It will be recalled that USPTO had a massive systems crash on December 22, 2015 which shut down every one of USPTO’s external-facing e-commerce systems, including the EFS-Web system for filing of patent applications and the TEAS system for filing of trademark applications.
On December 23, 2015 USPTO purported to “deem” December 22 and 23 to be holidays. The next day, I pointed out (see blog article) that USPTO probably lacked the power to do this. I said that the USPTO needed to head over to Capitol Hill to get a special bill passed which would cause December 22 and 23, 2015 to be real holidays (for purposes of the USPTO).
It was, of course, only a matter of time before the USPTO’s power to “deem” a day to be a federal holiday in the District of Columbia would be tested in litigation. And now that day has come.
Alert blog reader Suzannah K. Sundby noted in the EFS-Web email discussion group that as reported in the PharmaPatents Blog, a company called Elm 3DS Innovations, LLC has sued the USPTO about this. As the blog article says:
Elm 3DS Innovations, LLC has sued the USPTO in the U.S. District Court for the Eastern District of Virginia to challenge its authority to declare that December 22-24, 2015 were “holidays” because the USPTO had experienced a power outage that impacted its electronic filing systems. Elm asserts that it was harmed by this allegedly ultra vires action because it led the USPTO to accept petitions for Inter Partes Review of Elm patents after the statutory period of 35 USC § 315(b) had expired. If the USPTO’s authority to declare the holidays is not upheld, such a decision could have a far-reaching impact.
The litigation uncertainty created by USPTO’s purported “deeming” was previously theoretical, but is now real.
Probably this lawsuit will get tossed due to a quirk of the America Invents Act. When Congress (through the AIA) created the Inter Partes Review mechanism, Congress made the IPR a two-step process. The first step was the IPR filer’s asking that an IPR be instituted. If the PTAB (Patent Trial and Appeal Board) decided that a particular pleading threshold had been met, then the second step (the IPR itself) would be carried out. Importantly for this discussion, Congress in the AIA said that the decision by the PTAB whether to move from the first step to the second step was not reviewable in any forum. In other words, to the extent that the purported “deeming” somehow put into question whether this particular IPR was proper, an argument can be made that this question is not reviewable in any forum. The court would be able, it it were so inclined, to dismiss Elm’s litigation against the USPTO on this extremely narrow ground. Such a narrow-grounds dismissal would leave for future litigation the general question whether the USPTO exceeded its powers by “deeming” those system-crash days to be federal holidays in the District of Columbia.
Of course what USPTO should do now is what I said it should do back on December 24, 2015. USPTO should go to Capitol Hill and get a special bill passed to eliminate the now-all-too-real uncertainty about whether the “deeming” activity was within USPTO’s power. The special bill should, of course, contain retroactivity language back to December 22, 2015.
Here’s another point that I raised in my December 24 blog article:
While the USPTO is visiting at the Hill asking for a special bill to fix this December 22-24 problem retroactively, USPTO might as well ask that Congress undo the $400 penalty for failing to e-file that came into effect with the America Invents Act. Or at least ask that Congress give the USPTO the power to waive that penalty when needed.
Why did USPTO not attend to this task back in December as it should have? I imagine it is just the embarrassment factor. Nobody likes to show up on Capitol Hill with hat in hand asking for relief, and having to say “we had a supposedly redundant backup server for filing patent applications that was supposed to be working if the main server failed, but they were both plugged into the same UPS and when the UPS died this brought down both servers.” At that point someone might point out that the USPTO had been told over and over again by its customers that the supposedly redundant backup server wasn’t really redundant, and had been told over and over again by its customers that the backup server needed to be moved to someplace that was geographically distant from the main server. Someone might point out that there was a similar event on May 14, 2014 during which the main server and backup server both crashed for some eighteen hours, and might ask why the USPTO did not bring about the geographic diversity after the 2014 crash.
Yes it will, of course, be embarrassing to the USPTO to have to go to Capitol Hill for this relief. Let’s hope the USPTO swallows any reluctance and does the right thing about this. Any continued failure to get this special bill will simply leave the litigation risk outstanding.