Rietmann v. Dudas: US District Court : PATENT - not arbitrary, abuse not accepting delayed maintaince fee; incapacitation not shown St. Paul Lawyer Michael E. Douglas Minnesota Injury Lawyers - Personal Injury Attorneys in Minneapolis, Bloomington and Brooklyn Park
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Rietmann v. Dudas: US District Court : PATENT - not arbitrary, abuse not accepting delayed maintaince fee; incapacitation not shown

1
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Sandra D. Rietmann,
Plaintiff,
v. Civil No. 07-4176 (JNE/SRN)
ORDER
Jonathan W. Dudas, Director of the
United States Patent and Trademark Office,
Defendant.
Andrew Spicer, Esq., Carlineo Markus LLP, and Anne Awsumb, Esq., and Dustin Bower, Esq.,
Purdue & Awsumb, P.A., appeared for Plaintiff Sandra D. Rietmann.
Thomas Stoll, Esq., United States Patent and Trademark Office, and David Fuller, Esq., Office
of the United States Attorney for the District of Minnesota, appeared for Defendant Jonathan W.
Dudas, Director of the United States Patent and Trademark Office.
Sandra Rietmann brought this action under the Administrative Procedure Act (APA) to
review the denial by Jonathan Dudas, Director of the United States Patent and Trademark Office
(Director), of her petition to accept delayed payment of a maintenance fee. The case is before
the Court on cross-motions for summary judgment. For the reasons set forth below, the Court
grants the Director’s motion, denies Rietmann’s motion, and affirms the denial of Rietmann’s
petition to accept delayed payment of a maintenance fee.
I. BACKGROUND
United States Patent No. 5,819,049 (’049 Patent) issued to Rietmann on October 6, 1998.
To maintain her patent, Rietmann had to pay maintenance fees at three points during the patent’s
life. See 35 U.S.C. § 41(b) (2000). The first was due three years and six months after the
patent’s issuance; the second seven years and six months after issuance; and the third eleven
years and six months after issuance. See id. Rietmann did not pay the first maintenance fee by
2
the due date or the end of a six-month grace period. See id. The patent therefore expired at the
grace period’s end. See id.
In November 2006, more than four years after the ’049 Patent’s expiration and after the
end of the grace period associated with the second maintenance fee, Rietmann filed a “Petition to
Accept Unavoidably Delayed Payment of Maintenance Fee in an Expired Patent under 37 CFR
1.378(b)” (First Petition). See 35 U.S.C. § 41(c)(1) (authorizing the Director to accept late
payment of a maintenance fee if the delay was unavoidable); 37 C.F.R. § 1.378(b) (2007).
According to the First Petition, the attorney who prosecuted the ’049 Patent, Ivar Kaardal, was
negligent in representing Rietmann before the Patent and Trademark Office (PTO). Kaardal’s
alleged negligence included the failure to prevent the ’049 Patent’s expiration. Kaardal allegedly
never explained maintenance fees to Rietmann, never reminded her about maintenance fees, and
never told her that the ’049 Patent had expired. In addition, Rietmann claimed that “[d]uring
2001-2002, [she] was completely overwhelmed by the combination of numerous medical,
employment, home, personal, financial, and social situations that unquestionably affected [her]
ability to function.” Rietmann first learned of her patent’s expiration in April 2006 from
Technology, Patents & Licensing, Inc., which assisted Rietmann in compiling information to
substantiate her claim of unavoidable delay. She also “executed a deal, such that, if the ’049
Patent is revived, [she] will receive a significant, six-figure sum of money.” Although aware in
April 2006 that she had to pay the second maintenance fee by October 2006, she asserted that she
filed the First Petition as soon as possible after learning of her patent’s expiration. Thus, she
submitted the first and second maintenance fees with the First Petition.
