IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

Dennis L. Schmirler Plaintiff, v. Hon. David J. Kappos, In his official capacity as Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office Defendant. MEMORANDUM IN OPPOSITION TO DEFENDANTS CROSS-MOTION FOR SUMMARY JUDGMENT AND IN RESPONSE TO DEFENDANTS OPPOSITION TO PLAINTIFFS MOTION FOR SUMMARY JUDGMENT Case No. 10-cv-00144-LA

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Now comes Plaintiff Dennis L. Schmirler, through his attorneys, Garet K. Galster and Ryan Kromholz and Manion, S.C., and responds to Defendants Cross-Motion for Summary Judgment and supporting memorandum (Defendants Memorandum) and Defendants Opposition to Plaintiffs Motion for Summary Judgment. Timeline For reference, Mr. Schmirler respectfully maintains the following timing of events, which remains uncontradicted by Defendant.

Argument I. Mr. Schmirler is a patentee. As admitted by Defendant, The USPTO issued U.S. Patent No. 6,214,374 on April 10, 2001. (Defendants Memorandum at 15.) At that point, Mr. Schmirler became a patentee, with a personal property interest in the patent. See 35 U.S.C. 100(d) and 35 U.S.C. 261. Defendants entire argument rests on the assertion that Mr. Schmirler is a patent applicant rather than a patentee. Defendant attempts to support such

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assertion on two primary bases: first, Defendant argues, as a result of Dr. Portmans chargeback (SOF 16-18), the issue fee had never been paid, and thus the patent did not validly issue[;] and, second, Defendant argues, the USPTO offered the applicants, through their attorney of record, the opportunity to clear up the situation[.] Both of Defendants primary bases are flawed as ex post facto. With respect to Defendants first argument, Defendant fails to explain how a chargeback occurring after patent issuance effects a nonpayment of an issue fee on the date on which a patent issues. Indeed, it is undisputed that on the day the 374 Patent issued, the USPTO had in its possession the issue fee for same. (See Timeline, above.) Furthermore, it is axiomatic that a chargeback would only be required if a fee had been paid. Conversely, if the issue fee had never been paid, as asserted by Defendant, there would have been no need for a chargeback. In fact, the Office admitted that the fee was paid. (A229, stating [t]he credit card charge was posted to applicants credit card account on October 13, 2000[.]) Additionally, Defendant fails to explain the basis for the Offices purported authority to even grant a refund in such a situation, or why American Express was allowed to take back any fees paid. (See Plaintiffs Memorandum in Support of his Motion for Summary Judgment, Dkt. 17, Section III, at 21-22). With respect to Defendants second argument, Defendant relies on the flawed assertion that Currently, the attorney of record for this patent application is Gary Essman. (Defendants Memorandum at 16.) This statement is unsupportable on the face of the Administrative Record. While Mr. Essman assisted in getting the

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374 Patent allowed and issued, his power of attorney terminated promptly upon his receipt of the issued patent. (See Revocation of Power of Attorney and Appointment of New Attorneys, A208-209.) The power provided by Mr. Schmirler to Mr. Essman, and the other attorneys of Mr. Essmans firm, was to prosecute the application to issuance, to transact all business in the U.S. Patent and Trademark Office in connection therewith, and to receive the issued patent[.] (A208.) This power of attorney was accepted by the Office on December 7, 2000. (A212.) Accordingly, upon receipt of the issued patent, Mr. Essmans power of attorney was terminated with respect to the USPTO. On the basis of the Administrative Record, Mr. Essman did not have any power to act on behalf of Mr. Schmirler after receipt of the issued patent. There is no indication in the Administrative Record that the USPTO verified that Mr. Essman was authorized to act on behalf of the inventors or subsequent owners of the 374 Patent. Also, in the USPTOs attempt to clear up the situation, there is no indication in the Administrative Record that the USPTO attempted to contact any of the listed inventors, nor did the USPTO publish anything in its weekly Gazette. Indeed, the Office merely sent a letter to a correspondence address and later confirmed that no reply to the Offices June 7, 2004 notice had been filed. (A235, final two bullet points.) The record is devoid of any authority for Mr. Essman to transact any business with the USPTO, postissuance, in connection with the issued 374 Patent. (See R.) Because Defendant has relied upon only ex post factors in an attempt to justify the USPTOs actions in this case, has failed to provide any authority for the

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USPTOs refund action, and has relied on communications with an attorney that had no power to act after patent issuance, the USPTOs actions should be declared arbitrary, capricious, or otherwise not in accord with the law.

II.

Even if Mr. Schmirler is a Patent Applicant at This Time, There is No Harm in Allowing Him Redress. This case does not involve any change in scopeor breadthof patent rights.

