Source: http://ipmall.info/content/bpai-board-patent-appeals-and-interferences-patent-and-trademark-office-pto-1-gustavsson-v-0
Timestamp: 2019-04-19 18:23:39+00:00

Document:
Patent granted to Bengt Gustavsson on January 14, 1986, Patent No. 4,564,054, filed May 2, 1984, Serial No. 06/606,184.
Application of Luigi Valentini and Mario Coccia, filed January 27, 1987, Serial No. 07/009,073. Accorded benefit of U.S. application Serial No. 704,211, filed February 22, 1985 and Italian application No. 19785A/84, filed February 24, 1984.
Norman F. Oblon, Stanley P. Fisher, Marvin J. Spivak, C. Irvin McClelland, Gregory J. Maier, Arthur I. Neustadt, Robert C. Miller, Richard D. Kelly, James D. Hamilton, Eckhard H. Kuesters, Robert T. Pous, Charles L. Gholz, Jorge A. Goldstein and Marvin C. Guthrie for Valentini et al.
This is a decision on the final hearing requested by the senior party, Valentini et al. (Valentini), in response to the Examiner-in-Chief's (EIC's) order to show cause in his September 15, 1989 decision on motions. In this decision the EIC decided that Valentini's claims corresponding to the count are unpatentable to it under 35 U.S.C. 135(b) and then dismissed all nine of Valentini's motions as moot. Three of these motions, which allege fraud on the PTO by Gustavsson, were also dismissed on the additional ground that the board is no longer authorized to consider duty of disclosure issues. Valentini challenges both grounds for dismissal.
In a preliminary amendment (paper No. 3) received January 27, 1987 in the involved Valentini application, Valentini requested an interference with the involved Gustavsson patent, which issued on January 14, 1986. Valentini contended that its claim 9 and Gustavsson's claim 1 are directed to the same patentable invention and proposed a count allegedly broader than either of these claims. The examiner (paper No. 7) indicated that the proposed count would not be considered for interference purposes because it omitted material limitations from Gustavsson's patent claim 1 and (in paper No. 8) suggested another claim for interference purposes. [FN1] Valentini (paper No. 9) copied the suggested claim as its claim 21 and also added claim 22, which allegedly corrects three "clerical errors" in the suggested claim, i.e., claim 21. In the same paper, Valentini requested that claim 22 rather than claim 21 be designated as corresponding to the count of the interference, which suggestion was adopted by the examiner in the preparation of his initial interference memorandum.
In accordance with the examiner's initial memorandum, this interference was declared designating Gustavsson's claims 1 and 2 and only Valentini's claim 22 as corresponding to the count, which is identical to Valentini's claim 22.
(1) Valentini's motion under 37 CFR 1.633(a) for judgment as to Gustavsson's claims 1 and 2 on the ground that they are unpatentable under 35 U.S.C. 102 and 103 over prior art (paper No. 10), which Valentini admits also renders its claim 22 unpatentable (paper No. 34).
(3) Valentini's motion under 37 CFR 1.633(c)(3) [FN3] to redefine the interference by designating Gustavsson's claims 3-17 as corresponding to the count (paper No. 12).
(4) Valentini's contingent motion under 37 CFR 1.633(a) for judgment as to Gustavsson's claims 3-17 on the ground that they are unpatentable under 35 U.S.C. 103 over prior art (paper No. 13).
(5) Valentini's contingent motion under 37 CFR 1.633(a) for judgment as to Gustavsson's claims 4-17 on the ground that they are unpatentable under 35 U.S.C. 112 (paper No. 14).
(6) Valentini's motion under 37 CFR 1.633(f) to be accorded the benefit of the filing date of application Serial No. 06/607,502, filed May 7, 1984 (paper No. 15).
(7) Valentini's motion under 37 CFR 1.633(a) for judgment as to all of Gustavsson's patent claims due to a second type of fraud (paper No. 16).
(8) Valentini's motion under 37 CFR 1.633(a) for judgment as to all of Gustavsson's patent claims due to a third type of fraud (paper No. 17).
