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The fallout from the partial US government shutdown could soon hit medtech-related court cases and patent filings. Federal courts and the US Patent and Trademark Office have been using existing funds to continue operations, but they will soon be running out.

The Administrative Office of the US Courts posted a notice on its website Jan. 22 saying that it now estimates that federal courts can sustain funded operations through Jan. 31. The courts have been using court fee balances and other "no-year" funds so judiciary employees have been reporting to work and receiving full pay since the shutdown began Dec. 22.

The office had previously said the money would run out on Jan. 18, and then revised the estimate to Jan. 25. The most recent statement says the courts are able to sustain operations through a combination of putting off non-critical expenses and using what funds remain available, such as court filing fees.

“Most of the measures are temporary stopgaps, and the Judiciary will face many deferred payment obligations after the partial government shutdown ends,” the office said.

If the money runs out before the shutdown is resolved, the courts would be able to fund “mission-critical” work that supports the courts’ constitutional powers under the Anti-Deficiency Act. This would include case resolutions and related work, the statement reads. Each court would determine the staff necessary to support this work. The halt in other activity could impact the medtech industry, which is involved in a constant stream of patent disputes.

Most appellate courts have said it’s business as usual for now, with filing and other deadlines still in effect. A rare exception is the Court of Appeals for the 4thCircuit, which announced on Jan. 24 that it expects funding to expire on Feb. 1 and that no further extensions would be possible. “Mission critical” work will continue after that date, the court said.

The next medtech-related case on the court’s calendar,Life Technologies Inc. v. Life Technologies Corp., will look at whether the court can hold an executive of a defunct company personally responsible for attorney’s fees and damages related to trademark infringement. It’s set for oral arguments on March 21.

The Court of Appeals for the Federal Circuit often hears cases involving the federal government, including FDA and the patent office. On Jan. 18, that court announced plans to remain open and operational “until further order of the court.”  Boston Scientific, which has been fighting a surgical clip patent claim from the Cook Group, appealed an Indiana federal court’s ruling that the clips were unpatentable to the Federal Circuit on Jan. 23.

The California-based 9thCircuit has also announced plans to continue normal operations. “The Court of Appeals has a constitutional duty to continue to hear and resolve cases, even during periods of a government shutdown,” Chief Judge Sidney R. Thomas said in a Jan. 19 statement. He said that his personal staff and court employees would remain on the job through the shutdown.

Device-related cases pending before the 9thCircuit include at least two product liability suits involving Medtronic infusion pumps, as well as a class-action complaint alleging Zimmer Biomet failed to pay its sales reps appropriate overtime.

The US Administrative Office of the US Courts notes that the Department of Justice has requested that civil cases in which the federal government is a party be suspended or postponed. Some federal courts have issued orders to suspend or postpone such cases while others have declined to do so.

Patent Office Countdown

The US Patent and Trademark Office has been able to delay the repercussions of the shutdown. It has had access to prior-year fee collections to continue normal operations for several weeks.

"Should the USPTO exhaust these funds before a partial government shutdown comes to an end, the agency would have to shut down at that time, although a small staff would continue to work to receive new applications and any other examination, post-examination, post-issuance, and PTAB [Patent Trial and Appeal Board] or TTAB [Trademark Trial and Appeal Board] filings; receive payments related to such filings; and maintain IT infrastructure, among other functions," a notice on the agency's website states.

A PTO spokesperson said there is no firm date as to when the funds will run out.

While furloughed government employees are suffering without a paycheck they will eventually get paid.  On Jan. 16, President Trump signed into law the "Government Employee Fair Treatment Act of 2019," which requires the compensation of government employees for wages lost, work performed, or leave used during a lapse in appropriations beginning on or after Dec. 22.

From the editors of The Gray Sheet

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