Understandably, all of the signature requirements in the Rules (37 CFR) cited by Defendant involve situations in which there is a high likelihood of a change in scope of patent rights. That is, during patent prosecution, and in reissue and reexamination proceedings, the scope of rights defined by a patent is uncertain and may be changed. Once a patent has issued, however, the scope of patent rights is fixed by the issued patent claims. Though the Rules do not provide for changing a power of attorney after patent issuance, Defendant provides only a unilateral dedication-to-public rationale for requiring Mr. Schmirler to attempt to join other patentees in the present matter. The USPTO suggests that any other owner of the 374 Patent may wish to exercise its right to donate the disclosure to the public domainand withdrawal of the holding of abandonment, or revival of the application, therefore affects the rights of all of the parties[.] (A279.) However, where joint ownership is involved, no joint owner has ever had the power to bind the others in a public disclaimer. To the extent that any patentee or applicant wishes to disclaim or dedicate to the public any claimed subject matter, such disclaimer shall thereafter be considered

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as part of the original patent to the extent of the interest possessed by the

disclaimant and by those claiming under him. 35 U.S.C. 253 (emphasis added).
Thus, any public disclaimer extends only insofar as the joint owners interest in the patent. There is no harm in allowing Mr. Schmirler to request reinstatement of the 374 Patent: if the other owner wishes to disclaim its extent of patent rights, it is free to do so. See id. Defendant seems to suggest that Mr. Schmirler is under a duty to attempt to contact co-inventors/owners. (Defendants Memorandum at 18.) However, in a 31line footnote, the USPTO advised Mr. Schmirler that such attempt would be insufficient in this case. (A274, n. 15, stating While such evidence would not be sufficient, in the present case, to show sufficient cause . . . and proceeding to list a litany of types of evidence that could be submitted.) Any imposition of a requirement on Mr. Schmirler to attempt to contact co-inventors or a non-existent corporation (DPI) would be fruitless, and the result would be the same: (i) if other inventors/owners were located and found, the petition would be considered, or (ii) if other inventors/owners were not located, but there was shown some unspecified actions by Mr. Schmirler to so contact, the petition would be considered. Thus, any imposition of a duty on Mr. Schmirler to contact any joint patent owner fails to advance the ball, and serves only to form a proverbial hoop through which Mr. Schmirler would need to jump, with the end result being identical. Because patent rights were fixed in scope as of April 10, 2001, and because any other purported patent co-owner could disclaim any patent rights that are

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reinstated by the Court, any reinstatement of the 374 Patent would be harmless. III. The USPTO rules are designed to prevent . . . every part-owner of a patent [from taking] unilateral and independent (and potentially conflicting) action before the USPTO . . . and properly so. The above heading (III) was stated by Defendant, (Defendants Memorandum at 21), and Mr. Schmirler could not agree more. Mr. Schmirler disagrees, however, with Defendants snowball argument that unilateral and independent (and potentially conflicting) action before the USPTO is in any way a logical consequence that would result if Mr. Schmirlers contentions are adopted by the Court. (Id.) Quite the contrary. The first incident in connection with the 374 Patent involving unilateral and independent . . . action before the USPTO was actually the USPTOs unauthorized grant of a refund after issuance of the 374 Patent, which refund was purportedly based upon unilateral and independent action on behalf of Mr. Edward Portman. However, at the time of any purported refund request, Mr. Portman did not have authority to transact business with the USPTO in connection with the subject patent application. At least as early as December 8, 2000 (A212) and arguably as early as October 25, 2000 (A209), Mr. Portman assigned power of attorney to Mr. Essmans firm; therefore, he lacked authority to act in connection with the patent application. The earliest date of record on which any refund request was made by Mr. Portman to American Express (not to the USPTO) is December 17, 2000. (See American Express Service Establishment Claim Form, Dkt. 12-1 at 5.) Clearly, by

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this date, Mr. Portman lacked any representative authority to make any request to the USPTO that would bind any of the other inventors. Accordingly, because Defendant has admitted that the USPTO rules are designed to prevent . . . every part-owner of a patent [from taking] unilateral and independent (and potentially conflicting) action before the USPTO, and because the USPTO allowed an unauthorized inventor to unilaterally and independently receive a refund, the proximate result of which was the vacation of the 374 Patent, this Court should declare the USPTOs actions arbitrary, capricious, or otherwise not in accord with the law, and grant Mr. Schmirlers motion for summary judgment. Conclusion For the foregoing reasons, Mr. Schmirler respectfully requests that this Court hold that the Offices action in connection with the refund of the paid issue fee, the withdrawal of the 374 Patent from issue, and/or the Offices failure to consider Mr. Schmirlers petition filed with the Office, individually or collectively, constituted agency action that was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. Respectfully submitted, Date: 31 May 2011 By: Ryan Kromholz & Manion, S.C. s/Garet K. Galster
Joseph A. Kromholz (State Bar No. 1002464) jkromholz@rkmiplaw.com Garet K. Galster (State Bar No. 1056772) ggalster@rkmiplaw.com RYAN KROMHOLZ & MANION, S.C. P. O. Box 26618

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Milwaukee, Wisconsin 53226-0618 Attorneys for Plaintiff

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CERTIFICATE OF SERVICE
I hereby certify that I have this day caused copies of the foregoing document to be served on the parties and counsel of record noted below by Court email and First Class Mail: By First Class Mail: Frances M Lynch United States Patent & Trademark Office PO Box 15667 Arlington, VA 22215 Thomas W Krause United States Patent & Trademark Office PO Box 15667 Arlington, VA 22215 By Court Email: Matthew V Richmond United States Department of Justice (ED-WI) Office of the US Attorney 517 E Wisconsin Ave - Room 530 Milwaukee, WI 53202 Christian R Larsen United States Department of Justice (ED-WI) Office of the US Attorney 517 E Wisconsin Ave - Rm 530 Milwaukee, WI 53202

Date: 31 May 2011

s/Peggy Pechulis Peggy Pechulis

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