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IP Alert: Post-Decision Certificate of Correction Held Inapplicable in IPR Proceeding

February 13, 2020

On remand from the Federal Circuit, the Patent Trial and Appeal Board (PTAB) delivered an order in Emerson Electric v. SIPCO holding that a certificate of correction under 35 U.S.C. § 255 issuing after the PTAB’s Final Decision and after the patentee’s initial notice of appeal to the Federal Circuit did not apply retroactively. The PTAB held that the certificate of correction had no impact on the final decision in the inter partes review because it was not in effect during the proceeding.

SIPCO prosecuted U.S. Patent No. 8,754,780. Through an apparent error, SIPCO did not claim the benefit of an earlier patent application.

On April 29, 2016, Emerson filed a petition for inter partes review (IPR) of the ’780 patent on several grounds. As to the first ground, Emerson argued, “Because [the ’780 patent] had no co-pendency with any of its parents, the ’780 Patent is not entitled to any effective filing date prior to its actual filing date on April 2, 2013.” Therefore, Emerson asserted the ’780 patent claims 1–15 were invalid over a reference having a prior art date before April 2, 2013.

Within a month, on May 26, 2016, SIPCO filed an ex parte petition to accept an unintentionally delayed priority claim with a request for a certificate of correction under section 255 to correct the domestic priority for the ’780 patent by changing an incorrect application to the correct application. If successful, SIPCO’s ’780 patent would have an earlier effective filing date to antedate the cited reference.

However, SIPCO did not adhere to PTAB rules of practice. SIPCO did not file a motion with the PTAB for leave to file the first request a certificate of correction, and did not inform Emerson’s IPR counsel of its request. Emerson learned of the effort to obtain a certificate of correction by checking the USPTO database, then brought the filing to the PTAB’s attention.

The PTAB issued an order staying SIPCO’s effort pending the PTAB’s decision on whether to institute an IPR. Subsequently, after instituting the IPR, the PTAB lifted the stay.

Thereafter, the USPTO denied SIPCO’s first request for a certificate of correction for being noncompliant with USPTO rules governing requests for certificate of correction.

SIPCO sought and was given leave for a second request for a certificate of correction filed December 23, 2016, but this request was dismissed on January 19, 2017, again for being noncompliant with applicable USPTO rules.

SIPCO filed a motion for leave to file a third request for a certificate of correction. The PTAB denied the motion. On October 25, 2017, the PTAB issued its final decision and permitted SIPCO to file its third request for a certificate of correction. In the final decision, the PTAB invalidated some claims of the ’780 patent over the reference that SIPCO sought to antedate.

SIPCO subsequently filed its third request and petition for a certificate of correction on December 7, 2017, and filed an appeal with the Federal Circuit two weeks later.

On January 16, 2018, the USPTO Petitions Branch dismissed SIPCO’s third request, yet again for being noncompliant with USPTO rules governing requests for certificate of correction.

On January 30, 2018, SIPCO filed a fourth request and petition for a certificate of correction to correct the lineage for the ’780 patent. Nine days later, the USPTO granted SIPCO’s fourth request and issued the corrected filing receipt with the modified lineage for this patent. According to the PTAB, the USPTO issued the certificate of correction with the corrected domestic priority for the ’780 patent on March 27, 2018.

On May 8, 2018, SIPCO filed a motion with the Federal Circuit for a remand to the PTAB to consider the effect of the certificate of correction with the corrected lineage for the ’780 patent. The Federal Circuit then issued an order on June 27, remanding the case to the PTAB to consider in the first instance the effect, if any, of the certificate of correction. The Federal Circuit retained jurisdiction and stayed proceedings in the pending appeal while awaiting a PTAB decision on remand.

The question presented on remand to the PTAB was whether the certificate of correction issued under section 255 can be applied retroactively. Section 255 provides an avenue for a patentee to seek correction of an issued U.S. Patent:

Whenever a mistake of a clerical or typographical nature, or of minor character, which was not the fault of the Patent and Trademark Office, appears in a patent and a showing has been made that such mistake occurred in good faith, the Director may, upon payment of the required fee, issue a certificate of correction, if the correction does not involve such changes in the patent as would constitute new matter or would require re-examination. Such patent, together with the certificate, shall have the same effect and operation in law on the trial of actions for causes thereafter arising as if the same had been originally issued in such corrected form.

