In re Lovin: The Examiner’s Answer is Too Late To Make a Proper Rejection of Dependent Claims

By Sue D. Nym
November 23, 2011

The Federal Circuit is considering whether to hear In re Lovin en banc, and indeed they should rehear Lovin en banc.  The Federal Circuit should defend the applicant’s right to receive a meaningful explanation of claim rejections before the applicant is required to rebut the rejections.

Lovin has received exceptional attention in the patent law blogosphere.  The facts of Lovin are discussed here at Ryan Alley’s blog.  In short, Lovin permits an examiner to wait until an examiner’s answer to explain how and why dependent claims are rejected.  What’s worse, Lovin permits the examiner to require the applicant to provide a substantive reason for patentability before the examiner explains the rejection.  There have also been prominent discussions of Lovin regarding the PTO’s compliance with administrative law at PatentlyO and at IPWatchdog.

I want to discuss Lovin from a different angle: I think that the panel decision contradicts numerous patent decisions of the Federal Circuit and its predecessor court.  The decision also undermines the value of dependent claims to both patentees and the Patent Office, thereby making the case exceptionally important.

There are four important issues intertwined in Lovin:

  1. What must an examiner do to properly reject a claim?
  2. Is the examiner permitted to do something less for dependent claims than for independent claims?
  3. What must the applicant do to trigger the examiner’s duty to properly reject a claim, including a dependent claim?
  4. If the examiner fails to properly reject claims in the final office action, how late is too late for the examiner to provide an explanation?

What Must an Examiner Do to Properly Reject a Claim?

Procedurally, the law requires that an examiner explain a rejection sufficiently to allow the applicant to know how to respond.  In Lovin, the examiner designated three references and § 103 for dependent claims, but did not make findings of fact, as required by Graham v. John Deere, to indicate which claim elements are present in which references, and which are missing.  The examiner simply indicated that the dependent claims were rejected without saying anything further about them.

It is contrary to law to require applicants to substantively rebut rejections before the examiner gives a meaningful explanation.  The requirement for the examiner to first explain the rejection derives from (a) Federal Circuit precedent on the prima facie case, which requires the examiner to explain the rejection before applicant responds (without requiring applicant to “shoot arrows into the dark”), (b)  case law on “new grounds of rejection” which requires the PTO to give the applicant a “fair opportunity to respond” to new facts and legal rationales (which, in Lovin, were untimely made in the examiner’s answer), (c) Office regulations that require that:

When a reference is complex or shows or describes inventions other than that claimed by the applicant, the particular part relied on must be designated as nearly as practicable. The pertinence of each reference, if not apparent, must be clearly explained and each rejected claim specified.

and (d) Supreme Court precedent interpreting the Administrative Procedure Act, which requires government agencies to explain the bases for their decisions.

May an Examiner Give Dependent Claims Less Attention than Independent Claims? 

Is an examiner allowed to give dependent claims less attention than independent claims?  On the surface, one is tempted to say yes.  After all, applicants are usually focused on independent claims, not dependent claims.  Also, the PTO is strapped for cash, but examining dependent claims takes up precious time and resources.  As discussed below, however, both policy and binding precedent show that claims are not inferior just because they are dependent.  Dependent claims must receive equal attention during examination.

The PTO previously tried to implement regulations almost identical to the rule that the Federal Circuit endorses in Lovin.  In January of 2006, the PTO wrote in a Notice of Proposed Rulemaking that it was proposing to delay consideration of dependent claims until the independent claims are in condition for allowance.

However, the PTO never adopted this proposed regulation, because in January 2008 the Office of Management and Budget directed” the PTO to “remove” the proposal.[i]  Thus, in Lovin, the PTO is attempting to implement a rule almost identical to one that the Office of Management and Budget barred the PTO from promulgating.

The practical problem with the PTO’s proposal is that it fails to consider the value of dependent claims as backup strategies.  The efficiency boost that the PTO described would only occur if the examiner agrees with the applicant about the independent claims.  But, as in Lovin, examiners typically fail to agree with the applicant about independent claims.  In those cases, the failure to fully consider and address those dependent claims results in less efficiency, not more.  The prosecution of Lovin’s application has been anything but efficient.

