Opinion ID: 1388013
Heading Depth: 2
Heading Rank: 3

Heading: Consistency with the Patent Act

Text: We address here the specific conflicts that the district court identified and relied upon in its opinion. Because each of the rules is procedural, we must, as discussed above, give Chevron deference to the USPTO's interpretation of the provisions of the Patent Act that relate to proceedings in the Office. Cooper Techs., 536 F.3d at 1337. For such provisions, we must first determine whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778. [I]f the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute. Id. at 843, 104 S.Ct. 2778. Even if a court has previously resolved the specific question at issue, the agency's construction must be adopted unless the prior court decision holds that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion. Brand X, 545 U.S. at 982, 125 S.Ct. 2688.
The district court found that Final Rule 78's requirement for the third and subsequent continuation applications was inconsistent with the text of 35 U.S.C. § 120 and this court's precedent. Section 120, with emphasis and bracketed enumeration added, provides that: An application for patent for [1] an invention disclosed in the manner provided by the first paragraph of section 112 of this title in an application previously filed in the United States, or as provided by section 363 of this title, which is [2] filed by an inventor or inventors named in the previously filed application shall have the same effect, as to such invention, as though filed on the date of the prior application, [3] if filed before the patenting or abandonment of or termination of proceedings on [3a] the first application or on [3b] an application similarly entitled to the benefit of the filing date of the first application and [4] if it contains or is amended to contain a specific reference to the earlier filed application. No application shall be entitled to the benefit of an earlier filed application under this section unless an amendment containing the specific reference to the earlier filed application is submitted at such time during the pendency of the application as required by the Director. The Director may consider the failure to submit such an amendment within that time period as a waiver of any benefit under this section. The Director may establish procedures, including the payment of a surcharge, to accept an unintentionally delayed submission of an amendment under this section. The district court concluded that Final Rule 78 was inconsistent with the statutory mandate that qualifying applications shall have the benefit of the priority date of the initial application. Tafas II, 541 F.Supp.2d at 814. Additionally, the district court cited this court's predecessor for the propositions that there is no statutory basis for fixing an arbitrary limit to the number of [continuing] applications, id. (quoting In re Henriksen, 55 C.C.P.A. 1384, 399 F.2d 253, 254 (1968)) (alteration provided by the district court), and that a limit upon continuing applications is a matter of policy for the Congress, id. (quoting In re Hogan, 559 F.2d 595, 604 n. 13 (CCPA 1977)). In light of the USPTO's presumed inten[t] to deny additional applications in almost all circumstances, the district court found that Final Rule 78 set forth a mechanical rule that changes existing law and deprives applicants of their valuable rights under 35 U.S.C. § 120 to an unlimited number of continuation and continuation-in-part applications as a matter of right. Id. at 815. We agree with the district court that Final Rule 78 is inconsistent with § 120, although we rely on narrower grounds. Section 120 unambiguously states that an application that meets four requirements  shall have the same effect, as to such invention, as though filed on the date of the prior application. 35 U.S.C. § 120 (emphasis added). These requirements, which correspond to the bracketed enumeration above, include [1] the invention claimed in the application must have been properly disclosed in a prior-filed application; [2] the application must have been filed by inventor(s) named on the prior-filed application; [3] the application must have been filed before the patenting or abandonment of or termination of proceedings on the first application or on an application similarly entitled to the benefit of the filing date of the first application; and [4] the application must contain or be amended to contain a specific reference to the prior-filed application. The use of shall indicates that these are the exclusive requirements, and that all applications that meet these requirements must receive the benefit provided by § 120. See Transco Prods., Inc. v. Performance Contracting, Inc., 38 F.3d 551, 556 (Fed.Cir.1994) (The plain and unambiguous meaning of section 120 is that any application fulfilling the requirements therein `shall have the same effect' as if filed on the date of the application upon which it claims priority.). Thus, Rule 78 is invalid because it attempts to add an additional requirement that the application not contain amendments, arguments, or evidence