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Do Patent Applicants have a Chance at the CAFC?


Written by Scott M. Daniels
Westerman Hattori Daniels & Adrian, LLP
Author of the US PTO Litigation Blog
Posted: January 14, 2013 @ 12:53 pm

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Do patent applicants appealing a rejection of their claims from the Patent Trial and Appeals Board have a chance of success at the Court of Appeals for the Federal Circuit? What about patentees appealing to the CAFC from rejections in reexamination proceedings? The candid answer is not much of a chance. Of course, every case is different and needs to be considered on its own merits. Yet, the standards for review of Board decisions, followed by the CAFC, significantly favor affirmance of those decisions.

What about a rejection by the Board that the claims in an application or patent are anticipated by a prior art reference? The CAFC reviews an anticipation rejection as a “finding of fact” under the “substantial evidence” standard. In re Gleave, 560 F.3d 1331, 1334-35 (Fed. Cir. 2009). A finding of fact is “supported by substantial evidence [and therefore affirmed] if a reasonable mind might accept the evidence to support the finding.” Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938). For a reversal, it is not enough that the CAFC simply disagrees with the Board – the CAFC must find that no reasonable person would have rejected the claims.

What about a rejection by the Board that the claims are obvious over a prior art reference? For obviousness, the standard is often stated to be a “mixed” question of fact and law. Since questions of law are reviewed de novo by the CAFC, doesn’t an obviousness rejection by the Board get more rigorous review? No, because the “mixture” isn’t very even. “Obviousness is a question of law … based on four factual inquiries: the scope of the prior art, the differences between the prior art and the claimed invention, the level of ordinary skill in the field of the invention, and any objective considerations [such as commercial success of the claimed invention].” C.W. Zumbiel v. Kappos, 2012 U.S. App. LEXIS 26554 (December 27, 2012). Once the factual inquiries – to be reviewed by the CAFC under the substantial evidence standard – are determined, the answer to the ultimate legal question of obviousness is commonly self-evident.



But isn’t claim construction the first issue to be settled in any anticipation or obviousness analysis? And since claim construction is a matter of law, doesn’t the CAFC take a completely fresh look at how the Board has construed the rejected claims? The answer is definitely yes for validity decisions from the District Courts and from the ITC. But the CAFC requires the Board to give patent claims their “broadest reasonable construction consistent with the specification.” In re Avid Identification Systems, 2013 U.S. App. LEXIS 438 (January 8, 2013). Where there are several possible meanings to a claim term in dispute, the Board and the CAFC do not choose the most likely meaning, they chose the “broadest reasonable” meaning, i.e., the claim construction most likely to a conclusion that the claim is anticipated or obvious.

The difficulties faced by an applicant or a patentee at the CAFC are sometimes compounded by the Courts inclination to find “waiver,” that is, to find that arguments against a rejection from the Board have been waived because they were not timely raised at the Board. Two of the Judges in the Avid Identification panel decision last week invoked the notion of waiver to refuse to consider one of the patentee’s arguments, specifically, the argument that the Board failed to construe an obviously means-plus-function limitation under 35 U.S.C. § 112, ¶ 6 as required by In re Donaldson, 16 F.3d 1189 (Fed Cir. 1989).

Listen to Judge Clevenger’s dissent, laying the fault at the door of the Board, not with the patentee:

the PTO did not analyze the claim under § 112, ¶ 6, and so the only appropriate action is to remand the case to the Examiner with instructions to apply a correct claim construction.

Judge Clevenger elaborated on the Board’s failing:

PTO is required to act properly under the Administrative Procedure Act. It cannot behave arbitrarily. But it does so regularly, much to the detriment of the public, when confronting § 112, ¶ 6 claims. Sometimes it honors its Donaldson duties, and sometimes it shirks them, hiding behind 37 C.F.R. § 41.37(c)(1)(v). Random is the polite word for the Board’s erratic behavior. This court should hold the PTO to its obligations, because doing so benefits the public.

Judge Clevenger then listed all the factual questions left unresolved because the Board had not addressed the means-plus-function limitation. The Judge concluded that the “correct result in this appeal is a remand to the Board with directions to … obey Donaldson.”

The Patent Trial and Appeal Board is a tribunal with special expertise in analysis of patentability and validity issues, but so too is the CAFC. It is true that the CAFC reviews a paper record, but it is no “colder” than record seen by the Board and the examiner. Should the CAFC be so deferential to the Board? I don’t think so.


About the Author

Scott M. Daniels is a partner in the Washington, DC law firm of Westerman Hattori Daniels & Adrian, LLP, and is the author of the firm's US PTO Litigation Blog. Daniels has 30 years of experience in patent litigation, particularly litigation at the U.S. International Trade Commission. He now leads the litigation and reexamination groups at WHDA. He is also a regular contributor to the PLI Patent Law Practice Center.

14 comments
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  1. Scott,

    Nice article on how hard it is to win your case on appeal to the Board and especially the Federal Circuit. It also illustrates why you’ve got to contest every reasonable issue.

    If you want to avoid the waiver issue you pointed out, filing a reply brief to an Examiner’s Answer is virtually MANDATORY. That view is reinforced by the USPTO response to a comment on the current appeal rules that “the absence of a reply brief should not raise an inference or prsumption that the appellant acquiesces to any new arguments made by the examiner in the answer.” The USPTO’s response was decidedly ADVERSE: “The USPTO declines to amend the rule explicityl to provide that teh absence of a reply brief should not raise an inference or prsumption that the appellant acquiensces to any new arguments made by the examiner.”

