Submarine Patent

A submarine patent is a patent that was kept pending before the USPTO for a prolonged period — often decades — while an industry developed, using the technology, and then 'surfaced' (issued) late in the patent term with claims specifically drafted to cover the industry's established products. The term 'submarine' metaphorically describes how the application was hidden from public view while running silently, then surfaced to torpedo an unsuspecting industry. HOW IT WORKED — THE PRE-GATT MECHANICS: before June 8, 1995 (the GATT TRIPS implementation date), U.S. patent terms ran for 17 years FROM THE GRANT DATE, not from the filing date; applications were not published at 18 months — they remained completely confidential until issuance; this created a loophole: (1) an inventor could file an application in, say, 1965; (2) keep it pending through continuations, amendments, and appeals; (3) in 1985, after an industry had built products around the technology, amend the claims to cover those products; (4) the patent issues in 1990 — and has a full 17 years from issuance (until 2007), even though the application was filed 25 years earlier; NOTABLE EXAMPLES: Jerome Lemelson's bar code scanner patents — filed in the 1950s, issued in the 1980s–1990s, collected hundreds of millions in royalties from electronics manufacturers; Gilbert Hyatt's general-purpose microcontroller patent (filed 1970, issued 1990, claimed prior art over Intel's 4004); George Davison's petroleum industry patents.

The Uruguay Round Agreements Act (implementing GATT TRIPS) made two critical changes to U.S. patent law effective June 8, 1995, that together closed the submarine patent loophole: CHANGE 1 — TERM FROM FILING DATE: the patent term changed from 17 years from grant to 20 years from the EARLIEST EFFECTIVE FILING DATE; this eliminated the incentive to delay prosecution — every day the application sat pending was a day of patent term being consumed; an applicant who filed in 1975 and took until 1995 to get a patent would have only 0 years of remaining term (the patent would expire immediately on issuance); CHANGE 2 — 18-MONTH PUBLICATION: applications filed on or after November 29, 2000 are published 18 months after the priority date (with some exceptions for applicants not seeking foreign patent protection); this makes pending claims visible to the public, ending the ability to secretly tailor claims to cover an industry that has developed around the technology; TRANSITIONAL PROVISION: applications filed BEFORE June 8, 1995 retained the 17-year-from-grant term for patents issuing from those applications (provided the application was still pending); this is why submarine patents continued to issue in the late 1990s and 2000s from very old applications; THE LAST SUBMARINES: the last true submarine patents issued from pre-June-8-1995 applications; because many continuation chains were filed before the cutoff but kept alive through the 1990s and 2000s under transitional rules, the era technically ended in the late 2000s to early 2010s as even the oldest transitional applications aged out.

While true submarine patents no longer exist under post-GATT law, several modern practices raise analogous concerns: (1) CONTINUATION APPLICATIONS: post-GATT, a patent applicant can still file continuation applications indefinitely as long as a parent application remains pending; continuation claims can be amended to cover competitor products after they appear (but now the patent term ticks down from the original filing date); DEFENSE — 18-MONTH PUBLICATION: pending claims are now public at 18 months, so competitors can monitor published applications and adjust product designs; PROSECUTION LACHES — THE MODERN DEFENSE: even within the statutory term, unreasonable and inexcusable delay in prosecution can bar enforcement; Symbol Technologies v. Lemelson (Fed. Cir. 2004) applied prosecution laches to Lemelson's post-GATT continuation chain, finding that delays from 1954 to 1994 were unreasonable and prejudiced the accused infringers who had relied on the technology; (2) CONTINUATION AMBUSH: a competitor sees an issued patent and designs around it; the patent holder files a continuation with new claims covering the design-around; the continuation can be filed at any time while any family member is pending; DEFENSE: Freedom-to-operate analysis should monitor pending continuation applications in relevant families; (3) DIVISIONAL SURFACING: a divisional filed from an old application can issue decades after the original filing but within the 20-year term; the prosecution laches defense is available if the delay was unreasonable and caused material prejudice.

Prosecution laches is an equitable defense to patent infringement based on the patent owner's unreasonable and inexcusable delay in prosecuting the patent, combined with material prejudice to the accused infringer. LEGAL STANDARD: established in Symbol Technologies, Inc. v. Lemelson Medical (Fed. Cir. 2004): (1) UNREASONABLE AND INEXCUSABLE DELAY: the delay in prosecution must be unreasonable given the circumstances; merely staying within the statutory period does not immunize from laches; the court examines whether there was any legitimate reason for keeping the application pending so long; (2) MATERIAL PREJUDICE: the accused infringer must have been materially prejudiced by the delay; prejudice can be: (a) ECONOMIC: the accused infringer built a business around the technology during the delay period; made substantial investments in tools, factories, distribution assuming the technology was unencumbered; (b) EVIDENTIARY: witnesses died, documents were destroyed, prior art evidence was lost during the delay; HOW COURTS APPLY IT: courts look at the entire prosecution history to identify unjustified delays; a 10-year delay with abandoned applications, unnecessary refilings, and no bona fide prosecution activity supports laches; brief delays to conduct prior art searches or respond to complex office actions do not; BURDEN: the accused infringer has the burden of proving both prongs by a preponderance of the evidence; REMEDY: prosecution laches may bar all damages or preclude enforcement entirely; it is an equitable defense, so courts have discretion; courts may also consider whether the patent holder affirmatively misled the accused infringer; MODERN RELEVANCE: post-GATT continuation applications with slow prosecution and commercially motivated amendment timing may face prosecution laches challenges.

Although true submarines are history, protecting against continuation-based ambushes requires active monitoring and strategic practices: (1) MONITOR PUBLISHED APPLICATIONS: the USPTO's Patent Center (Public PAIR) and the 18-month publication requirement make it possible to monitor applications in relevant technology areas; use patent watch services and keyword monitoring to identify pending continuation applications in competitor patent families; (2) FREEDOM-TO-OPERATE (FTO) ANALYSIS: before launching a new product, conduct a comprehensive FTO analysis that includes: issued patents covering the technology; pending published applications in relevant families (continuations, divisionals); key word searches in the USPTO PGPUB database; (3) MONITOR FAMILY STATUS: for each known blocking patent, track all related pending applications; tools like Derwent Innovation, Orbit Intelligence, and the USPTO's Patent Center allow family-level monitoring; (4) DESIGN-AROUNDS: when designing around an issued patent, consider the continuation risk; if the patent holder has a pending continuation application, the design-around may be claimed in that continuation; design around the original disclosure (not just the issued claims) when possible; (5) INTERVENING RIGHTS — POST-REISSUE ANALOGY: unlike reissue patents (which provide intervening rights under § 252 for pre-reissue activity), continuation patents generally do NOT provide intervening rights for design-around activity that occurs during prosecution; (6) PROSECUTION LACHES: if a continuation issues after long, unjustified delay and the accused infringer has made substantial investments in the allegedly infringing technology, prosecution laches may be available as a defense.