United States: 2017 CAFC Guidance For Patent Prosecutors

Prosecutor's Tool Box 2017

Patent prosecutors navigate complex USPTO rules and seemingly esoteric examinational requirements to procure patent rights. In doing so, it is easy to lose sight of the fact that the Manual of Patent Examining Procedure (MPEP) does not have the full force and effect of law. Nevertheless, patent examiners (rarely trained lawyers) adhere to their interpretation of the Manual requirements. To budge examiners off of entrenched, legal positions, savvy prosecutors will keep a trained eye on the Federal Circuit for help.

2017 provided several decisions of immediate value to patent prosecutors.

1. Broadest Reasonable Does not Mean Broadest Possible! (In Re Smith International Inc.)

The USPTO applies a broadest reasonable claim interpretation (BRI) to patents and patent applications. The abbreviation "BRI" is often used to reference the full claim interpretation standard, which is the broadest reasonable interpretation in light of the specification, from the perspective of one skilled in the relevant art. (MPEP 2111)

Unfortunately, a complete BRI analysis is often mistaken by overemphasis of the "BRI" mantra. That is to say, the proper test is not simply a "broadest reasonable interpretation" of claims in a linguistic sense. Rather, a proper broadest reasonable interpretation of the claims is one that is consistent with the specification of the subject application/patent. While it is true that limitations from a patent specification may not be imported to the claims, the USPTO often times confuses this prohibition with the required contextual consideration of the specification.

In 2010, the CAFC strongly cautioned the USPTO on reading claims independent of a patent specification during patent reexamination in In re Suitco Surface (CAFC 2010). In 2017, the agency was reversed again for failing to conform the "reasonableness" determination with the scope of the patent specification.

This year, in In Re Smith International Inc. ( here) the patent owner and the patent examiner (reexamination) differed as to the proper definition of "body" in the context of a downhole drilling tool.

In affirming the examiner's rejections, the Board determined that the term "body" is a "generic term such as 'member' or 'element' that by itself provides no structural specificity." The Board reasoned that although "the specification describes the body as a discrete element separate from other elements, the specification does not "define[] the term 'body'" or "preclude the Examiner's interpretation."

In reversing the Board's "specification does not expressly preclude" reasoning, the Court noted:

The correct inquiry in giving a claim term its broadest reasonable interpretation in light of the specification is not whether the specification proscribes or precludes some broad reading of the claim term adopted by the examiner. And it is not simply an interpretation that is not inconsistent with the specification. It is an interpretation that corresponds with what and how the inventor describes his invention in the specification, i.e., an interpretation that is "consistent with the specification." . . . . .

The Board emphasized that the patentee here did not act as a lexicographer, and that the specification neither defines nor precludes the examiner's reading of the term "body." Accordingly, the Board found that nothing in the specification would disallow the examiner's interpretation, rendering it "reasonable." However, following such logic, any description short of an express definition or disclaimer in the specification would result in an adoption of a broadest possible interpretation of a claim term, irrespective of repeated and consistent descriptions in the specification that indicate otherwise. That is not properly giving the claim term its broadest reasonable interpretation in light of the specification.

(internal citations omitted)

The language quoted above clarifies that not only must a BRI construction be reasonable based on the accompanying specification, but notably, it is not the burden of the applicant/patentee to disprove an unreasonably broad construction with an express specification definition or disclaimer. This case will prove invaluable to patent prosecutors.

Another helpful decision on the question of system claim interpretation was issued in Mastermine Software, Inc. v. Microsoft Corp.

2. Claiming User Interaction (Mastermine Software, Inc. v. Microsoft Corp.)

In Mastermine, the Court considered the extent to which user-initiated methodology of a Customer Relations Management (CRM) system may be recited in system claims. The district court found certain claims of the patents-in-suit (7,945,850 & 8,429,518), indefinite for improperly claiming two different subject-matter classes citing IPXL Holdings, L.L.C. v. Amazon.com, Inc., 430 F.3d 1377( here). The Federal Circuit reversed.

In its reversal, the Federal Circuit provided helpful guidance to patent prosecutors on how to claim user-driven hardware features in the first instance, as well as how to impress upon a patent examiner that functional language of such claims does not cross the line to reciting a separate statutory class.

As a reminder, IPXL held that a single claim covering both an apparatus and a method of use of that apparatus is indefinite under 35 U.S.C § 112, 2nd paragraph. This is because simultaneously claiming both an apparatus and method of using the apparatus can make it unclear whether infringement occurs when one creates an infringing system, or whether infringement occurs when the user actually uses the system in an infringing manner.

