Federal Circuit Rejects ‘Swearing Behind’ as Insufficient Under Rule 131

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Federal Circuit Review No. 71-1.
Federal Circuit Rejects Applicants’ Evidence of Swearing Behind as Insufficient to Satisfy Requirements Under Rule 131

In re: Thomas Steed, Sourav Bhattacharya, Sandeep Seshadrijois, No. 2014-1458, 2015 U.S. App. LEXIS 17248 (Fed. Cir. Oct. 1, 2015) (Before Newman, Clevenger, and Dyk, J.) (Opinion for the court, Newman, J.).  Click Here for a copy of the opinion.

Steed, Bhattacharya, and Seshadrijois (collectively, “Applicants”) filed a patent application with claims directed to a web-based debt collection system. During prosecution, the Examiner rejected the claims as obvious in view of U.S. Pre-Grant Publication No. 2004/0019560 (“’560 reference”), alone or in combination with other references. After unsuccessfully attempting to distinguish the ‘560 reference, Applicants submitted a Rule 131 Declaration to “swear behind” the ‘560 reference and remove it as prior art. Applicants submitted exhibits with the Declaration to establish conception, reduction to practice and continuing diligence. The Examiner found the Declaration and exhibits insufficient to show conception and reduction to practice. In addition, the exhibits revealed that a significant gap of time was unaccounted for to show due diligence.

Applicants appealed to the Patent Trial and Appeal Board (“Board”). Their brief included a chronological listing of entries in the “Inventor Activity Logs” and “Inventor Intranet Site Activity Logs” to show diligence over a period of seven years. During the hearing, the Board refused to consider this evidence because it was not evidence of record before the Examiner. The Board determined that Applicants had waived its defense of prior reduction to practice, and was limited to prior conception with diligence, because the reduction to practice issue was not raised in Applicants’ briefs. The Court then concluded that Applicants “had not set forth specific facts to establish dates and acts of either conception or reduction to practice.” The Board ultimately affirmed the Examiner’s rejection of the claims as obvious based on the ‘560 reference. Applicants appealed to the Federal Circuit.

The issue on appeal was whether Applicants antedated the ‘560 reference in accordance with Rule 131. A patent applicant bears the burden of establishing “reduction to practice prior to the effective date of the reference, or conception of the invention prior to the effective date of the reference coupled with due diligence from prior to said date to a subsequent reduction to practice or to the filing of the application.” 37 C.F.R. 1.131(b). With respect to the Board’s ruling that Applicants had waived its “reduction to practice” argument, the Federal Circuit disagreed. According to the Court, Applicants’ references to activities earlier than the effective date of the ‘560 reference in its Appeal and Reply Briefs “negate[d] the Board’s ruling that [Applicants] waived the issue of actual reduction to practice.”

However, the Court concluded that substantial evidence supported a finding that Applicants failed to establish conception and continuing diligence, or actual reduction to practice, before the effective date of the ‘560 reference. The Court agreed with the Board that Applicants’ exhibits were “not self-explanatory;” they provided no specific dates or acts tied to elements of the claims. In addition, 57 months of time was unaccounted for in Applicants’ attempt to show due diligence. The Court also agreed with the Board’s refusal to consider evidence that was not previously presented to the Examiner. Applicants’ proper remedy was “to file a continuation application and present [] evidence [of an earlier reduction to practice or conception date] to the Examiner in the first instance.” Therefore, the ‘560 reference remained a prior art.

With respect to obviousness, since Applicants failed to provide any substantive argument on appeal, the rejection must be sustained. Accordingly, the Court affirmed.