United States: Federal Circuit Reaffirms Rule That A Priority Claim Must Include The Entire Chain Of Priority

On April 19, 2018, the Federal Circuit ruled that a patent's claims were obvious in light of a related application that claimed priority to the same provisional application that the patent incorporated by reference. The ruling in Droplets, Inc. v. E*TRADE Bank1 reaffirms the rule that "a patent must contain a specific reference to each prior-filed application to be entitled to those applications' earlier filing dates."2

Section 120 of 35 U.S.C. recites requirements to claim priority from an earlier U.S. application, stating:

An application for patent for an invention disclosed in the manner provided by the first paragraph of section 112 of this title in an application previously filed in the United States, or as provided by section 363 of this title, which is filed by an inventor or inventors named in the previously filed application shall have the same effect, as to such invention, as though filed on the date of the prior application, if filed before the patenting or abandonment of or termination of proceedings on the first application or on an application similarly entitled to the benefit of the filing date of the first application and if it contains or is amended to contain a specific reference to the earlier filed application.34 (Emphasis added.)

Section 119 e(1) of 35 U.S.C. recites similar requirements when claiming priority from an earlier filed U.S. provisional application.5 Moreover, 37 C.F.R. §1.78, which is a regulation issued by the U.S. Patent and Trademark Office in accordance with 35 U.S.C. §119 e(1), states that:

Any nonprovisional application or international application designating the United States of America that claims the benefit of one or more prior-filed provisional applications must contain, or be amended to contain, a reference to each such prior-filed provisional application, identifying it by the provisional application number (consisting of series code and serial number) or international application number and international filing date. The reference must also identify the relationship of the applications (i.e., whether the later-filed application is a continuation, divisional, or continuation-in-part of the prior-filed nonprovisional application or international application).6 (Emphasis added.)

The claims at issue in Droplets, found in U.S. Patent No. 8,402,115 (the '115 patent), are directed "to a method and system 'for delivering interactive links for presenting applications and second information at a client computer from remote sources in a network-configured computer processing system.'"7 E*TRADE Bank (along with other parties) petitioned for inter partes review (IPR) of Droplets' '115 patent.

The '115 patent was filed on January 26, 2009, and was co-pending with the application that led to U.S. Patent No. 7,502,838 (the '838 patent). The '838 patent was filed on November 24, 2003, and was co-pending with the application that led to U.S. Patent No. 6,687,745 (the '745 patent). The '745 patent was filed on June 22, 2000, and was co-pending with the earliest filed application in the chain of priority, Provisional Application No. 60/153,917 (the '917 provisional). The '917 provisional was filed on September 14, 1999, and published on March 22, 2001. In addition, a Patent Cooperation Treaty (PCT) application was filed on September 14, 2000, and published on March 22, 2001.8

The '838 patent specifically identifies itself as a continuation application of the application leading to the '745 patent, and expressly claims priority from the '917 provisional. Thus, the '838 patent was clearly entitled to the benefit of the filing date for the '917 provisional. The '115 patent, however, includes a claim of priority to the '838 patent, incorporating by reference the '838 patent's disclosures. The '115 patent also includes a cross reference to the '917 provisional, indicating that the '917 provisional is a related application, and also incorporating by reference the disclosures of the '917 provisional.9

In its IPR decision, the U.S. Patent Trial and Appeal Board found that the '115 patent failed to claim priority to the '917 provisional application.10 Specifically, the Board found that the effective filing date of the '115 patent is November 24, 2003, which is the filing date of the '838 patent, rather than the filing date of the '917 provisional or the filing date of the '745 patent.11 Droplets argued that, by incorporating by reference the disclosures of the '917 provisional, a claim of priority to the '917 provisional was made under 37 C.F.R. §1.57. 12 Statute 37 C.F.R. §1.57 allows for a priority claim under 37 C.F.R. §1.78 to be considered as an incorporation by reference of the prior application.13 The Board concluded, however, that the incorporation by reference was not a "specific reference" as required by the rules.14 As such, the board found that the PCT application, which published in March 2001, qualified as prior art.15 The Board found the claims obvious over the PCT application and other prior art.16

On appeal, the Federal Circuit affirmed the Board. The Federal Circuit noted that "'Although § 120 might appear to be a technical provision,' courts have long-recognized that 'it embodies an important public policy,' and thus have required strict adherence to its requirements."17 Moreover, "the information that must be disclosed is information that would 'enable a person searching the records of the Patent Office to determine with a minimum of effort the exact filing date upon which a patent applicant is relying to support the validity of his application or the validity of a patent issued on the basis of one of a series of applications.'"18 The court further noted that "the 'specific reference' requirement in § 120 'mandates each inter-mediate application in the chain of priority to refer to the prior applications.'"19

