This past Monday the USPTO released the final rule package pertaining to the Rules of Practice Before the Board of Patent Appeals & Interferences in Ex Parte Appeals. (here).

This final rule notification stems from the earlier notice of proposed rule making issued last November. The rules are limited to ex parte proceedings only and have no bearing on patent interferences, or inter partes patent reexamination. Likewise, the new rules will not control Inter Partes Review or Post Grant Review. The final rules become effective on January 23, 2012. (for appeals initiated on or after the effective date)

In response to the original publication of the rules, I pointed out that the proposal provides an interesting safeguard against new rejections in an Examiner Answer. Namely, the filing of a 1.181 petition challenging such a rejection tolls the period for filing a Reply brief. Thus an Applicant may await decision on the petition before filing the Reply. This provision will be very helpful in patent application prosecution, but may aggravate ex parte reexamination pendency if abused.

While there is little incentive for delay in application prosecution once reaching the Examiner Answer phase, such is not always the case for ex parte patent reexamination. For example, prosecution cannot simply be restarted by the filing of an RCE; likewise extensions of time are not available as a matter of right. So, once reaching the appeal phase, faced with the proposition of losing at the Board, initiation of the proposed petition procedure may be used as a de facto delay tactic. In my experience the pendency of a 1.181 petitions can be upward of 4-6 months, if not longer. Since most patent reexamination is now conducted concurrent with litigation, delay of an adverse decision can be very valuable to litigants in certain circumstances.

The PTO addressed this concern in its response to Comment 60 in the Final Rule publication. In the response the PTO acknowledges the potential for abuse in ex parte reexamination proceedings and states that internal controls will be put in place to manage such situations. However, the Office was not willing to commit to a hard deadline for deciding such petitions.

Generally speaking, the Final Rules are largely the same as that originally proposed and are applicant/patentee friendly. Assuming proper implementation and oversight, the new rules are a very positive development.

Interestingly, in responding to a comment pointing out the value of the pre-appeal brief conference (Comment 87), the Office indicated that different “rule making initiative” is currently under consideration for that proceeding. As I pointed out some time ago in a guest post for IPWatchdog, a few slight revisions to this proceeding would be highly beneficial.

Back in February, In re Stepan (or In re Side-steppin if it helps you remember the case) was argued before the CAFC. In a previous post, I explained how this case demonstrated a problem addressed by the 2010 proposed rule package for practice before the BPAI. Namely, the shifting in rejection grounds during appeal relative to that of the originally applied rejection. The newly proposed Rules attempt to liberalize the manner by which an Applicant/Patent Holder may challenge a “new ground of rejection” as presented in an Examiner Answer. The idea being, it is unfair for the Office to change course once prosecution is closed as no new rebuttal evidence may be entered.

Unchecked, a modification to the Office’s fact finding/legal theory in an Examiner Answer or BPAI decision can be quite prejudicial during patent reexamination. This is because, once on appeal, there is no RCE-like procedural mechanism by which a patent holder can unilaterally restart prosecution for the purpose of submitting new rebuttal evidence (unlike patent application prosecution).

At issue in Stepan was reexamination of U.S.Patent 6,359,022. During the reexamination, the USPTO disputed the priority right to a parent application under 35 USC  § 120. As the parent was a CIP, the examiner did not agree that certain claims were entitled to priority. Thus, under the examiner’s theory the applied art of the reexamination qualified under 102(b).

The Patentee argued that the priority claim was effective and that the art qualified as 102(a). Therefore, the Patentee asserted that declaration evidence (antedating) under 37 CFR § 1.131 was effective to “swear behind” the applied art. As the examiner maintained the 102(b) rejection, the sufficiency of the declaration evidence was not examined.

On appeal, the Board found that the Examiner was incorrect as to 120, and that some of the disputed claims were entitled to the priority date of the parent. However, the Board found that the declaration evidence was insufficient for these claims. In essence, the Board affirmed the examiner by changing the basis of the rejection from 102(b) to 102(a), but did not designate the 102(a) rejection as new. The Board sidestepped the new rejection issue by taking the position that the Patentee had anticipated the 102(a) rejection by submitting the declaration evidence, and that either rejection(102(a) or 102(b)) was still applied under 102.