On February 15, 2007, the PTO dismissed the First Petition. The PTO concluded that
neither Rietmann’s lack of knowledge of the need to pay the first maintenance fee nor her
3
preoccupation with other matters that took precedence over paying the fee constituted
unavoidable delay. The PTO also concluded that Rietmann had not demonstrated any agreement
with Kaardal to track and pay the maintenance fee. Assuming that Kaardal’s representation of
Rietmann continued to when the first maintenance fee was due, the PTO stated that Rietmann
would be bound by the actions or inactions of her chosen representative. With regard to
Rietmann’s allegations of health issues, the PTO acknowledged that physical or mental
incapacitation can be a cause of delay. To be unavoidable delay, the incapacitation had to render
Rietmann unable to conduct business with the PTO from her patent’s expiration to the filing of
the First Petition. The PTO concluded that the record revealed that Rietmann “was not disabled,
throughout the period that the patent was expired, such that she could not have earlier paid the
maintenance fee.” The PTO also concluded that Rietmann had failed to substantiate her
allegations of financial hardship. In summary, the PTO concluded that Rietmann had not
exercised the standard of care observed by a reasonable person in the conduct of his or her most
important business.
Rietmann responded by filing a Renewed Petition seeking reconsideration of the PTO’s
February 15 decision. She asserted that her delay in paying the maintenance fee was
unavoidable due to her physical and mental incapacitation and her attorney’s negligent,
deceptive, and fraudulent representation. After receiving information about her attorney’s
disciplinary history before the PTO pursuant to a Freedom of Information Request, Rietmann
supplemented her Renewed Petition.
On August 10, 2007, the PTO issued its decision on the Renewed Petition as
supplemented. The PTO denied Rietmann’s request to accept delayed payment of the
maintenance fee. Briefly, the PTO reiterated that neither Rietmann’s unawareness of the need to
4
pay the first maintenance fee nor her preoccupation with other matters that took precedence over
paying the fee constituted unavoidable delay. The PTO again concluded that Rietmann had
failed to demonstrate any agreement with Kaardal to monitor the maintenance fee. The PTO
noted that Kaardal’s exclusion from practice before the PTO in 2004 was irrelevant because the
record indicated that Kaardal was not representing Rietmann when the first maintenance fee was
due. The PTO also noted that neither Rietmann nor Kaardal had taken any steps to ensure
payment of the first maintenance fee. The PTO rejected Rietmann’s assertion that financial
difficulties rendered the delay in payment unavoidable because the record revealed that she
chose to use her income during the relevant time period for purposes other than the maintenance
fee. As to her alleged incapacitation, the PTO stated that Rietmann had not shown that the
incapacitation coincided with the entire period of delay. In summary, the PTO stated that “the
showing of record is of a lack of diligence on the part of [Rietmann].”
Less than two months later, Rietmann brought this action. The parties now move for
summary judgment. See Smith v. Mossinghoff, 671 F.2d 533, 537 (D.C. Cir. 1982).
II. DISCUSSION
As noted above, notwithstanding a patent’s expiration for failure to pay a maintenance
fee, “[t]he Director may accept the payment of any maintenance fee required by subsection (b) of
this section . . . at any time after the six-month grace period if the delay is shown to the
satisfaction of the Director to have been unavoidable.” 35 U.S.C. § 41(c)(1). A petition to
accept an unavoidably delayed payment of a maintenance fee must include:
A showing that the delay was unavoidable since reasonable care was taken to
ensure that the maintenance fee would be paid timely and that the petition was
filed promptly after the patentee was notified of, or otherwise became aware of,
the expiration of the patent. The showing must enumerate the steps taken to
ensure timely payment of the maintenance fee, the date and the manner in which
5
patentee became aware of the expiration of the patent, and the steps taken to file
the petition promptly.
