Saturday, October 06, 2018

NAI loses appeal of IPR decision at the CAFC; 120 and chain of priority issues

Woodbolt Distributors, LLC (“Woodbolt”) requested
that the United States Patent and Trademark Office
(“PTO”) reexamine U.S. Patent No. 8,067,381 (“the ʼ381
patent”) owned by Natural Alternatives International,
Inc. (“NAI”). The PTO ordered inter partes reexamination,
and the examiner rejected the challenged claims as
anticipated by or obvious over cited prior art, including a
parent of the reexamined patent. NAI appeals the Patent
Trial and Appeal Board’s (“Board”) final determination
affirming the examiner’s rejections and its subsequent
denial of NAI’s request for rehearing. Woodbolt is not a
party to this appeal. The Director of the PTO has intervened
to defend the Board’s decision. We have jurisdiction
pursuant to 28 U.S.C. § 1295(a)(4)(A). We affirm.

Of the history

District court litigation involving the ʼ381 patent
commenced between NAI and Woodbolt in December
2011.2 In May 2012, during that proceeding, Woodbolt
sought inter partes reexamination of the asserted patent
claims.3 The request alleged that “the asserted claim to
priority of the ʼ381 Patent is defective” because the “applicants
deliberately and expressly terminated their claim
to the priority of the first four applications[,]” which thus
“broke[] the chain of priority between the Fourth and
Fifth Applications.” J.A. 45–46. During reexamination,
NAI did not dispute that it had waived priority to the
fourth through the first applications in its fifth application.
J.A. 971. But it insisted that the sixth application
maintained priority back to the first application because
NAI did not amend the “Cross Reference of Related Applications”
in the sixth application. According to NAI, it was
irrelevant what happened to the fifth application once the
sixth application became entitled to the first application’s
filing date. J.A. 975. Unpersuaded, the examiner finally
rejected the reexamined claims in view of prior art including
the ʼ596 patent (i.e., the patent that issued from the
first application), and then closed prosecution.4 J.A. 1210,

NAI appealed the examiner’s decision to the Board.
The Board determined that when NAI filed the eighth
application, “[t]he fifth application [was] not entitled to
the benefit of the fourth application since the specific
reference to the fourth application was deleted in the
fifth.” J.A. 13. Because the eighth application claimed
priority to the first application via the fifth application,
the Board determined that the eighth application (and
thus the ʼ381 patent) was also not entitled to the benefit
of the fourth through the first applications. See J.A. 16.
The Board issued a final written determination affirming
the examiner’s rejections and denied NAI’s request for


The Board determined that
when filed, the eighth application did not meet the “specific
reference” requirement of § 120 as to the filing date
of the first application. J.A. 11–12. That was so, according
to the Board, because the eighth application claimed
the benefit of the first application’s filing date by way of
the fifth application, and NAI had amended the fifth
application to claim priority to only the 2003 provisional
application. See id. In other words, because the fifth
application lacked priority to the first application, the
eighth application’s priority claim to the first application
(via the fifth application) did not satisfy all of § 120’s
requirements. The Board, therefore, did not err in determining
that the ʼ381 patent was not entitled to claim the
benefit of the filing date of the first application under
§ 120, as the priority claim in the ʼ381 patent was defective
from the start.

The MPEP arises:

As an initial matter, we note that the MPEP “does not
have the force of law[,]” Molins PLC v. Textron, Inc., 48
F.3d 1172, 1180 n.10 (Fed. Cir. 1995), and does not bind
us, Litton Sys., 728 F.2d at 1439. Nonetheless, we have
reviewed MPEP § 201.11 and find that nothing in its text
limits the scope of waiver to only the instant application.
Indeed, § 201.11 does not contemplate all possible consequences
of waiving a benefit claim in a particular application.
Moreover, at least in the context of terminal
disclaimers, the MPEP has explicitly indicated when a
disclaimer applies only to the instant application and not
to downstream applications. See, e.g., Hagenbuch v.
Sonrai Sys., 2015 U.S. Dist. LEXIS 39083, *10–13 (N.D.
Ill. Mar. 27, 2015) (explaining that “[t]he MPEP in effect
in 1993 described the effect of a disclaimer that, by its
terms, applied only to the ‘instant application’”); see also
MPEP § 1490(VI)(B) (9th ed., Rev. 8) (2017) (“A terminal
disclaimer filed to obviate a nonstatutory double patenting
rejection is effective only with respect to the application
or patent identified in the disclaimer unless by its
terms it extends to continuing applications . . . .”).

A Civil War era patent case is cited:

NAI, however, neither explains why § 120 compels
this interpretation of priority claims nor provides any case
law to support its conclusion. Nor does NAI provide any
argument to undermine the long-standing interpretation
of priority as a single chain, growing with each additional
continuation. The Supreme Court has previously explained
that under § 120, parent and continuing applications
“are to be considered as parts of the same
transaction, and both as constituting one continuous
application, within the meaning of the law.” Godfrey v.
Eames, 68 U.S. 317, 326 (1863); see also Sticker Indus.,
405 F.2d at 93 (stating that “each application in a long
chain grows out of the one immediately preceding it”). We
therefore decline to adopt NAI’s interpretation of chain of


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