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Timestamp: 2019-04-22 14:30:27+00:00

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Application for Patent filed June 1, 1977, Serial No. 802,486, for the Reissue of Patent No. 3,940,422, granted February 24, 1976, based on application Serial No. 434,252, filed January 17, 1974. Aromatic Carboxylic Amide Derivatives.
This appeal is from the final rejection by the special program examiner (henceforth examiner) of claims 8 to 10, which are all of the claims remaining in this reissue application. Illustrative claim 8 is reproduced below.
8. A compound comprising N-(3',4'-dimethoxycinnamoyl)anthranilic acid.
No references have been relied on by the examiner on appeal.
The appealed claims have been finally rejected upon examination pursuant to 35 U.S.C. 131 and 132 under 37 C.F.R. 1.56(d). The rejection is based upon a purported violation, during prosecution of the original patent application, of the duty of disclosure imposed by the cited regulation on applicants, their attorneys and their agents.
We have carefully considered all of the facts in this case, particularly as summarized by the examiner and appellants in their briefs on appeal. We have also considered the arguments and authorities set forth by the examiner and appellants in support of their respective positions. Both appellants' brief and the examiner's answer on appeal are admirably thorough and, giving all due consideration to the complexity of the issue at hand, concise. To be equally concise, we find the examiner's analysis of the applicable law and rebuttal of appellants' arguments to be quite convincing of the correctness of the rejection on appeal and we shall adopt the examiner's position as our own. We would add several comments, however, for completeness and to make of record a subsequently reported decision of the Court of Appeals for the Federal Circuit.
Although appellants have raised this issue only by implication, it should be positively stated that rejections made during the prosecution of a reissue application are properly treated according to the law which exists during that prosecution. In re Wadlinger, 496 F.2d 1200, 181 USPQ 826 (CCPA 1974). Thus, it was incontrovertably correct to consider 37 C.F.R. 1.56(d) applicable in the examination of the present reissue application.
We emphasize our complete agreement with the examiner's position, as supported by the authority cited by him, that a duty to disclose material prior art existed long prior to the 1977 amendment to 37 C.F.R. 1.56 and, what is here relevant, during the prosecution of appellants' original patent application.
*2 The authority cited by the examiner would also have supported his position that gross negligence alone could amount to a violation of the duty of disclosure. Any lingering doubts on this issue were laid to rest by the decision in In re Jerabek, ---- F. 2d ----, 229 USPQ 530 (Fed. Cir. 1986), which affirmed the then Board of Appeals decision cited by the examiner at page 10 of the answer on appeal.
The materiality of the undisclosed prior art evidence in the present case was incontrovertible since lack of novelty is a bar to patentability in virtually every patent statute in the world. In view of that materiality of the evidence, gross negligence on the part of appellants or one or more of their agents is manifest where the existence of that evidence is not communicated to the agent knowledgeable in the applicable law.
This is an Examiner's Answer to the Appeal Brief filed November 6, 1984 in support of applicants' appeal from the Decision Finally Rejecting Application Under 37 CFR 1.56(d) dated June 19, 1984.
A copy of the claims remaining in the application appears on page 1 of appellants' Brief. In the second line of each claim, a hyphen should be inserted prior to 'anthranilic'.
Claims 8-10, all claims remaining in the instant reissue application stand finally rejected upon examination pursuant to 35 U.S.C. 131 and 132 under 37 CFR 1.56(d) based upon a violation by applicants' Japanese attorney, Akira Agata, of the duty of disclosure through bad faith or gross negligence in connection with application Serial No. 434,252, an application upon which the instant application relies, it being the application from which the patent sought to be reissued matured.
1. The application is for the reissue of U. S. Patent No. 3,940,422 which issued on February 24, 1976 from application Serial No. 434,252, filed January 17, 1974.
2. Application Serial No. 434,252 was prepared by Japanese patent attorney, Akira Agata, on behalf of the inventors' assignee, Kissei Pharmaceutical Co., Ltd.
3. The application prepared by Akira Agata and executed by the inventors was forwarded to U. S. attorney, William J. Daniel, for filing. Mr. Daniel revised the application (specification and claims), had the specification and claims retyped and filed the revised application with the executed declaration in the Office on January 17, 1974. The alterations made by Mr. Daniel in the specification and claims of the parent application after execution by the inventors have been found to have been editorial in nature and not to warrant the striking of this reissue application. (Paper No. 29, pages 2-4).
Your petitioners further declare . . .