(9) Valentini's motion under 37 CFR 1.635 and 1.616 for sanctions against Gustavsson for failure to comply with 37 CFR 1.602(b) and (c) (paper No. 18).
(10) Gustavsson's motion under 37 CFR 1.633(a) for judgment as to Valentini's claim 22, which corresponds to the count, on the ground that it is unpatentable to Valentini under 35 U.S.C. 135(b) (paper No. 22). This motion concludes (p. 29) with a request for "termination of the instant Interference," presumably without a decision on Valentini's motions.
(11) Gustavsson's motion under 37 CFR 1.633(b) for judgment on the ground that there is no interference-in-fact (paper No. 23).
(12) Gustavsson's motion under 37 CFR 1.633(f) to be accorded the benefit of the filing date of U.S. application Serial No. 05/536,647, filed September 23, 1983 as well as the benefit of Swedish application No. 8301176, filed March 3, 1983 (paper No. 24).
*3 (13) Gustavsson's contingent motion under 37 CFR 1.635 for access to related applications of Valentini (paper No. 25).
(14) Gustavsson's contingent motion under 37 CFR 1.633(c)(1) to substitute a proposed count for the existing count (paper No. 26).
(15) Gustavsson's motion under 37 CFR 1.633(c)(3) to redefine the interfering subject matter by designating Valentini's claim 21 as corresponding to the count (paper No. 27).
(16) Gustavsson's contingent motion under 37 CFR 1.635 for permission to file a certificate of correction for the Gustavsson patent (paper No. 42).
Oppositions were filed in response to all of the above motions except motion (12) to the extent it requested benefit of the U.S. application and motion (15). Furthermore, Gustavsson's initial opposition to motion (6) was withdrawn in paper No. 74.
since it is evident that the Interference was declared in violation of the very section of the statute establishing Interferences, no further issues should be considered. While an attack on a patent may be appropriate in a properly declared Interference, an Interference declared in direct violation of the Statute (and/or the Rules) governing Interferences should not be used for such purposes.... Other procedures and jurisdictions exists [sic] for such purposes if they are warranted.
In a decision mailed September 15, 1989, the EIC granted Gustavsson's motion (10) for judgment against Valentini as to its claim 22 for unpatentability under 35 U.S.C. 135(b), noting that "Valentini does not oppose the subject motion on the merits." The EIC also granted Gustavsson's unopposed motion to designate claim 21 as corresponding to the count. In addition, since Gustavsson did not file a contingent motion under 1.633(a) for judgment as to Valentini's claim 21 on the ground of unpatentability under 35 U.S.C. 135(b), the EIC moved sua sponte under 37 CFR 1.610(e) and 1.633(a) for judgment as to claim 21 on this ground and implicitly granted this sua sponte motion, noting Valentini's admission that claims 21 and 22 differ only by three clerical errors.
Valentini argues that the interference should not be terminated merely because the sole Valentini claim [sic, claims] corresponding to the count is [sic, are] unpatentable and, according to Valentini, the parties are entitled to remain in the interference and to be heard on all the issues raised in their preliminary motions regardless of whether a decision on one of the motions turns out to be dispositive of the interference as to one of the parties. To support this assertion, Valentini refers to the unpublished decision in another interference (No....), and also cited Kwon v. Perkins, 6 USPQ2d 1747 (BPAI 1988). For the reasons given by Gustavsson by way of reply, the reliance by Valentini on an unpublished decision and on Kwon is inappropriate under the present circumstances. If an applicant does not object to a finding on motion that his claims corresponding to the count are unpatentable to him, there is no good reason why the Patent and Trademark Office should be put to the additional burden of considering issues pertaining to the patentability of an opponent's claims. Cf. Guglielmino v. Winkler, 11 USPQ2d 1389 (BPAI 1989); M v. V, 6 USPQ2d 1039 (BPAI 1988); Hilborn v. Dann, 546 F.2d 401, 192 USPQ 132 (CCPA 1976).
The decision on motions concluded by giving notice that pursuant to 37 CFR 1.640(d)(1) judgment would be entered against Valentini as to its claims 21 and 22 unless Valentini within twenty days showed cause why such action should not be taken.