Emerson and SIPCO reprised their respective arguments on whether the reference to “the trial of actions for causes thereafter arising” in the second sentence of section 255 meant the PTAB should retroactively apply the certificate of correction. Emerson argued that an IPR qualifies as a “trial of actions for causes” under the second sentence of section 255, and the certificate of correction should therefore not apply retroactively, but should only apply going forward. Otherwise, Emerson argued, it would be prejudiced, and the PTAB’s denial of SIPCO’s request for leave to file the third request for a certificate of correction determined the request “should not have any impact on the IPR.” SIPCO countered by arguing that an IPR is not a “trial of actions for causes” in section 255, also pointing out that failing to give retroactive effect to certificates of correction under section 255 “would waste Patent Office resources.”

In its decision, the PTAB declined to decide whether an IPR is “a trial of actions” under section 255. It stated, “Assuming, without deciding, whether an inter partes review is such a ‘trial of actions,' the statute makes a certificate of correction applicable only to actions arising after a certificate issues.”

According to the PTAB, “the logical and natural reading of § 255 is that, like § 254 [correction of mistakes by the Patent Office], a certificate of correction for an applicant’s mistake similarly does not receive retroactive application.” The PTAB said “[t]he statute [35 U.S.C. § 255] does not contain any affirmative language indicating any intention to retroactively apply a certificate of correction,” but did not fully analyze the absence of any statutory prohibition if an IPR is not a “trial of actions.” The PTAB referred to section 254, stating:

Sections 254 and 255 provide the following language giving effect to a certificate, stating it ‘shall have the same effect and operation in law on the trial of actions for causes thereafter arising as if the same had been originally issued in such corrected form.’ Therefore, these sections expressly give effect to a certificate on a trial of actions for causes arising after the certificate issues. These sections do not contain any language, or otherwise provide any indication, that certificates generally should be given retroactive effect. Instead, these provisions unambiguously provide the circumstance in which a certificate under these sections are to be given effect.

The PTAB cited the Federal Circuit’s decision in Southwest Software, Inc. v. Harlequin, where the court rejected the retroactive application of a certificate of correction issued under a different statute, 35 U.S.C. § 254. In Southwest Software, the court explained that the language in section 254 “plays the role of establishing that, for all circumstances in which the certificate of correction is effective—namely, at all times after its issue date—the certificate is considered part of the original patent,” and “[m]oreover, it does not seem to us to be asking too much to expect a patentee to check a patent when issued in order to determine whether it contains any errors that require the issuance of a certificate of correction.” The PTAB concluded, “those considerations have equal applicability to § 255—perhaps even greater import, [since] § 255 addresses errors by the patentee. A lack of diligence by the patentee in correcting patent errors has potentially negative consequences for the public, who may allocate its affairs based on the patent as issued, unaware of any such error” (emphasis added).

The PTAB then pointed to correction of inventorship under 35 U.S.C. § 256, which by its terms allows for retroactive application of corrected inventorship, whereas section 255 does not have a similar provision.

Next, the PTAB cited the IPR statutes and rules granting the PTAB authority over another matter involving the ’780 patent before the USPTO. The PTAB argued there was an incongruity between having discretion to stay or prohibit filing of a request for a certificate of correction during an IPR and requiring retroactive effect after the Final Decision is issued and after an appeal to the Federal Circuit has been filed. The PTAB observed that issuance of a certificate of correction under section 255 is not a statutorily required action; rather, the issuance is discretionary because the USPTO Director “may, upon payment of the required fee, issue a certificate of correction.”

SIPCO has appealed, and a Federal Circuit decision is expected in late 2020 or early 2021. Irrespective of who prevails, the case provides some lessons. In many cases it is wise to proofread an allowed application and the issued patent itself for proper priority claims. If any errors are discovered in an issued patent, the patentee should timely seek any certificate of correction or reissue to fix such errors and should carefully follow the USPTO rules in doing so.

Please contact Fitch Even partner Kendrew H. Colton, author of this alert, with any questions concerning this matter.
 

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