(h) That none of the inventors had any direct dealing whatsoever with the United States attorney who represented them during the prosecution of their application which matured into United States 3,940,422 and said United States attorney was never informed of the art referred to in paragraphs 2-5 . . ..
That in March 1975, Mr. Yukiyoshi Ajisawa informed him by physically showing him an article and a pertinent part of Chemical Abstracts cited by the French Patent Office and that as a result of a full review of the French Patent Office Action dated January 28, 1975, it became clear that a compound within the scope of the claims of the foreign patent applications including the United States Patent Application Serial No. 434,252, the counterpart of the Japanese Patent Application Serial Number sho 48-7357 was disclosed. Thus, he became aware that the article cited in paragraph 15(2) of Applicants' Reissue Declaration disclosed a compound within the scope of the claims of said application, and Mr. Ajisawa informed him that the KISSEI PHARMACEUTICAL CO. LTD. conducted a novelty search using Chemical Abstracts, and that as a result, other articles were uncovered which disclosed compounds within the scope of the claims of said application. In this regard, Mr. Yukiyoshi Ajisawa showed him the pertinent parts of Chemical Abstracts cited in paragraphs 15(3)-(5) of Applicants' Reissue Declaration.
That when Mr. Yukiyoshi Ajisawa informed him of the prior art in March 1975, as described in the above paragraph (e), he appreciated that compounds disclosed in Chemical Abstracts and the article fell in the scope of the claims of said patent application.
That he did not recommend citation of the articles to the United States Patent and Trademark Office . . ..
any application fraudulently filed or in connection with which any fraud is practiced or attempted on the Patent and Trademark Office, may be stricken from the files.
(a) A duty of candor and good faith toward the Patent and Trademark Office rests on the inventor, on each attorney or agent who prepares or prosecutes the application and on every other individual who is substantively involved in the preparation or prosecution of the application and who is associated with the inventor, with the assignee or with anyone to whom there is an obligation to assign the application. All such individuals have a duty to disclose to the Office information they are aware of which is material to the examination of the application. Such information is material where there is a substantial likelihood that a reasonable examiner would consider it important in deciding whether to allow the application to issue as a patent. The duty is commensurate with the degree of involvement in the preparation or prosecution of the application.
(d) An application shall be stricken from the files if it is established by clear and convincing evidence that any fraud was practiced or attempted on the Office in connection with it or that there was any violation of the duty of disclosure through bad faith or gross negligence.
[t]he section codifies the existing Office policy on fraud and inequitable conduct, which is believed consistent with the prevailing case law in federal courts.
The authority of the Commissioner to strike applications has been long recognized by the Commissioner and the Courts. See for example, In re Heany, 1911 C.D. 138, 171 O.G. 983 (Commissioner's Decision 1911); Ex parte Mallard, 71 USPQ 294 (Commissioner's Decision 1946); and Norton v. Curtiss, 167 USPQ 532 (CCPA 1970).
[w]here such a condition [fraudulent or deceptive intention] is shown to exist, the right to reissue the patent is forfeited.
In re Heany, supra, at 180.
any conduct which will prevent the enforcement of a patent after the patent issues should, if discovered earlier, prevent the issuance of the patent.
No patent will be granted on an application in connection with which fraud on the Office was practiced or attempted or the duty of disclosure was violated through bad faith or gross negligence. The claims in an application shall be rejected if upon examination pursuant to 35 U.S.C. 131 and 132, it is established by clear and convincing evidence (1) that any fraud was practiced or attempted on the Office in connection with the application, or in connection with any previous application upon which the application relies, or (2) that there was any violation of the duty of disclosure through bad faith or gross negligence in connection with the application, or in connection with any previous application upon which the application relies.
While questions of fraud and violations of the duty of disclosure have historically been dealt with by the Commissioner through the mechanism of striking the affected application, there is no statutory requirement that the Commissioner act in that manner. Clearly the Commissioner can choose how, and by whom, the examination directed by 35 U.S.C. 131 can be made. 35 U.S.C. 132 authorizes a rejection in those circumstances where applicant is not 'entitled to a patent under the law.' The rule change simply modifies the mechanism and procedures which the Commissioner will use where the applicant is not 'entitled to a patent under the law' because of failures to comply with § 1.56(d).
It is thus apparent that subsequent to July 1, 1982, any violations of the duty of disclosure under 37 CFR 1.56 which occurred through bad faith and/or gross negligence and supported by evidence which is clear and convincing will be subjected to a rejection pursuant to 35 U.S.C. 131 and 132.
