The United States Patent and Trademark Office cannot recover salaries of its lawyers and paralegals in civil actions brought under 35 U.S.C. §145
WHDA Blogging Team | December 26, 2019
Peter v. Nantkwest, Inc.
December 11, 2019
Opinion by Justice Sotomayor (unanimous decision)
Summary
The “American Rule” is the principle that parties are responsible for their own attorney’s fees. While the Patent Act requires applicants who choose to pursue civil action under 35 U.S.C. §145 to pay the expenses of the proceedings, the Supreme Court found that the American Rule’s presumption applies to §145, and the “expenses” does not include salaries of its lawyers and paralegals.
Details
There are two possible ways in which a dissatisfied applicant may appeal the final decision of the Patent Trial and Appeal Board. One option is to appeal to the United States Court of Appeals for the Federal Circuit under 35 U.S.C. §141. In choosing this avenue, the applicant will not be able to offer new evidence that was not presented before the USPTO. The other option is to seek remedy in filing a civil action against the Director of the USPTO in federal district court under 35 U.S.C. §145. Unlike under 35 U.S.C. §141, the applicant may introduce new evidence, and the district court would make de novo determinations based on the new evidence and the administrative record before the USPTO. Because 35 U.S.C. §145 allows for an applicant to introduce new evidence, the litigation can be lengthy and expensive. For this reason, the Patent Act requires applicants who choose to file a civil action under 35 U.S.C. §145 to pay “[a]l the expenses of the proceedings.” 35 U.S.C. §145.
In this case, the USPTO denied NantKwest, Inc’s patent application, which was directed to a method for treating cancer. NantKwest Inc. then filed a complaint against the Director of the USPTO in the Eastern District of Virginia under 35 U.S.C. §145. The District Court granted summary judgment to the USPTO, which the Federal Circuit affirmed. The USPTO moved for reimbursement of expenses, including the pro rata salaries of the USPTO attorneys and paralegals who worked on the case. The Supreme Court noted in its opinion that this was “the first time in the 170-year history of §145” that the reimbursement of such salaries were requested as a part of expenses. The District Court denied the USPTO’s motion. NantKwest, Inc. v. Lee, 162 F. Supp. 3d 540 (E.D. Va. 2016). Then a divided Federal Circuit panel reversed. NantKwest, Inc. v. Matal, 860 F. 3d 1352 (2017). The en banc Federal Circuit voted sua sponte to rehear the case, and reversed the panel over a dissent, holding that the “American Rule” (the principle that parties are responsible for their own attorney’s fees) applied to §145, after examining the plain text, statutory history, the judicial and congressional understanding of similar language, and policy considerations. NantKwest, Inc. v. Iancu, 898 F. 3d 1177 (2018). The Supreme Court granted certiorari.
The Supreme Court first notes as the “basic point of reference” the principle of the “American Rule” which is that “[e]ach litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise.” While the USPTO did not dispute this principle, it argued that the presumption applies only to prevailing-party statutes, and as §145 requires one party to pay all expenses, regardless of outcome, it is therefore not subject to the presumption. However, the Supreme Court stated that Sebelius v. Cloer, 569 U.S. 369 (2013) confirm that the presumption against fee shifting applies to all statutes, including statute like §145 that do not explicitly award attorney’s fees to “prevailing parties.”
The Supreme Court then analyzed whether Congress intended to depart from the American Rule presumption. The Supreme Court first looked at the plain text, reading the term alongside neighboring words in the statute, and concluded that the plain text does not overcome the American Rule’s presumption against fee shifting. The Supreme Court also looked at statutory usage, and found that “expenses” and “attorney’s fees” appear in tandem across various statutes shifting litigation costs, indicating “that Congress understands the two terms to be distinct and not inclusive of each other.” While some other statutes refer to attorney’s fees as a subset of expenses, the Supreme Court stated that they show only that attorney’s fees can be included in “expenses” when defined as such.
Based on the foregoing, the Supreme Court concluded that the USPTO cannot recover salaries of its lawyers and paralegals in civil actions brought under 35 U.S.C. §145.
