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UNITED STATES DISTRICT COURTEASTERN DISTRICT OF WISCONSINDennis L. Schmirler,Plaintiff, Case No. 10-C-144v.Hon. David J. Kappos,In his official capacity asSecretary of Commerce forIntellectual Property and Director of theUnited States Patent and Trademark Office,Defendant.DEFENDANT’S REPLY MEMORANDUM IN SUPPORTOF CROSS-MOTION FOR SUMMARY JUDGMENTDefendant David Kappos, Under Secretary of Commerce for Intellectual Property andDirector of the United States Patent and Trademark Office (“Director”), by his undersignedcounsel, respectfully submits this reply memorandum in support of Defendant’s cross-motion forsummary judgment.
SUMMARY OF THE ARGUMENT
In his opening memorandum, the Director explained that Mr. Schmirler is not entitled torelief from this Court because: (1) Mr. Schmirler’s petition failed to comply with USPTOsignature requirements; and (2) to the extent Mr. Schmirler is seeking “revival” of the vacatedpatent or abandoned patent application at issue here, he has failed to exhaust administrativeremedies. Mr. Schmirler’s response fails to squarely address either the signature requirements orthe exhaustion issue, and instead raises several peripheral issues that merit only a brief response.In short: (1) the Director’s statement that “a patent issued” does not make Mr. Schmirler a
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2patentee; (2) even if it did, Mr. Schmirler would still not be entitled to proceed unilaterallybefore the USPTO; (3) in the absence of a new correspondence address submitted by theinventors, the USPTO’s mailing of the notice that the patent might be vacated to the officialcorrespondence address on file – Mr. Essman’s address – was consistent with Office procedureand was neither arbitrary or capricious; and (4) the fact that Dr. Portman received a refund,rendering the issue fee unpaid, was not the result of “arbitrary and capricious” USPTO conduct.
I.
 
Mr. Schmirler Is an Applicant, Not a Patentee.A.
 
The Patent Did Not Validly Issue and Was Rendered Void Ab Initio When ItWas Vacated.
The Director’s position is that the ’374 patent never
validly
issued, and that when theUSPTO vacated it, it became void ab initio. As previously explained, this was the result of Dr.Portman’s chargeback, which: (1) left the statutorily-required issue fee unpaid; and (2) causedthe USPTO to withdraw its prior petition decision reviving the previously-abandonedapplication. Director’s S.J. Mem. at 15. Although the inventors might have been able to savethe patent had they responded to the USPTO’s June 7, 2004, Notice in a manner that cured orotherwise addressed these defects (A230-31), the inventors did not so respond, and the USPTOvacated the patent. Once the patent was vacated for failure to meet the preconditions forreceiving a patent, Mr. Schmirler and his co-inventors were returned to the status of applicants of an abandoned application. As explained in the opening memorandum, the USPTO’s regulationsmake clear that an applicant cannot proceed unilaterally without his co-inventors or co-owners.Director’s S.J. Mem. at 15-19.Mr. Schmirler contends that the Director has failed to explain how a chargeback occurring after patent issuance “effects a nonpayment of an issue fee on the date on which apatent issues.” Schmirler Reply Mem. at 3. This argument, however, is based on the flawed
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3premise that an issue fee discrepancy will only be a problem if it exists on the date the patentissues. As explained previously (Director’s S.J. Mem. at 11, 15, 24), 35 U.S.C. § 151 requiresthat any “remaining balance of the issue fee shall be paid within three months of the sending of anotice thereof,” and provides that “if not paid, the patent shall lapse.” 35 U.S.C. § 151. Dr.Portman’s chargeback created a “remaining balance,” and the inventors’ failure to respond to theJune 7, 2004, Notice caused the patent to lapse.
1
But the significance of Dr. Portman’s chargeback request is not limited to the issue feedeficiency it created. It also raised questions about the inventors’ previous assertions that theprior abandonment had been unintentional. Portman’s attempt to obtain a refund of the moneythat was intended to cover the issue fee of the patent could well have reflected an intention thatthe patentThe fact that the issue fee remained unpaidafter notice to the inventors gave the USPTO ample basis for voiding the patent and returning theinventors to applicant status.not 
1
Contrary to Mr. Schmirler’s implication (Schmirler Reply Mem. at 3), the Director’sstatement that “as a result of Dr. Portman’s chargeback . . . , the issue fee had never been paid”was not meant to suggest that the issue fee had not been paid at one time. Rather, as Mr.Schmirler acknowledges, the USPTO does not deny that the issue fee was paid. Schmirler ReplyMem. at 3. The USPTO’s point is merely that the chargeback left the fee unpaid, as if it hadnever been paid.issue, and thus gave rise to the inference that the abandonment may not have beenunintentional after all. If that were the case, then the USPTO should not have revived theunderlying application in the first place. In light of this new information regarding the inventors’intent, the USPTO withdrew its decision granting the revival request, thereby undercutting thepatent on a ground independent of the issue fee deficiency. The inventors’ failure to respond tothe USPTO’s June 7, 2004, Notice with an explanation of the chargeback provided anindependent ground for the USPTO to vacate the patent, and thereby restore the inventors to the
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