circuit (CAFC) decisions on prosecution laches in the Hyatt v. Hirshfeld (2021) and the Hyatt v. Stewart (2025), particularly after the multiple briefings in the Hyatt case on the binding effect of such holdings.

It added that nowhere in the decisions was any reason given why the principles in the SCA Hygiene and Petrella could be inapplicable for precluding prosecution laches.

The court ruled, “Under the principles in the SCA Hygiene, Petrella, and Brockamp, there is no room for the courts to displace Congress’s specific policy choice on timeliness, even when ‘the lack of a laches defense could produce policy outcomes judges deem undesirable.’”

Meanwhile, some experts have reasoned that prosecution laches is different from laches in bringing infringement suits because only the latter has statutes of limitation.

Writer’s View

The article of Dennis Crouch, ‘Hyatt v. Stewart: Why Petrella and SCA Hygiene Don’t Save Long-Delayed Patent Prosecutions,’ stated, “I think Hyatt loses this one because there is no statute of limitations governing the overall patent prosecution timeline.”

The write-up added, “Unlike Hyatt’s pre-GATT applications, which benefit from the old 17-year-from-issuance term system where prosecution delays actually extend the total monopoly period, post-URAA applicants face a built-in temporal constraint: every day spent in prosecution is a day lost from the patent’s enforceable life.”

The purported distinction was wrong, as it ignored a salient aspect of the Uruguay Round Agreements Act (URAA) in which Congress left no timeliness requirement ‘gap’ even for transitional pre-GATT applications such as Hyatt’s.

While the URAA does not set an ‘absolute numerical’ time limit for prosecuting pre-GATT applications, it limited the ‘total’ duration of prosecution for pre-GATT applications by setting a limit of two continuation-equivalent ‘submissions’ for such applications after the effective date of the URAA (8 June 1995).

The two ‘submission’ limit was Congress’ compromise ‘modality’ for implementing a hard timeliness requirement, relying on the statutory limit on duration of prosecution of each ‘submission’.

How Congress Reacted

In 1994, Congress tightened the timeliness requirements by counting the patent term from the priority filing date rather than the issuance date.

It stated that it could not impose such requirements ‘retroactively’ on pending applications with original priority dates before the URAA’s effective date (8 June 1995). That was because their resulting enforceable patent life would have been much shorter than 17 years, particularly for continuing applications filed after the effective date. It would have unfairly prejudiced applicants who earlier agreed to participate in the patent bargain, assuming they would receive full rights under 35 U.S.C. §§ 120-121 and receive patents in force for 17 years.

Therefore, to allow reasonable practices for continuations and divisions while preserving their 17-year patent term, and yet subject them to reasonable timeliness requirements, Congress relied on the statutory limit on duration of prosecuting a single submitted application to final action, considering that applicants must reply to Office actions ‘within six months,’ 35 U.S.C. § 133. And ever since the enactment of Patent Office examination, Congress’s framework called for concluding prosecution on the ‘second’ Office action.

Section 7 of the 1836 Patent Act provided that following a first Office action rejection, “If the applicant in such case shall persist in his claim for a patent, with or without any alteration of his specification, and if the specification and claim was not modified as, in the opinion of the Commissioner, shall entitle the applicant to a patent, he may, on appeal, and upon request in writing, have the decision of a board of examiners.”

This embodied Congress’s express direction for a ‘compact’ prosecution before the appeal, where the applicant was given ‘only one opportunity’ to amend the application to satisfy the Commissioner, making the second Office action final.

Rephrased Intent

The intent was rephrased in the Patent Act of 1870, which is currently codified in 35 U.S.C. § 132(a) as a right of appeal by “an applicant for a patent, whose claims have been rejected twice.”

Thus, the applicants cannot prolong prosecution of a single application because “on the second or any subsequent examination or consideration by the examiner, the rejection or other action may be made final.” 37 C.F.R. § 1.113(a).

Hence, the timeliness focus in the URAA was confined to continuing application practice, which is under applicants’ control. It was recognized that the applicants of transitional applications entitled to 17 year patent term from issuance would ‘not’ lose patent term, if after the final action, they could reopen prosecution in the ‘same application’ and make a ‘submission’ equivalent to a continuing application, similar to the old ‘File-Wrapper Continuation’ practice.

Given the U.S. Patent and Trademark Office’s (USPTO’s) control over the prosecution duration of each ‘submission’, limiting the ‘number’ of such ‘submissions’ achieved the overall timeliness goal for transitional pre-GATT applications.

Accordingly, the URAA directed the USPTO “to provide for further limited reexamination” of pending transitional pre-GATT applications. URAA § 532(a)(2)(A).

The associated Statement of Administrative Action (approved by Congress under 19 U.S.C. § 3511(a)(2) as part of the URAA) read: “The further limited reexamination will permit applicants to present for consideration a submission after the [USPTO] has issued a final rejection on an application.” H.R. Doc. No. 316, 103d Cong., 2d Sess., Vol. 1, (27 September 1994) (SAA) at 1005.

It added, “The [USPTO] will consider on the merits the first and second such submissions.” SAA at 1006.

The subject transitional pre-GATT applications to a statutory hard limit of two URAA ‘submissions’ equivalent to two continuing applications. See 60 Fed. Reg. 20195, 20214 (25 April 1995).

(The filing of the submission and the fee under § 1.129(a) was equivalent to the filing of a continuation application and would be treated similarly).

