Court Opinion

ID: 9486635
Source: CourtListenerOpinion
Date Created: 2023-08-05 11:54:54.585677+00
Date Added: 2024-06-11T17:51:50.657769
License: Public Domain

NEWMAN, Circuit Judge,
concurring in part, dissenting in part.
I agree with the panel majority that the district court erred in the final step of its analysis. I write separately because I do not share the majority’s view that the district court did not have discretion to consider *1104whether the inventions were the same, and did not have authority to dispose of the case on that basis. The panel majority has imposed a new restriction on the district court, replacing its judicial discretion with a dependency on the details of PTO proceedings that has not heretofore applied in § 146 actions.
The majority holds that the question of identity of the inventions claimed in patent applications in “interference” can not be decided by the district court in a § 146 trial de novo, unless certain internal administrative procedures were followed in the PTO. The majority deems it immaterial that neither side raised this objection at the time that the district court was trying the question of identity of invention. Indeed, both sides viewed the question of identity of invention as essential to resolution of the dispute as to priority of invention. Essential it is, and as fully within the purview of a district court in a § 146 proceeding, as it was before the PTO when the interference was declared.
I
The panel majority refers to the 1985 statutory and rule changes relating to interferences as somehow supporting the unreviewa-bility by the district court of the issue of identity of invention. These changes were designed to remove the then-existing prohibition whereby the Board of Patent Interferences was barred from considering questions of patentability when raised during an interference proceeding, and thereby to remove one of the time-consuming procedural restrictions that plagued priority contests. See Perkins v. Kwon, 886 F.2d 325, 327-28, 12 USPQ2d 1308, 1310-11 (Fed.Cir.1989). New regulations were adopted, to guide examiners and practitioners. Id. These PTO regulations did not remove the district court’s discretion to consider relevant questions of pat-entability in a § 146 proceeding.
Under the pre-1985 practice, if a question of patentability of the interference count, or interpretation of the scope or meaning of the claim, arose after the interference was “declared”, it was usually set aside until after the priority contest was over — often a matter of years — and then taken up ex parte, also often a matter of years. The result was delay, inconvenience, inequity, and inefficiency. The removal of this barrier resulted in a simpler, not a more “arcane”, practice. Caution is required lest this court create new bureaucratic complexities, and transport these complexities into the district court.
The PTO, by “declaring” the interference between Widmayer and Hess in accordance with 37 C.F.R. § 1.611, held that there was a common invention represented by the interference count. The district court, after a full trial in accordance with 35 U.S.C. § 146, held that there was not a common invention. My colleagues on this panel hold that the district court is not authorized to decide whether there was a common invention, because Con-servolite had made no motion in the PTO in accordance with 37 C.F.R. § 1.633, and the Board did not redecide the issue of common invention. I do not agree that the district court was without discretion to decide the case on this basis, for the absence of identity of invention fully disposed of the issue before the court. The issue of identity of invention was litigated in the district court without objection. It is the only issue on this appeal.
Neither side viewed the issue of identity of invention as outside the permissible scope of the district court proceeding. Although the panel majority holds that “the issues presented by the parties were not raised during the interference; therefore, they were not properly before the district court”, that procedural objection was not raised before the district court. Indeed, it is not raised by either party on this appeal. Thus I can not join in taxing the district court with “legal error” in “consider[ing] a matter not properly before it”. Even the PTO is not so rigorous. See 37 C.F.R. § 1.655(c) (1993) (“To prevent manifest injustice, the Board may consider an issue even though it would not otherwise be entitled to consideration [in rendering a final decision]”). Thus I see scant benefit in requiring the district court sua sponte to investigate what happened in the PTO motion period when neither party objected before the district court, or before us.
When a trial court considers an issue that both parties agree is properly before it, and that is within the court’s jurisdiction — and *1105when the issue is dispositive of the dispute— surely it is not “legal error” to decide the dispute on that basis. This is not a matter of deference to the PTO with respect to such aspects as the burden of proof, as discussed in Kubota v. Shibuya, 999 F.2d 517, 27 USPQ2d 1418 (Fed.Cir.1993). Nor is this like a direct appeal to the Federal Circuit on the PTO record, as in Kubota v. Shibuya. A trial before the district court is not limited to the record of the Board proceedings, and should not be rigidly limited to the procedures whereby that record was created.
Every interference proceeding is founded on the threshold determination by the PTO that both parties are claiming the same invention. It is indeed a new ruling to hold that this material and dispositive fact can not be redetermined before the district court in a trial de novo. Although the majority holds that Conservolite was “precluded” from raising this issue at the Board’s interference hearing, the district court did not find preclusion, the parties did not argue preclusion, the PTO rules provide for discretion — and neither party raised the question of preclusion on this appeal.