As noted above, this change in grounds was significant as the Patentee never had an opportunity to address the perceived deficiencies in the declaration evidence, and has no ability to unilaterally reopen prosecution. In their analysis of the issues (here), the CAFC explained:

By making and relying on new fact findings regarding an issue the examiner did not raise, i.e., the sufficiency of Stepan’s Declaration to swear behind the Singh reference as § 102(a) prior art, the Board relied on a new ground of rejection. Kumar, 418 F.3d at 1367–68 (finding that a new ground of rejection exists when the Board relies on new fact findings which had not been previously advanced by the examiner about an existing prior art reference); see also In re Kronig, 539 F.2d 1300, 1302–03 (CCPA 1976) (noting there was no new ground of rejection when the Board used the same basis and the same reasoning advanced by the examiner). It is crucial that the examiner issue a rejection (even if that rejection is subsequently withdrawn) so the applicant is on notice that it is obligated to respond. Mere reliance by the Board on the same type of rejection or the same prior art references relied upon by the examiner, alone, is insufficient to avoid a new ground of rejection where it propounds new facts and rationales to advance a rejection—none of which were previously raised by the examiner.

(emphasis added)

.                .               .              .                .                 .

Notice does not focus on the applicant’s arguments divorced from the examiner’s rejections of record that are actually appealed to the Board. Instead, it focuses on the “adverse decisions of examiners” during prosecution which form the basis of the Board’s scope of review. 35 U.S.C. § 6(b). Because Stepan did not have prior notice of the Board’s intent to craft and rely on new findings of fact to support a §§ 102(a)/103(a) rejection and because it failed to identify this rejection as a new ground, Stepan’s notice rights were violated. 5 U.S.C. § 554(b)(3); 35 U.S.C. § 6(b). Had the Board labeled its rejection as a new ground of rejection, Stepan could have reopened prosecution to address the newly-alleged deficiencies in its Declaration with the examiner. We vacate the Board’s decision and remand with instructions to designate its rejection as a new ground of rejection.

Going forward it is expected that prosecution will be reopened in more appeals, especially appeals in patent reexamination as Patentees/Requesters have available no mechanism to reopen prosecution on their own to rebut new reasoning of the Board.

In a strange development, the BPAI issued a decision yesterday invalidating claims 1-6 of U.S. Patent 6, 961,737. While the decision itself is straight forward, it is odd in that claims 1, 3, 4 and 6 were previously invalidated by the CAFC.

As discussed this time last year, the ‘737 Patent was one of the patents at issue in In Dow Jones & Co., Inc. v. Ablaise Ltd., (Fed. Cir. 2010). On May 28, 2010, the CAFC determined that all but claims 2 and 5 of the ‘737 Patent were invalid based upon prior art, including a patent identified as the “Bobo Patent.” The decision was noteworthy as footnote 3 explained the final rejection status of the reexamination, lamenting that the appeal may have been mooted altogether had the reexamination been at a more advanced point. At that time I pointed out that had the defendants not delayed their request for some two years that they may have been able to save themselves the cost of the CAFC appeal.

Yesterday, the BPAI essentially agreed with the CAFC, invalidating all claims based on the Bobo Patent, but such was a waste of time and resources. (decision here)

As noted in MPEP 2286, a final Federal Court holding of invalidity or unenforceability (after all appeals), is binding on the Office. Upon the issuance of a final holding of invalidity or unenforceability, the claims being examined which are held invalid or unenforceable will be withdrawn from consideration in the reexamination.

So why did the BPAI waste the time in issuing this appeal decision?

Reading the BPAI appeal, it becomes immediately apparent that the two claims left intact by the CAFC (claims 2 and 5) were not at all the focus of the appeal (See page 7 of the Decision). Instead, the entirety of the appeal discussion was directed to claims previously invalidated by the CAFC. Had the BPAI been aware of the previous decision, it seems their work would have been greatly reduced. (based upon the seemingly conclusory arguments submitted for claims 2 and 5).

PAIR records indicate that briefing was completed prior to the CAFC decision, and the Examiner Answer may have issued prior to the CAFC decision becoming final (expiration of rehearing/appeal time). However, thereafter the dispute continued on to the docketing and ultimate BPAI decision, some 12 months later.

Of course, the Office performs their own litigation searching.  But in cases such as this, where the patent is asserted against a wide swath of industry, digesting all of the various filings can be a formidable task. For this reason MPEP 2282 encourages not only the Patent Owner and Third Party, but any parties to update the Office as to such decisions.

In this case the Decision was provided to the Office by the Patent Owner on June 3, 2010. Unfortunately it was not submitted as a Notice of Concurrent Proceeding (MPEP 2282), but instead, on a Form 1449 IDS filing; for this reason, it was likely overlooked in the file.

In preparing a request for reexamination, often times, user manuals and other proprietary documents are uncovered. As discussed back in March,the degree of public accessibility of such references is key to determining whether or not a given reference qualifies as prior art. In the March decision, public accessibility was not found for a reference limited to confidential distribution among members of a technical group.

