United States: Patentee May Not Challenge The Result Of An Ex Parte Reexamination In District

In In re Teles AG Informationstechnologien, No. 12-1297 (Fed. Cir. Apr. 4, 2014), the Federal Circuit held that the United States District Court for the District of Columbia ("D.D.C.") lacked subject matter jurisdiction over a patent owner's appeal of a Board decision in an ex parte reexamination, but erred in dismissing rather than transferring the case to the Court. Treating the case as properly transferred, the Court affirmed the Board's rejection of claim 35 of U.S. Patent No. 6,954,453 ("the '453 patent") as obvious.

Teles AG Informationstechnologien and Sigram Schindler Beteiligungsgesellschaft MBH (collectively "Teles") own all substantial rights in the '453 patent, which is directed to a method and apparatus for transmitting data in a telecommunications network. Following a third-party request, the PTO conducted an ex parte reexamination of the '453 patent and rejected certain claims as obvious over U.S. Patent No. 6,069,890 ("White") combined with either U.S. Patent No. 6,137,792 ("Jonas") or U.S. Patent No. 4,996,685 ("Farese"). Teles appealed, and the Board affirmed. Teles then sought review of the Board's decision in the D.D.C. pursuant to 35 U.S.C. § 145. The D.D.C. dismissed the case for lack of subject matter jurisdiction, concluding that after the 1999 amendments to the Patent Act, § 145 proceedings could not be maintained by patent owners. The D.D.C. then attempted to transfer the case to the Federal Circuit pursuant to 28 U.S.C. § 1631.

The Federal Circuit first held that the D.D.C. erred in dismissing the case since a transfer is not proper when combined with a dismissal, but held that it would review the case as though properly transferred. According to the Court, because the statutory deadline for filing an appeal to the Court had passed and there was no evidence suggesting bad faith in Teles's filing with the district court, it was in the interest of justice to transfer the case.

"Amendments intended to clarify statutory language do not indicate that the original language should be construed to mean the opposite of the clarifying language. The 2011 amendments do not manifest Congress' intent to preserve the availability of § 145 in the earlier version of the section." Slip op. at 13-14 (citation omitted).

The Federal Circuit then held that the district court lacked jurisdiction over a patent owner's appeal under § 145 following the 1999 American Inventors Protection Act. The Court explained that when Congress amended the Patent Act in 1999 to create a system of inter partes reexamination, it changed the text of existing statutory provisions, amending (1) § 141 to limit patent owner appeals in any reexamination proceeding "only" to the Federal Circuit; (2) § 134 to list appeals to the Board individually by (a) patent applicants, (b) patent owners, and (c) third-party requestors; and (3) § 145 to refer only to § 134(a), governing applicants. The Court rejected Teles's argument that a § 145 civil action was not an "appeal," and, thus, § 141 limits patent owner appeals to the Federal Circuit as opposed to other circuit courts, concluding that such a reading would render the provision superfluous since the Court already had exclusive jurisdiction over Board decisions.

The Court also rejected Teles's argument that concluding that the 1999 amendments restricted § 145 to patent applicants was inconsistent with 35 U.S.C. § 306, which expressly states a patent owner in a reexamination may seek court review under § 145. The Court concluded that "this inconsistency in retaining a reference to § 145 in § 306 does not undermine the clear intention of the 1999 amendments to eliminate § 145 as to patent owners." Slip op. at 9. The Court also dismissed Teles's reliance on the legislative history, including Congress's failure to adopt bills that would have amended § 306 to remove the reference to § 145, concluding that "reliance on failed legislative proposals is disfavored as a means of inferring legislative intent." Id. at 11.

Finally, the Court rejected Teles's argument that nonretroactive amendments made in 2011 to § 306 to remove the reference to § 145 showed that prior to 2011, patent owners could appeal under § 145. The Court observed that Teles's theory "contradicts the legislative history, which recognized that the amendments corrected a drafting error in the 1999 legislation . . . ." Id. at 13. The Court therefore held "that the 1999 amendments eliminated the right of patent owners to secure review under § 145" and affirmed that the district court lacked jurisdiction over the § 145 action. Id. at 14.

Finally, the Federal Circuit turned to the Board's obviousness rejection of claim 35 of the '453 patent.
Regarding claim construction, the Court held that the Board did not err by not construing the function of claim 35 under 35 U.S.C. § 112, ¶ 6 in terms of an alternative possibility in the specification. According to the Court, "[w]hen construing functional claims under § 112 ¶ 6, '[t]he statute does not permit limitation of a means-plus-function claim by adopting a function different from that explicitly recited in the claim.'" Id. at 17-18 (second alteration in original) (quoting Micro Chem., Inc. v. Great Plains Chem. Co., 194 F.3d 1250, 1258 (Fed. Cir. 1999)). The Court also rejected Teles's argument that the Board's claim construction was erroneous because Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289, 1294 (2012), "requires that the 'inventive concepts' embodied by the claimed invention be identified as part of construing claims." Slip op. at 18. The Court concluded that Mayo referred to an "inventive concept" only in the context of § 101 patent eligibility analysis, which had no bearing on claim construction.

Regarding obviousness, the Court affirmed the Board's decision that White combined with either Jonas or Farese taught all the limitations of claim 35. The Court rejected Teles's argument that Jonas failed to disclose monitoring an individual communication rather than the entire network, concluding that this argument "assumes an overly limiting construction of the prior art reference and the language of claim 35." Id. at 20. Finally, the Court rejected Teles's assertion that a person of ordinary skill in the art would not have found it obvious, or even possible, to combine White with Jonas, because doing so would be an extremely complicated process. Rather, the Court concluded that White presumes that redesigned equipment would be required, and Jonas would "clearly be envisioned in this network redesigned by White." Id. at 21 (citation omitted). Accordingly, the Court affirmed the Board's obviousness rejection of claim 35 of the '453 patent.

Judges: Dyk (author), Moore, Wallach

[Appealed from Board]

This article previously appeared in Last Month at the Federal Circuit, May 2014.

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