Both Congress and the PTO have long recognized the utility of dependent claims to both inventors and the PTO.  Congress itself expressly provided for dependent claims in 35 U.S.C. § 112.  Similarly, in MPEP § 714.12, the PTO has for a long time stated the benefit of fully examining dependent claims:

Many of the difficulties encountered in the prosecution of patent applications after final rejection may be alleviated if each applicant includes, at the time of filing or no later than the first reply, claims varying from the broadest to which he or she believes he or she is entitled to the most detailed that he or she is willing to accept.

MPEP § 714.12 observes that prompt examination of dependent claims makes prosecution more efficient.  Dependent claims allow multiple examinations to proceed in parallel.  Instead of a claim being examined and amended through a series of twenty (or more) rounds of prosecution, all twenty (or more) claims are examined in parallel in a single office action.  Also, the dependent claims focus the examiner’s attention on the best prior art for the entire application, including independent claims, as required by MPEP §§ 706.02 and 904.03.

The “begin by ignoring dependent claims” policy that the PTO proposed in 2006, and seeks in Lovin, is directly contradicted by the “carefully examine dependent claims and explain their rejections to streamline prosecution” policy of MPEP § 714.12 and Rule 1.104(c)(2).  But if the PTO and Federal Circuit permit examiners to effectively ignore dependent claims until the examiner’s answer, as in Lovin, then the utility of dependent claims to both inventors and the Patent Office will be undermined.

What Must an Applicant Do to Trigger the Examiner’s Duty to Explain Rejections of Claims, Including Dependent Claims?

The answer to this question is: nothing more than file the application.  The law on the “prima facie case” makes the order of the dance clear: the examiner must lead by going first, and only then must the applicant respond.  Most recently, the Federal Circuit held that the examiner fails to make a prima facie case when “a rejection is so uninformative that it prevents the applicant from recognizing and seeking to counter the grounds for rejection.”  In re Jung, 637 F.3d 1356, 1362 (Fed. Cir. 2011).  Many in the patent bar regarded Jung as contradicting the higher standard for a prima facie case set in precedential decisions of the Federal Circuit and its predecessor court, including In re Oetiker, In re Piasecki, and Application of Warner.  Nevertheless, saying absolutely nothing about the dependent claims, as the examiner did in the final rejection in Lovin, does not even satisfy the lower standard of Jung.

Curiously, although the prima facie case clearly puts the initial burden on the examiner, Judge Dyk in Lovin repeatedly implies that the applicant failed to trigger the examiner’s duty to examine.  For example, Judge Dyk writes that throughout prosecution, Lovin “did not provide separate arguments for the dependent claims.”  He writes that “[Lovin’s] arguments for the dependent claims […] were not [well developed].”  Judge Dyk also writes that “[Lovin] declined to submit a reply to the examiner’s answer.”

Although Judge Dyk refers to these alleged failings by Lovin, the result in Lovin does not hinge on any of them.  The decision in Lovin depends on deferring to the PTO’s interpretation of its own appeal regulation (37 CFR § 41.37(c)(1)(vii)), and not on the applicant’s failure to preemptively argue dependent claims or file a reply brief.  Indeed, the clear implication of Lovin is that Lovin’s brief was defective at the time it was filed for failing to “substantively” address dependent claim rejections that the examiner had never explained—regardless of whether the examiner later tried to cure that deficiency.

The problem is that the PTO interprets 37 CFR § 41.37(c)(1)(vii) in a manner that eviscerates the obligations of examiners under Rule 1.104, the law on the prima facie case, new grounds of rejection, and administrative law requirements for agencies to explain their decisions.  In Lovin, Judge Dyk endorses an interpretation according to which, if the examiner has not explained rejections, the applicant must go first in the appeal brief, and then the examiner can explain in the examiner’s answer.  But that is not the law of the Federal Circuit.  Under binding precedent on the prima facie case (i.e. Oetiker, Piasecki, Warner, and Jung), the examiner must go first without the applicant doing anything at all.  The examiner must go first, regardless of whether the applicant preemptively argues claims, makes “well developed” arguments, and/or files a reply brief.

The decision in Lovin is exceptionally important because the longstanding assignment of the initial burden to the examiner makes perfect sense.  The applicant cannot read the examiner’s mind.  It is impossible for applicants to meaningfully rebut an examiner who is stonewalling by remaining silent.  Yet the result in Lovin allows examiners to “sit mum” and force applicants to “shoot arrows into the dark”—precisely what the prima facie case rule is designed to prevent.

When must an examiner explain a rejection?  Is a first explanation in an examiner’s answer too late?