Takeaway
The USPTO has recovered attorney costs under a similar trademark law, 15 U.S.C. 1071, in the 2015 Fourth Circuit decision of Shammas v. Focarino, 114 USPQ2d 1489 (4th Cir. 2015). While the Supreme Court does not mention the applicability of the interpretation of “expenses” under 35 U.S.C. §145 to the interpretation of “expenses” in 15 U.S.C. 1071(b)(3), we would expect the Supreme Court to interpret “expenses” the same way in both of these statutes.
Heightened “original patent” written description standard applies for reissue patents
WHDA Blogging Team | December 20, 2019
Forum US Inc., v. Flow Valve, LLC.
June 17, 2019
Before Reyna, Schall, and Hughes. Opinion by Reyna.
Summary
The CAFC affirmed a district court decision holding that Flow Valve’s Reissue Patent No. RE 45,878 (“the Reissue patent”) is invalid because of insufficiently supported broadening claims. The original patent “must clearly and unequivocally disclose the newly claimed invention as a separate invention,” otherwise the claims in the reissue patent do not comply with the original patent requirement of 35 USC 251.
Details
Flow Valve’s original Patent No. 8,215,213 (“the original patent), entitled “Workpiece Supporting Assembly” relates to machined pipe fittings typically used in the oil and gas industry. The written description and drawings disclose only embodiments with arbors.
Figs. 4 and 5 from the original patent with arbors circled in red:
Claim 1 of the original patent also expressly claimed the arbors (emphasis added):
A workpiece machining implement comprising:
a body member having an internal workpiece channel, the body member having a plurality of body openings communicating with the internal workpiece channel;
means supported by the body member for positioning a workpiece in the internal work piece in the internal workpiece channel so that extending workpiece portions of the workpiece extend from selected ones of the body openings;
a plurality of arbors supported by the body member, each arbor having an axis coincident with a datum axis of one of the extending workpiece portions; and
means for rotating the workpiece supporting assembly about the axis of a selected one of the arbors.
When Flow Valve filed the reissue patent application, the patentees broadened the claims by adding seven new claims, where the arbor limitations were replaced by a “pivotable” limitation. Claim 14 is representative of the reissue patent:
Claim 14 of the reissue patent:
A workpiece supporting assembly for securing an elbow during a machining process that is performed on the elbow by operation of a workpiece machining implement, the workpiece supporting assembly comprising:
a body having an internal surface defining a channel, the internal surface sized to receive a medial portion of the elbow when the elbow is operably disposed in the channel; and
a support that is selectively positionable to secure the elbow in the workpiece supporting assembly, the body pivotable to a first pivoted position, the body sized so that a first end of the elbow extends from the channel and beyond the body so the first end of the elbow is presentable to the workpiece machining implement for performing the machining process, the body pivotable to a second position and sized so that a second end of the elbow extends from the channel beyond the body so the second end of the elbow is presentable to the workpiece machining implement for performing the machining process.
Forum US, Inc. sued Flow Valve for a declaratory judgment of invalidity of the reissue patent, arguing that the added reissue claims were invalid because they did not comply with the original patent requirement under 35 USC 251.
In particular, Forum argued that the claims broadened the original patent claims by omitting the arbor limitations, which is a violation of the original patent requirement of Reissue patent because the original patent did not disclose an invention without arbors.
In response, Flows Valve supplied an expert declaration asserting that a person of ordinary skill in the art would have understood from the specification that not every embodiment requires “a plurality of arbors” and that the arbors are an optional feature.
The district court granted Forum’s summary judgement, holding that “no matter what a person of ordinary skill would recognize, the specification of the original patent must clearly and unequivocally disclose the newly claimed invention in order to satisfy the original patent rule.”
Flows Valve appealed but the CAFC affirmed the district court’s decision.
In affirming the district court’s decision, the CAFC relied on two cases U.S. Indus. Chems., Inc. v. Carbide & Carbon Chems. Corp., 315 U.S. 668 (1942), and Antares Pharma, Inc. v. Medac Pharma Inc., 771 F.3d 1354 (Fed. Cir 2014), to the effect that, for broadening reissue claims, “it is not enough that an invention might have been claimed in the original patent because it was suggested or indicated in the specification”, instead, the original patent “must clearly and unequivocally disclose the newly claimed invention as a separate invention.”