37 C.F.R. § 1.378(b)(3); see Ray v. Lehman, 55 F.3d 606, 609 (Fed. Cir. 1995). “[I]n
determining whether a delay in paying a maintenance fee was unavoidable, one looks to whether
the party responsible for payment of the maintenance fee exercised the due care of a reasonably
prudent person.” Ray, 55 F.3d at 609; see Burandt v. Dudas, No. 2007-1504, 2008 WL 2344993,
at *4 (Fed. Cir. June 10, 2008). In Burandt, the Federal Circuit set forth the applicable standard
of review:
We review a district court’s grant of summary judgment de novo,
reapplying the standard applicable at the district court. Because this case was
brought under the APA, we apply the standard of review set forth in that statute.
The APA provides that “[t]he reviewing court shall ... hold unlawful and set aside
agency action, findings, and conclusions found to be arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law.” Under an arbitrary
and capricious standard, the scope of review is narrow and a court may not
“substitute its judgment for that of the agency.” A court reviewing the agency
decision “must consider whether the decision was based on a consideration of the
relevant factors and whether there has been a clear error of judgment.” “An abuse
of discretion occurs where the decision is based on an erroneous interpretation of
the law, on factual findings that are not supported by substantial evidence, or
represents an unreasonable judgment in weighing relevant factors.”
Burandt, 2008 WL 2344993, at *3 (citations omitted).1 Here, the parties dispute whether the
Director abused his discretion in concluding that Rietmann had not established unavoidable
delay based on either Kaardal’s intentional deception and gross negligence or her incapacitation.
A. Kaardal
Rietmann asserts that she established unavoidable delay because she reasonably relied on
Kaardal to monitor maintenance fees and he intentionally deceived her or was grossly negligent.
1 In her motion papers, Rietmann requested de novo review of the Director’s decision. At
the motion hearing, Rietmann acknowledged that the arbitrary and capricious standard governs.
See 35 U.S.C. § 41(c)(1); Burandt, 2008 WL 2344993, at *4, 6 (stating that section 41(c)(1)
“provides the Director with discretion to accept a late maintenance fee” and “disagree[ing] with
. . . assertion that the district court erred by giving deferential review to the PTO’s determination
of unavoidable delay”).
6
As noted above, the Director concluded that Rietmann had no agreement with Kaardal regarding
maintenance fees and that Rietmann was bound by Kaardal’s actions or inactions, assuming that
his representation continued to the first maintenance fee’s due date.
In a declaration submitted in support of her First Petition, Rietmann described the
prosecution of the ’049 Patent and Kaardal’s role in it. In January 1996, Rietmann disclosed her
invention to Invention Submission Corporation (ISC) under an agreement of confidentiality. A
few months later, she received from ISC a Basic Information Package that included a
Preliminary Patentability Search Report prepared by Kaardal. Before receiving the package,
Rietmann had not had any contact with Kaardal. In July 1996, Rietmann entered into an
agreement with Western Invention Submission Corporation (WISC), an affiliate of ISC, to
submit her invention to industry. She also entered into a Patent Services Addendum with WISC.
Pursuant to the addendum, WISC agreed to assist with the submission of a patent application and
the response to the PTO’s initial substantive communication. WISC also agreed to pay for
reasonable and expected legal fees. In addition, WISC hired Kaardal on Rietmann’s behalf to
prepare, file, and prosecute a patent application. Although she had contracted with WISC,
Rietmann received most communications about her invention from ISC, even if they were from
Kaardal. Rietmann never understood the relationship between ISC, WISC, Kaardal, and a
drafting company that prepared drawings for her application. She never spoke to Kaardal
regarding the preparation, filing, or prosecution of her application.
Rietmann’s application was filed in February 1997, and she paid the filing fee. She paid
the issue fee in February 1998, and the’049 Patent issued in October 1998. In the summer and
fall of 1998, Rietmann called the PTO on multiple occasions regarding the issuance of her patent
and a change of address. During one of the calls in August 1998, she asked the PTO to mail the
7
original patent to her instead of ISC. She thought the PTO would send any correspondence
related to the ’049 Patent to her. The last communication she had from Kaardal was a letter in
October 1998. In that letter, Kaardal forwarded the original patent and mentioned maintenance
fee payments. The original patent also disclosed the requirement to pay maintenance fees.
