Earlier today, the Federal Circuit issued a decision in Cancer Research Tech. Ltd. v. Barr Labs., Inc. that limits the defense of prosecution laches.
In 2005, the Federal Circuit issued the decision in Symbol Techs., Inc. v. Lemelson Med. that established an equitable defense of prosecution laches. The patent would be held unenforceable if the applicant exhibited unreasonable and unexplained delay during prosecution of the patent. Prior to the change in the law in 1995 that reduced the term of a patent to 20 years from the earliest filing date, applicants could simply delay substantive prosecution to extend the term of an ultimately issuing patent.
In Cancer Research, the applicant filed its original US application on August 23, 1982. The PTO issued the first substantive office action on November 18, 1983 rejecting some of the pending claims. Rather than respond to the rejection, the applicant abandoned the application and filed a continuation application. This, by itself, would not be a problem. The applicant continued to do this, however, filing a total of 11 continuing applications, abandoning the first 10, and finally prosecuting the application to its issuance on November 9, 1993. The patent was granted patent term extension for clinical testing such that it expires in February 2014.
The district court found the delay of nearly a decade to prosecute the application to be unreasonable and unexplained, holding the patent unenforceable for prosecution laches. The Federal Circuit reversed.
The court held that the defense of prosecution laches requires a showing not only of unreasonable and unexplained delay, but also, as with any laches defense, there must be prejudice to the defendant by the delay.
[T]o establish prejudice an accused infringer must show evidence of intervening rights, i.e., that either the accused infringer or others invested in, worked on, or used the claimed technology during the period of delay.
There is no evidence of intervening rights, as nobody else developed the product during the period of delay. Barr did not file an ANDA (the act of infringement in this case) until 2007, 14 years after issuance of the patent. There was no evidence that anyone else was prejudiced by the delay either. The patentee did run the risk that someone else would develop a product and be prejudiced by the delay, but nobody did.
Judge Prost dissented, arguing that Federal Circuit precedent did not require a showing of prejudice for the defense of prosecution laches. She also argues that since the patent does not expire until 32 years after the original application was filed, the public is indeed prejudiced by the delay in prosecution. By confining the period of action for prejudice to the period of the delay (in this case 1984-1993), the majority is able to ignore the fact that the delay in prosecution now prejudices anyone who wants to enter the market.