Court Opinion

ID: 9473233
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:23:29.245189+00
Date Added: 2024-06-11T17:43:24.021996
License: Public Domain

NIES, Circuit Judge, with whom SMITH and BISSELL, Circuit Judges,
join, concurring.
While I agree with the result reached by the majority, I disagree with the majority opinion insofar as it holds that, in a reexamination proceeding, a patent is never accorded the presumption of validity. In this case it makes no difference whether the presumption is or is not applied, as the board itself stated. The holding that the claimed invention would have been obvious over art not previously considered is fully justified, had the presumption been recognized.
This case illustrates the advantage of the new reexamination procedure. It worked here precisely as proponents of the legislation envisaged. What has resulted, however, in my view, is an easy case making bad law, not unusual with dicta. The majority decision finds a negation of the statutory presumption that is not expressed in the statute. Further, the majority opinion cannot be justified on the grounds that it is necessary to achieve the statutory objectives. Indeed, this decision can only have a chilling effect on voluntary use of the new procedure by patent owners, which was to be one of its prime objectives. H.R.Rep. No. 1307, 96th Cong., 2d Sess. 4, reprinted in 1980 U.S.Code Cong. & Ad.News 6460, 6463.
After complying with the procedures promulgated by Congress for obtaining a patent, a patent owner is in a position comparable to the holder of a deed or title to property. 35 U.S.C. § 261 (1982); Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1548, 220 USPQ 193, 198 (Fed.Cir.1983); Schenck v. Nortron Corp., 713 F.2d 782, 784, 218 USPQ 698, 699 (Fed.Cir.1983). That government grant is not to be set aside unless the deciding tribunal is clearly convinced that the grant was in error, having been predicated on erroneous or incomplete facts or a wrong application of law.
The statutory provision in 35 U.S.C. § 282 is absolute:
A patent shall be presumed valid.
Nothing in the reexamination chapter, 35 U.S.C. §§ 301-307, states otherwise.1 Nothing in the legislative history indicates that Congress intended a patent owner involved in reexamination to “start over” to resecure his patent. On the contrary, the chapter is directed simply to resolution of a new question of patentability under 35 U.S.C. §§ 102 or 103. Specifically, 35 U.S.C. § 304 provides:
§ 304. Reexamination order by Commissioner
If, in a determination made under the provisions of subsection 303(a) of this title, the Commissioner finds that a substantial new question of patentability affecting any claim of a patent is raised, the determination will include an order for reexamination of the patent for resolution of the question. [Emphasis added.]
As explained in the legislative history:
This “substantial new question” requirement would protect patentees from having to respond to, or participate in unjustified reexaminations. Further, it would act to bar reconsideration of any argument already decided by the Office, whether during the original examination or an earlier reexamination.
H.R.Rep. No. 1307, 96th Cong., 2d Sess. 7, reprinted in 1980 U.S.Code Cong. & Ad. News 6460, 6466.
*861The presumption of validity dovetails neatly with reexamination to resolve a substantial new question of patentability and its application would fit within the precedent of this court in which the presumption of validity has been defined or its effect explained in a series of decisions.2 Indeed, in In re Andersen, 743 F.2d 1578, 1580, 223 USPQ 378, 380 (Fed.Cir.1984), the PTO acknowledged that the presumption of validity applied.3
The presumption of validity places on the challenger of a patent the burden of coming forward with evidence to establish facts which may lead to the conclusion that the patent is invalid. SSIH Equipment S.A. v. U.S. Int’l Trade Comm’n, 718 F.2d 365, 375, 218 USPQ 678, 687 (Fed.Cir.1983). The challenger bears the burden of proof of such facts, as well as the ultimate burden of persuasion on the legal issue of validity. Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1534, 218 USPQ 871, 875 (Fed.Cir.1983). The PTO acknowledges that it bears these burdens in examination of an original application or in reexamination of patent claims. The PTO does not accept, however, that the quantum of proof of facts is “clear and convincing” evidence, which this court has stated to be imposed by the presumption. SSIH, 718 F.2d at 375, 218 USPQ at 687.