After learning of her patent’s expiration, Rietmann discovered that a maintenance fee
reminder was sent to Kaardal in April 2002. Kaardal did not forward the reminder to her.
In support of her Renewed Petition, Rietmann submitted a supplemental declaration. In
it, she asserts that she believed Kaardal would continue to represent her interests with respect to
the ’049 Patent after its issuance. In March 2004, Rietmann called a patent attorney and
discussed whether to retain his services to research whether anyone was infringing on the ’049
Patent. Ultimately, she decided not to retain the attorney.
The Court’s review of the record reveals that the Director’s decision was not arbitrary,
capricious, or an abuse of discretion insofar as Rietmann attempted to show unavoidable delay
based on Kaardal’s alleged deception or negligence. Substantial evidence contradicts
Rietmann’s conclusory assertion in her supplemental declaration that Kaardal would continue to
represent her with regard to the ’049 Patent after its issuance. For example, she characterized the
Patent Services Addendum, pursuant to which WISC agreed to pay legal fees and retained
Kaardal, as relating to the preparation and filing of a patent application and the response to the
PTO’s initial substantive communication. In August 1998, she called the PTO to change her
address and thought that the PTO would send all documents related to the ’049 Patent to her
instead of ISC. In March 2004, she called a patent attorney other than Kaardal about potential
infringement on the ’049 Patent. Substantial evidence supports the Director’s conclusion that
Rietmann failed to establish an agreement with Kaardal regarding maintenance fees. Even if
8
there were such an agreement, then Rietmann would be bound by Kaardal’s acts or omissions.
See Link v. Wabash R.R. Co., 370 U.S. 626, 633-34 (1962); Huston v. Ladner, 973 F.2d 1564,
1567 (Fed. Cir. 1992). Moreover, Kaardal informed Rietmann of maintenance fees in October
1998, and there is no evidence that Rietmann made any subsequent inquiries of Kaardal or that
Kaardal misrepresented the status of the ’049 Patent to her.2 Cf. Burandt, 2008 WL 2344993, at
*5. Insofar as Rietmann attempted to demonstrate unavoidable delay based on Kaardal’s alleged
deception or negligence, the Court concludes that the Director’s decision was not arbitrary,
capricious, or an abuse of discretion.
B. Incapacitation
Rietmann contends that she established unavoidable delay because she was incapacitated.
She claims that she was incapacitated in 1998 when she received notice from Kaardal and the
original patent about the requirement to pay maintenance fees such that the notice was
“meaningless.” She also asserts that she was incapacitated during the period to pay the first
maintenance fee and that her incapacitation continued for several years after her patent’s
expiration.
In the declaration submitted in support of her First Petition, Rietmann stated that she had
a history of medically diagnosed mental health issues, including depression and anxiety, and
several other ailments. After describing the treatment that she obtained in the mid- and late-
1990s, Rietmann stated that she felt by the end of 1998 “as if [her] life was coming apart, as
[she] continued to experience symptoms of anxiety, chronic depression and fatigue.” With
2 Rietmann relies heavily on In re Lonardo, 17 U.S.P.Q.2d 1455 (Comm’r Patents 1990).
In Huston, the Federal Circuit stated that Lonardo is not binding. Huston, 973 F.2d at 1567.
Moreover, Lonardo is distinguishable. In Lonardo, the petitioner diligently contacted his
attorney regarding a patent application whose abandonment was knowingly concealed by the
attorney.