Now that we have determined that the examiner must go first, by making a prima facie case, the question remains: when must the examiner go first?  How late is too late?  Clearly, the final rejection in Lovin, which was silent about the dependent claims, did not make a prima facie case of unpatentability.  However, the examiner’s answer did contain some discussion of the dependent claims (albeit still in a haphazard manner that does not comply with MPEP § 1207.02(A)(9) and (10)).

The examiner’s answer is far too late for an examiner to properly reject any claim, even a dependent claim.  By statute, an appeal is taken from the examiner’s “decision,” not from the examiner’s answer.  The final rejection of an application—which in Lovin contained no discussion of the dependent claims—represents the end of prosecution, not the beginning.

Lovin and its departure from established law are exceptionally important because the practical consequences of permitting examiners to remain silent until the examiner’s answer are staggering.  By the examiner’s answer, the applicant typically has received one office action, filed a response to that action, received a final office action, filed a response to that action, filed a notice of appeal, and filed a full appeal brief.  The government fees for filing the application, notice of appeal, and appeal brief total at least $2,490.  The legal fees for reviewing each of the office actions and preparing the responses could easily be $10,000.  Thus, the applicant will often have spent over $12,000 by the time that the examiner bothers to explain why most of the application’s claims are rejected.  Across the more than 100,000 patent applications examined each year, the rule in Lovin could result in a tax on the inventing community on the order of tens of millions of dollars.

Thus, although the Federal Circuit requires the PTO to provide an applicant with a “fair opportunity to respond” when the PTO raises new facts and rationales, there is nothing “fair” about waiting until an examiner’s answer to spring new facts and rationales on the applicant, and then limiting the applicant to mere attorney argument in a reply brief.  Rather, if the examiner waits until the examiner’s answer to explain how claims are rejected, a fair opportunity to respond would permit applicants to freely reopen prosecution under 37 C.F.R. § 1.111, which is all that Lovin requests here.  That remedy would place Lovin in the same position as if the examiner had fulfilled the duty to explain the rejections in the first office action.

The panel in Lovin made a number of errors that the Federal Circuit should correct by en banc rehearing, including incompatibility of the panel decision with the court’s own precedent, including In re Beaver or In re Nielsen, as well as In re JungIn re Stepan, and Application of Kronig.  Although the PTO is endorsing the outcome in Lovin for the admirable purpose of increasing efficiency during examination, it is not clear that efficiency will be increased.  Moreover, an examiner’s answer is too long to wait, and the wait is too expensive, to learn why and how an examiner is rejecting any claim in an application.



            [i] U.S. Patent and Trademark Office, Supporting Statement to request for clearance under Paperwork Reduction Act, http://www.reginfo.gov/public/do/DownloadDocument?documentID=44055&version=2 at pages 1-2 (Jan. 2008) (“At the direction of OMB, this renewal is being resubmitted with all of the rule-related information removed from the collection pertaining to the notices of proposed rulemaking approved by OMB on 2/22/2006 entitled ‘Changes to Practice for the Examination of Claims in Patent Applications’ (RIN 0651-AB94)”).

The Author

Sue D. Nym

Sue D. Nym  

As you have probably guessed, Sue D. Nym is not a real person. Occasionally we receive an article and the author wishes to remain anonymous. All such anonymous posts, whether contributed by a man or a woman, are attributed to Ms. Nym.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 12 Comments comments.

  1. Ryan Alley November 23, 2011 2:01 pm

    Hi Sue, thanks for the link and great discussion on several issues going on in Lovin.

    Would you agree that the BPAI had only to adopt the Examiner’s element-by-element application from the Answer in affirming and designate their opinion a new ground of rejection to have carried their procedural burden? If so, the USPTO is probably justified in being required to do this small step, but it really gets the Applicant only a chance to amend the claims without paying for an RCE (especially if the element-by-element application is a substantively correct, which no one has addressed yet). I would think most Applicants would be much better off just petitioning after the Answer to have it designated a new ground.

    All that said, I’m in agreement with you that Lovin does not follow the Beaver and Nielsen precedents, and I don’t think the panel’s dismissal of those precedents is satisfying. I’m wondering if enough judges will agree, in which case I would think they would also reach the Paperwork Reduction Act claims advanced by Amicus Regulatory Checkbook (http://www.patentlyo.com/patent/2011/09/protect-the-public-from-agency-misconduct.html).

