CAFC gives guidance on reply briefs in Durance case

An issue of relevance to prosecution practice is what can be considered in a reply brief:


In making these findings, however, the Board disregarded Durance’s
reply-brief arguments by citing 37 C.F.R. § 41.41(b)(2)
and stating that these arguments were “not responsive to
an argument raised in the Answer.”6 J.A. 33.
Durance sought rehearing from the Board. J.A. 51.
In its rehearing request, Durance averred that the Board
erroneously ignored its reply-brief arguments on structural
identity, which it claims were made in direct response
to the examiner’s answer and provided citations.
J.A. 53–55. Durance contended that the Board should
have addressed its arguments that the claimed structure
is different than the corresponding structure in Burger
with respect to the features of motors, gears, and the
divider walls that promote tumbling.

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The Board also reiterated that it
would not consider Durance’s reply-brief arguments,
stating that Durance “did not provide such a showing or
indicate where a new argument requiring such response
was raised in the [examiner’s] Answer.” J.A. 46. However,
“in the interest of fairness,” the Board decided to
consider Durance’s argument in its reply brief that the
amount of material packed into the container affects
whether the material would tumble. J.A. 46–47. The
Board, however, did not consider any of Durance’s arguments
relating to the divider walls within the container
and their role in the promotion of tumbling.



As to standards of review:


We review Board decisions in accordance with the
Administrative Procedure Act (“APA”), 5 U.S.C. § 706(2)
(2012). Dickinson v. Zurko, 527 U.S. 150, 152, 165 (1999).
Under the APA, we review the Board’s legal conclusions
de novo and its factual findings for substantial evidence.
ACCO Brands Corp. v. Fellowes, Inc., 813 F.3d 1361, 1365
(Fed. Cir. 2016). Substantial evidence is “such relevant
evidence as a reasonable mind might accept as adequate
to support a conclusion.” In re Gartside, 203 F.3d 1305,
1312 (Fed. Cir. 2000) (quoting Consol. Edison Co. of N.Y.
v. NLRB, 305 U.S. 197, 229 (1938)).
We review the Board’s application of its procedural
rules for abuse of discretion. Eli Lilly & Co. v. Bd. of
Regents of Univ. of Wash., 334 F.3d 1264, 1266–67 (Fed.
Cir. 2003). An abuse of discretion occurs if the decision is
clearly unreasonable, arbitrary, or fanciful; is based on an
erroneous conclusion of law; rests on clearly erroneous
fact findings; or involves a record that contains no evidence
on which the Board could base its decision.
Abrutyn v. Giovanniello, 15 F.3d 1048, 1050–51 (Fed. Cir.
1994).



The CAFC found a lack of clarity in the Board's position:



Under these circumstances of multiple shifting articulations,
this Court is not confident in the Patent Office’s
reasoning for its rejection of the Application, specifically
as to which embodiment of Burger the Board relied on,
and whether the Board relied on inherency as a basis for
the tumbling function.

The examiner and Board’s shifting reliance on Burger
and on inherency obfuscated the issues before Durance,
particularly regarding the issue of structural identity. As
error, Durance points to the Board’s failure to consider
arguments in Durance’s reply brief made in response to
the examiner’s answer. Appellants’ Br. 24. Specifically,
Durance argues that the Board should have considered its
arguments that claim 1 of the ’989 application “included
the tumbling feature in means-plus-function language
that was directed to structure different than the structure
of Burger.” Id. Durance also argues that the examiner’s
and Board’s structural-identity findings cannot be applied
to the method claims “because even the identical structure
would not perform all the steps unless operated in
the correct manner and used with a partially filled container.”
Id. We agree with Durance.


As to the contents of a reply brief:


The Board relied on 37 C.F.R. § 41.41(b) to find waiver.
Section 41.41(b)(2) outlines what content cannot be
included in an applicant’s reply brief. It provides in
relevant part:

Any argument raised in the reply brief which was
not raised in the appeal brief, or is not responsive
to an argument raised in the examiner’s answer,
including any designated new ground of rejection,
will not be considered by the Board for purposes of
the present appeal, unless good cause is shown.
Section 41.41(b)(2) permits a reply brief to respond to “an
argument raised in the examiner’s answer.” In particular,
nothing in this provision bars a reply brief from
addressing new arguments raised in the examiner’s
answer that are not articulated in the Final Office Action,
regardless of whether the examiner designated that new
argument as a “new ground of rejection.”7 To be clear, 37
C.F.R. § 41.39(a)(1) provides that “[a]n examiner’s answer
is deemed to incorporate all of the grounds of rejection set
forth in the Office action from which the appeal is taken.”
Since the examiner’s answer is deemed to incorporate all
grounds in the Final Office Action, an applicant’s reply
may not respond to grounds or arguments raised in the
examiner’s answer if they were part of the Final Office
Action and the applicant did not address them in the
initial appeal brief. If an examiner’s answer includes
arguments raised for the first time, i.e., not in the Final
Office Action, an applicant may address those arguments
in the reply. 37 C.F.R. §§ 41.39, 41.41.
Here, the examiner’s first clear representation that
she was relying on structural identity, and not inherency,
appeared in the examiner’s answer. See J.A. 85. We
agree with the Patent Office that there need not be talismanic
words to indicate a ground of rejection. Appellee’s
Br. 28–29. But in this case, there is no mention of structural
identity with Figure 8 of Burger before the examiner’s
answer. And the equivocal nature of the examiner’s
and Board’s remarks throughout the examination of the
’989 application, including whether inherency was the
basis for the rejection, clouded the issues before Durance.
Accordingly, Durance had no notice, prior to the examin-
argument as a “new ground of rejection.”7 To be clear, 37
C.F.R. § 41.39(a)(1) provides that “[a]n examiner’s answer
is deemed to incorporate all of the grounds of rejection set
forth in the Office action from which the appeal is taken.”
Since the examiner’s answer is deemed to incorporate all
grounds in the Final Office Action, an applicant’s reply
may not respond to grounds or arguments raised in the
examiner’s answer if they were part of the Final Office
Action and the applicant did not address them in the
initial appeal brief. If an examiner’s answer includes
arguments raised for the first time, i.e., not in the Final
Office Action, an applicant may address those arguments
in the reply. 37 C.F.R. §§ 41.39, 41.41.
Here, the examiner’s first clear representation that
she was relying on structural identity, and not inherency,
appeared in the examiner’s answer. See J.A. 85. We
agree with the Patent Office that there need not be talismanic
words to indicate a ground of rejection. Appellee’s
Br. 28–29. But in this case, there is no mention of structural
identity with Figure 8 of Burger before the examiner’s
answer. And the equivocal nature of the examiner’s
and Board’s remarks throughout the examination of the
’989 application, including whether inherency was the
basis for the rejection, clouded the issues before Durance.
Accordingly, Durance had no notice, prior to the examin-
argument as a “new ground of rejection.”7 To be clear, 37
C.F.R. § 41.39(a)(1) provides that “[a]n examiner’s answer
is deemed to incorporate all of the grounds of rejection set
forth in the Office action from which the appeal is taken.”
Since the examiner’s answer is deemed to incorporate all
grounds in the Final Office Action, an applicant’s reply
may not respond to grounds or arguments raised in the
examiner’s answer if they were part of the Final Office
Action and the applicant did not address them in the
initial appeal brief. If an examiner’s answer includes
arguments raised for the first time, i.e., not in the Final
Office Action, an applicant may address those arguments
in the reply. 37 C.F.R. §§ 41.39, 41.41.
Here, the examiner’s first clear representation that
she was relying on structural identity, and not inherency,
appeared in the examiner’s answer. See J.A. 85. We
agree with the Patent Office that there need not be talismanic
words to indicate a ground of rejection. Appellee’s
Br. 28–29. But in this case, there is no mention of structural
identity with Figure 8 of Burger before the examiner’s
answer. And the equivocal nature of the examiner’s
and Board’s remarks throughout the examination of the
’989 application, including whether inherency was the
basis for the rejection, clouded the issues before Durance.
Accordingly, Durance had no notice, prior to the examin-
er’s answer, of this ground on which his application was
being rejected.8

It was therefore proper under § 41.41(b)(2) for Durance
to respond to the structural identity argument
raised in the examiner’s answer. The Patent Office
contends that Durance should have petitioned to have the
examiner’s answer designated as a new ground of rejection,
relying on the Patent Office’s Manual of Patent
Examination Procedure (“MPEP”) § 1207.03. But this
Court does not read MPEP § 1207.03 or 37 C.F.R. § 41.41
to put such a burden on applicants. Neither contemplates
that the applicant has to petition to have a new argument
in an answer designated as a new ground of rejection
before it can respond to the new argument. Rather,
§ 41.41 states that a showing of good cause is only required
if the argument is not responsive to an argument
raised by the examiner. Here, Durance’s reply brief was
responsive to the examiner’s answer and included citations
indicating the new arguments to which Durance was
responding. See J.A. 62–64. It was error for the Board to
find such argument waived.