9
regard to 2001-02, when she could have paid the first maintenance fee, Rietmann stated that she
“was unable to realize that [she] had to pay a maintenance fee” due to chronic depression,
anxiety, other medical conditions, and life events. In March 2001, she was diagnosed with a
breast abnormality and later submitted to a fine needle aspiration for cytology. In May 2001, a
destitute friend, in need of moral and financial support, moved in with Rietmann. Rietmann
provided for and supported her friend, who stayed with Rietmann until January 2002. In June
2001, a biopsy of Rietmann’s liver revealed the presence of fatty liver disease. Later that year,
Rietmann was diagnosed with a myomatous uterus. In March 2002, she had surgery to remove
several myomas from her uterus. She recovered from the surgery for approximately two months
and then returned to work. In the spring of 2002, Rietmann felt overwhelmed by her medical
conditions, job, social life, and emotional state. She began therapy with Rebecca Stahle in June
2002. The next month, Rietmann was injured in an automobile accident. After her insurer
declined to pay for medical care for her injuries, Rietmann hired an attorney and ultimately
resolved the payment dispute in February 2005 after an arbitration hearing. The dispute and
medical care contributed to her stress and “shifted [her] focus.” Thus, Rietmann maintains that it
was impossible for her to have timely paid the first maintenance fee.
Rietmann also submitted declarations from Charles Haislet, who performed the surgery in
March 2002; Wendy Bongers, Rietmann’s physician since March 2004; Rebecca Stahle,
Rietmann’s psychotherapist since June 2002; and Jonathan Mack, who performed a
psychological evaluation on Rietmann in April 2007. Haislet stated that the period leading up to
the surgery, the surgery itself, and the recovery period “were likely traumatic periods” for
Rietmann and that he “would expect that it took . . . Rietmann approximately six to eight weeks
to recover from the surgery.” Bongers stated that Rietmann was initially prescribed medication
10
in September 1998 to help control Rietmann’s depression and anxiety; that Rietmann
experienced particularly high stress and anxiety in 2001 and 2002; that periods of anxiety or
depression would typically impair Rietmann’s ability to function normally on a daily basis; that
Rietmann continues to take medication to help control her depression and anxiety; and that
Bongers signed forms for Rietmann to take leave under the Family Medical Leave Act. Stahle
stated that she treated Rietmann on a weekly or twice monthly basis from June 2002 to 2006 and
has since treated Rietmann once or twice per month; that Rietmann’s “levels of stress/anxiety
and depression have fluctuated several times over the course of her treatment”; and that
Rietmann finds it difficult to cope with several concurrent activities and may become
overwhelmed and unable to make decisions. Mack reviewed medical and other records
concerning Rietmann, conducted a four-hour clinical interview of her, and performed several
psychological tests on her. He opined that Rietmann had several psychological, psychiatric, and
neuropsychological disorders since at least 1988. The disorders included: panic disorder with
agoraphobia; post-traumatic stress disorder; dysthymic disorder; major depressive disorder;
generalized anxiety disorder; learning disorder; pain disorder; and avoidant personality disorder
with borderline and dependent features. Mack opined that her disorders were “aggravated and
inflamed during the 1997-98 and 2001-2005 time frames such that her Global Assessment of
Functioning score at those times was in the Serious Symptoms range of 41 – 49.” A table
attached to Mack’s report describes a score from 41-50 as: “Serious symptoms (e.g., suicidal
ideation, severe obsessional rituals, frequent shoplifting) OR any serious impairment in social,
occupational, or school functioning (e.g., no friends, unable to keep job).” Mack also opined that
Rietmann’s “state of psychological overwhelm was such that she was too incapacitated by the
. . . diagnostic conditions to be able to attend to her obligations to the U.S. Patent Office.”
11
Notwithstanding Rietmann’s assertion that she proved her incapacitation, there is
substantial evidence in the record that indicates Rietmann was not incapacitated. As noted
above, Rietmann claims that she was incapacitated in the fall of 1998 when she received notice
from Kaardal and the original patent of the requirement to pay maintenance fees. However, in
the declaration submitted in support of her First Petition, Rietmann stated that she called the PTO
on multiple occasions in the summer and fall of 1998 regarding the ’049 Patent’s issuance. After
the patent issued, Rietmann acknowledged that she tried to market or license the patent, a
process she found “very frustrating and unfruitful.” She felt that she was “always being forced
into a deal that was not in [her] best interest.”
