First published in LES Insights
The priority date applicable to a patent can strongly affect its validity, by changing what references apply as potentially invalidating prior art to the patent. One way of obtaining an early priority date is to quickly file a provisional patent application and follow that within a year with a nonprovisional application. In a recent case, the United States District Court for the District of Massachusetts advanced a policy of strict compliance with the law governing priority claims and held that the first-filed patent in a patent family could not claim priority to an earlier-filed provisional application. Specifically, in Worlds, Inc. v. Activision Blizzard, Inc., (D. Mass. Mar. 13, 2014),1 the court held that the first-filed patent lacked "a specific reference" to the provisional application under 35 U.S.C. § 119, as further defined by the Code of Federal Regulations. Without the required specific reference, the patent could not benefit from the provisional application's priority date. Thus, lacking the priority claim, the entire patent family was subject to a public-use bar under 35 U.S.C. § 102(b).
Plaintiff Worlds, Inc. asserted infringement of five continuation patents against defendants Activision Blizzard, Inc. and others. Each patent claimed priority to a first-filed patent in the family, the '045 patent, not asserted in the litigation. Worlds contended that the '045 patent, filed November 12, 1996, was entitled to the priority date of a provisional application filed one year earlier, on November 13, 1995. In turn, according to Worlds, the patents-in-suit should also be entitled to the provisional application's priority date. Otherwise, they would be invalid because of prior public use from Worlds' public release of two products in April and June of 1995, which embodied all asserted claims.
The '045 patent, however, did not contain any reference to the provisional application. Only certain documents from the '045 patent's prosecution history mentioned the provisional application: an application transmittal letter, the inventors' declarations, and a request for corrected filing receipt. Worlds also noted that the USPTO's online PAIR database indicated that the '045 patent claimed priority to the provisional application.
Activision moved for summary judgment of invalidity, arguing that none of these references to the provisional application constituted "a specific reference" required to claim priority under 35 U.S.C. § 119(e), as further defined by federal regulations. Thus, the case turned on whether the nonprovisional application that issued as the '045 patent contained "a specific reference" to the provisional application sufficient to establish a claim of priority.
The Worlds Decision
To determine what constitutes "a specific reference," the court turned to the regulations. Observing that the '045 patent was filed before November 29, 2000, the court applied the 1996 version, 37 C.F.R. § 1.78, which required reference to a prior provisional application "in the first sentence of the specification following the title" in order to claim priority to that provisional. The '045 patent indisputably failed to refer to the provisional application in the first sentence following the title. Thus, the court held that the '045 patent could not claim priority to the November 13, 1995, provisional application.
Even applying the 2000 version of the regulation, which allows a claim of priority if the provisional application is referenced in an application data sheet, the court reached the same result. Worlds contended that references to the provisional application in an application transmittal letter, the inventors' declarations, and a request for corrected filing receipt constituted "data sheets." But the court disagreed, noting that none of those documents was clearly labeled "Application Data Sheet," and observing that an ADS "may not contain any other application data (i.e., abstract, amendments, transmittal letter, etc.)."
In a footnote, the court cited a passage from a recent Federal Circuit case, Medtronic CoreValve, LLC v. Edwards Lifesciences Corp., 741 F.3d 1359 (Fed. Cir. 2014),2 which states, "[a]llocating the responsibility of disclosure through specific references to the patentee eliminates the inefficiencies associated with having the public expend efforts to unearth information when such information is readily available to the patentee." In advancing this policy, the court rejected Worlds' contention that any errors regarding a specific reference were "harmless scriveners' errors." The court emphasized that "the public should not be obliged to hunt through hundreds of documents in a lengthy prosecution history to find a patent's priority date."
The court also declined to make an equitable exception for Worlds' patents-in-suit. In the court's view, the case fell outside the scope of exceptions applied by some other courts. Some have found sufficient notice based on a correct reference to a prior application on a published patent's cover. Consistent with the policy of public notice, the court further refused to "correct" the missing reference to the provisional application. Thus, the first-filed '045 patent could not benefit from the priority date of the provisional application. As a result, the patents-in-suit also could not claim priority to the provisional, rendering the entire family invalid because Worlds had publicly used the inventions more than one year before the priority date.
The patents, however, were not invalid in the general sense. Notably, four days before filing its opposition to Activision's summary-judgment motion, Worlds filed "Certificates of Correction" with the USPTO to properly reference the provisional application. The USPTO issued the petitions for correction, purportedly fixing the problematic lack of disclosure. But, as the court noted, "a certificate of correction applies only prospectively to future acts of infringement." Thus, Worlds could recover for any future infringement, but not for any damages predating the certificates. The court asked the parties to decide whether Worlds would file a new case or pursue damages only for the future period in the present case.
Strategy and Conclusion
The Worlds decision shows that courts may require strict compliance with the statute and regulations guiding claims of priority. They may place the burden of clear disclosure on patent owners in order to satisfy the policy of public notice. These notions of disclosure and priority can be the basis for invalidating patents or shortening the period of time during which royalties or other damages would be payable, and as a result may affect the potential revenue during patent assertion and the value of portfolios. Therefore, when evaluating patent portfolios, it may be useful to consider the full chain of priority, identify any shortcomings that could invalidate or shorten the period for damages, assess the potential change in valuation, identify remedial action like certificates of correction that may be taken to counter shortcomings, and reassess the value of the patents in view of the timing and likelihood of success for such remedial action.