In a paper received September 20, 1989 (paper No. 80), Valentini moved under 37 CFR 1.635 for a stay of the interference pending the outcome of the appeal to the Federal Circuit of the board's Guglielmino decision. In a concurrently filed paper (No. 81), Valentini also responded to the order to show cause by requesting a final hearing on the EIC's decision on motions.
Gustavsson (paper No. 82) opposed the motion for a stay, arguing that the issue in Guglielmino was not relevant to the question of whether the EIC in this interference acted properly in dismissing Valentini's motions.
*5 In a paper received May 16, 1990 (No. 83), Valentini requested that the interference be resumed in view of the Federal Circuit's decision in Winkler v. Guglielmino, 17 USPQ2d 1175 (Fed.Cir.1990), wherein the court, in an opinion dated May 8, 1990, reversed the board. Valentini also acknowledged (p. 2) that the Federal Circuit's decision in that case "is not dispositive of the issues raised by the party Valentini et al."
The legislative history ... shows that Congress intended that if patentability is fairly placed at issue in the proceeding, it will be determined.
The Board, by resolving both priority and patentability when these questions are fully presented, settles not only the rights between the parties but also rights of concern to the public. The public interest in the benefits of a patent system is best met by procedures that resolve administratively questions affecting patent validity that arise before the PTO. To do otherwise is contrary to the PTO's mission to grant presumptively valid patents, 35 U.S.C. § 282, and thus disserves the public interest.
886 F.2d at 328-29, 12 USPQ2d at 1310-11. Valentini further noted that because Perkins was a patentee, the board's decision to address the patentability of Perkin's patent claims had nothing to do with "the PTO's mission to grant presumptively valid patents" (Valentini's emphasis).
In view of Perkins, Valentini requested that the EIC reconsider his earlier decision and "withdraw his dismissal of the party Valentini et al.'s motions (1)-(9) ... and that he should grant those motions for the reasons stated therein."
*6 PUrsuant [sic] to § 1.655(a), Valentini is entitled to raise at final hearing the question of whether the dismissal of any of its motions was manifestly erroneous or an abuse of discretion. Valentini is not entitled to review at final hearing of the decision on Gustavsson motions 10 and 15 since Valentini failed to oppose these motions on the merits[.] § 1.655(b). In this regard, it is noted that the undersigned no longer considers it appropriate or necessary to rely on the Guglielmino v. Winkler case cited in his decision since that case is considered inapposite with respect to the circumstances in the present interference.
Both parties filed briefs. Only Gustavsson was represented at final hearing, Valentini having waived appearance (paper No. 95).
(e) whether the EIC committed reversible error in dismissing Valentini's request for reconsideration on the grounds that it was belated and not authorized by the rules.
37 CFR 1.655(a) expressly provides (our emphasis): "The Board may ... consider whether any interlocutory order was manifestly erroneous or an abuse of discretion. All interlocutory orders shall be presumed to have been correct and the burden of showing manifest error or an abuse of discretion shall be on the party attacking the order."
Consistent with its legislative function, Congress "may leave it to administrative officials to establish rules within the prescribed limits of the statute." Patlex Corp. v. Mossinghoff, 758 F.2d 594, 605, 225 USPQ 243, 251 (Fed.Cir.1985) (citing United States v. Grimaud, 220 U.S. 506, 517 (1911)), modified on other grounds, 771 F.2d 480, 226 USPQ 985 (Fed.Cir.1985). In the patent field, Congress has done precisely that by providing that the Commissioner "may, subject to the approval of the Secretary of Commerce, establish regulations, not inconsistent with law, for the conduct of proceedings in the Patent and Trademark Office." 35 U.S.C. § 6(a). In this type of situation, "the validity of a regulation promulgated thereunder will be sustained so long as it is 'reasonably related to the enabling legislation.' " Mourning v. Family Publications Service, Inc., 411 U.S. 356, 369 (1973) (quoting Thorpe v. Housing Authority of Durham, 393 U.S. 268, 280 (1969)); see Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844 (1984); Patlex, 758 F.2d at 606, 225 USPQ at 252.
