Chenery issue in CAFC decision in IN RE KEISUKE AOYAMA

Judge Newman's dissent in the case begins:

On this appeal from a PTO rejection, the court has ap- plied a new ground of rejection—which the court calls “indefiniteness”—and issued a final judgment on that ground, although the applicant has had no opportunity to respond to the rejection. The panel majority’s ab initio decision is improper, for the Federal Circuit has issued a final judgment on an issue that was not decided by the Board, contrary to 35 U.S.C. §144, which authorizes the Federal Circuit to “review the decision from which an appeal is taken on the record.”

The PTO had based its judgment of unpatentability on “anticipation,” a ground on which my colleagues announce they shall remain silent, although it is the only issue on appeal, as required by Securities & Exchange Commission v. Chenery Corporation, 318 U.S. 80, 94 (1943) (“The grounds upon which an administrative action must be judged are those upon which the record discloses that its action was based.”); Securities & Exchange Commission v. Chenery Corporation, 332 U.S. 194, 196 (1947) (“[A] reviewing court, in dealing with a determination or judgment which an administrative agency alone is authorized to make, must judge the propriety of such action solely by the grounds invoked by the agency.“). Although the court remands to the PTO, in order the give the applicant the opportunity (indeed the right) to amend the claims or submit new evi- dence in light of the rejection, the applicant has had no opportunity to argue the merits of the definiteness rejection; the Federal Circuit’s judgment is final and binds the Board on remand. Thus the applicant cannot argue, or submit evidence to show that a person of ordinary skill in computer programming would not find the claims indefinite. While the court cites 37 C.F.R. §41.50(b), which instructs the Board to remand after it raises a new ground of rejection, this court has finally decided that the claims as written are unpatentable on this ground, placing a heavy appellate thumb on the scale of remand. Remanding, as here, to the Board to allow the applicant to conform to the court’s ad- verse final judgment on indefiniteness is far different from remanding to the Board to consider claim definiteness in the first instance. I must, respectfully, dissent.

AND

The Board found the claims “anticipated,” and although my colleagues acknowledge that “a claim cannot be both indefinite and anticipated,” Enzo Biochem, Inc. v. Applera Corp., 599 F.3d 1325, 1332 (Fed. Cir. 2010), my colleagues resolve this conflict by declining to discuss it, stating that they “do[] not reach the ground relied on by the Board,” Maj. Op. at 10, defying the requirements for appellate review of agency action. See Chenery, 318 U.S. at 94 (“[A]n adminis- trative order cannot be upheld unless the grounds upon which the agency acted in exercising its powers were those upon which its action can be sustained.”); Chenery, 332 U.S. at 196 (“If those grounds are inadequate or improper, the court is powerless to affirm the administrative action by substituting what it considers to be a more adequate or proper basis.”); Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285-86 (1974) (courts “may not supply a reasoned basis for the agency’s action that the agency itself has not given”).

AND

Aoyama has had no opportunity to develop a record on this aspect, for it was not raised during examination, and was not a ground of rejection by the Board. In Biomedino, LLC v. Waters Technologies Corporation, 490 F.3d 946, 950 (Fed. Cir. 2007) the court stated that “[w]hile the specifica- tion must contain structure linked to claimed means, this is not a high bar.”