CAFC tackles re-examination estoppel in BETTCHER v. BUNZL
The outcome of the case was a mixed bag:
Following the entry of judgment of non-infringement and no invalidity in a lawsuit brought against Bunzl Processor Distribution, LLC (“Bunzl”) and Bunzl USA, Inc. (no longer a party) by Bettcher Industries, Inc. (“Bettcher”) in the Northern District of Ohio for infringement of U.S. Patent No. 7,000,325 (“’325 patent”), Bunzl appeals from a denial of its motion for entry of judgment as a matter of law of invalidity or for a new trial on invalidity. Bettcher cross-appeals from the district court’s re- fusal to order a new trial on infringement following the jury’s verdict of non-infringement. For the reasons discussed below, we affirm in part, vacate in part, and remand.
There was an inter partes re-examination involved:
After Bettcher filed suit, and while proceedings were pending before the district court, Bunzl requested inter- partes reexamination of the ’325 patent in the United States Patent and Trademark Office (“Patent Office”). In due course, the reexamination was granted and the examiner ultimately declined to adopt the grounds of rejection proposed by Bunzl and issued a Right of Appeal Notice. Bunzl appealed to the Board of Patent Appeals and Interferences (“Board”). At the time of the filing of the appeal to this court, the reexamination was pending before the Board, which has since affirmed the examiner’s
conclusions affirming the validity of all claims subject to reexamination. Bunzl Processor Distrib. LLC v. Patent of Bettcher Indus., Inc., Appeal 2011-007091 (B.P.A.I. July 28, 2011). When the examiner issued the Right of Appeal Notice, Bettcher requested that the district court exclude certain of Bunzl’s invalidity references under 35 U.S.C. § 315(c) on the ground that the examiner had already determined that they did not invalidate the claims of the ’325 patent and therefore, according to Bettcher, Bunzl was estopped from asserting these references in district court. According to Bettcher, the § 315 estoppel took effect as soon as the examiner finished the reexamination and the Right of Appeal Notice was sent to the patentee. The district court agreed that the examiner had “issued a ‘final determination’ in the re-examination proceedings,” and granted Bettcher’s request to exclude the references. Bunzl included the exclusion of these references as a separate basis for its new trial motion. The district court denied Bunzl’s motion, noting that “this issue is one of first impression.” Sept. 16 Order at 1.
And, yes, there was a patent lawyer (named Stallion) involved as a witness:
At closing argument, counsel for Bunzl stated with regard to Stallion’s testimony that: “We called Mr. Stallion, who you heard is a patent lawyer. Patent lawyers talk about what patent lawyers talk about . . . . The only patent lawyer that testified in this case is Mr. Stallion, and that’s what he told you . . . . Mr. Stallion put it in legal for you . . . . He said there’s no way these immedi- ately can wear.” Id. 1470-1475. Counsel for Bettcher did not object to counsel for Bunzl’s closing remarks regard- ing Stallion’s testimony.
The CAFC addressed the estoppel issue from 35 U.S.C. § 315:
Bunzl contends that the district court wrongly inter- preted 35 U.S.C. § 315 in holding that its estoppel provision applied at the conclusion of examination when the examiner issued the Right of Appeal Notice. Bunzl seeks a new trial on obviousness on this basis. As discussed below, this court agrees with Bunzl that the estoppel provision of § 315 is triggered not when examination is completed but only after all appeal rights have been exhausted.
Inter-partes reexamination proceedings are codified at 35 U.S.C. §§ 311-318. Section 315, entitled “Appeal,” provides:
(a) Patent owner. – The patent owner involved in an inter partes reexamination proceeding under this chapter –
(1) may appeal under the provisions of section 134 [i.e., to the Board] and may appeal under the provisions of sections 141 through 144 [i.e., to the Federal Circuit], with respect to any decision adverse to the patentability of any original or proposed amended or new claim of the patent; and
(2) may be a party to any appeal taken by a third- party requester under subsection (b).