Our precedent holds that the presumption of validity is not weakened or destroyed during litigation by presentation of more relevant art not considered by the PTO, but may be more easily overcome if such art is presented. American Hoist & Derrick Co. v. Sowa & Sons, 725 F.2d 1350, 1358-60, 220 USPQ 763, 769-71 (Fed. Cir.1984). This follows from the absence of a decision on such matter by the administrative expert, the PTO examiner, to which deference must be given. Id. at 1359, 220 USPQ at 770. The situation in reexamination falls precisely within this concept. If reexamination concerns only a question of patentability not previously considered by the PTO, a fortiori, there is no prior decision to which deference is due and the presumption can be more easily overcome. But deference should be required in reexamination with respect to a matter which was previously considered or is substantially the same, e.g., basing a rejection on a new reference which is not materially different from one which has been overcome. The legislative history quoted above expresses a clear intent, consistent with the presumption of validity,, that patents are not to be examined de novo. The legislative history quoted by the majority relates only to previously unconsidered matters. However, concerning matters which are essentially the same as those previously considered which may be re-raised during reexamination, a patentee is entitled to more respect for his property than the majority decision recognizes. Indeed, the majority’s analysis and certain statements in the legislative history which speak of enhancing the presumption of validity by reexamination4 seem to equate the presumption of validity with the presumption of administrative regularity or correctness, a concept which our precedent has specifically rejected. American Hoist, 725 F.2d at 1359-60, 220 USPQ at 770.
The majority justifies its position that the presumption does not apply in reexamination on the ground that reexamination is *862an ex parte proceeding, while the presumption is appropriate only in inter partes disputes. The record in this case shows that an alleged infringer in litigation forced the reexamination, filed a brief analyzing the art in connection with its request to the PTO, filed a reply to the patent owner’s objection, was served with copies of the examiner’s actions and the patent owner’s responses, and was permitted to intervene and brief matters in this court. The record here does not disclose that affidavits accompanied the alleged infringer’s request for reexamination or his reply to the patent owner’s statement, but this type of submission is allowed by such person. To characterize reexamination in its entirety as an ex parte proceeding under such circumstances, while technically correct, ignores reality. It is, in my view, more appropriate to view it here as collateral to the pending litigation, although without res judicata effect against the alleged infringer if the claims are held valid. 3 Chisum, Patents § 11.07[4][f], at 11-128 (1984).
I agree with the majority that reexamination should work in such a manner that it will be “neutral.” However, the decision today, in my view, will make patent owners resistent to reexamination. The deck is stacked against them by this decision and by In re Yamamoto, 740 F.2d 1569, 1571, 222 USPQ 934, 936 (Fed.Cir.1984). The court has made reexamination into a proceeding which affords advantages to an infringer over his position in court.
Delay itself is an advantage to an in-fringer of greater economic power than the patent owner, and the lack of res judicata effect against the infringer gives that party two opportunities to attack the patent. These advantages are inherent in reexamination and must be accepted as the quid pro quo for the perceived benefits of reexamination. We need not, however, go further and, as a matter of statutory interpretation, also change the rules by which validity is to be judged to the infringer’s benefit. An infringer may well have evidence which is sufficient to meet the low threshold of “a substantial new question of patentability”, but not sufficiently persuasive in court to overcome the presumption of validity, including the burden of clear and convincing proof. This might be particularly true where evidence is submitted to the PTO in the form of affidavits of experts or others who thereby escape the testing of cross examination.
With respect to claim construction, claims in litigation are to be “so construed, if possible, as to sustain their validity.” ACS Hospital Systems, Inc. v. Montefiore Hospital, 732 F.2d 1572, 1577, 221 USPQ 929, 932 (Fed.Cir.1984), citing Klein v. Russell, 86 U.S. (19 Wall.) 433, 466, 22 L.Ed. 116 (1874); Turrill v. Michigan, S. & N.I. R.R., 68 U.S. (1 Wall.) 491, 510, 17 L.Ed. 668 (1864). Claims in reexamination, on the other hand, “will be given their broadest reasonable interpretation.” In re Yamamoto, 740 F.2d at 1571, 222 USPQ at 936. Thus, claims may be valid and infringed in court but invalid in the PTO and, a fortiori, not infringed. It is small solace to a patent owner in that situation that he may amend his claims in reexamination and secure narrower new claims. Upon amendment, his claims are subject to complete examination and an infringer has the benefit of intervening rights to the extent afforded under 35 U.S.C. § 252 pursuant to 35 U.S.C. § 307(b).