As further set forth in the May 19, 1982 Federal Register, the PTO Board of Appeals will, if an appeal is filed, review any rejection based on the failure to comply with the duty of disclosure [37 CFR 1.56(e)].
*7 Although the previously quoted regulation 1.56(d) was not in effect at the time . . . (April, 1970), we conclude that the regulation essentially represents a codification of the 'clean hands' maxim as applied to patent applicants.
In March 1975, subsequent to the filing of application Serial No. 434,252 but before its issuance as U. S. Patent No. 3,940,422 on February 24, 1976, Japanese attorney, Akira Agata, was informed by inventor Ajisawa of prior art references disclosing compounds within the scope of the claims in that application. Mr. Agata, although he appreciated that compounds disclosed in the references thus brought to his attention fell within the scope of the claims of application Serial No. 434,252, informed neither his U. S. correspondent attorney, Mr. Daniel, nor the Examiner of the prior art references. As a result of Mr. Agata's failure to inform either Mr. Daniel or the Examiner of the material prior art references of which he became aware in March 1975, U. S. Patent No. 3,940,422 issued on February 24, 1976, with claims 1-4 clearly anticipated, 35 U.S.C. 102, by those prior art references.
Argus also attempts to avoid a holding of inequitable conduct by reason of the subjective 'good faith' of its attorney, a defense applicable in common law fraud cases. It is Argus's position that the precedent of this court is in error by failing to recognize that 'fraud' is an intentional tort and that the 'good faith' of the party charged with fraud is always a complete defense. Thus, per Argus, the subjective 'good faith' of its attorney in his understanding of the law negates the charge of fraud.
[T]hreshold intent is established where an actor in an applicant's position would have reasonably known that the reference was material, e.g., that the reference would have been important to a reasonable examiner in deciding whether to allow the claims.
*8 Id. at 1564, 223 USPQ at 1096.
Counsel's subjective 'good faith' does not, therefore, negate inequitable conduct. Rather, the question as in J.P. Stevens, is whether a reasonable person in the position of Argus's counsel knew or should have known that the information was material. . . .
Because the withheld information on sales was clearly material, and Argus's attorney should have known of its importance to the PTO's consideration, inequitable conduct under the precedent of this court has been established.
While appellant may have believed that Stow et al. was not a relevant reference, the Patent and Trademark Office now has ample evidence from which to conclude that Stow et al. was known by Beckman to be highly relevant prior art. The duty to disclose relevant, material prior art under these circumstances, known to the applicant or his agents and not found by the examiner, is well established. . . . We do not agree that appellant could, under the state of the law in 1956 or now, amend claims expressly to avoid a § 102 reference unknown to the examiner and justifiably consider there was no duty to bring that reference to the examiner's attention.
Id. at 627, 187 USPQ at 212-213. Accord, Driscoll v. Cebalo, 713 F.2d 878, 884-85, 221 USPQ 745, 750 (Fed. Cir. 1984) (current PTO requlations consistent with prior case law in federal courts).
to have their application for reissue examined in the same manner as any other application and, therefore, the case of Rohm & Haas Company v. Crystal Chemical Company, previously cited, must be applied or otherwise the instant application would not be examined in the same manner as the original applications as mandated by 37 CFR 1.176 but would be examined in a different manner.
nor do we consider that filing the reissue application here constitutes a cure under Rohm and Haas Co. v. Crystal Chemical Co., 722 F.2d 1556, 220 USPQ 289 (Fed. Cir. 1983). See In re Clark, 522 F.2d 623, 187 USPQ 209 (CCPA 1975).
Applicants further argue that even if a violation of Rule 56 occurred during prosecution of the parent, such fraud was cured 'by the filing of the reissue application and its prosecution.' In this respect, applicants contend that if there is deceptive intention, the filing of a reissue application cannot be used to cure fraud on the PTO since it does not clear 'the first hurdle'. See In re Clark, supra. Applicants further contend that the reissue declaration does not admit to any deceptive intention. Additionally, applicants argue that the record is valid of any 'shred of evidence' re deceptive intention.
said errors [from a(5)] arose 'without any deceptive intention' on the part of the applicant.
If 37 CFR 1.175 a(1), a(2), a(3), a(5) and a(6) are satisfied, examination on the merits will go forward. The primary examiner will determine whether the reissue oath or declaration contains the required averment that the 'errors arose without any deceptive intention.' However, the primary examiner will not comment or question as to whether the lack of deceptive intention averment appears correct or false. This evaluation will be considered by the Office of the Assistant Commissioner for Patents when prosecution on the merits is closed or the application is otherwise ready for consideration by the Board of Patent Appeals and Interferences. See 37 CFR 1.56(e). This is precisely the situation which occurred here. Prosecution having been closed by the primary examiner the duty of disclosure issue is ripe for treatment.