that could have been submitted earlierthat is foreclosed by the statute. Because the statute is clear and unambiguous with respect to this issue, the USPTO's reliance on Chevron and Brand X is unavailing. As amici, several intellectual property and administrative law professors argue that Henriksen expressly recognized ambiguity in § 120. Accordingly, they argue, the USPTO's interpretation is entitled to deference under Brand X. We agree that the Henriksen court's approach of delving into the legislative history, which it noted was somewhat inconclusive, indicates that the text of the statute contains some ambiguity. See Henriksen, 399 F.2d at 256-58. However, the issue in Henriksen was whether there was a limit to the number of prior applications through which a chain of copendency may be traced to obtain the benefit of the filing date of the earliest of a chain of copending applications. Id. at 254. In other words, the question related to the permissible length of a chain of serial continuation applications, not the total number of continuation applications that may be filed. Specifically, the dispute was over the meaning of clause [3b] identified abovean application similarly entitled to the benefit of the filing date of the first application. Id. at 260-61. The ambiguity in clause [3b], however, cannot save Final Rule 78. The Final Rule limits continuation applications on the basis of the total number of such applications previously filed, not on the length of a given serial chain of such applications. 37 C.F.R. § 1.78(d)(1)(i)(B). By its terms, Final Rule 78 would apply to an applicant who seeks to file three continuation applications while the first application is still pending, even though each of these applications falls squarely within clause [3a] and would thus satisfy any reasonable interpretation of clause [3] and the rest of § 120. Therefore, while we must defer to the USPTO's reasonable interpretation of clause [3], there is no such interpretation that preserves the validity of Final Rule 78. Finally, the USPTO's reliance on In re Bogese, 303 F.3d 1362 (Fed.Cir. 2002), is unavailing. In Bogese, this court affirmed the Board of Patent Appeals and Interferences's rejection of claims in the applicant's continuation application on the grounds of extraordinary delay in prosecution. 303 F.3d at 1366. The applicant had submitted twelve continuation applications over an eight-year period and did not substantively advance prosecution of [the application at issue] when required and given an opportunity to do so. Id. at 1369. According to the USPTO, Bogese forecloses any argument that the conditions enumerated in Section 120 for making a priority claim are exclusive. USPTO Br. 45. This is so, it contends, because the opinion recognized that [t]he PTO has inherent authority to govern procedure before the PTO, and that authority allows it to set reasonable deadlines and requirements for the prosecution of applications. Bogese, 303 F.3d at 1368. We do not read the opinion so broadly. The holding of Bogese was that the PTO has authority to order forfeiture of rights for unreasonable delay. Id. at 1369. However, Bogese does not extend that power beyond the boundaries of prosecution history laches, which was upheld as an equitable defense to infringement in Symbol Technologies, Inc. v. Lemelson Medical, 277 F.3d 1361 (Fed.Cir.2002) ( Symbol II ). Rather, the panel recognized that the PTO has the authority to reject patent applications for patents that would be unenforceable under our holding in [ Symbol II ]. Bogese, 303 F.3d at 1367. We agree that the USPTO has inherent authority to govern procedure before the PTO, and that authority allows it to set reasonable deadlines and requirements for the prosecution of applications. Id. at 1368. However, under Bogese, the USPTO cannot set requirements that conflict with § 120 unless those requirements comport with a proper application of prosecution history laches. There are no firm guidelines for determining when prosecution laches exists. Symbol Techs., Inc. v. Lemelson Med. Educ. & Research Found., 422 F.3d 1378, 1385 (Fed.Cir.2005) ( Symbol IV ). However, it is limited to cases of unreasonable and unexplained delay in prosecution. Id. at 1384-85. We need not address the precise boundaries of the USPTO's authority to promulgate rules under Bogese because Final Rule 78 is far too restrictive to fall within the scope of prosecution history laches. The rule operates on an applicant's third continuation application without regard to when it was filed, even if the delay is significantly shorter than any of the delays in our prior prosecution history laches cases. See, e.g., Symbol IV, 422 F.3d at 1386 (eighteen to thirty-nine years elapsed between filing and issuance); Bogese, 303 F.3d at 1369 (eight years without the applicant substantively advancing prosecution). The rule simply captures too many applications that would not be even remotely susceptible to a prosecution history laches challenge. Therefore, Final Rule 78 is not a proper use of the USPTO's authority under Bogese to apply prosecution history laches.