Given this court’s interpretation of proper reexamination procedure, the obvious strategy of an infringer would be to force the patentee back to the PTO where the patentee’s presumptive advantage, as well as claim construction advantage, is eliminated.
The majority’s analysis focuses on the aspect of reexamination dealing with the threshold determination that “a substantial new question of patentability” has been raised. The majority then continues its analysis of this case as if reexamination itself is a “limited examination” directed to that question. However, our court has also analogized reexamination to reissue proceedings. In re Yamamoto, 740 F.2d at 1572, 222 USPQ at 937. In reissue, examination is not limited to the question *863raised by the patent owner. 37 C.F.R. § 1.176. The PTO has taken a similarly expansive view of the scope of reexamination in its regulations and in its stated operating procedures.
Reexamination, as interpreted by the PTO, is a two step process involving: (1) the determination that there is “a substantial new question of patentability”, and (2) reexamination itself. The latter step is not constrained, in the PTO view, by the former. In a very real sense, once reexamination is ordered (an unreviewable decision), the patent holder “starts over” under the PTO view on all § 102 and § 103 issues with respect to all claims, amended or unamended, whether or not related to the new question.
With respect to the first step, i.e., determining whether there should be reexamination, PTO regulation 37 C.F.R. § 1.515 provides:
§ 1.515 Determination of the request for reexamination.
(a) Within three months following the filing date of a request for reexamination, an examiner will consider the request and determine whether or not a substantial new question of patentability affecting any claim of the patent is raised by the request and the prior art cited therein, with or without consideration of other patents or printed publications. [Emphasis added.]
Turning to the Manual of Patent Examining Procedure (MPEP), one sees that examiners are instructed as follows, when considering a request for reexamination:
§ 2242 Criteria for Deciding Request.
... Material new arguments or interpretations can raise “a substantial new question of patentability” as to prior art patents or printed publications already considered by the Office.
§ 2244 Prior Art on Which Determination Is Based.
The determination whether or not “a substantial question of patentability” is present can be based upon any prior art patents or printed publications. Section 303(a) of the statute and 37 CFR 1.515(a) provide that the determination on a request will be made “with or without consideration of other patents or printed publications,” i.e., other than those relied upon in the request. The examiner is not limited in making the determination to the patents and printed publications relied upon in the request. The examiner can find “a substantial new question of patentability” based upon the prior art patents or printed publications relied upon in the request, a combination of the prior art relied upon in the request and other prior art found elsewhere, or based entirely on different patents or printed publications. The primary source of patents and printed publications used in making the determination are those relied upon in the request. However, the examiner can also consider the prior art of record in the patent file from the earlier examination or a reexamination and any patents and printed publications of record in the patent file from submissions under 37 CFR 1.501 which are in compliance with 37 CFR 1.98 in making the determination.
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Any question as to whether a substantial new question of patentability exists should be resolved in favor of granting the request for reexamination. [Emphasis added.]
With respect to the scope of the examination on reexamination, the second step, 37 C.F.R. § 1.552(a) provides:
Patent claims will be reexamined on the basis of patents or printed publications. No limitation is found there, or is intended, to limit reexamination to the new question of patentability which started reexamination.5 In making rejections, the examiners are told in the MPEP:
*864§ 2256 Prior Art Patents and Printed Publications Considered by Examiner in Reexamination.
The primary source of prior art will be the patents and printed publications cited in the request.
The examiner must also consider patents and printed publications —cited by a reexamination requester under § 1.510
—cited in patent owner’s statement under § 1.530 or a requester’s reply under § 1.535 if they comply with § 1.98 —cited by patent owner under a duty of disclosure (§ 1.555) in compliance with § 1.98
—discovered by the examiner in searching