In addition, the court found that Droplets' argument that the specific reference requirement was satisfied by incorporating the '838 patent by reference failed. The court noted that "37 CFR § 1.57 requires a proper claim under regulation 1.78 as a prerequisite; it allows a later application, which enumerates a valid priority claim from an earlier application consistent with regulation 1.78, to cure any inadvertently omitted portion of the specification or drawings."20 The court noted that omitted portions may include "essential material," which is material required to satisfy the requirements of 35 U.S.C. §112, or "nonessential material," which may be subject matter indicating "'the background of the invention or illustrating the state of the art.'"21 However, "nothing in regulation 1.57 authorizes making a priority claim under § 120 through an incorporated reference."22 As such, the Federal Circuit concluded that "a patent must contain a specific reference to each prior-filed application to be entitled to those applications' earlier filing dates," and that "Incorporation by reference cannot satisfy this statutorily mandated specific reference requirement."23

Applicants should take heed when a claim of priority is made to either a previously filed nonprovisional or provisional application. A claim of priority should include a priority claim to each and every prior-filed application in the application's chain of priority, in accordance with 35 U.S.C. §119 and 35 U.S.C. §120, to be entitled to those applications' earlier filing dates. In addition, for applications not yet in issue, applicants would be wise to verify that a proper claim of priority, if available, is made. For applications that have issued as a patent, applicants may want to consider correcting the patent by way of a reissue or supplemental examination, for example. Otherwise, an applicant may find that a prior application in a patent's chain of priority is cited against the patent as prior art, possibly invalidating the patent.

For More Information

If you have any questions about this Alert, please contact Samuel W. Apicelli or Andrea M. Augustine, heads of the Patent Preparation and Prosecution division; Anthony J. Fitzpatrick or Matthew C. Gaudet, heads of the Patent Litigation division; Joaquin Hernandez; any member of our Intellectual Property Practice Group; or the attorney in the firm with whom you are regularly in contact.

Footnotes

1 Droplets, Inc. v. E*TRADE Bank, 2016-2504, 2018 WL 1866903 (Fed. Cir. Apr. 19, 2018).

2 Id. at *11.

3 Because the '115 patent was filed on January 26, 2009, the citation is to the pre-AIA version of the statute.

4 35 U.S.C. §120 also provides that "No application shall be entitled to the benefit of an earlier filed application under this section unless an amendment containing the specific reference to the earlier filed application is submitted at such time during the pendency of the application as required by the Director. The Director may consider the failure to submit such an amendment within that time period as a waiver of any benefit under this section. The Director may establish procedures, including the payment of a surcharge, to accept an unintentionally delayed submission of an amendment under this section."

5 35 U.S.C. §119 e(1), pre-AIA, recites: "An application for patent filed under section 111(a) or section 363 of this title for an invention disclosed in the manner provided by the first paragraph of section 112 of this title in a provisional application filed under section 111(b) of this title, by an inventor or inventors named in the provisional application, shall have the same effect, as to such invention, as though filed on the date of the provisional application filed under section 111(b) of this title, if the application for patent filed under section 111(a) or section 363 of this title is filed not later than 12 months after the date on which the provisional application was filed and if it contains or is amended to contain a specific reference to the provisional application. No application shall be entitled to the benefit of an earlier filed provisional application under this subsection unless an amendment containing the specific reference to the earlier filed provisional application is submitted at such time during the pendency of the application as required by the Director. The Director may consider the failure to submit such an amendment within that time period as a waiver of any benefit under this subsection. The Director may establish procedures, including the payment of a surcharge, to accept an unintentionally delayed submission of an amendment under this subsection during the pendency of the application."

6 37 C.F.R. §1.78, in the version in effect as of January 2009, the filing date of the '115 patent.

7 Droplets, Inc, at *1.

8 Id. at *1 – 2.

9 Id. at *2.

10 Id. at *3.

11 Id.

12 Id.

13 37 C.F.R. §1.57(a), the version in effect in January 2009, states: "Subject to the conditions and requirements of this paragraph, if all or a portion of the specification or drawing(s) is inadvertently omitted from an application, but the application contains a claim under § 1.55 for priority of a prior-filed foreign application, or a claim under § 1.78 for the benefit of a prior-filed provisional, nonprovisional, or international application, that was present on the filing date of the application, and the inadvertently omitted portion of the specification or drawing(s) is completely contained in the prior-filed application, the claim under § 1.55 or § 1.78 shall also be consIdered an incorporation by reference of the prior-filed application as to the inadvertently omitted portion of the specification or drawing(s)."

14 Droplets, Inc, at *3.

15 Id.

16 Id.

17 Id. at *5, quoting Sampson v. Ampex Corp., 463 F.2d, 1045 (2nd Cir. 1972).

18 Id. at *6.

19 Id., quoting Medtronic CoreValve, LLC v. Edwards Lifesciences Corp., 741 F.3d 1359, 1363 (Fed. Cir. 2014).

20 Id. at *7.

21 Id. at *7 – 8; see also M.P.E.P. §608.01(p) I.A.

22 Id. at *8.

23 Id. at *11.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

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