Congress also ensured the opportunity for transitional application applicants to respond to a requirement for restriction or for the filing of divisional claims without filing a divisional application after 8 June 1995, that would otherwise lose patent term.

It further directed that after 8 June 1995, “The USPTO will not make or maintain a requirement for restriction or the filing of a divisional application for an application that has been pending for three years or longer as of 8 June 1995, taking into account the priority date.” SAA, at 1006.

Thus, the USPTO was authorized instead to charge “an appropriate fee for examination of each independent and distinct invention in an application in excess of one.” SAA, at 1006.

Congress was aware of pre-GATT applications which had been pending for several years and specifically ‘excused’ ‘all’ such applications ‘pending for three years or longer,’ including through continuing applications. These were given a limited opportunity for only two additional ‘submissions’.

Still, Congress provided specific exceptions that would deny protection to pre-GATT applicants from restriction requirements in cases where applicants ‘did’ have some control over divisional claiming ‘prior’ to 8 June 1995:

It said, “This limitation does not apply if such a restriction requirement was first made in an application or a predecessor application more than two months prior to 8 June 1995, or if there has not been at least one USPTO action due to actions by the applicant.” SAA, at 1006. The USPTO implemented these URAA transitional rules in 37 C.F.R. § 1.129.

Congress chose a ‘specifically-tailored’, ‘detailed modality’ for balancing fairness for applicants and timeliness requirements for protecting the public interest in the URAA. It was done for pre-GATT applications by fair and reasonable means subject to specific parameters.

Supreme Court citation

As the Supreme Court remarked elsewhere, the detailed provision, “its technical language, the iteration of the limitations in both procedural and substantive forms, and the explicit listing of exceptions, taken together, indicate that Congress did not intend courts to read other unmentioned, open-ended, ‘equitable’ exceptions into the statute that it wrote. There are no counterindications.” United States v. Brockamp, 519 U.S. 347, 352 (1997).

The elaborate modality for timeliness fits the principle in the SCA Hygiene and Petrella case, which is more general than merely relying on the absolute number of years as statutes of limitation. Their holding is about the delineation of Congressional powers from judicial equitable powers in setting timeliness requirements. “Petrella‘s holding rested on both separation-of-powers principles and the traditional role of laches in equity.” SCA Hygiene, 580 U.S. at 328.

The separation-of-powers principle meant there was no ‘gap’ to fill where Congress ‘covered the field’, regardless of its choices. Therefore, the principles in the SCA Hygiene, Petrella, and the Brockamp cases are general and fully applicable to the various modalities that Congress chose for covering timeliness requirements to the exclusion of laches for ‘all’ patent applications, including transitional pre-GATT applications.

Congress Clarified Applicants Could Not Lose Their Patent Rights

Congress consistently left ‘no policy’ choices on timeliness to judges’ equitable powers to force forfeiture of patent rights. This was further evident when it clarified the consequences with respect to any delays in prosecution.

In the American Inventors Protection Act of 1999 (AIPA), Congress provided for patent term ‘to applicants through Patent Term Adjustment (PTA) credit in 35 U.S.C. § 154(b)(1) to compensate for USPTO delays.

Importantly, Congress expressed its choice of the specific modality for regulating applicants’ timeliness by providing that applicants’ PTA credit would be reduced by “the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application.” § 154(b)(2)(C)(i).

This meant that Congress made explicit the ’extent’ of applicants’ loss due to failure “to engage in reasonable efforts to conclude prosecution”.

An applicant who complied with statutory and regulatory timeliness requirements ‘could not lose’ the entire patent right itself. This served as a ‘legislative clarification’ of the consequences Congress intended all along for what the USPTO deemed ‘unreasonable delay’. Branch v. Smith, 538 U.S. 254, 281 (2003). The subsequent statute in pari materia clarifies the earlier statute’s meaning.

In this manner, when a post-AIPA applicant complied with statutory and regulatory timeliness requirements, a court could not force forfeiture of the patent right under prosecution laches.

Moreover, pre-AIPA and post-AIPA applicants who complied with statutory and regulatory timeliness requirements were alike in all relevant respects regarding the delay. This meant that the judicially imposed doctrines could not create unequal treatment of pre-AIPA and post-AIPA applications where Congress clarified that forfeiture was not the intended consequence. Village of Willowbrook v. Olech, 528 U.S. 562, 564 (2000).

The Equal Protection Right must apply where the plaintiff was treated differently from others similarly situated, and where there was no rational basis for the difference in treatment. Under the principles in the SCA Hygiene, Petrella, and the Brockamp cases, there was no room for the courts to displace Congress’s specific policy choice on timeliness, even when “the lack of a laches defense could produce policy outcomes judges deem undesirable.” SCA Hygiene, at 335, n.4.

This showed that throughout, Congress left no ‘gap’ or stone unturned by its choice of modalities for enforcing timeliness requirements, including by the administrative framework that it authorized the USPTO to implement.

It also signified that the importance of USPTO regulations was detailed in the Small Business Technology Council’s (SBTC) Amicus brief in support of rehearing en banc in the Hyatt case.

In its brief, SBTC detailed 132 USPTO rules for regulating timeliness, including 37 C.F.R. § 11.18 for preventing “unnecessary delay or needless increase in the cost of any proceeding before the Office.” The Council also showed that the CAFC precedential holdings in the Hyatt case rendered 30 percent of US patents presumptively unenforceable for prosecution laches.

Thus, the CAFC should grant rehearing en banc to correct its two Hyatt panel decisions.