The district court found that Final Rule 114, which governs the availability of RCEs, conflicts with the Patent Act in two ways. The first was that it places a limit on RCEs as of right on the basis of application family, rather than on the basis of each individual application, whether it be a parent application or a continuation or continuation-in-part application. Tafas II, 541 F.Supp.2d at 815. The district court found that this was inconsistent with 35 U.S.C. § 132, which uses the singular form of application. Additionally, the court noted Congress's pronouncement, upon enacting Section 132(b), that the RCE provisions `shall apply to all applications' filed on or after June 8, 1995. Id. (quoting American Inventors Protection Act of 1999, Pub.L. No. 106-113, § 4405(b)(1), 113 Stat. 1501, 1501A-560 to 1501A-561 (1999)). Second, the court found that § 132(b)'s mandate that [t]he director shall prescribe regulations to provide for the continued examination of applications for patent at the request of the applicant gave applicants the right to an unlimited number of RCEs per application at their discretion. Id. This right, the court held, was violated by Final Rule 114. Id. We do not find that § 132 unambiguously dictates that its provisions be applied on a per application basis. Cf. Henriksen, 399 F.2d at 258 (So read, `an application' does not necessarily refer only to a single application.); 1 U.S.C. § 1 ([W]ords importing the singular include and apply to several persons, parties, or things....). Therefore, because we defer to the USPTO's reasonable interpretation of the statute, we conclude that Final Rule 114 can properly be applied on a per family basis. See Cooper Techs., 536 F.3d at 1337-38. Appellees next argue that the use of shall in conjunction with the phrase at the request of the applicant in § 132(b) clearly shows that Congress intended RCEs to be unlimited and subject only to the applicant's discretion. GlaxoSmithKline Br. 40. We do not find the statute so clear. It is plausible that, as the USPTO suggests, § 132(b) simply directs the USPTO to prescribe regulations to govern the applicant's ability to request continued examination which must, in some circumstances, be granted. Under this reading, nothing prevents the USPTO from limiting the availability of the second and subsequent RCEs. Because § 132(b) does not unambiguously require the USPTO to grant unlimited RCEs, we defer to the USPTO's interpretation. See Cooper Techs., 536 F.3d at 1337-38. Finally, Appellees argue that § 132(a) requires the USPTO to continue examination if the applicant persists in his claim for a patent. Tafas Br. 32-33. Section 132(a) provides: Whenever, on examination, any claim for a patent is rejected, or any objection or requirement made, the Director shall notify the applicant thereof, stating the reasons for such rejection, or objection or requirement, together with such information and references as may be useful in judging of the propriety of continuing the prosecution of his application; and if after receiving such notice, the applicant persists in his claim for a patent, with or without amendment, the application shall be reexamined. No amendment shall introduce new matter into the disclosure of the invention. 35 U.S.C. § 132(a) (emphases added). The USPTO responds that this argument reflects a misunderstanding of the relationship between subsections (a) and (b) [of § 132]. USPTO Br. 53. According to the USPTO, [s]ubsection (a) provides for the `reexamination' of an application at the applicant's request after the initial examination provided in section 131. In contrast, `continued examination' under subsection (b) occurs after the reexamination provided for in subsection (a) is complete. Id. Section 132 does not define the difference between continued examination and reexamination. Because we find the USPTO's explanation reasonable, we defer to its interpretation that § 132(a) does not require it to grant unlimited RCEs. See Cooper Techs., 536 F.3d at 1337-38. Under this interpretation, Final Rule 114 does not conflict with § 132(a).
