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Hundreds of companies facing infringement suits by inventor Jerome Lemelson’s estate won a victory Thursday when a federal appeals court ruled that unreasonable delay in prosecuting a patent may prevent its enforcement. In a 2-1 ruling in Symbol Technologies Inc. v. Lemelson Medical, Education & Research Foundation, 00-1583, the U.S. Court of Appeals for the Federal Circuit found that the so-called “defense of prosecution laches” was a valid argument against patent infringement. The doctrine holds that an undue delay by a plaintiff may unfairly hinder a defendant’s ability to mount a defense. Overturning a lower court decision, the Federal Circuit cited two U.S. Supreme Court cases that applied the defense of prosecution laches in patent disputes. The court also said the defense is allowable under the 1952 Patent Act. And the court refuted the defendant’s argument that the Federal Circuit is bound by two of its nonpublished opinions that rejected the defense. “Unpublished, or as this court calls them, nonprecedential decisions do not give the judiciary free will to reinvent the law; they merely permit a judgment about whether a case contributes significantly to the body of law,” Chief Judge Haldane Mayer wrote. The Federal Circuit ruling “gives our clients a green light to raise a defense they always felt entitled to raise,” said Jesse Jenner, a partner at New York’s Fish & Neave who represents Symbol Technologies. The decision could undercut about a dozen suits the Lemelson estate has pending against hundreds of companies. “If Lemelson’s patent is held to be unenforceable [based on] the defense of prosecution laches, that would basically terminate all these other cases,” said George Sirilla, a partner in Pillsbury Winthrop’s McLean, Va. office. Sirilla submitted an amicus curiae brief to the Federal Circuit on behalf of the National Retail Federation. Pillsbury represents dozens of national retail chains sued by Lemelson for their use of bar-code scanning technology. “This was a pleasant surprise,” said Michael Barclay, a partner at Wilson Sonsini Goodrich & Rosati who has previously represented companies in disputes with Lemelson. Noting that several district courts have rejected the prosecution laches defense, as well as the Federal Circuit in unpublished opinions, Barclay said, “everybody assumed the defense wouldn’t work.” Since Lemelson’s death in 1997 his estate has continued to sue hundreds of companies in the semiconductor, software and computer and retail industries for infringing patents related to machine vision and bar-code technology. Hundreds of companies have agreed to license rights to the technology, paying out more than $1 billion to date. Lemelson’s original patents were filed in 1954 and 1956 and he subsequently submitted continuance applications, obtaining additional patents in the 1980s. Lemelson’s foes say he let his applications languish at the U.S. Patent and Trademark Office while others independently developed these technologies. Cognex Corp., a manufacturer of machine vision products, and eight manufacturers of bar-code scanners led by Symbol Technologies, filed separate suits against Lemelson in 1998 seeking a ruling that Lemelson’s patents are invalid and not infringed by the users of their products. Combining their cases for pre-trial discovery, the manufacturers asked a federal court to address whether a delay in pursuing patent claims precluded Lemelson from suing for infringement. The court will take up the questions of validity and infringement in a trial set to begin in August. In a dissenting opinion, Judge Pauline Newman said the Federal Circuit’s ruling goes against the statute covering continuing patent applications. “The judicial creation of a new ground on which to challenge patents that fully comply with the statutory requirements is in direct contravention to the rule that when statutory provisions exist they may be relied on without equitable penalty,” Newman wrote. This new cause of action of “prosecution laches,” Newman said, “will open legally granted patents to a new source of satellite litigation of unforeseen scope, for the continuation practice is ubiquitous in patent prosecution.” Gerald Hosier, who represents the Lemelson estate, could not be reached for comment Friday. Jenner said Hosier could ask the Federal Circuit to reconsider the decision, review the case en banc or seek review by the U.S. Supreme Court.

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