Valentini does not take issue with the EIC's conclusion that claim 21 is unpatentable to it under 35 U.S.C. 135(b). Instead, Valentini contends (opening brief, pp. 9-11) that the sua sponte procedure employed by the EIC to simultaneously move for and grant judgment on this ground is not authorized by the interference rules, including 37 CFR 1.610(e) [FN10] and 1.633(a), and was therefore "clear error and an egregious abuse of discretion" (p. 11). Valentini offers two arguments in support of this conclusion, neither of which we find persuasive. One argument is that 1.633(a) authorizes motions for judgment only by parties and the EIC is not a party. In our opinion, these same facts make it clear that the basis for the EIC's action was 1.610(e) alone, with 1.633(a) being cited merely by way of analogy.
The other argument is that 1.610(e) is inappropriate because 1.641 already provides a procedure for dealing with the situation presented by claim 21. [FN11] We agree with Gustavsson (brief, p. 13) that the phrase "may not be patentable" (our emphasis) in 1.641 indicates that this rule is inapplicable where, as here, a party has admitted that its claims corresponding to the count are unpatentable. This conclusion is also apparent from the fact that where a party has admitted its claims corresponding to the count are unpatentable, no purpose would be served by giving each party time to "present its views," as required by 1.641. By admitting that claim 22 is unpatentable to it under 35 U.S.C. 135(b) and further admitting that claims 21 and 22 differ only by three "clerical errors," Valentini effectively admitted that claim 21 is unpatentable to it under 35 U.S.C. 135(b). Under these circumstances, the examiner was correct to conclude that the 1.641 procedure would have been inappropriate.
Alternatively, even assuming for the sake of argument that the 1.641 procedure was available to deal with Valentini's claim 21, we are not persuaded that the examiner's decision to instead use a sua sponte procedure based on 1.610(e) was "manifestly erroneous or an abuse of discretion." The reason is that in view of Valentini's effective admission that claim 21 is unpatentable under 35 U.S.C. 135(b), the EIC was justified in assuming that Valentini would not use any additional time granted pursuant to 37 CFR 1.641 to argue the contrary. [FN12] The EIC's use of a sua sponte procedure under these particular circumstances is also consistent with the requirement in 37 CFR 1.610(c) that an EIC "shall exercise control over the interference such that the pendency of the interference before the Board does not normally exceed two years."
*8 In any event, even if the sua sponte procedure used by the EIC did constitute an abuse of discretion, it amounted to harmless error because Valentini has not opposed the EIC's action on the merits.
Gustavsson argues that the EIC's dismissal of Valentini's motions (1)-(9) was neither manifestly erroneous nor an abuse of discretion, because this interference was void ab initio as a result of Valentini's admitted failure to comply with 35 U.S.C. 135(b). We disagree. Regardless of the circumstances under which an interference is declared between pending applications or between a pending application and an unexpired patent under the new interference rules (37 CFR 1.601 et seq.), it cannot be void ab initio. As explained in Patent Interference Proceedings; Final Rule, 49 Fed.Reg. 48416, 48419 (Dec. 12, 1984), reprinted in 1050 O.G. 385, 388 (Jan. 29, 1985), "Under these new rules, all interferences, including those involving only applications, will be terminated with a judgment" (our emphasis).
The object of the interference will be to resolve all controversies as to all interfering subject matter defined by one or more counts. A final decision in the interference will determine who, if anyone, is entitled to claims which correspond to a count.
*9 886 F.2d at 328-29, 12 USPQ2d at 1311.
The Office will ... not consider duty of disclosure issues in interferences declared pursuant to 35 U.S.C. 135. Duty of disclosure issues which are raised by the parties in an interference will not be commented upon by the Examiner-in-Chief except to note that such issues are no longer considered by the Office.
an agency's interpretation of a statute it administers is entitled to deference, Chevron U.S.A., 467 U.S. at 844, but "the courts are the final authorities on issues of statutory construction. They must reject administrative constructions of the statute, whether reached by adjudication or by rulemaking, that are inconsistent with the statutory mandate or that frustrate the policy that Congress sought to implement." FEC v. Democratic Senatorial Campaign Committee, 454 U.S. 27, 32 (1981).