(b) Third-party requester. – A third-party requester—
(1) may appeal under the provisions of section 134, and may appeal under the provisions of sec- tions 141 through 144, with respect to any final decision favorable to the patentability of any original or proposed amended or new claim of the patent; and
(2) may, subject to subsection (c), be a party to any appeal taken by the patent owner under the pro- visions of section 134 or sections 141 through 144.
(c) A third-party requester whose request for an inter partes reexamination results in an order un- der section 313 is estopped from asserting at a later time, in any civil action arising in whole or in part under section 1338 of title 28, the invalid- ity of any claim finally determined to be valid and patentable on any ground which the third-party requester raised or could have raised during the inter partes reexamination proceedings. This sub- section does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings.
When the estoppel of § 315(c) attaches is a question of first impression.
AND
The parties’ arguments on appeal essentially require this court to decide the meaning of “finally determined” in § 315(c) in view of the language of the statute, the legisla- tive framework, the related regulations, and the legisla- tive history.
“Our first step in interpreting a statute is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case. Our inquiry must cease if the statutory language is unambiguous and the statutory scheme is coherent and consistent.” Pennzoil-Quaker State Co. v. United States, 511 F.3d 1365, 1373 (Fed. Cir. 2008) (quoting Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997)). “[S]tatutory language cannot be construed in a vacuum. It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.” Davis v. Mich. Dep’t. of Treasury, 498 U.S. 803, 809 (1989). Section 315 does not expressly define “finally determined,” but its content and context do.
a. Section 315
The estoppel provision appears at the end of § 315, which provides appeal rights both from examiner and Board decisions. Specifically, § 315(a) provides that patent owners “may appeal under the provisions of section 134 [i.e. to the Board] and may appeal under the provisions of sections 141 through 144 [i.e. to the Federal Circuit],” as well as participate in any appeal brought by a third-party requester. And § 315(b) likewise provides that third-party requesters may appeal both to the Board and to the Federal Circuit, and may participate in appeals brought by patent owners. The estoppel provision of subsection (c) thus falls immediately following the establishment of both parties’ rights of appeal, including appeal to this court.
The placement of the estoppel provision within the inter partes reexamination statute strongly suggests that the phrase “finally determined” refers to the stage of the proceedings when the events contemplated by subsections (a) and (b) have run their course. And because subsections (a) and (b) both state that the parties may appeal decisions both to the Board and to this court, this implies that estoppel requires exhaustion of all appeal rights, including appeals to this court.
Bunzl argues that because subsections (a) and (b) refer to “final decisions,” whereas subsection (c) refers to “final determinations,” therefore the appealable “decisions” of subsections (a) and (b) do not, in and of themselves, amount to “final determinations.” We agree.
The bottom line:
The parties’ other arguments have been considered and are not persuasive. For the reasons discussed above, we hold that the estoppel provision of 35 U.S.C. § 315(c) applies only after all appeal rights are exhausted, including appeals to this court.
Relevant statutory text on estoppel:
(b) Final decision.–Once a final decision has been entered against a party in a civil action arising in whole or in part under section 1338 of title 28, that the party has not sustained its burden of proving the invalidity of any patent claim in suit or if a final decision in an inter partes reexamination proceeding instituted by a third-party requester is favorable to the patentability of any original or proposed amended or new claim of the patent, then neither that party nor its privies may thereafter request an inter partes reexamination of any such patent claim on the basis of issues which that party or its privies raised or could have raised in such civil action or inter partes re- examination proceeding, and any inter partes re- examination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office, notwithstanding any other provision of this chapter. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the patent and Trademark Office at the time of the inter partes reexamination proceedings.
Judge Reyna dissented on the anticipation portion of the decision and cited Schreiber:
Turning to Bettcher’s contention that the chamfers cannot be bearing surfaces because they were not recog- nized or used as such at the time, this court’s decision in In re Schreiber, 128 F.3d 1473, 1477-78 (Fed. Cir. 1997) is both instructive and controlling. There, a claim directed to a popcorn dispensing spout was found anticipated by a prior art patent directed to a spout for dispensing oil. The claim at issue included both structural elements and functional elements. Id. at 1475. There was no dispute that the structural limitations of the claim were all met by the prior art oil spout.