The IPXL holding is often used to attack claims directed to systems receiving human input, such as many consumer electronics devices and software-based systems. For example, it is often cited by patent examiners in rejecting perceived "hybrid claims." In many cases, however, a rejected hybrid claim is nothing more than an apparatus claim that recites system functionality.

Turning back to Manstermine, claim 8 of the '850 patent (system claim) was analyzed as to its use of active verbs in association with user interaction. The relevant portion of claim 8 is reproduced below.

a reporting module installed within the CRM software application . . . ;

wherein the reporting module installed within the CRM software application presents a set of user selectable database fields as a function of the selected report template, receives from the user a selection of one or more of the user-selectable database fields, and generates a database query as a function of the user selected database fields;

(emphasis added)

In explaining its reversal of the lower court's indefiniteness finding, the Court walked through a number of post-IPXL cases, distinguishing the differences between the claims in those cases and the Mastermine claims. The Court explained that unlike in IPXL, the Mastermine claims merely use permissible functional language to describe the capabilities of the claimed system, it is clear that infringement occurs when one makes, uses, offers to sell, or sells the claimed system.

Particularly useful is the Court's discussion of IPXL in the context of these claims, and in comparison to past claims of other post-IPXL cases:

Though claim 8 (above) includes active verbs—presents, receives, and generates—these verbs represent permissible functional language used to describe capabilities of the "reporting module." . . . the claims at issue here merely claim that the system possesses the recited structure capable of performing the recited functions. These claims . . .here do not claim activities performed by the user. While these claims make reference to user selection, they do not explicitly claim the user's act of selection, but rather, claim the system's capability to receive and respond to user selection. The limitations at issue here ("receiv[ing] from the user a selection" and "generat[ing] a database query as a function of the user selected database fields") focus on the capabilities of the system, whereas the claims in IPXL Holdings ("the user uses the input means") . . . focus on specific actions performed by the user. Moreover . . .the functional language here does not appear in isolation, but rather, is specifically tied to structure: the reporting module installed within the CRM software application.

(internal quotes and citations omitted, emphasis added)

Prosecutors in the software/electronic arts will find this case helpful. It should be particularly useful in dealing with rejections from patent examiners struggling with the distinction between true hybrid claims and system functionality driven by user interaction.

3. When is a Rejection New?

Back in August of 2017, the Federal Circuit reviewed an appeal from an inter partes reexamination in Honeywell Intl. Inc. v. Mexichem Amanco Holding S.A. de C.V. et al. to determine whether or not the Board's reliance on a reference different from those of the patent examiners underlying rejections constituted a "new rejection." The Court's discussion, especially that found in the dissent, may help shed light on this somewhat amorphous standard critical to whether or not a "final" action has been properly designated, or when an Examiner Answer constitutes a new rejection.

First, the "new rejection" framework stems from notice and due process concepts of the Administrative Procedure Act (APA). In patent prosecution and appeals before the PTAB, this procedural concern often manifests itself as a change in a rejection that so changes the "thrust" of the earlier positions that it would violate due process to close prosecution or enter an appeal decision absent further opportunity for the Applicant/Appellant to respond on the merits.Turning back to Honeywell, the Federal Circuit vacated and remanded the PTAB's decision rejecting numerous claims in two merged inter partes reexaminations. Part of the reason for the majority's remand was that the PTAB relied on a new ground of rejection. Specifically, the PTAB rejected Honeywell's evidence of unexpected results in light of the ""Omure reference, on the grounds that this reference demonstrated the Patentee had not established a nexus to its secondary indicia evidence. As noted by the majority, Omure—while briefed by the parties—was not explicitly relied upon by the Examiner. Thus, the Court concluded that the PTAB's reliance on Omure constituted a new ground of rejection in violation of the APA. (not a "new ground" per se, more a "new evidentiary" basis for denying the patentee's argument)

Judge Wallach dissented from this part of the opinion, concluding that the PTAB did not issue or rely on a new ground of rejection. The dissent (here) noted that:

When considering whether the [PTAB] issued a new ground of rejection, the ultimate criterion of whether a rejection is considered new in a decision by the [PTAB] is whether applicants have had fair opportunity to react to the thrust of the rejection.

Which begs the question: What exactly is the "thrust" of a rejection?

Judge Wallach explains that the PTAB is not limited to reciting and agreeing with the Examiner's rejection verbatim, and may further explain the rejection and respond to parties' arguments. Dissent Op. at 2. On the other hand, if the PTAB finds facts not found by the examiner regarding the differences between the prior art and the claimed invention, and these facts form the basis for the PTAB's rejection, then the PTAB improperly enters a new ground of rejection. Id.

