Possibility of repeal of false marking statute is not a basis to stay litigation

Last week, I wrote about Judge Merryday's denial of a motion for leave to add an equitable estoppel defense to a false marking claim in the Advanced Cartridge Technologies v. LexMark International dispute. Another interesting order has come out. The defendant had filed an inter partes reexamination request, and asked the court to stay the litigation while the reexamination runs its course. The court refused that first motion.

The defendant filed a second motion to stay, this time arguing not only that the reexamination would simplify the litigation, but also that "Congress will likely repeal the false patent marking statute, and that the Federal Circuit will likely hold the statute unconstitutional." The Court was not convinced:

Although either the re-examination or a change to the false patent marking statute promises to simplify the issues, neither the re-examination, nor the legislative effort to modify the false patent marking statute, nor the constitutional challenge before the Federal Circuit demonstrably will conclude before this litigation. The occurrence and content of each prospect is speculative and offers no sound basis to frustrate a litigant’s access to the court.

Second Motion to Stay denied.

Advanced Cartridge Technologies, LLC v. Lexmark International, Inc., slip op. Case No. 8:10-cv-0486 (M.D. Fla. Apr. 21, 2011) (J. Merryday)

The budget and the patent office

Director Kappos's blog entry (reproduced below) explains it all.

An Update on the USPTO's FY 2011 Budget:

As you may know, the FY 2011 budget was enacted on April 15, 2011 and contains the USPTO’s appropriation through the end of this fiscal year, September 30, 2011. With the enactment of the Full-Year Continuing Appropriations Act, 2011, our total spending authority for FY 2011 has been limited to $2.09 billion.

Given this level of spending authority, USPTO will have to make significant reductions for the current fiscal year.

We have not come by these decisions lightly; I recognize that these measures will create new challenges for our ability to carry out our agency’s mission, but we will continue seeking innovative ways to do more with less.

Effective immediately and until further notice:

• Track One of the Three-Track program, which offers expedited patent examination and was scheduled to go into effect on May 4, 2011, is postponed;
• The opening of the planned Nationwide Workforce satellite office in Detroit, as well as consideration of other possible satellite office locations, is postponed;
• Hiring—both for new positions and backfills—is frozen;
  
• IT projects will be scaled back;
  
• Funding for Patent Cooperation Treaty (PCT) outsourcing will be substantially reduced;
• Employee training will be reduced;
• All overtime is suspended.

In addition, business units will be required to reduce all other non-compensation-related expenses, including travel, conferences and contracts.

Trademarks is unaffected and will maintain normal operations.

I would like to thank our entire team for their continuing cooperation and patience, and for their dedication and service during this challenging time.

Patently-O and IP Watchdog have additional details.

"Equitable estoppel" as a defense to false marking? Nah

Advanced Cartridge Technologies has sued Lexmark here in Tampa for infringement of a handful of patents and false marking. Regarding the false marking allegations, ACT claims that Lexmark lists a bunch of patents on various products, and there are various issues with those patents. ACT also argues that each product is not covered by each patent, and thus it is false marking to include all of them on the packaging. Lexmark responds that it is not subject to false marking liability in part because it includes a disclaimer stating that the product is covered by one or more of the listed patents. Thus, because each product is covered by at least one of the listed patents, Lexmark argues it should not be subject to false marking liability because of its disclaimer. ACT disagrees that the disclaimer shields Lexmark.

In discovery, Lexmark learned that ACT marked a waste bin product with some toner patents. Lexmark asked for leave to file an amended answer so that it could assert the affirmative defenses of unclean hands and equitable estoppel "in light of [plaintiff's] interpretation of the false marking statute."

The Court took a paragraph to deny Lexmark's motion:

The plaintiff asserts a false patent marking claim. Alleging that the plaintiff also engages in false patent marking, the defendant moves (Doc. 105) for leave to file an amended answer asserting “the affirmative defenses of unclean hands and judicial estoppel.” However, the proposed defenses, perhaps legally and factually dubious in this instance, are untimely raised and probably productive of unwarranted delay and unnecessary expense.* The defendant's motion (Doc. 105) to file an amended answer is DENIED.

* The defense of "equitable estoppel" appears meritless in the present circumstances. The defense of "unclean hands," if available, requires a distinct showing of inequitable and pertinent conduct. Interestingly, the defendant identifies no case in which the equitable defense of "unclean hands" has barred a statutory false patent marketing claim.

Advanced Cartridge Technologies, LLC v. Lexmark International, Inc., slip op. Case No. 8:10-cv-0486 (M.D. Fla. Apr. 14, 2011) (J. Merryday)

Want your patent application processed in 12 months? First 10,000 can pay $4,000 to participate

Want to jump to the front of the line and get your patent application processed in 12 months? The PTO's press release will be of interest to you.

Press Release, 11-24

USPTO Announces Launch Date for Fast-Track Patent Processing

USPTO to begin accepting requests for prioritized examination of patent applications on May 4, 2011

Washington – The United States Patent and Trademark Office (USPTO) announced today plans for the agency to begin accepting requests for prioritized examination of patent applications – allowing inventors and businesses to have their patents processed within 12 months. It currently takes nearly three years to process the average patent. The program, called Track One, launches May 4, 2011, and is part of a new Three-Track system, which will provide applicants with greater control over when their applications are examined and promote greater efficiency in the patent examination process.

“Track One provides a comprehensive, flexible patent application processing model to our nation’s innovators, offering different processing options that are more responsive to the real-world needs of our applicants,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos. “The Three-Track program will bring the most important new products and services to market more quickly, helping to build businesses and create new jobs in America.”

Requests for prioritized examination will initially be limited to a maximum of 10,000 applications starting May 4, 2011 through the remainder of fiscal year 2011, ending September 30. The USPTO will revisit this limit at the end of the fiscal year to evaluate whether adjustments are needed for future years.

Filing a request for prioritized examination through Track One will include a fee under 37 CFR 1.102(e) of $4,000, in addition to filing fees for the application. For smaller entities, the USPTO is working to offer a 50 percent discount on any filing fee associated with the program, as it does with many other standard processing fees.

Under the Three-Track program, patent applicants may request prioritized examination through Track One, traditional examination under the current procedures through Track Two, and for non-continuing applications first filed with the USPTO, an applicant-controlled delay for up to 30 months prior to docketing for examination under Track Three. Track Three is expected to be available to applicants by September 30, 2011.

The Federal Register notice announcing the implementation of Track One is now available for review here. For additional background on the Three-Track program which USPTO plans to launch before the end of the fiscal year, see the initial program announcement here.