—of record in the patent file from earlier examination

—of record in patent file from § 1.501 submission prior to date of an order if it complies with § 1.98. [Emphasis added.] § 2216 Substantial New Question of Patentability.
... If a substantial new question of pat-entability is found as to one claim, all claims will be reexamined during the ex parte reexamination process. [Emphasis added.]
The MPEP example of the processing of a “typical” reexamination shows a request for reexamination of claims 1-4 of a patent (MPEP § 2214, at 2200-11); a decision that a new question is raised as to claims 1-3 and no new question as to claim 4 (MPEP § 2246, at 2200-29); and, finally, a decision (1) not to reexamine claims 1-3 because of a court decision; (2) a rejection of issued claim 4; (3) a determination of patentability of issued claim 5; and (4) a rejection of new
claim 6 (MPEP § 2262, at 2200-41). Thus, issued claim 4 is lost — although no decision was made that a substantial new question of patentability existed to involve the claim in the reexamination.
Coupling this expansive view of the scope of reexamination with the denial of a presumption of validity gives carte blanche to the Office to “second guess” the original allowance on the basis of the art originally considered or, at least, not materially different. This unrestrained view of its power during reexamination was, indeed, expressed by the board in In re DeWitt, No. 581-71, slip. op. at 5 (Bd.App. May 30, 1984), the appeal of which is also decided today, No. 84-1555 (Fed.Cir. Feb. 27, 1985), in which the board opined:
[T]here is no policy reason against the Office reconsidering its own work product and admit it may have made an er-ror____
This view is too simplistic. The questions of validity of patents over prior art are not clear cut. The conflicting testimony of responsible experts, which this court sees every day in the records of patent cases before it, belies the concept that determining an “error” was made will be readily apparent.6 The ultimate decision is a judgment call and the result may well depend on whether one starts with the view that the patent is valid or that reexamination starts on a clean slate. See American Hoist, 725 F.2d at 1358-60, 220 USPQ at 769-71 (judgment of invalidity reversed, inter alia, for failure to accord presumption of validity).
For the foregoing reasons, I believe it would be the correct and desirable interpretation of the statute to apply the presump*865tion of validity in reexamination in the same manner as in court proceedings, and I would also apply the identical standard for claim construction.7
Alternatively, I urge the majority to limit reexamination to “resolution of the question,” that is, to the “substantial new question of patentability” which caused the reexamination to be ordered, in accordance with 35 U.S.C. § 304. Nothing in the statute constrains the Commissioner, of course, from finding more than one substantial new question of patentability. However, under the statute, the Commissioner is required to make such determination. He should not merely allow reexamination to proceed in any direction at the discretion of an examiner. Clearly, reexamination was not designed to allow the PTO simply to reconsider and second guess what it has already done.

. The directive in 35 U.S.C. § 305 to follow "procedures established for initial examination under the provisions of sections 132 [PTO must give notice of rejection with reasons] and 133 [time for response]” patently have no bearing on the substantive issue here.

. American Hoist & Derrick Co. v. Sowa & Sons, 725 F.2d 1350, 1358-60, 220 USPQ 763, 769-71 (Fed.Cir.1984); Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1534, 218 USPQ 871, 875-76 (Fed.Cir.1983); SSIH Equipment S.A. v. U.S. Int’l Trade Comm’n, 718 F.2d 365, 375, 218 USPQ 678, 687 (Fed.Cir.1983); Solder Removal Co. v. U.S. Int’l Trade Comm’n., 582 F.2d 628, 632-33, 199 USPQ 129, 133 (CCPA 1978).

. In this case, the board's position is that it makes no difference whether the presumption applies or not. In In re DeWitt, No. 581-71, slip op. at 5 (Bd.App. May 30, 1984), the appeal of which is also decided today, No. 84-1555 (Fed. Cir. Feb. 27, 1985), the board took the next step and explicitly held that the presumption did not apply to claims under reexamination.

. See, e.g., Patent Reexamination: Hearings on S. 1679 Before the Comm, on the Judiciary, 96th Cong., 1st Sess. 1, 60 (1979) (testimony of Arthur R. Whale) ("[Reexamination] will bring the presumption of validity to the same level with respect to newly cited art.”).

. In publishing the implementing regulations, Acting Commissioner of Patents and Trademarks Tegtmeyer stated with respect to the scope of reexamination:
*864The scope of the reexamination proceeding which was originally proposed has been essentially adopted in the final rules. The suggestions that the rules be broadened to include other issues have not been adopted since the other issues would unduly complicate the proceedings, raise the expense of the proceedings and raise questions whether such issues can be considered under Pub.L. 96-517. 1007 O.G. 31 (1981).
Thus, while "other" issues such as fraud, will not be considered, the only stated limitation on §§ 102 and 103 issues is that indicated above.

. "Federal courts have a difficult enough time trying to determine whether an invention, narrowed by the patent application procedure and fixed in the specifications which describe the invention for which the patent was granted, is patentable." Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 492, 94 S.Ct. 1879, 1891, 40 L.Ed.2d 315 (1974).

. Implicit in my opinion, of course, is that no presumption applies to new or amended claims.