Rietmann’s employment history also undermines her claim of incapacitation before,
during, and after the window to pay the first maintenance fee. From 2000 to at least 2005,
Rietmann was employed by Target Corporation. On her federal tax returns from 2000 to 2005,
she called herself a credit representative, a credit specialist, a fraud associate, and a credit fraud
associate.
In May 2001, a few months before she could have paid the first maintenance fee,
Rietmann admits that she took on the role of “provider” for a “destitute” friend in need of “moral
and financial support.” She continued in that role until January 2002, a few months after the
window to pay the first maintenance fee had opened.
As noted above, in July 2002, during the window to pay the first maintenance fee,
Rietmann was injured in an automobile accident. She disputed her insurer’s refusal to pay for
her medical care, hired an attorney, and ultimately resolved the dispute after arbitration in 2005.
She admits that she “shifted her focus” during this dispute.
12
In the meantime, in March 2004, Rietmann contacted a patent attorney to discuss whether
to retain his services to research potential infringement on the ’049 Patent. Ultimately, she
decided not to retain the attorney.
On her 2004 federal tax return, she took a capital loss. An attached schedule explained
that Rietmann had stopped actively marketing her patent in 2004 and declared it “worthless.”
The capital loss carried over to her 2005 federal tax return, which was dated March 20, 2006,
approximately one month before Technology, Patents & Licensing first contacted Rietmann.
Finally, a review of the medical reports as summarized in Mack’s report undermines
Rietmann’s claim of unavoidable delay based on incapacitation. On August 15, 2002,
Rietmann’s “depression was noted to be improved.” On February 13, 2003, Rietmann reported
that she had done well on the medication for her depression, and her psychiatric screen was
within normal limits. On May 14, 2003, Rietmann reported that she was very busy at work. On
March 15, 2004, Rietmann denied suicidal ideation and problems with concentration, energy,
and appetite. On June 21, 2004, Rietmann was stable and doing well. She again denied suicidal
ideation and problems with concentration, energy, and appetite. On July 6, 2004, Rietmann’s
ears were examined, and she obtained a signature on a scuba clearance form in preparation for a
scuba trip in September 2004. On November 14, 2005, an assessment of her mood and affect
revealed no depression, anxiety, or agitation. She was still taking the medication to control her
depression.
On this record, the Director’s decision to deny Rietmann’s petition was not arbitrary,
capricious, or an abuse of discretion insofar as Rietmann attempted to show unavoidable delay
based on incapacitation. Rietmann maintained employment from at least 2000 to 2005 at Target
as a credit or fraud associate. During that time, she was able to support a destitute friend for
13
several months; attempt to market her invention; engage in a dispute with her insurer by hiring
an attorney and pursuing arbitration; contact a patent attorney regarding infringement on the ’049
Patent; declare the patent worthless and take a capital loss on her 2004 and 2005 federal tax
returns; and plan a scuba trip. Without belittling the conditions Rietmann has experienced, the
Court concludes that there is substantial evidence in the record that Rietmann could have
inquired into the status of her patent in the years between its issuance and her discovery of its
expiration. See Burandt, 2008 WL 2344993, at *6. Insofar as Rietmann attempted to
demonstrate unavoidable delay based on incapacitation, the Director’s denial of her petition was
not arbitrary, capricious, or an abuse of discretion.
III. CONCLUSION
Based on the files, records, and proceedings herein, and for the reasons stated above, IT
IS ORDERED THAT:
1. Rietmann’s motion for summary judgment [Docket Nos. 39, 43, 50] is
DENIED.
2. The Director’s motion for summary judgment [Docket No. 17] is
GRANTED.
3. The Director’s denial of Rietmann’s petition to accept delayed payment of
a maintenance fee is AFFIRMED.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: June 27, 2008
s/ Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge
 

 
 
 

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