Yesterday in Ex ParteePlus Inc, the BPAI considered an appellant’s theory that a proprietary user manual was not publicly accessible since it required a purchase, and included boiler plate language identifying its proprietary nature.

In considering the public accessibility of user manuals sold together with a product, the Board explained:

Appellant argues that the manuals were designed for use by those who licensed the associated computer software and all were indicated to be kept confidential, such that the authors of those manuals did not act to disseminate or otherwise make the manuals available (App. Br. 24-26). The Examiner finds that none of the operating manuals were confidential documents disseminated to a closed group, as any member of the public was able to purchase the software, and obtain access to the publications (Ans. 8). We agree with the Examiner.

We find much of Appellant’s arguments address the nature of the three applied manuals, and how those manuals were to be maintained in confidence (App. Br. 24-27). Appellant asserts that the manuals “were only accessible to a closed group of licensees of the respective software associated with the manuals” (App. Br. 25). While we agree with Appellant that the documents bear legends restricting reproduction and copying (Reply Br. 9), that does not rise to the level of confidentiality at issue here. Rather, we find that this speaks to the software and the manuals being proprietary. We find that most software and the manuals that come with such software would contain restrictions on copying and further distribution, but that would not rise to the level of those items being considered confidential disclosures. Considerations of such confidentiality would require restrictions on who could purchase or otherwise obtain the specific documentation, which has not been shown with respect to the cited manuals.. . . . . .

The requirement of purchasing software to obtain a manual goes to its cost and not its accessibility.

(emphasis added)

The rejection of the reexamined ePlus claims (24-45), of U.S. Patent 6,023,683 were affirmed. The patent was previously litigated in the EDVA against defendants SAP and Ariba Inc., both of which settled with ePlus. For more recent background on the ongoing ePlus campaign see the 2010 post (here)

Last May, Ex parte Lund was decided by the Board of Patent Appeals & Interferences (BPAI) (here). In the decision, the Board affirmed the rejection of the reexamined claims based upon the construction of the claim language electrical connecting means adapted to electrically connect said display means and said data entry array to said computer means in both said first and said second positions.

The Patentee urged that the means-plus-function structure corresponding to the electrical connecting means was limited to the specific mechanical orientation of the connectors shown in the Lund patent (Figs 12 and 15). Yet, the Board found that the function recited only required an electrical connection, such as provided by the ribbon cable or slot connector of the specification.

Unhappy with the Board’s decision, the Patentee appealed to the CAFC, emphasizing the first and second position aspects of the claimed function, explaining that this language demonstrated that the connector must be mechanically oriented in a specific fashion. 

Lund’s claim 1 is directed to a laptop computer. The first position is the usual clam-shell orientation (open), the second position enabled the user to rotate the screen and collapse it down on the keyboard in a tablet computer fashion. This was done by removing the screen from a slot connector, reversing the screen and re-inserting it to the connector, or by way of a flexible ribbon cable. (see below)

The prior art showed reversible screens that could be moved between such positions, but the electrical connections were distinguishable from those shown in Lund’s patent, at least with respect to mechanical positioning. The orientation sought by Lund is shown below as illustrated in Figs 12 and 15 of the patent.

During oral argument, the CAFC noted that the positional features argued were already present in dependent claims 2-8 of the Lund Patent. These claims were not subject to patent reexamination. In an awkward moment for the Patentee, Judge Lourie asked the Patentee why he was on appeal since claims 2-8 already captured what was being argued, and that these claims stood uncontested. Judge Lourie also pointed out that claim differentiation would seem to require a broader reading of claim 1. The Patentee did not have any meaningful rebuttal to these inquiries.

Ultimately, the CAFC seemed to agree with the Solicitor that although the claimed electrical connecting means was limited to the structure of the specification, in this case the card or ribbon connector, the function recited did not require any specific mechanical orientation to achieve the recited electrical connection function. So, although other aspects of claim 1 required specific mechanical interaction between components, the function of the electrical connecting means required only connectivity. Absent the existence of the dependent claims, perhaps this case would have been a closer call.

For those keeping score, the infamous patent portfolio of Ronald Katz continues to wither under the pressure of patent reexamination. Previously, I pointed out the problems patent reexamination has created for the Katz portfolio in parallel litigation. Likewise, last year, an expanded BPAI panel clarified their decision to reject claims in Katz Patent 5,561,707 by explaining the proper analysis for construing expired patent claims during patent reexamination.