Thus, the question before us is whether the November 8, 1988 notice, to the extent it precludes us from considering the issues of fraud raised in Valentini's motions (2), (7) and (8), is inconsistent with the statutory mandate or frustrates Congressional policy.
Valentini's reliance on Norton and Langer is misplaced because it fails to recognize a fundamental difference between interferences under the old interference rules (37 CFR 1.201 et seq.) and the new interference rules (37 CFR 1.601 et seq.). The old interference rules, which governed Norton and Langer, were construed as requiring an award of priority in favor of one of the parties. Consequently, in order to avoid awarding priority to a party that was the first to invent but also guilty of fraud or inequitable conduct, priority was awarded in favor of the party who was not guilty of fraud or inequitable conduct, regardless of who was actually the first to invent. This is not the situation under the new interference rules, which govern this interference and under which judgment may be entered against all of the parties as to their claims corresponding to the count. Thus, prior to the Commissioner's November 8, 1988 notice, allegations of fraud or inequitable conduct arising in a interference under the new rules, if proved, would have resulted in judgment against that party as to its claims corresponding to the count on the ground of unpatentability rather than resulting in an award of priority in favor of the other party. As a result, priority as to the subject matter of a count could be awarded in favor of a party only if its claims corresponding to the count were not unpatentable for any reason (e.g., fraud, unpatentability over prior art) and it was the first to invent the subject matter of the count.
*10 In view of the above, even if it is assumed for the sake of argument that allegations of fraud and inequitable conduct in an interference under the old interference rules were "questions of priority" in the sense of 35 U.S.C. 135(a) (a matter which we need not decide), it is clear that allegations of fraud and inequitable conduct in interferences under the new interference rules relate to patentability rather than priority and hence are not "questions of priority" in the sense of 35 U.S.C. 135(a). [FN16] Consequently, it is clear that the Commissioner's November 8, 1988, notice was not when promulgated, and is not now, inconsistent with the statutory mandate.
As to whether the board's failure to consider fraud and inequitable conduct issues raised during interferences under the new rules "frustrates the policy that Congress sought to implement," Ethicon, FEC, supra, Valentini has not identified, and we are unaware of, anything in the legislative history of Title 35 in general or section 135 in particular which demonstrates a specific Congressional intent to have the board decide fraud and inequitable conduct issues in interference proceedings.
For the foregoing reasons, we believe that the Commissioner's November 8, 1988, notice is valid and binding on the board insofar as it relates to allegations of fraud raised in this interference. As a result, the EIC's dismissal of motions (2), (7) and (8) on the ground that their consideration is precluded by the Commissioner's November 8, 1988, notice did not constitute reversible error.
Valentini argues that the EIC erred in dismissing its request for reconsideration in paper No. 83 [FN17] on the ground that it is not authorized by 37 CFR 1.640(c), which specifically authorizes a request for reconsideration of a decision on motion "which does not result in the issuance of an order to show cause under paragraph (d)" of section 1.640. According to Valentini, the EIC had the authority to consider this request pursuant to 37 CFR 1.610(e), which authorizes an EIC to determine a proper course of conduct in an interference "for any situation not covered by the rules." However, Valentini's "situation" was in fact covered by the rules. Having responded to the show cause order by filing a request for final hearing (paper No. 81), Valentini should have realized that its arguments regarding changes in the law subsequent to the EIC's decision on motions could and should be made in its brief for final hearing. Instead, Valentini filed its request for reconsideration before the EIC had even set the dates for filing briefs in paper No. 84. We are therefore not persuaded that the EIC committed reversible error in dismissing the request for reconsideration on this ground.
*11 Furthermore, assuming for the sake of argument that the EIC did have the authority to consider the request for reconsideration under 37 CFR 1.610(e), we find he did not commit reversible error in dismissing it on the alternative ground that it was belated. Although the request for reconsideration was based on the Federal Circuit's decision in Perkins v. Kwon, supra, it was not filed until May 16, 1990, more than seven months after Perkins was decided (Sept. 22, 1989) and more than six months after it was published at 12 USPQ2d 1308 (advance sheet Vol. 12, No. 4, Oct. 23, 1989).