Perhaps PTO interference practice remains “highly arcane and specialized”, as the panel majority puts it. As seen in this case, however, when remedy by civil action is selected in the district court, the agency’s arcana dissolves in favor of the mainstream procedures of the Federal Rules. In a proceeding under 35 U.S.C. § 146 the parties can create a new record; they can present new witnesses, adduce new evidence, run new tests, conduct demonstrations and plant visits, and bring in experts; and in general do what is needed, and the district court allows, in order to ascertain the truth and decide the dispute. See Standard Oil Co. (Indiana) v. Montedison, S.p.A., 664 F.2d 356, 361, 212 USPQ 327, 332 (3d Cir.1981) (“action brought under 35 U.S.C. § 146 is a trial de novo ”), cert. denied, 456 U.S. 915, 102 S.Ct. 1769, 72 L.Ed.2d 174 (1982).
The majority cites General Instrument Corp. v. Scientific-Atlanta, Inc., 995 F.2d 209,27 USPQ2d 1145 (Fed.Cir.1993), wherein this court sustained the decision of the district court not to consider a public use issue that had not been raised before the Board. This court reaffirmed, however, that “the district court may, in appropriate circumstances, exercise its discretion and admit testimony on issues even though they were not raised before the Board”. Id. at 214, 27 USPQ at 1149.
The 1985 legislation did not affect the statutory divergence between direct review by the Federal Circuit on the PTO record, 35 U.S.C. § 144, and the remedy by civil action in the district court authorized by 35 U.S.C. § 146. These paths are intended to provide different recourse. See Standard Oil Co. v. Montedison, S.p.A., 540 F.2d 611, 616-17, 191 USPQ 657, 660-61 (3d Cir.1976) (in a § 146 review of the decision of the Board, the court has discretion to depart from the general rule against raising new issues, when relevant to the factual issue of priority of invention). The reforms applied to the PTO in 1985 did not operate to reduce the discretion of the district court in a § 146 action. As stated in Perkins v. Kwon, 886 F.2d at 328, 12 USPQ2d at 1311, “Congress intended that if patentability is fairly placed at issue in the proceeding, it will be determined.”
Remedy for agency action by trial de novo in a court is not unique to the patent system. One need not look beyond other areas of Federal Circuit purview; for example, a federal employee with a discrimination claim before the Merit Systems Protection Board can take the claim to the district court for trial de novo; an importer can take an adverse decision of the Customs Service to the Court of International Trade for trial de novo; an adverse decision of a government Contracting Officer can be taken to the Court of Federal Claims for trial de novo. As we said in connection with a de novo proceeding under 35 U.S.C. § 145 relating to review of the Board’s denial of a patent, “[ujnless a party is prejudiced thereby or due process is denied, expeditious justice is better served by avoiding artificial restrictions on the district court’s authority to resolve all issues reasonably raised in the proceeding.” Newman v. Quigg, 877 F.2d 1575, 1579, 11 USPQ2d 1340, 1343 (Fed.Cir.1989) (district court had discretion to permit the Commissioner to raise a new ground of rejection).
*1106Since the panel majority recognizes that the district court had discretion to consider new issues or evidence in a § 146 action, it is hard to understand the premise of the majority’s ruling. This is not a case in which a party schemed to “leapfrog” the patent office decisionmakers, intending to save its trump card for the district court.1 It is inappropriate to require the district court to check whether every argument and issue was not only before the Board, but whether it was raised in compliance with “arcane and specialized” rules that were not identified, argued, or briefed.
It has heretofore been recognized that issues that may be dispositive of the issue of priority may be considered in a § 146 review, within the district court’s discretion. No abuse of that discretion has here been shown. The finding that the inventions of Widmayer and Hess were not the same disposed of the dispute as to priority. This issue was decided on its merits, and it was within the authority and discretion of the district court to decide it. Our review of the district court’s decision should include the merits of this issue.
II
The district court did make an error of law, after it found that the inventions of Widmayer and Hess were not the same. It was incorrect to award “priority” to the second inventor Hess, for when the inventions are different, the second-to-invent can not possibly have priority over the first-to-invent. To this extent, I join with the majority.

. The majority opinion suggests that the question of identity of invention was a new issue that had not been before the patent office. To the contrary, there was an explicit ruling by the examiner-in-chief that Widmayer had the right to make the count of the interference, following Widmayer’s copying into his application of claim 1 of Hess’ patent'. The claim was identified as copied for interference purposes, was examined in Wid-mayer’s application, and was found patentable to him. This was the basis of the declaration that “interference” existed, and of the Board's subsequent determination of who was the first to invent the common invention. The patentability to Widmayer of the Hess invention was thus decided in the PTO, as a routine and necessary step in the interference procedure. It was not a new issue — in contrast, for example, to the public use issue that was first raised in the district court in General Instrument — and it was fundamental to the interference.