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 December 2015 “Holidays”

The USPTO’s operating status webpage still provides information on the December 22 power outage and subsequent computer failures:

On December 22, 2015, at approximately 7:00 pm, the United States Patent and Trademark Office (USPTO) experienced a major power outage at its headquarters in Alexandria, Virginia, resulting in damaged equipment that required the subsequent shutdown of many USPTO online and information technology systems. ….

On the same webpage, the USPTO explains the decision to treat December 22-24, 2015 as “Federal holiday[s] within the District of Colombia”:

In light of this emergency situation, the USPTO will consider each day from Tuesday, December 22, 2015, through Thursday, December 24, 2015, to be a “Federal holiday within the District of Columbia” under 35 U.S.C. § 21 and 37 C.F.R. §§ 1.6, 1.7, 1.9, 2.2(d), 2.195, and 2.196.

As a result, “[a]ny action or fee due on these days will be considered as timely for the purposes of, e.g., 15 U.S.C. §§ 1051(b), 1058, 1059, 1062(b), 1063, 1064, and 1126(d), or 35 U.S.C. §§ 119, 120, 133, and 151, if the action is taken, or the fee paid, on the next succeeding business day on which the USPTO is open (37 C.F.R. §§ 1.7(a) and 2.196).”

Can The USPTO Declare A Federal Holiday Within The District Of Colombia?

Elm challenges the USPTO’s authority to declare that a day was a “Federal holiday within the District of Colombia” when that day was not treated as such by any other Federal agency. Elm asserts that only Congress can declare a “Federal holiday within the District of Colombia” Indeed, while a “Federal holiday within the District of Colombia” may arise when the U.S. Office of Personnel Management decides to close Federal agencies in the Washington, D.C. area, such as due to inclement weather, that did not happen on December 22-24, 2015.

The statute cited in the USPTO announcement, 35 USC § 21, does not appear to give the USPTO authority to declare a Federal holiday, but rather provides:

When the day, or the last day, for taking any action or paying any fee in the United States Patent and Trademark Office falls on Saturday, Sunday, or a Federal holiday within the District of Columbia, the action may be taken, or fee paid, on the next succeeding secular or business day.

Elm also notes that the December 22-24 holidays were inconsistent with USPTO’s own rule (37 CFR § 1.9(h)), which provides that a “Federal holiday within the District of Colombia” means “any day, except Saturdays and Sundays, when the [USPTO] is officially closed for business for the entire day.” The USPTO was not “officially closed for business” on December 22-24, 2015. Personnel were expected to report to work, papers could be filed in-person, and–except for electronic filings–business was conducted as usual.

According to Elm, the statutory deadline for the petitioners to file their IPR petitions expired December 24, 2015, but the PTAB accepted nine petitions filed December 28, 2015. Elm asserts that the declaration of holidays was arbitrary, capricious, an abuse of discretion, in excess of authority, and not in accordance with law, and seeks to enjoin the USPTO from “maintaining any action based on … [the} rule requiring the PTO to consider December 22-24, 2015 to be federal holidays in the District of Colombia.”

A Different Approach In December 2014

Interestingly, when the USPTO experienced problems with the electronic filing system for filing petitions for IPR, CBM and PGR proceedings in December of 2014, it took a different approach. Instead of declaring “holidays,” the Patent Trial and Appeal Board posted the following notice on its website:

PRPS is currently down as of December 16, 2014 3:00 pm EST. PTAB will be extending deadlines for the parties for all matters that do not have statutory deadlines until the site becomes available. As for petition filings, patent owner responses, motions, and requests for rehearing (on institution decisions or final decisions) and any other matters that have an imposed deadline or statutory due date, the parties should send an e-mail to TRIALS@USPTO.GOV indicating the need to file one of these items. DO NOT send attachments. PTAB will authorize filing of late attachments and PT AB will change the filing dates in PRPS to reflect the appropriate filing date. ALL MATTERS SHOULD BE SERVED ON OPPOSING COUNSEL ON THE APPROPRIATE DUE DATE.

Far-Reaching Consequences

The court’s decision on this issue could have far-reaching consequences. In addition to potentially invalidating other IPR, CBM and PGR proceedings that relied on the “holidays” for timeliness, a finding that the declaration of holidays was ultra vires could impact the validity of patent applications that relied on the holidays to satisfy statutory deadlines, such as to avoid statutory bars or satisfy filing deadlines.

Exposing Vulnerability

The power outage and ensuing computer system failures exposed a vulnerability of the USPTO filing system. While patent application papers can be accorded a filing date based on the date they are deposited with the United States Postal Service (USPS) for Priority Mail Express® delivery to the USPTO, many practitioners have forgotten (or never learned!) how to file papers via the USPS or were surprised to learn of the limited hours of their local Post Offices. Moreover, the rules that govern IPRs and other post-grant trials require all documents to be filed electronically “[u]nless otherwise authorized.” See 37 CFR §42.6(b)(2). Thus, while there are alternative ways to file documents with the USPTO, current rules and practices heavily favor electronic filings. The USPTO must recognize that power outages and system failures are bound to occur, and should ensure that there are workable alternatives that all applicants and petitioners can use.