Wednesday, January 23, 2013

In Rexnord, CAFC affirms examiner, reverses Board

The outcome in Rexnord v. Kappos, in which Rexnord was the requestor of an inter parted re-exam against patent owner Habasit-->

Rexnord Industries requested inter partes reexamination of U.S. Patent No. 6,523,680 (the ’680 patent), owned by Habasit Belting, Inc. The United States Patent and Trademark Office (PTO) Board of Patent Appeals and Interferences (Board) confirmed claims 1–14 of the ’680 patent. Rexnord appeals. We affirm that the claims are not anticipated, and reverse the Board’s determination that the claimed invention is not obvious in view of certain prior art.

The re-examined patent was directed to mechanical conveyor belt that is formed of rows of belt modules interlinked by transverse rods. Rexnord cited four references for the reexamina- tion: U.S. Patent No. 6,382,405 (Palmaer), U.S. Patent No. 6,471,048 (Thompson), U.S. Patent 5,372,248 (Hor- ton), and U.S. Patent No. 5,253,749 (Ensch).

The matter of obvious design choice arose:

The Board stated that “Rexnord’s reliance on ‘design choices’ . . . is more consistent with an obviousness analysis,” Dec. on Rehearing, at 4, but did not discuss Rexnord’s argu- ments for obviousness.

As to inherency:

The PTO responds that the Board correctly found that neither Palmaer nor Thompson states the size of the space between modules, and that the inherency argument fails because a space of less than 10 mm is not necessarily present in any reference belt. This court explained in In re Omeprazole Patent Litigation, 483 F.3d 1364 (Fed. Cir. 2007) that “anticipation by inherent disclosure is appro- priate only when the reference discloses prior art that must necessarily include the unstated limitation, [or the reference] cannot inherently anticipate the claims.” Id. at 1378. We agree with the Board that the precise less-than- 10 mm size limitation is not inherent in Palmaer or Thompson, for neither reference shows this limitation and that it would necessarily be recognized.

As to obviousness:

Thus we conclude that the Board erred in holding that it would not have been obvious to limit the space to the 10 mm maximum, and in reversing the examiner’s ruling of obviousness on this ground, without considering any of the other grounds of obvious- ness that had been raised for reexamination.

Of the timing of arguments:

The PTO brief states that “[t]he Board correctly declined Rexnord’s invitation to reject representative claim 1 as obvious over the com- bined teachings of Horton and Thompson under this new theory – presented by Rexnord for the first time in its request for rehearing.” Id. at 29–30.
However, the “new theory” was not new. These ref- erences had previously been presented to the examiner. See Request for Inter Partes Reexamination at 7 (“the ’680 patent teaches a design choice which allows pinching a small child’s finger having a diameter of less than 10 mm in the gap between adjacent links”; “the limitation of 10 mm is merely a design choice”; “A design choice was made by the Patentee in the ’680 patent”; “The Patentee clearly indicated that 10 mm is merely a design choice.”) The issue was fully raised before the examiner, and these references were not again a patentability issue until after the Board reversed the examiner.
When Habasit appealed the examiner’s decision, Rexnord was not barred from presenting this argument in defense of the examiner. The PTO states in its brief on this appeal:
Just as this Court does not entertain arguments made outside of appellant’s opening brief, see, e.g., In re Watts, 354 F.3d 1362, 1367 (Fed. Cir. 2004); In re Schreiber, 128 F.3d 1473, 1479 (Fed. Cir. 1997), the Board has a rule that similarly bars the presentation of new arguments outside appellant’s opening brief (absent circumstances not alleged here), see 37 C.F.R. § 41.79(b).
PTO Br. 24. We observe that Rexnord was not the appel- lant before the Board, and that the premise is an incorrect statement of the appellate process. On judicial review, the correctness of the decision appealed from can be defended by the appellee on any ground that is supported by the record, whether or not the appellant raised the argument. See Jaffke v. Dunham, 352 U.S. 280, 281 (1957) (“A successful party in the District Court may sustain its judgment on any ground that finds support in the record.”); Glaxo Group Ltd. v. TorPharm, Inc., 153 F.3d 1366, 1371 (Fed. Cir. 1998) (“an appellate court may affirm a judgment of a district court on any ground the
law and the record will support so long as that ground would not expand the relief granted”); Datascope Corp. v. SMEC, Inc., 879 F.2d 820, 822 n.1 (Fed. Cir. 1989) (“Ap- pellees always have the right to assert alternative grounds for affirming the judgment that are supported by the record.”); Bio-Rad Labs., Inc. v. Nicolet Instrument Corp., 807 F.2d 964, 969 (Fed. Cir. 1986) (“a court of appeals may affirm the judgment of a district court on any ground, including grounds not relied upon by the district court”).


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