  2. James D. Ivey November 23, 2011 4:25 pm

    I think the link in the article to In re Lovin is broken. I found the case here:

    http://scholar.google.com/scholar_case?case=12567103870992723326

    I thought the PTO is very concerned about the application backlog. How is playing “hide the ball” through nearly the entire prosecution process going to help with that?

    The fact pattern is very familiar to me; no meaningful examination until I file the Notice of Appeal. If the first Office Action was complete and good, I’d cancel the properly rejected claims and get allowance of the remaining, narrower claims by the second Office Action if any remain. Done. That’s how to reduce the backlog.

    Regards.

  3. Sue November 23, 2011 5:29 pm

    Ryan Alley –

    Thanks for your fantastic comment! Your blog is an invaluable asset to patent solicitors around the U.S.

    You ask:

    “Would you agree that the BPAI had only to adopt the Examiner’s element-by-element application from the Answer in affirming and designate their opinion a new ground of rejection to have carried their procedural burden?”

    Yes, the BPAI can always use 41.50b to make a new ground of rejection.

    The tricky part here is that the PTO states that a failure to petition an undesignated new ground in an examiner’s answer is petitionable, not appealable. I don’t know if the CAFC has ever blessed that interpretation. It seems like the alternative interpretation – that the BPAI is forced to repeat the new ground and then designate it as new under 41.50b – makes more sense (i.e. is more just). Especially because 1.181 petitions are worthless.

    Fortunately, I think Lovin should be able to win here simply on prima facie case law (Oetiker, Jung, etc.), without new ground of rejection law. I’ve never heard of someone saying that the prima facie case test is a petitionable vs. appealable issue depending on the stage of prosecution (in contrast to new grounds of rejection).

    “but it really gets the Applicant only a chance to amend the claims without paying for an RCE (especially if the element-by-element application is a substantively correct, which no one has addressed yet). I would think most Applicants would be much better off just petitioning after the Answer to have it designated a new ground.”

    Three things:
    1. it doesn’t just let them submit amendments, it also lets them submit evidence
    2. RCE are non-trivial expenses, in terms of both dollar price and type B PTA
    3. You’re focusing on this particular case. The problem is that the rule in Lovin, if upheld, would be applied across the entire examining corp. – 100,000s of cases. You have to ask yourself: do I want a PTO where examiners systemically wait until the examiner’s answer to meaningfully discuss dependent claims, or do I want a PTO where I get a full and fair treatment of all claims in the first action? Because that’s what the decision in Lovin could decide.

    “All that said, I’m in agreement with you that Lovin does not follow the Beaver and Nielsen precedents, and I don’t think the panel’s dismissal of those precedents is satisfying. I’m wondering if enough judges will agree,”

    Unfortunately, the petition for rehearing focuses on the APA and PRA without any real consideration of Beaver and Nielsen. Nor does the petition focus on the “examiner’s answer is too late” argument, which is the big argument I make above.

    I think Rader and Newman would be sympathetic. I think Moore is a close third. I think Dyk (who wrote Lovin) and Gajarsa would probably not be sympathetic. I’m not sure about Lourie (who can be very helpful to patentees on substance, not sure about procedure), Linn, or Bryson. Don’t know about the new judges either. I think the odds are against Lovin. 🙁

  4. step back November 24, 2011 7:14 am

    Dear Sue D. Baskets,

    There will always be extreme outlier cases.
    It sounds as if Lovin is such a case.

    However, is it worth spending so much energy and time picking over the skeletal bones of an outlier case?
    If that is the case, we can spend the rest of our lives re-arguing Gotchalk v. Benson too.

    The real lesson to be learned here is that if you plan to go up on appeal, you get your evidence into the record *before* you file that Notice of Appeal. And before you even do that, you call up the examiner and ask for an interview so that you can clarify on the record where the examiner is coming from. In other words, if the examiner does not give the basis of rejection in writing, you get it verbally from them and put the conversation into the record.

    No matter what you do, there is no guarantee you will get justice.
    After all, legal issues are decided by human beings and we humans can be irrational and vindictive at times.

    (Maybe off the record I can tell you about the time an SPE told me, it will be over his dead body before my client gets a patent. The story ends with the client getting the patent shortly thereafter. 🙂 )

  5. Sue November 24, 2011 7:45 am

    Dear Step Back –

    Your argument amounts “there will never be perfect justice at the PTO, so it’s not worth trying.” I disagree: I think it’s still worth trying.

