Monday, March 05, 2018

Knowles loses appeal at CAFC; Judge Newman in dissent: "never before has a final claim construction by this court been held not to be preclusive".

Appellant Knowles Electronics, LLC (“Knowles”) appeals
the inter partes reexamination decision on appeal of
the U.S. Patent and Trademark Office’s (“USPTO”) Patent
Trial and Appeal Board (“PTAB”) affirming an examiner’s
rejection of claims 1−4 of U.S. Patent No. 6,781,231
(“the ’231 patent”) for anticipation and proposed claims
23−27 for lack of an adequate written description.1
Cirrus Logic, Inc. v. Knowles Elecs. LLC (Cirrus I), No.
2015-004342, 2015 WL 5272691, at *2−3 (P.T.A.B. Sept.
8, 2015); see Cirrus Logic, Inc. v. Knowles Elecs. LLC
(Cirrus II), No. 2015-004342, 2016 WL 1378707, at *1−2
(P.T.A.B. Apr. 5, 2016) (denying request for rehearing).
Knowles appeals. We have subject matter jurisdiction
pursuant to 28 U.S.C. § 1295(a)(4)(A) (2012). We affirm

Judge Newman, in dissent, began:

I write in concern for perpetuation of the erroneous
position that the PTAB need not apply the prior final
judicial decision of the same issue of the same claims of
the same patent.1 This error not only produces an incorrect
result in this case, but will further impart uncertain
ty to proceedings under the America Invents Act. The
purpose whereby the PTAB was created as an agency
tribunal, in order to provide stable law and economical
determination of patent validity, is negated when final
adjudication in a court of last resort may be ignored, and
the issue litigated afresh in the agency tribunal.
The Supreme Court has recognized, “courts may take
it as given that Congress has legislated with the expectation
that the principle [of issue preclusion] will apply
except when a statutory purpose to the contrary is evident.”
B & B Hardware, Inc. v. Hargis Indus., Inc., 135 S.
Ct. 1293, 1303, 1305–06 (2015) (alteration in original)
(quoting Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501
U.S. 104, 108 (1991)). A prior judicial decision resolving
the same issue is accorded preclusive effect not only in
subsequent court proceedings but also before an administrative
agency, subject only to the established equitable
and due process exceptions to preclusion.

However, the PTAB stated that “precedent makes
clear that the USPTO is not bound in reexamination
proceedings by claim constructions produced by a court.”
PTAB Op. *12. While precedent has previously addressed
the effect of a prior district court claim construction on a
subsequent PTO proceeding, never before has a final
claim construction by this court been held not to be preclusive.

Judge Newman mentioned "separation of powers":

This conflict between court decision and agency obligation
raises issues of litigation and patent policy, as well
as invoking the fundamentals of stare decisis and separation
of powers. The adjudication of questions of patent
law takes on special significance in light of the purposes
of the America Invents Act. The purposes of efficiency,
economy, and finality of patent review are lost when
judicial determination of the same question of patentability
has been completed, including appeal to and decision
by the Federal Circuit—yet the decision is ignored and
the proceeding repeated by the administrative agency and
again appealed to the Federal Circuit; and where, as here,
the Federal Circuit reaches a contrary decision.


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