In summary, the decision of the EIC dismissing motions (2), (7) and (8) as raising issues outside the jurisdiction of the board is affirmed. However, the EIC's decision dismissing motions (1)-(9) collectively as moot on the ground that Valentini's claims corresponding to the count are unpatentable under 35 U.S.C. 135(b) is reversed and the case is remanded to the EIC for further proceedings consistent with this opinion.
FN1. The suggested claim is not identical to any of Gustavsson's patent claims.
FN2. Valentini also alleges two other types of fraud in motions (7) and (8). In view of our disposition of this case, it is not necessary to discuss the different types of fraud in detail.
FN3. The heading of this motion mistakenly identifies it as a motion under 1.633(a).
FN4. Valentini's failure to oppose this motion on the merits is a tacit admission that it failed to comply with 35 U.S.C. 135(b).
FN5. Later affirmed in Perkins v. Kwon, 886 F.2d 325, 12 USPQ2d 1308 (Fed.Cir.1989).
FN6. This notice, entitled "Further Clarification on Patent and Trademark Office Implementation of 37 CFR 1.56," supplements the Commissioner's notice entitled "Patent and Trademark Implementation of 37 CFR 1.56," 1095 O.G. 16-17 (Oct. 11, 1988).
FN7. Issue (a) is identified at pages 7-9 of Valentini's opening brief and the other four issues are identified at page 1 thereof.
FN8. Valentini's reliance on Piper v. Atomic Energy Commission, 502 F.2d 1393, 1397, 183 USPQ 235, 238 (CCPA 1974), which involved the board's interpretation of section 152 of the Atomic Energy Act, as amended (42 U.S.C. 2182), is misplaced because it did not involve the validity of a PTO rule.
FN9. As Valentini correctly notes, an abuse of discretion may be found where the decision under review is based on an erroneous conclusion of law. Western Electric Co. v. Piezo Technology Inc., 860 F.2d 428, 430, 8 USPQ2d 1835, 1855 (Fed.Cir.1988); J.P. Stevens Co. v. Lex Tex, Ltd., 822 F.2d 1047, 1050, 3 USPQ2d 1235, 1237 (Fed.Cir.1989).
FN10. 37 CFR 1.610(e) reads as follows: "The examiner-in-chief may determine a proper course of conduct in an interference for any situation not specifically covered by this part."
FN11. 37 CFR 1.641 reads as follows: "During the pendency of an interference, if the examiner-in-chief becomes aware of a reason why a claim corresponding to a count may not be patentable, the examiner-in-chief may notify the parties of the reason and set a time within which each party may present its views. After considering any timely filed views, the examiner-in-chief shall decide how the interference shall proceed."
FN12. Valentini does not now contend that it satisfied 35 U.S.C. 135(b).
FN13. This analysis also requires a determination of whether any of Gustavsson's patent claims 3-17 should be designated as corresponding to the count [motion (3) ].
FN14. However, as explained infra, motions (2), (7) and (8) were properly dismissed as raising an issue (i.e., fraud) which is outside the jurisdiction of the board.
FN15. That fraud and inequitable conduct are ancillary to priority is also implicit in Driscoll v. Cebalo, 731 F.2d 878, 885, 221 USPQ 745, 751 (Fed.Cir.1984), wherein the court, finding that Cebalo was grossly negligent in failing to inform the examiner of a material reference, reversed the board's award of priority to Cebalo in Interference No. 97,757.
FN16. This conclusion is also consistent with 37 CFR 1.633(a), under which Valentini's motions (2), (7) and (8) were expressly filed, which states that a motion thereunder "shall not be based on ... [p]riority of invention of the subject matter of a count by the moving party against any opponent" (our emphasis).
FN17. As noted earlier, Valentini's request for reconsideration, which was based on the Federal Circuit's September 22, 1989 decision in Perkins v. Kwon, was combined in the same paper with its request for a resumption of proceedings following the Federal Circuit's May 9, 1990 decision in Winkler v. Guglielmino.

References: application No. 19785
 application No. 8301176
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