Yesterday, the BPAI shot down claims of yet another patent of the Katz portfolio (5,815,551) in Ex Parte Ronald Katz Technology Licensing L.P. In the most recent appeal, it appears Katz pursued very similar arguments to that rejected by the BPAI last year with respect to expired patents.

Another infamous troll, Sorenson Research & Development Trust, fared much better yesterday at the BPAI.

In Ex Parte Jens Erik Sorenson (4,935,184) yet another expired patent was considered by the BPAI. However, rather than disputing the standard applied to such patents during reexamination, Sorenson disputed the inherency finding of the examiner relative to a key claim term. The Board explained their reversal of the examiner as follows:

[C]laim 1 requires that the stabilizing regions provided by the solidified first plastic material must rigidly secure the first common mode part in position in relation to the second complementary mold part.

We are of the opinion that the Examiner has not provided a sufficient basis with factual underpinnings to support the position that Moscicki inherently discloses this aspect of claim 1. . . . . [T]hough Moscicki’s first plastic material may impede some movement of the first common mold part in relation to the second complementary mold part, it may not be sufficiently solidified to “rigidly secure” the first common mold part in position in relation to the second complementary mold part. Indeed, the Kazmer Declaration provides evidence that Moscicki’s first plastic material would not “rigidly secure” as required by claim 1.

The Sorenson patent expired in February of 2008, thus it would appear to have only 3 years of enforceability remaining (i.e., 6 years beyond expiration). Since any renewed request for patent reexamination is unlikely to reach a final conclusion before that time, it seems that this licensing campaign will continue.

As reported here last January, the Board of Patent Appeals & Interferences (BPAI) heard oral arguments in the longstanding dispute between Callaway Golf and Acushnet. Acushnet is the parent company of Titleist, maker of the ProV1 family of golf balls. Callaway asserts that the ProV1 balls infringe several of their patents (6,210,293, 6,503,156, 6,506,130, 6,595,873)

The majority of the debate related to whether or not a certain hardness range recited in the claims referred to a characteristic of the material, used to construct the ball, or the ball itself. Callaway argued that the claims were directed to a ball, not ingredients. Acushnet explained that the specifications of the patents were broad enough to cover a ball hardness interpretation and an ingredient hardness interpretation, thus the PTO was correct in rejecting the claims.

Not surprisingly, today the BPAI affirmed all rejections made by the examiner (decisions here here and here)

Next up is the inevitable request for rehearing at the BPAI, then appeal to CAFC. In the co-pending litigation the patents were also found invalid. (March 2010 D.Del). Seems this war is all but over.

In November of 2010, the USPTO introduced a proposed rule package for practice before the BPAI. One focus of the new rules is to liberalize the manner by which an Applicant/Patent Holder may challenge a “new ground of rejection” as presented in an Examiner Answer. The idea being, it is unfair for the Office to change course, mid-way through an appellate process.

Unchecked, a modification to the Office’s fact finding/legal theory in an Examiner Answer can be quite prejudicial during patent reexamination. This is because, once on appeal, there is no RCE-like procedural mechanism by which a patent holder can unilaterally restart prosecution. Last week, In re Stepan posed this very issue to the CAFC, albeit in the context of a Board affirmance in patent reexamination. (oral arg. here).

At issue in Stepan was the right to priority to a parent application under 35 USC  § 120. Further, a declaration submitted under 37 CFR § 1.131 was submitted to antedate certain 102(a) prior art.  

Since the child patent disputed in Stepan was a CIP of the parent, the ability to benefit from the filing date of the parent was considered on a claim-by-claim basis. As such, the examiner determined that certain claims of the Stepan patent were not able to benefit from the 120 priority claim. For these claims, a reference to Singh was determined by the examiner to qualify as 102(b) prior art. Based on this statutory bar, no antedating was possible.

The Patentee argued that the 120 priority claim was proper (i.e., 112 support in the parent for the claims), and that priority claim transformed the Singh reference to 102(a) art; thus the Patentee reasoned that the antedating declaration was able to remove Singh as prior art. 

On appeal, the Board found that the Examiner was incorrect as to 120, and that some of the disputed claims were entitled to priority. However, the Board found that the declaration was insufficient for these claims. In essence, the Board affirmed the examiner by changing the basis of the rejection from 102(b) to 102(a). Rather than seek a rehearing of this issue, Stepan took the dispute to the CAFC.

The CAFC and the USPTO pointed out to Stepan that although this change of statutory basis would typically constitute a new ground of rejection, Stepan argued both 102(a) and 102(b) issues in their briefing to the BPAI, and before the examiner. The Patentee countered that had the ground been changed earlier, or designated as such in the affirmance, that the declaration evidence could have been corrected.

