Opinion ID: 449779
Heading Depth: 1
Heading Rank: 6

Heading: PTO Procedures

Text: 61 Gould challenges several of the implementing rules and regulations of the Patent and Trademark Office, relating to: the conditions for stay of reexamination stated in MPEP Sec. 2286; the standards applied in reaching a decision to grant reexamination as set out in 37 C.F.R. Sec. 1.530(a) and MPEP Secs. 2240 and 2244; and the fee structure of 37 C.F.R. Sec. 1.26(c). 62 Congress in performance of its legislative functions may leave it to administrative officials to establish rules within the prescribed limits of the statute. United States v. Grimaud, 220 U.S. 506, 517, 31 S.Ct. 480, 483, 55 L.Ed. 563 (1911). A statute that is valid on its face may nevertheless be administered in such a way that constitutional or statutory guarantees are violated: 63 [The courts] 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. 64 Federal Election Commission v. Democratic Senatorial Campaign Committee, 454 U.S. 27, 32, 102 S.Ct. 38, 42, 70 L.Ed.2d 23 (1981). 65 The PTO operates in accordance with detailed rules and regulations, including those set out in the Manual of Patent Examining Procedure (MPEP) which is made available to the public and which has been held to describe procedures on which the public can rely. In re Kaghan, 387 F.2d 398, 401, 156 USPQ 130, 132 (CCPA 1967). Our standard for review is whether the rule or procedure is within the agency's statutory authority and is reasonably related to the purposes of the enabling legislation, Mourning v. Family Publications Service, Inc., 411 U.S. 356, 369, 93 S.Ct. 1652, 1660, 36 L.Ed.2d 318 (1973), and does no violence to due process. Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). The rules and procedures here challenged all relate to the threshold decision by the PTO of whether to reexamine Gould's patents.
66 MPEP Sec. 2286 provides that the PTO will not stay its reexamination of a patent that is in litigation unless trial has commenced. As discussed ante, Gould asserts that this practice is directly contrary to the legislative purpose of providing an expeditious alternative to the entire process of litigation. Gould argues that in his case Congress' intention was defeated by the PTO's refusal to stay reexamination. He asserts that MPEP Sec. 2286, whereby the PTO proceeded with reexamination of Gould's patents, is contrary to statutory authority and invalid, and reexamination of Gould's patents should be vacated. 67 The Commissioner responds that it is not for the PTO to decide whether trial will continue or be stayed, and takes issue with Gould's statement that the completion of pre-trial procedures is a sufficient assurance of imminent trial as to require the PTO to refrain from proceeding with a request for reexamination, even if proceeding with such request would delay the trial, as occurred in Gould's situation. The PTO also argues that the rule is in accord with the statute. 68 Essentially, Gould argues that the PTO should be required to exercise discretion on whether to proceed with reexamination in view of imminent trial, and that the failure to authorize and to exercise such discretion is a critical flaw in PTO practice, which alone or with other flaws requires us to vacate the reexamination process that Gould's patents are undergoing. 69 We find no merit in Gould's analogy to reissue practice, for we observe that PTO procedures are identical for both reissue and reexamination applications where a court has stayed litigation, see MPEP Sec. 1442.03, suggested Form Paragraph 14.07: 70 While there is concurrent litigation related to this reissue application, action in this reissue application will NOT be stayed because a stay of that litigation is in effect for the purpose of awaiting the outcome of these reissue proceedings. 71 See also 37 C.F.R. 1.565(b). 72 Even if PTO discretion to stay reexamination were authorized it could not affect Gould's situation. The Florida district court did not invite the PTO to exercise discretion on whether to consider Control Laser's reexamination request, and did not defer to the PTO to decide whether reexamination or trial should proceed first. The Florida court itself stayed the trial in order for reexamination to be pursued. (The stay of pending litigation to enable PTO review of contested patents was one of the specified purposes of the reexamination legislation.) The court never relinquished control of its right to proceed with the trial; and the PTO never was granted the right to decide whether or when trial would proceed. 73 On these facts, the PTO did not have the opportunity to exercise the discretion that Gould complains MPEP Sec. 2286 prevents it from exercising. Whatever deprivation Gould may be experiencing due to the ongoing reexamination is not due to this administrative procedure, and we find no due process question raised thereby. Nor do we find in Sec. 2286 a derogation of the statutory purpose nor an undue extension of statutory authority. We affirm the district court on this issue. 74
75 Gould challenges the lawfulness of 37 C.F.R. Sec. 1.530(a), which provides that no statement by a patentee shall be considered by the PTO during the three-month period set in 35 U.S.C. Sec. 303 wherein the PTO is required to decide whether any substantial new question of patentability is raised. This objection is presented in the context of the PTO's rule of doubt expressed in MPEP Secs. 2240 and 2244. 12 Gould argues that the procedure is flagrantly unfair, since the PTO must rely solely on the representations of the person who requests reexamination without opportunity for any explanation by the patentee. The statute does not prohibit such explanation, but 35 C.F.R. Sec. 1.530(a) does. Gould asserts that the deprivation of the opportunity to be heard at this threshold stage violates due process. 76 Gould also protests 37 C.F.R. Sec. 1.26(c), arguing that the $1,500 fee for reexamination unlawfully weights the PTO's initial decision in favor of granting reexamination, because only if reexamination is granted will the PTO avoid refunding $1,200 of the $1,500. 77 Gould conceded before the district court, for the purpose of this case, that a substantial new question of patentability had been raised in the requests for reexamination of the two patents here at issue. Thus the challenged procedures of 37 C.F.R. Secs. 1.530(a) and 1.26(c), and MPEP Secs. 2240 and 2244, did not apply to Gould's detriment. In the absence of justiciable controversy with respect to these provisions, Gould does not have standing to challenge them. Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975); Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962).