Do Patent Applicants have a Chance at the CAFC?

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.

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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.