While a rehearing request to the BPAI is not required before seeking appeal to the CAFC, the panel was not impressed with the failure to point out this issue to the Board prior to the CAFC appeal.

Perhaps Stepan would have been better off exploring the controversial district court option to introduce new evidence.

Yesterday, the CAFC considered the patent reexamination appeals of NTP Inc. (see yesterday’s background post). In total, the CAFC heard just under 4 hours of oral arguments. The MP3 file can be found here.

Throughout the arguments the CAFC made it clear that much of the Board of Patent Appeals & Interference (BPAI) record was inadequate as to claim construction. The court repeatedly expressed concern that the competing claim constructions offered by the two parties were not clearly differentiated on the BPAI record. Throughout the arguments, the court repeatedly emphasized that a remand to the BPAI seemed in order.  

In the first hour, NTP contested the BPAI’s claim construction as inconsistent with the lexicographic definitions of the NTP patents. Throughout the first hour, the CAFC made it quite clear that the BPAI record was unclear as to a clear construction of the term “email.” Judge Moore was especially critical, at one point stating that the Board’s explanation as to this term  was “as wrong as wrong can be.” {48-52 min. mark}. Judge Moore noted that the the lack of fact finding in this regard seemed to require a remand. Judge Clevenger noted that the BPAI record “left a lot of openings.” {58 min. mark}

In the second hour, the sufficiency of the antedating evidence was debated. The CAFC seemed to question the conception evidence presented by NTP, labeling it “amorphous.” Again Judge Moore emphasized the fact finding of the BPAI, stating “I don’t love the Board’s findings….I think you got that already” {1.36 min. mark}. Here again the antedating fact finding was so intertwined with claim construction that the CAFC seemed to throw up there hands. The Panel asked the solicitor whether it was fair for the CAFC to decide the issues, or whether a remand to the USPTO was better as an expert agency. {1.45 min. mark}

In the third hour, the authenticity of a certain prior art document was debated (Telenor). The court asked NTP why they did not simply contact the authors to seek evidence that the document was fraudulent. NTP argued that the PTO needed to prove the authenticity of a one of a kind document. {2.05 min. mark} The court then seemed interested in whether public accessibility of a prior art reference is a question of law or fact. {2.15-18 min. mark}

At the close of the third hour a variety of issues were debated. NTP argued that consideration of 35 U.S.C. § 120 priority was inappropriate as a backdoor 112 attack. {2.38 min. mark} Next, NTP argued that the same issue was considered in the original prosecution, and noted that if this practice is accepted it will open the floodgates to similar challenges in patent reexamination. The court didn’t seem overly receptive to the public policy argument. 

At the outset of the 4th hr, the CAFC asked NTP to identify those rejections that would not hinge on claim construction, and would not have to be remanded to the USPTO. The Court requested NTP & the USPTO file a list of issues that could be be decided independent of the remand on the claim construction of “email” within 10 days {3.02 min. mark}.

What does this mean for NTP?

The CAFC seems inclined to affirm certain rejections that do not turn on the definition of “email,” and decide the authenticity of the Telenor reference. It seems clear that the bulk of the issues will be remanded back to the BPAI. Long story short, this battle will continue for another 12-18 months…..at least.  

Sorry BPAI, it’s coming back.

Today at 2PM, the CAFC will hear oral arguments in the patent reexamination appeals of NTP Inc. (Wall Street Journal article here). After years of prosecution and appeals through the PTO system, the NTP patent reexaminations of NTP v. RIM fame finally get their day in federal court.

As discussed last year, the USPTO rejected all but one of the previously adjudicated NTP claims. Specifically, all of the claims of NTP Inc’s U.S. Patents 6,317,592, 5,819,172, and 6,067,451 were rejected by the USPTO. These rejections were later affirmed by the Board of Patent Appeals & Interferences (BPAI).  Rejections  were affirmed-in-part in 5,436,960 and 5,625,670, (the surviving ‘670 claims appear to have been added in reexamination, claim 15 of the ‘960 appears to be the only surviving claim successfully asserted against RIM).

As to the newly added claims, thesewill not be enforceable until printed by the USPTO. Even then damages will only be available from the time of printing, until expiration, in 2012. As printing is still months away these claims seem to be of marginal strategic value.

The CAFC has set aside an entire afternoon to hear these appeals en masse. It seem unlikely that the rejections will be reversed as NTP has relied on some fairly “controversial” theories to put it diplomatically. To date NTP has argued that a certain Telenor art reference was fabricated by the requester, and that Markman decisions are binding on the USPTO.

For those interested in hearing the oral arguments, audio recordings should be posted on the CAFC website some time Friday.