Applying this reasoning to the facts of Honeywell, Judge Wallach found the majority's reliance on statements by the PTAB that they "disagreed" with the Examiner were not sufficient to rise to the level of a new rejection. Rather, having concluded that the record supported a finding of prima facie obviousness, the PTAB next considered evidence of secondary considerations. The Board concluded there was no nexus, without relying on Omure. Thus, according to Judge Wallach, the "PTAB's analysis of secondary considerations does not include an improper new ground of rejection." That is, although the PTAB discussed Omure in other portions of its analysis in rejecting Honeywell's secondary considerations argument, it was not the principal evidence upon which the PTAB's rejection was based, and thus should not be considered a new ground of rejection. Rather, the PTAB was simply providing a more thorough explanation of the Examiner's conclusion, and limiting the PTAB to "verbatim repetition of the examiner's office actions...would ill-serve the [PTAB's] purpose as a reviewing body."

The takeaway here is that the "thrust" of the rejection balances the interests of notice and due process with the administrative flexibility necessary to explain decisions differently. Where the "thrust" may be argued to have shifted will depend upon whether or not the difference in explanation is supplementary in nature, or altogether new, principal evidence. As demonstrated by Honeywell reasonable minds may differ in this analysis.

4. Are You Properly Corroborating Your In Re Katz Declarations? (EmeraChem Holdings, LLC v. Volkswagen Group of America, Inc.)

Finally, a case that may be more of use in the unpredictable arts (where In re Katz declarations are common in prosecution).

In EmeraChem Holdings,the Federal Circuit considered the degree of corroboration necessary to disqualify a prior art reference as an inventor's own work. In EmeraChem the Court made clear that such corroboration may be within the inventor declaration itself, but, it must be more than a mere naked assertion of inventorship.

In EmeraChem (here) petitioner Volkswagen sought Inter Partes Review (IPR) of Patent No. 5,599,758 ('758 Patent). One of the references cited in the IPR was U.S. Patent No. 5,451,558 ('558 reference). The '558 reference lists four co-inventors, two of which are the sole co-inventors listed on the challenged '758 Patent assigned to EmeraChem. The '558 reference qualified as prior art under pre-AIA 102(e) since the "inventive entity" was different than the '758 patent.

In an attempt to disqualify the '558 reference as prior art, EmeraChem filed an inventor declaration signed by the two inventors of their '758 patent. The Declaration stated that the cited parts of the '558 reference were solely invented by them and not the other two listed inventors. No statements by the two remaining inventors listed on the '558 reference were provided by EmeraChem or Volkswagen. The PTAB rejected the inventor declaration submitted by EmeraChem as insufficient to prove that the '558 reference was not prior art under pre-AIA 102(e). The Board noted that EmeraChem did not call the other inventors of the '558 reference as witnesses and did not offer "any contemporaneous documentary evidence in support of the Campbell Declaration." (pg. 4 of the opinion).

The Federal Circuit affirmed the Board's decision rejecting the inventor's declaration. The CAFC noted that the declaration itself "amount[ed] to a naked assertion" and that the declaration did not provide "any context, explanation, or evidence to lend credence to the inventor's bare assertion." (pg 6 of the opinion). The CAFC relied upon case law that highlighted the concern for corroborating evidence when an interested party is the one making the declaration. In this case, the inventors of the challenged patent were clearly "interested parties". (pg 7 of the opinion).

But what about the sections of the Manual of Patent Examining Procedure (MPEP) that seem to suggest an unequivocal statement by inventors is enough?

The CAFC distinguished EmeraChem's reliance on MPEP §§715.01(a), 715.01(c)(I), and 2136.05 (and characterizations of case law cited therein).

The Court distinguished In re DeBaun, 687 F.2d 459 (C.C.P.A. 1982), highlighting the fact that DeBaun attached a drawing to his declaration that corroborated the assertions made in the declaration. Therefore, the Court held that DeBaun does not "stand for the proposition that a declaration alone is always sufficient to support an inventor's claim to inventorship." (pg 8 of the opinion). Further, as to In re Katz, the Court focused on the significance of the fact that the two co-authors on Katz's published article were explained in the declaration as mere teaching assistants. In Katz, the declaration was sufficient to rebut "the board's inference that [the co-author's] names were on the article because they were co-inventors." (pg 9 of the opinion). he CAFC noted that in both Debaun and Katz, something more than a naked assertion by the inventor was needed.

As this case makes clear, the MPEP does not have the force and effect of the law. As pre-AIA applications will be pending for many years to come, prosecutors would be wise to bolster their In re Katz declarations with more than just mere conclusions of inventorship. Ideally, the inventors would explain the contributions of the co-authors in a manner that makes clear that their contributions do not rise to the level of inventorship.

Prosecutors should keep an eye on the Federal Circuit in 2018. The MPEP is not the law, and is routinely revised to align with the feedback of the courts.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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