AND
The court explained that “choosing to define an ele- ment functionally, i.e., by what it does, carries with it a risk” in that “a functional limitation asserted to be critical for establishing novelty in the claimed subject matter may, in fact, be an inherent characteristic of the prior art.” Id. at 1478 (quoting In re Swinehart, 439 F.2d 210, 212 (CCPA 1971)). To find that a claim element is inher- ently disclosed in the prior art, it must necessarily be present in the prior art. King Pharms., 616 F.3d at 1274. Because the oil spout in Schreiber was “capable of” dis- pensing popped popcorn in the manner set forth in the claim, it inherently satisfied all of the functional limita- tions and anticipated the claimed popcorn spout. 128 F.3d at 1478-79. As the court explained, “Schreiber's contention that his structure will be used to dispense popcorn does not have patentable weight if the structure is already known, regardless of whether it has ever been used in any way in connection with popcorn.” Id. at 1477.
AND
It is undisputed that the chamfers of the pre-1998 blades could function as bearing faces, as demonstrated by the mock-up used at trial. No recognition of such capability in the prior art is required. Schering Corp. v. Geneva Pharmaceuticals, Inc., 339 F.3d 1373, 1377 (Fed. Cir. 2003) (“[T]his court rejects the contention that inherent anticipation requires recognition in the prior art.”); In re Cruciferous Sprout Litig., 301 F.3d 1343, 1349 (Fed. Cir. 2002) (“Inherency is not neces- sarily coterminous with knowledge of those of ordinary skill in the art. Artisans of ordinary skill may not recog- nize the inherent characteristics or functioning of the prior art.” (quotations omitted)). Each chamfer inherently satisfies the “bearing face” limitation “regardless of whether it has ever been used in any way in connection with [a bearing].” Schreiber, 128 F.3d at 1477.
Following the entry of judgment of non-infringement and no invalidity in a lawsuit brought against Bunzl Processor Distribution, LLC (“Bunzl”) and Bunzl USA, Inc. (no longer a party) by Bettcher Industries, Inc. (“Bettcher”) in the Northern District of Ohio for infringement of U.S. Patent No. 7,000,325 (“’325 patent”), Bunzl appeals from a denial of its motion for entry of judgment as a matter of law of invalidity or for a new trial on invalidity. Bettcher cross-appeals from the district court’s re- fusal to order a new trial on infringement following the jury’s verdict of non-infringement. For the reasons discussed below, we affirm in part, vacate in part, and remand.
There was an inter partes re-examination involved:
After Bettcher filed suit, and while proceedings were pending before the district court, Bunzl requested inter- partes reexamination of the ’325 patent in the United States Patent and Trademark Office (“Patent Office”). In due course, the reexamination was granted and the examiner ultimately declined to adopt the grounds of rejection proposed by Bunzl and issued a Right of Appeal Notice. Bunzl appealed to the Board of Patent Appeals and Interferences (“Board”). At the time of the filing of the appeal to this court, the reexamination was pending before the Board, which has since affirmed the examiner’s
conclusions affirming the validity of all claims subject to reexamination. Bunzl Processor Distrib. LLC v. Patent of Bettcher Indus., Inc., Appeal 2011-007091 (B.P.A.I. July 28, 2011). When the examiner issued the Right of Appeal Notice, Bettcher requested that the district court exclude certain of Bunzl’s invalidity references under 35 U.S.C. § 315(c) on the ground that the examiner had already determined that they did not invalidate the claims of the ’325 patent and therefore, according to Bettcher, Bunzl was estopped from asserting these references in district court. According to Bettcher, the § 315 estoppel took effect as soon as the examiner finished the reexamination and the Right of Appeal Notice was sent to the patentee. The district court agreed that the examiner had “issued a ‘final determination’ in the re-examination proceedings,” and granted Bettcher’s request to exclude the references. Bunzl included the exclusion of these references as a separate basis for its new trial motion. The district court denied Bunzl’s motion, noting that “this issue is one of first impression.” Sept. 16 Order at 1.
