Court Opinion

ID: 9473158
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:21:15.39403+00
Date Added: 2024-06-11T17:43:21.602551
License: Public Domain

JACK P. MILLER, Circuit Judge,
dissenting.
The three members of this panel are in agreement except with respect to the second point of the opinion entitled “Estoppel Against Woods.” On this point, the Board of Patent Interferences (“board”) granted Tsuchiya’s motion for judgment based on estoppel arising out of the first interference. My brothers (“the majority”) would affirm; whereas, I would vacate the board’s judgment and remand.
The majority has reacted to this case as though it were some strange, deep sea growth (properly termed an “interference”), which threatens the “sanctity” of a final judgment of the board against the party Woods. Allow Woods to resist discovery, fail to appeal the board’s order, prosecute ex parte, force a second interference, and then have a second bite at the apple? No — never! Such a “perverse result” must be avoided even though 37 C.F.R. § 1.257(b) permits it.1
No matter that the board’s opinion in the first interference gave noncompliance *1583with a discovery order as the only stated reason for awarding priority to Tsuchiya and, indeed, refrained from any indication that its award of priority was on the merits! 2 The majority’s interpretation of the “public interest” compels it to ignore the' board’s own words and to gratuitously conclude that the award in the first interference was “on the merits consonant with the policy behind Rule 287(d)(2).”
Now, why such concern of the majority over whether the award in the first interference was on the merits? Because that would support granting, in the present interference, estoppel by judgment in favor of Tsuchiya. But why can’t the majority recognize that the award in the first interference was based “solely” on ancillary matters? It can, and it should. But 37 C.F.R. § 1.257(b) provides that where priority is based solely on ancillary matters, Woods’ status as senior party would be preserved and there could be no judgment by estoppel; whereas, the majority has decided that Woods simply must be estopped! Otherwise, all is lost. Well, then, how does the majority get around the fact that the board’s award in the first interference was based solely on an ancillary matter? The answer, curiously, is “magic.” You see, 37 C.F.R. § 1.287(d)(2) provides for sanctions by the Board of Patent Interferences for failure to comply with an order. One sanction is the award of priority against the defaulting party. Another is that the failure “may be considered by the Board of Patent Interferences as basis for ... holding certain facts to have been established.” Even though, as a matter of fact, such “facts” were never established? That’s what the majority says! Just call those non-facts “per se priority facts,” and voila! They are established!3 And so, “robes flying,”4 the majority gallops off to proclaim to interference practitioners that it is not what the Board of Patent Interferences says that controls, but what a majority of a panel of this court thinks the board could have said controls.
When district courts deem facts to have been established as a sanction under Federal Rule of Civil Procedure 37(b)(2)(A) for noncompliance with a discovery order, the facts deemed established are explicitly stated. See General Atomic Co. v. Exxon Nuclear Co., 90 F.R.D. 290 (S.D.Cal.1981); Cromaglass Corporation v. Ferm, 344 F.Supp. 924 (M.D.Pa.1972), appeal dismissed, 500 F.2d 601 (3d Cir.1974) (in banc); Kahn v. Secretary of Health, Education, and Welfare, 53 F.R.D. 241 (D.Mass.1971).
If the alternative sanction of a default judgment under Federal Rule of Civil Procedure 37(b)(2)(C) is selected, that judgment has the effect of res judicata. 6 J. Moore, W. Taggart & J. Wicker, Moore’s Federal Practice § 55.09 (2d ed. 1984); IB J. Moore, J. Lucas & T. Currier, Moore’s Federal Practice §§ .409[l.-2], .409[4] (2d ed. 1984). The effect of res judicata is that the judgment exclusively establishes only facts in issue and directly adjudicated or necessarily involved in the determination of an action. See Gaitan v. United States, 295 F.2d 277, 279 (10th Cir.1961), cert. denied, 369 U.S. 857, 82 S.Ct. 939, 8 L.Ed.2d 15 (1962).
In the context of an interference, the entry of judgment as a sanction should not alone result in the assumption that certain *1584facts were established, because 37 C.F.R. § 1.257(b), which has no counterpart in the Federal Rules of Civil Procedure, makes the basis of a judgment of priority critical to its prospective effect. Given this criticality and the fact that the board’s decision in the first interference was not explicit, this court should not assume that the basis for that decision was on the merits rather than on an ancillary matter (as noted infra).
Contrary to note 14 of the majority opinion, the Commissioner’s opinion does not clarify the confusion regarding the basis of the board’s judgment of priority in the first interference.
If all this is not persuasive, the majority has another arrow — the precise meaning of “ancillary matters” in the context of 37 C.F.R. § 1.257(b) is not clear, and there is no reliable a priori method of determining whether or not a given issue is ancillary to priority! There are three significant cases bearing on interpretation of the word “ancillary” for purposes of 37 C.F.R. § 1.257(b).
In Goodbar v. Banner, 599 F.2d 431, 435, 202 USPQ 106, 109 (CCPA), cert. denied, 444 U.S. 927, 100 S.Ct. 267, 62 L.Ed.2d 184 (1979), the court said that where it was not known whether requested discovery would lead to legally relevant and admissible evidence, the court was of the opinion that an order for discovery was not ancillary to priority “as the case law has developed the meaning of that term.” And it added: “The happenstance that the ordered discovery might result in evidence bearing upon or even establishing priority does not make this issue ancillary to priority.” Id. (Footnote omitted.)
The following year, in Morris v. Diamond, 634 F.2d 1347, 1350, 208 USPQ 202, 204 (CCPA 1980), the court said that the admission of testimony relevant to a determination of priority was a matter ancillary to priority and properly within the court’s appellate jurisdiction.
The next year, in Morris v. Tegtmeyer, 655 F.2d 216, 220, 210 USPQ 693, 697 (CCPA 1981), the court pointed to its statement in Morris v. Diamond, 634 F.2d at 1350, 208 USPQ at 204, that “an interlocutory decision on the admissibility of evidence relating to priority is a matter ancillary to priority,” which it defined as “a matter logically related to the outcome of a priority issue.”
Thus, not only do the two most recent opinions of our predecessor court reflect a more liberal view of the meaning of “ancillary matters,” but the most recent opinion sets forth a reasonably practical definition which, contrary to the majority, seems sufficiently clear to provide a workable, a priori guide-post for determining whether most issues, at least, are ancillary to priority. Certainly, this definition covers the discovery order sought in the first interference which, as the majority recognizes, logically related to evidence bearing on originality and derivation.
The board’s judgment should be vacated and the case remanded for a determination of priority on the merits.

. I am no apologist for a litigant who seeks to defeat discovery; nor do I approve of relitigation of questions that should have been decided earlier. However, the way to deal with such matters is for the Patent and Trademark Office to change the regulations — rather than for this court, in effect, to do so.

. The board simply said:
Accordingly, in view of the failure of the senior party to comply with the order of May 15, 1978, pursuant to 37 CFR 1.287(d)(2) priority of invention of the subject matter in issue is hereby awarded to William Sadayuki Tsuchiya, the junior party.

. " ‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’ ” L. Carroll, Alice’s Adventures in Wonderland and Through the Looking-Glass and What Alice Found There 190 (R.L. Green ed. 1971). Also apt is Alice’s comment: "Tve often seen a cat without a grin ... but a grin without a cat! It’s the most curious thing I ever saw in all my life!’ ” Id. at 59.

. Norton v. Macy, 417 F.2d 1161, 1168 (D.C.Cir.1969) (Tamm, J., dissenting).