Like the District Court, the Appeals Court discounted the expert declaration, commenting that “when a person of ordinary skill in the art would understand ‘does not aid the court in understanding what the’ patent actually say.”
Take away
- Heightened “original patent” written description standard applies for reissue patents.
- Expert testimony on the understanding of a person of skill in the art as evidence is insufficient.
- If it is likely in the foreseeable future to have the needs to broaden the claims, use a continuation application so that applicant does not have to meet the additional “clear and unequivocal disclosure as separate invention” requirement of a broadening reissue.
WHEN IS PRIOR ART ANALOGOUS?
WHDA Blogging Team | November 29, 2019
Airbus v. Firepass
November 8, 2019
Lourie, Moore, and Stoll
Summary:
To determine whether a reference is “analogous prior art,” one must first ask whether the reference is from the same “field of endeavor” as claimed invention. If not, one must ask whether the reference is “reasonably pertinent” to the particular problem addressed by the claimed invention.
As phrased by the CAFC here, a reference is “reasonably pertinent” if
an ordinarily skilled artisan would reasonably have consulted in seeking a solution to the problem that the inventor was attempting to solve, [so that] the reasonably pertinent inquiry is inextricably tied to the knowledge and perspective of a person of ordinary skill in the art at the time of the invention.
Thus, one should consider (i) in which areas one skilled in the art would reasonably look, and (ii) what that skilled person would reasonably search for, in trying to address the problem faced by the inventor. Accordingly, courts or examiners should consider evidence cited by the parties or the applicant that demonstrates “the knowledge and perspective of a person of ordinary skill in the art at the time of the invention.”
If a reference fails both the “field of endeavor” and the “reasonably pertinent” tests, it is not analogous prior art and not available for an obviousness rejection.
Background:
Challenger Airbus filed an inter partes reexamination against a patent owned by Firepass. The examiner rejected the claims at issue here as being obvious over the Kotliar reference in view of other prior art. The examiner also rejected other claims, not in issue here, as being obvious over Kotliar in view of four prior references (Gustafsson, the 1167 Report, Luria, and Carhart).
The claimed invention is an enclosed fire prevention and suppression system (for instance, computer rooms, military vehicles, or spacecraft), which extinguishes fire with an atmosphere of breathable air. The inventor found that a low-oxygen atmosphere (16.2% or slightly lower), maintained at normal pressure, would inhibit fire and yet be breathable by humans. Normal pressure is maintained by added nitrogen gas.
The patent contains the following independent claim that was added during the reexamination:
A system for providing breathable fire-preventive and fire suppressive atmosphere in enclosed human-occupied spaces, said system comprising:
an enclosing structure having an internal environment therein containing a gas mixture which is lower in oxygen content than air outside said structure, and an entry communicating with said internal environment;
an oxygen-extraction device having a filter, an inlet taking in an intake gas mixture and first and second outlets, said oxygen-extraction device being a nitrogen generator, said first outlet transmitting a first gas mixture having a higher oxygen content than the intake gas mixture and said second outlet transmitting a second gas mixture having a lower oxygen content than the intake gas mixture;
said second outlet communicating with said internal environment and transmitting said second mixture into said internal environment so that said second mixture mixes with the atmosphere in said internal environment;
said first outlet transmitting said first mixture to a location where it does not mix with said atmosphere in said internal environment;
said internal environment selectively communicating with the outside atmosphere and emitting excessive internal gas mixture into the outside atmosphere;
said intake gas mixture being ambient air taken in from the external atmosphere outside said internal environment with a reduced humidity; and
a computer control for regulating the oxygen con-tent in said internal environment.
The Board of Appeals reversed the examiner’s rejection, finding that Kotliar is not analogous prior art. The Board stated that the examiner had not articulated a “rational underpinning that sufficiently links the problem [addressed by the claimed invention] of fire suppression/prevention confronting the inventor” to the disclosure of Kotliar, “which is directed to human therapy, wellness, and physical training.” Significantly, the Board did not consider Airbus’ argument that “breathable fire suppressive environments [were] well-known in the art,” stating that the four references, relied on by Airbus, were not used by the examiner for the rejection of the claims in issue here.