And, yes, there was a patent lawyer (named Stallion) involved as a witness:
At closing argument, counsel for Bunzl stated with regard to Stallion’s testimony that: “We called Mr. Stallion, who you heard is a patent lawyer. Patent lawyers talk about what patent lawyers talk about . . . . The only patent lawyer that testified in this case is Mr. Stallion, and that’s what he told you . . . . Mr. Stallion put it in legal for you . . . . He said there’s no way these immedi- ately can wear.” Id. 1470-1475. Counsel for Bettcher did not object to counsel for Bunzl’s closing remarks regard- ing Stallion’s testimony.
The CAFC addressed the estoppel issue from 35 U.S.C. § 315:
Bunzl contends that the district court wrongly inter- preted 35 U.S.C. § 315 in holding that its estoppel provision applied at the conclusion of examination when the examiner issued the Right of Appeal Notice. Bunzl seeks a new trial on obviousness on this basis. As discussed below, this court agrees with Bunzl that the estoppel provision of § 315 is triggered not when examination is completed but only after all appeal rights have been exhausted.
Inter-partes reexamination proceedings are codified at 35 U.S.C. §§ 311-318. Section 315, entitled “Appeal,” provides:
(a) Patent owner. – The patent owner involved in an inter partes reexamination proceeding under this chapter –
(1) may appeal under the provisions of section 134 [i.e., to the Board] and may appeal under the provisions of sections 141 through 144 [i.e., to the Federal Circuit], with respect to any decision adverse to the patentability of any original or proposed amended or new claim of the patent; and
(2) may be a party to any appeal taken by a third- party requester under subsection (b).
(b) Third-party requester. – A third-party requester—
(1) may appeal under the provisions of section 134, and may appeal under the provisions of sec- tions 141 through 144, with respect to any final decision favorable to the patentability of any original or proposed amended or new claim of the patent; and
(2) may, subject to subsection (c), be a party to any appeal taken by the patent owner under the pro- visions of section 134 or sections 141 through 144.
(c) A third-party requester whose request for an inter partes reexamination results in an order un- der section 313 is estopped from asserting at a later time, in any civil action arising in whole or in part under section 1338 of title 28, the invalid- ity of any claim finally determined to be valid and patentable on any ground which the third-party requester raised or could have raised during the inter partes reexamination proceedings. This sub- section does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings.
When the estoppel of § 315(c) attaches is a question of first impression.
AND
The parties’ arguments on appeal essentially require this court to decide the meaning of “finally determined” in § 315(c) in view of the language of the statute, the legisla- tive framework, the related regulations, and the legisla- tive history.
“Our first step in interpreting a statute is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case. Our inquiry must cease if the statutory language is unambiguous and the statutory scheme is coherent and consistent.” Pennzoil-Quaker State Co. v. United States, 511 F.3d 1365, 1373 (Fed. Cir. 2008) (quoting Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997)). “[S]tatutory language cannot be construed in a vacuum. It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.” Davis v. Mich. Dep’t. of Treasury, 498 U.S. 803, 809 (1989). Section 315 does not expressly define “finally determined,” but its content and context do.
a. Section 315
The estoppel provision appears at the end of § 315, which provides appeal rights both from examiner and Board decisions. Specifically, § 315(a) provides that patent owners “may appeal under the provisions of section 134 [i.e. to the Board] and may appeal under the provisions of sections 141 through 144 [i.e. to the Federal Circuit],” as well as participate in any appeal brought by a third-party requester. And § 315(b) likewise provides that third-party requesters may appeal both to the Board and to the Federal Circuit, and may participate in appeals brought by patent owners. The estoppel provision of subsection (c) thus falls immediately following the establishment of both parties’ rights of appeal, including appeal to this court.