The district court held that the ESD requirement violated 35 U.S.C. §§ 102, 103, 112, and 131, as well as this court's precedent that holds that applicants have no duty to search the prior art. The court began its analysis with § 112, ¶ 2's requirement that [t]he specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention. The district court held, and Appellees argue on appeal, that this language precludes the USPTO from putting an arbitrary limit on the number of claims in an application. Subject to the arguable requirement that an applicant cannot obscure his invention by undue multiplicity, our precedent does not suggest that there is a limit on the number of claims. In re Clark, 25 C.C.P.A. 1317, 97 F.2d 628, 631 (1938); see also In re Wakefield, 57 C.C.P.A. 959, 422 F.2d 897, 900 (1970) ([A]n applicant should be allowed to determine the necessary number and scope of his claims....); In re Chandler, 50 C.C.P.A. 1422, 319 F.2d 211, 225 (1963) ([A]pplicants should be allowed reasonable latitude in stating their claims in regard to number and phraseology employed. The right of applicants to freedom of choice in selecting phraseology which truly points out and defines their inventions should not be abridged.). However, we need not decide whether the USPTO may impose a limit on the number of claims an applicant can pursue because we do not find that the ESD requirement creates any such limit. Rather, it simply requires that an ESD be submitted if more than five independent or twenty-five total claims are included in certain sets of copending applications. Because we cannot, as discussed above, conclude that Final Rules 75 and 265, on their face, effectively foreclose applicants from successfully submitting ESDs, we similarly cannot conclude that these rules place an absolute limit on claim numbers in violation of § 112, ¶ 2. The district court also found that Final Rules 75 and 265 went too far by requiring applicants to conduct a broad search of patents, patent applications, and literature, and provide, among other things, a `detailed explanation' of `how each of the independent claims is patentable over the cited references.' Tafas II, 541 F.Supp.2d at 816 (quoting 37 C.F.R. § 1.265(a)). The court relied on several of this court's inequitable conduct cases that noted that, in general, there is no duty to conduct a prior art search. Frazier v. Roessel Cine Photo Tech., Inc., 417 F.3d 1230, 1238 (Fed.Cir.2005) (quoting FMC Corp. v. Hennessy Indus., Inc., 836 F.2d 521, 526 n. 6 (Fed.Cir.1987)); see also Bruno Indep. Living Aids, Inc. v. Acorn Mobility Servs., Ltd., 394 F.3d 1348, 1351 n. 4 (Fed.Cir.2005). We agree with the USPTO that these cases do not speak to whether the USPTO may impose such a duty by regulation. Indeed, this court has already upheld the USPTO's authority to require from applicants such information as may be reasonably necessary to properly examine or treat the matter. 37 C.F.R. § 1.105; see also Star Fruits, 393 F.3d at 1282-84. On this record, we see no persuasive reason to prohibit the USPTO from requesting the information required by Final Rule 265, even if the applicant must take action to acquire that information. Finally, the district court found that Final Rules 75 and 265 improperly shift the burden away from the examiner and onto the applicant. Tafas II, 541 F.Supp.2d at 817. The court relied on the language in § 102 that [a] person shall be entitled to a patent unless, along with the requirement in § 131 that [t]he director shall cause an examination to be made of the application. Id. Additionally, the district court noted that this court's precedent places the burden of putting forth a prima facie case of unpatentability on the USPTO. See In re Oetiker, 977 F.2d 1443, 1445 (Fed.Cir.1992). We agree with the district court that the USPTO bears the initial burden of proving unpatentability, but disagree that the ESD requirement shifts that burden. Final Rules 75 and 265 do not require an applicant to make a prima facie case of patentability. While the rules require an applicant to conduct a prior art search and report his view of why the invention is patentable based on the results, the content of this disclosure does not change the standards by which the application is examined. An examiner cannot reject an application because he believes that the applicant failed to find the most material references or if he is otherwise not persuaded by the applicant's view of the prior art. Even under the new rules, the examiner must examine the application in accordance with § 131 and the applicant will be entitled to a patent unless the examiner can make a prima facie case of unpatentability. 35 U.S.C. § 102. Thus, while creating an additional procedural step for the submission of applications, the ESD requirement does not alter the ultimate burdens of the examiner or applicant during examination.