Discussion:
The CAFC began its analysis by citing the “field of endeavor” and the “reasonably pertinent” tests mentioned above.
With respect to “field of endeavor,” the CAFC agreed with the Board. The Court explained that the disclosure of the references is the primary focus, but that courts and examiners must also consider each reference’s disclosure in view of the “the reality of the circumstances” and “weigh those circumstances from the vantage point of the common sense likely to be exerted by one of ordinary skill in the art in assessing the scope of the endeavor.”
Here, the Board found that the “field of endeavor” for the patent to be “devices and methods for fire prevention/suppression,” citing the preamble of the claim, the title and specification of the patent. Kotliar, on the other hand, concerns “human therapy, wellness, and physical training,” based on its title and specification. The Board concluded that Kotliar was outside the field of endeavor of the claimed invention, particularly in view of the fact that Kotliar never mentions “fire.”
The CAFC found that the Board’s conclusion is supported by substantial evidence.
Airbus argued that the Board should have considered the four references—Gustafsson, the 1167 Report, Luria, and Carhart—to which show that “a POSA would have known and appreciated that the breathable hypoxic air produced by Kotliar is fire-preventative and fire-suppressive, even though Kotliar does not state this” (emphasis in original). The CAFC disagreed, stating that Board’s failure to consider these references, if error, was harmless error. The CAFC explained that
a reference that is expressly directed to exercise equipment and fails to mention the word “fire” even a single time—falls within the field of fire prevention and suppression. Such a conclusion would not only defy the plain text of Kotliar, it would also defy “common sense” and the “reality of the circumstances” that a factfinder must consider in determining the field of endeavor.
The CAFC, however, came to the opposite conclusion with respect to the “reasonably pertinent” test. As with the “field of endeavor” test, the Board had failed to consider the four references. The CAFC found that this was a mistake.
In determining whether a reference is “reasonably pertinent” to the particular problem addressed by the claimed invention, for assessing whether a reference is analogous prior art, the court or the examiner should consider (i) in which areas one skilled in the art would reasonably look, and (ii) what that skilled person would reasonably search for, in trying to address the problem faced by the inventor. A court or examiner should therefore consider evidence cited by the parties or the applicant that demonstrates “the knowledge and perspective of a person of ordinary skill in the art at the time of the invention.”
Here, the four references are relevant to the question of whether one skilled in the art of fire prevention and suppression would have reasonably consulted references relating to normal pressure, low-oxygen atmospheres to address the problem of preventing and suppressing fires in enclosed environments. As stated above, the four references—Gustafsson, the 1167 Report, Luria, and Carhart—to which show that “a POSA would have known and appreciated that the breathable hypoxic air produced by Kotliar is fire-preventative and fire-suppressive, even though Kotliar does not state this” (emphasis in original). These references, the CAFC stated, could therefore lead a court or an examiner to conclude that one skilled in the field of fire prevention and suppression would have looked to Kotliar for its disclosure of a hypoxic room, even though Kotliar itself is outside the field of endeavor.
The CAFC therefore vacated the Board’s decision and remanded the case for the Board to consider whether Kotliar is analogous prior art in view of the four references.
Takeaway:
In resolving the “reasonably pertinent” test, courts and examiners must look at all the evidence of record.
Preamble Reciting a Travel Trailer is a Structural Limitation – Avoiding Assertions of Intended Use
Stephen G. Adrian | November 26, 2019
In Re: David Fought, Martin Clanton.
November 4, 2019
Newman, Moore and Chen
Summary
This decision provides an excellent example of when a limitation in a preamble is given patentable weight. The decision also illustrates arguments which will not be successful. The Federal Circuit held that not only was the preamble limiting, but also held that a “travel trailer” is considered a specific type of recreation vehicle having structural distinctions.
Background
The patent application contains two independent claims:
1. A travel trailer having a first and second compartment therein separated by a wall assembly which is movable so as to alter the relative dimensions of the first and second compartments without altering the exterior appearance of the travel trailer.