The placement of the estoppel provision within the inter partes reexamination statute strongly suggests that the phrase “finally determined” refers to the stage of the proceedings when the events contemplated by subsections (a) and (b) have run their course. And because subsections (a) and (b) both state that the parties may appeal decisions both to the Board and to this court, this implies that estoppel requires exhaustion of all appeal rights, including appeals to this court.
Bunzl argues that because subsections (a) and (b) refer to “final decisions,” whereas subsection (c) refers to “final determinations,” therefore the appealable “decisions” of subsections (a) and (b) do not, in and of themselves, amount to “final determinations.” We agree.
The bottom line:
The parties’ other arguments have been considered and are not persuasive. For the reasons discussed above, we hold that the estoppel provision of 35 U.S.C. § 315(c) applies only after all appeal rights are exhausted, including appeals to this court.
Relevant statutory text on estoppel:
(b) Final decision.–Once a final decision has been entered against a party in a civil action arising in whole or in part under section 1338 of title 28, that the party has not sustained its burden of proving the invalidity of any patent claim in suit or if a final decision in an inter partes reexamination proceeding instituted by a third-party requester is favorable to the patentability of any original or proposed amended or new claim of the patent, then neither that party nor its privies may thereafter request an inter partes reexamination of any such patent claim on the basis of issues which that party or its privies raised or could have raised in such civil action or inter partes re- examination proceeding, and any inter partes re- examination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office, notwithstanding any other provision of this chapter. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the patent and Trademark Office at the time of the inter partes reexamination proceedings.
Judge Reyna dissented on the anticipation portion of the decision and cited Schreiber:
Turning to Bettcher’s contention that the chamfers cannot be bearing surfaces because they were not recog- nized or used as such at the time, this court’s decision in In re Schreiber, 128 F.3d 1473, 1477-78 (Fed. Cir. 1997) is both instructive and controlling. There, a claim directed to a popcorn dispensing spout was found anticipated by a prior art patent directed to a spout for dispensing oil. The claim at issue included both structural elements and functional elements. Id. at 1475. There was no dispute that the structural limitations of the claim were all met by the prior art oil spout.
AND
The court explained that “choosing to define an ele- ment functionally, i.e., by what it does, carries with it a risk” in that “a functional limitation asserted to be critical for establishing novelty in the claimed subject matter may, in fact, be an inherent characteristic of the prior art.” Id. at 1478 (quoting In re Swinehart, 439 F.2d 210, 212 (CCPA 1971)). To find that a claim element is inher- ently disclosed in the prior art, it must necessarily be present in the prior art. King Pharms., 616 F.3d at 1274. Because the oil spout in Schreiber was “capable of” dis- pensing popped popcorn in the manner set forth in the claim, it inherently satisfied all of the functional limita- tions and anticipated the claimed popcorn spout. 128 F.3d at 1478-79. As the court explained, “Schreiber's contention that his structure will be used to dispense popcorn does not have patentable weight if the structure is already known, regardless of whether it has ever been used in any way in connection with popcorn.” Id. at 1477.
AND
It is undisputed that the chamfers of the pre-1998 blades could function as bearing faces, as demonstrated by the mock-up used at trial. No recognition of such capability in the prior art is required. Schering Corp. v. Geneva Pharmaceuticals, Inc., 339 F.3d 1373, 1377 (Fed. Cir. 2003) (“[T]his court rejects the contention that inherent anticipation requires recognition in the prior art.”); In re Cruciferous Sprout Litig., 301 F.3d 1343, 1349 (Fed. Cir. 2002) (“Inherency is not neces- sarily coterminous with knowledge of those of ordinary skill in the art. Artisans of ordinary skill may not recog- nize the inherent characteristics or functioning of the prior art.” (quotations omitted)). Each chamfer inherently satisfies the “bearing face” limitation “regardless of whether it has ever been used in any way in connection with [a bearing].” Schreiber, 128 F.3d at 1477.
posted by Lawrence B. Ebert at 12:39 PM
0 Comments:
Post a Comment
<< Home