    If you take your logic to its natural conclusion, then examiners will be freely permitted to ignore dependent claims until an appeal is filed. This is justified, in your view, because applicants can submit evidence or conduct interviews. But they cannot know precisely what evidence to submit, if they don’t know how the examiner is rejecting the claims. And they shouldn’t have to go through the time and expense of conducting an interview, just to get the examiner to do a proper job the first time. There’s no guarantee that the examiner will be any more helpful in the interview than on paper (if the examiner just says nothing helpful and tells you to go fly a kite, what are you going to do? Petition the director?). We just want the examiner to do his or her job – that’s all we’re asking!

    Lastly, you focus on the fact that this is an outlier case. I’m not sure it is. But even if it is an outlier, the rule in Lovin blesses what happened here. If the rule in Lovin stands, then the shoddy examination here could spread throughout the examining corps like wildfire – there will be nothing to stop something that the CAFC says is perfectly fine.

    As I said to Ryan Alley: you have to ask yourself whether you want a PTO where the examiner systematically ignores dependent claims until the examiner’s answer, or not. Because that’s what the decision in Lovin could ultimately lead to.

  6. Corporate Refugee November 24, 2011 8:03 am

    these issues so perfectly tee up the primary tension holding back significant improvement in patent quality and prosecution efficiency. neither the applicant nor the examiner wants to fully play his hand until ultimately necessary. the fed cir has a fantastic opportunity here to fix this stalemate.

  7. Richard Belzer November 24, 2011 12:03 pm

    Ryan,

    Thanks for reminding readers of my amicus brief. The full text is here:

    http://www.rbbelzer.com/uploads/7/1/7/4/7174353/110920_final_regulatory_checkbook_amicus_brief.pdf

    The Paperwork Reduction Act is the most important law patent counsel don’t know about. It prohibits agencies from imposing unapproved information burdens on the public. The PTO lacked OMB approval for the appeal brief until December 22, 2009. That means the Board never had the authority to reject Lovin’s appeal for having failed to provide any information. To the extent that the Board changed its interpretation of the existing rule, or enforced provsions of the never-finalized 2008 rule, the Paperwork Act protects the public from that, too.

    If patent counsel exercised their rights under this law, much of the agency behavior you find disturbing would stop.

  8. step back November 24, 2011 9:10 pm

    I guess I have to eat crow in thinking this was an outlier incident:

    Appeal 2009-011859
    Application 10/675,439
    Decided 11/25/2011 Ex parte JEYHAN KARAOGUZ:

    Regarding above contention 2, Appellants quote a claim limitation
    and allege that the prior art does not disclose or suggest the limitation.
    Appellants’ Brief is otherwise silent as to why this is the case. Again,
    Appellants’ silence does not persuade us that the Examiner has erred.
    Appellants present no substantive arguments regarding the claims other than
    merely restating the limitations called for in the claims. See 37 C.F.R.
    § 41.37(c)(1)(vii) (“A statement which merely points out what a claim
    recites will not be considered an argument for separate patentability of the
    claim.”); In re Lovin, 99 USPQ2d 1373, 1379 (Fed. Cir. 2011) (“[W]e hold
    that the Board reasonably interpreted Rule 41.37 to require more substantive
    arguments in an appeal brief than a mere recitation of the claim elements and
    a naked assertion that the corresponding elements were not found in the
    prior art.”).

  9. Sue November 24, 2011 9:19 pm

    Step Back –

    After the panel decision in Lovin, the BPAI started citing it repeatedly. Recently, however, I heard that they have largely stopped doing that (i.e. because of some internal directive from Kappos or upper management).

    Another reason why it’s important for the panel to be reversed en banc.

  10. Anon November 25, 2011 10:10 pm

    Step Back,

    A quick check in Lexis to augment your findings revealed the following breakdowns of 24 cases:
    Month Decided
    July – 1
    August – 14
    September – 7
    October – 2

    Tech center
    1600 – 3
    1700 – 3
    2100 – 7
    2400 – 3
    3700 – 6
    3900 – 2

    Appeal Number Year
    12 for 2009,
    8 for 2010 and
    4 for 2011.

  11. Sue November 26, 2011 5:54 pm

    Anon –

    Thanks for your very useful comment!

    It just shows how it remains important that Lovin is reversed en banc.

    Sue