    In fact, there is a Board rehearing decision (Ex parte Njo) where the failure to file a reply brief in response to the Examiner’s Answer was seen as acquienscence to the point(s) being made in the Examiner’s Answer. (I’m not makin this up either.) While the view taken by the Board in Njo may not be leagall correct, filing a rpely is at least “insurance” against the Board assuming that the appellant has “acquiesced” to the points made in the Examiner’s Answer

  2. To all:

    Sorry for the typos in the last two sentences of my final paragraph which should read:

    (I’m not making this up either.” While the view taken by the Board in Njo may not be legally correct, filing a reply brief is at least “insurance” against the Board assuming that the appeallant has “acquiesced” to the (new) points made in the Examiner’s Answer.

  3. Thanks for the excellent points. I do not think the CAFC should be heavily deferential to the Board, since 35 USC 102 makes it clear that the inventor should obtain a patent unless -. Unfortunately, the problems with the patent system are much deeper than burden of proof issues. The biggest problem we have is the Courts, PTO, and much of the public do not understand patents are a PROPERTY RIGHT.

  4. Gene, did this site recently install some sort of text-selection-thwarting code? It’s more than a bit irksome to not be able to copy and paste citations in order to pull up the full case being referred to.

  5. Ah, yes, I see you’ve installed a function transparently named “frustrate_copy.js”. Childish. If anyone wants to copy your content, they’ll just view source. The only people you’re frustrating are your honest readers.

  6. test

    difficulties faced by an applicant or a patentee at the CAFC are sometimes compounded by the Courts inclination to find “waiver,” that is, to find that arguments against a rejection from the Board have been waived because they were not timely raised at the Board. Two of the Judges in the Avid Identification panel decision last week invoked the notion of waiver to refuse to consider one of the patentee’s arguments, specifically, the argument that the Board failed to construe an obviously means-plus-function limitation under 35 U.S.C. § 112, ¶ 6 as required by In re Donaldson, 16 F.3d 1189 (Fed Cir. 1989).

  7. As I sit here and think about all this stuff my brain is starting to hurt. Maybe it is too late in the day, maybe I have had to much caffeine, maybe I’m still not thinking straight from a homepage outage of about 25 minutes earlier today.

    Having said all that… isn’t a determination about novelty and obviousness a question of law? When the CAFC wants to simply ignore a district court don’t they say the entire matter is a question of law? In Markman didn’t the Supreme Court say that the construction of claim language is a question of law, not fact?

    Deference to the agency based upon findings of fact are one thing, but findings of fact as they relate to claims and prior art aren’t really “findings of fact” as we know that term in other areas of law. Questions of law deserve no deference. This is not a “reasonable interpretation” Chevron situation, is it?

    Thoughts?

  8. Gene,

    What is making my brain hurt is that I’ve written about this issue over and over again through a course of years.

    Look here: http://patentu.blogspot.com/2007/04/failure-to-call-witness-for-defense.html

    If the attorney for the patent applicant does not place “evidence” into the record regarding the contested facts, then the PTO automatically wins under the substantial evidence rule. This has been the case since the Supreme Court decided Dickinson v. Zurko back in 1999 (13 years ago). Drink more coffee. Then wake up. You have not yet had your daily quota of caffeine and I have not yet begun to become fighting mad about this topic. Ugh. :-)

  9. Anyone… everyone…

    Is there any other place in administrative law where an ALJ is charged with making a purely legal finding that is then reviewed not as a question of law but under the substantial evidence test?

    -Gene

  10. Gene,

    I think you are mischaracterizing the situation.
    If the patent applicant attacks a finding of fact made by the examiner/Board, then the substantail evidence rule kicks in.
    If the patent applicant attacks a procedural aspect (e.g. failure to give the applicant due process) then the substantial evidence rule is not in play. See for example the old case of In re Anton (failure to address a rule 132 declaration submitted as evidence by the applicant).

    The CAFC makes non-patent APA decisions all the time. Look at their reviews of board decisions by other agencies.

  11. Thanks Step. I’ll take a look.

  12. Gene, it occurred to me (in hindsight) that I mis-recalled the name of the case
    It is In re ALton
    Here is a link
    The issue was adequate written description:

    http://www.intellirights.com/articles/InreAlton-CAFC-Feb5-1996.pdf

  13. Gene,

    You were looking for a case where the CAFC reverses an ALJ on a mixed facts and law basis
    Here is an example from today:

    http://www.cafc.uscourts.gov/images/stories/opinions-orders/12-3074.pdf

    snippet:
    Finally, OPM argues that under the standard set
    forth in Skidmore v. Swift & Co., 323 U.S. 134 (1944), and
    later reaffirmed by United States v. Mead Corp., 533 U.S.
    218 (2001), this court should defer to OPM’s and SSA’s
    interpretations that Mr. Stephenson remained entitled to
    SSA disability benefits. The Skidmore standard “requires
    courts to give some deference to informal agency interpretations
    of ambiguous statutory dictates, with the degree of
    deference depending on the circumstances.” Cathedral
    Candle Co. v. U.S. Int’l Trade Comm’n, 400 F.3d 1352,
    1365 (Fed. Cir. 2005). As the Court explained in Mead,
    “[t]he fair measure of deference to an agency administering
    its own statute has been understood to vary with
    circumstances, and courts have looked to the degree of the
    agency’s care, its consistency, formality, and relative
    expertness, and to the persuasiveness of the agency’s
    position.” Mead, 533 U.S. at 228.

  14. step back,

    Any discussion of agency (especially the patent agency) latitude should at least reference Tafas.