2. A travel trailer having a front wall, rear wall, and two side walls with a first and a second compartment therein, those compartments being separated by a wall assembly, the wall assembly having a forward wall and at least one side member,
the side member being located adjacent to and movable in parallel with respect to a side wall of the trailer, and
the wall assembly being moved along the longitudinal length of the trailer by drive means positioned between the side member and the side wall. (Emphasis added)
The examiner rejected claim 1 as anticipated by a reference describing a conventional truck trailer such as a refrigerated trailer, and rejected claim 2 as anticipated over another reference describing a bulkhead for shipping compartments. The applicants appealed the rejections by (1) arguing that the claims do not have a preamble, (2) arguing that a travel trailer is a type of recreational vehicle, as supported by extrinsic evidence, and (3) arguing that the Examiner erred by rejecting the claims without addressing the level of ordinary skill.
Discussion
The CAFC reviewed the Board’s legal conclusions (involving claim construction) de novo and reviewed the factual findings (involving the extrinsic evidence) for substantial evidence.
The effect of a preamble is treated as a claim construction issue. The CAFC was not persuaded by the argument that the claims do not have a preamble because a traditional transitional phrase such as “comprising” was not used. The CAFC explained that although a traditional transitional phrase was not used, the word “having” performs the role of a transitional phrase. As such, this argument was not persuasive.
The next argument, however, was found persuasive. In particular, the CAFC has repeatedly held that a preamble is limiting when it serves as antecedent basis for a term appearing in the body of the claim. See, e.g., C.W. Zumbiel Co., 702 F.3d at 1385; Bell Commc’ns Re-search, Inc. v. Vitalink Commc’ns Corp., 55 F.3d 615, 620–21 (Fed. Cir. 1995); Electro Sci. Indus., Inc. v. Dynamic De-tails, Inc., 307 F.3d 1343, 1348 (Fed. Cir. 2002); Pacing Techs., LLC v. Garmin Int’l, Inc., 778 F.3d 1021, 1024 (Fed. Cir. 2015). As seen in claims 1 and 2 above, each claim refers back to the preamble.
With respect to the meaning of “travel trailer”, the PTAB quoted relevant portions of the extrinsic evidence:
“Recreational vehicles” or “RVs,” as referred to herein, can be motorized or towed, but in general have a living area which provides shelter from the weather as well as personal conveniences for the user, such as bathroom(s), bedroom(s), kitchen, dining room, and/or family room. Each of these rooms typically forms a separate compartment within the vehicle . . . . A towed recreational vehicle is generally referred to as a “travel trailer.”
Probably the single most-popular class of towable RV is the Travel Trailer. Spanning 13 to 35 feet long, travel trailers are designed to be towed by cars, vans, and pickup trucks with only the addition of a frame or bumper mounted hitch. Single axles are common, but dual and even triple axles may be found on larger units to carry the load.
In regard to the meaning of “travel trailer”, the extrinsic evidence shows that “travel trailer” connotes a specific structure of towability which is not an intended use. In addition, the extrinsic evidence shows that recreational vehicles and travel trailers have living space rather than cargo space, which also is not an intended use. As such, “travel trailer” is a specific type of recreational vehicle and the term is a structural limitation.
The CAFC thus concludes:
“There is no dispute that if “travel trailer” is a limitation, Dietrich and McDougal, which disclose cargo trailers and shipping compartments, do not anticipate. Just as one would not confuse a house with a warehouse, no one would confuse a travel trailer with a truck trailer.”
The argument that the PTAB erred for failing to explicitly state the level of ordinary skill was a loser:
“Unless the patentee places the level of ordinary skill in the art in dispute and explains with particularity how the dispute would alter the outcome, neither the Board nor the examiner need articulate the level of ordinary skill in the art. We assume a proper determination of the level of ordinary skill in the art as required by Phillips.”
Takeaways
- The preamble is limiting when it serves as antecedent basis for a term appearing in the body of the claim.
- A term in the preamble can be construed as a structural limitation and not merely a statement of intended use when the evidence supports such meaning.