*10 As noted in the record to date, Japanese Counsel Agata violated his duty of disclosure by failing to disclose the prior art references noted above.
Conduct before the PTO that may render a patent unenforceable is broader than 'common law fraud.' . . . It includes failure to disclose material information, or submission of false material information, with an intent to mislead. Because the 'fraud' label can be confused with other forms of conduct, this opinion avoids that label and uses 'inequitable conduct' as a more acurate description of the proscribed activity, it being understood that the term encompasses affirmative acts of commission, e.g., submission of false information, as well as omission, e.g., failure to disclose material information.
'Inequitable conduct' requires proof by clear and convincing evidence of a threshold degree of materiality of the nondisclosed or false information. . . .
'Inequitable conduct' also requires proof of a threshold intent. That intent need not be proven with direct evidence. . . . It may be proven by showing acts the natural consequences of which are presumably intended by the actor. . . . Proof of deliberate scheming is not needed; gross negligence is sufficient. . . . Gross negligence is present when the actor, judged as a reasonable person in his position, should have known of the materiality of a withheld reference. . . .
Once the thresholds of materiality and intent are established, the court must balance them and determine as a matter of law whether the scales tilt to a conclusion that inequitable conduct occurred. . . . If the court reaches that conclusion, it must hold the patent claims at issue are unenforceable.
Clearly, the 'threshold intent' referred to in the third paragraph of the above quotation is the 'intent to mislead' referred to in the first paragraph quoted. Surely, 'an intent to mislead' must be considered a 'deceptive intent'.
It is difficult if not impossible to imagine prior art of greater materiality than the prior art which Mr. Agata failed to disclose during the prosecution of application Serial No. 434,252. That prior art anticipated (35 U.S.C. 102) the invention defined in claims 1-4 of Patent No. 3,940,422 and rendered obvious (35 U.S.C. 103) the invention of the remaining claims, claims 5-7, of that patent. Certainly, the threshold degree of materiality required for a holding of inequitable conduct has been established.
Mr. Agata, judged as a reasonable person in his position--an attorney who has undertaken to prosecute a U.S. patent application on behalf of the inventors or their assignee--should have known of the materiality of the prior art references involved. This is especially so in view of the fact that Mr. Agata had been advised by Mr. Daniel on two occasions of the effect that a prior art reference disclosing a compound within the scope of the claims would have. In the letter dated January 29, 1974 to Mr. Agata, Mr. Daniel stated, 'One can speculate that one or more compounds within the scope of the structural formula might be theorectically known in the chemical literature so that such compounds would no longer be novel and patentable per se.' Again, in the letter dated October 11, 1974, Mr. Daniel warned, 'More importantly, if some one should uncover a disclosure any where in the technical literature of any compound within the scope of the present claims, such claims would be invalidated.' (Copies of these letters are attached as Exhibits 4 and 11 to Mr. Agata's declaration filed November 1, 1982). Thus, gross negligence constituting proof of a threshold intent has been established.
*11 Upon balancing these thresholds of materiality and intent, it is believed that a conclusion that inequitable conduct occurred is inescapable. The inequitable conduct should not be considered 'error without any deceptive intention'.
The claims in an application shall be rejected if upon examination pursuant to 35 U.S.C. 131 and 132, it is established by clear and convincing evidence . . . that there was any violation of the duty of disclosure through bad faith or gross negligence in connection with . . . any previous application upon which the application relies.
A violation of the duty of disclosure through at least gross negligence in connection with application Serial No. 434,252 has been established by clear and convincing evidence. The present application clearly relies upon application Serial No. 434,252 it being the application from which the patent for which reissue is sought matured.
It is believed that the rejection of all claims remaining in this application is proper and should be affirmed.
Appellants may file a reply brief directed only to such new points of argument as may be raised in this examiner's answer, within twenty days from the date of this answer. Any such reply brief should be directed to the Special Program Examination Unit, Office of the Assistant Commissioner for Patents, Crystal Plaza Building 3, Room 10D04. The application will be held in the Special Program Examination Unit until a reply brief is filed or the 20 day period for filing such Reply Brief has expired. The application will thereafter be forwarded to the Board of Patent Appeals and Interferences.

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