A Critique Of Recent Opinions Of The Federal Circuit In Patent Interferences

1993 – Article
Journal of the Patent and Trademark Office Society, volume 75 (1993), pages 448-83

I. Introduction This article covers Federal Circuit precedential opinions[1] published since those covered in the author's previous article by the same title at 73 JPTOS 700 (1991) through December 31, 1992.[2]

The most welcome interference development of the year was the court's holding in In re Deckler that an interference judgment bars a party against which judgment was entered as to the or a count of an interference from obtaining or maintaining claims that are patentably indistinguishable from the lost count, thereby relegating In re McKellin to the status of a curious historical anomaly. On the other hand, the worst interference development of the year was the court's resurrection of the doctrine of ancillarity to priority in Kimberly-Clark Corp. v. Proctor & Gamble Distributing Co., in which it held (or, at least, said) that it reviewed the trial court's determination of an inequitable conduct charge in a patent-patent interference "because it is so closely intertwined with validity and priority, which are subject to review under Section 291, and [because?] inequitable conduct has otherwise been treated as ancillary to priority."

II. Substantive Interference Law

A. Evidence Required to Prove an Actual Reduction to Practice

How good is good enough is the usual question when evaluating a proffered actual reduction to practice. While every such case is fact-intensive, DSL Dynamic Sciences Ltd. v. Union Switch & Signal, Inc., 928 F.2d 1122, 18 USPQ2d 1152 (Fed. Cir. 1991) (opinion delivered by Circuit Judge Rich for a panel that also consisted of Circuit Judges Plager and Clevenger), is a striking illustration of the maxim that an actual reduction to practice can be achieved by a device that is not yet in commercially acceptable condition.

This was an appeal in a 35 USC 146 quasi-de novo civil action to review the decision of the Board of Patent Appeals and Interferences in a patent-application interference. DSL's assignor (the party Schmid) was the patentee and the senior party. Union Switch's assignor (the party Blosnick) was the applicant and the junior party. The invention defined by the sole count was a "coupler mount assembly" used to attach equipment to a railway car coupler. The party Schmid stood on its September 1983 filing date,[1] and the party Blosnick relied on an asserted actual reduction to practice that had taken place in May 1983 on a caboose.[2]

Before the board, the party Schmid argued that the prototypes used by the party Blosnick in its asserted actual reduction to practice did not fall within the scope of the count and therefore were insufficient to reduce to practice the invention of the count. The board disagreed, and the party Schmid then filed a 35 USC 146 action. However, before the district court, the party Schmid entirely changed its theory of the case. It no longer contended that the prototypes were outside the scope of the count. Instead, it "argued that the tests were not performed in the intended environment of a coupler mount assembly, and therefore were not sufficient to establish reduction to practice."[3]

In support of its new theory, the party Schmid sought to rely on two categories of evidence not submitted to the board. First, the party Schmid offered the testimony of an expert witness[4] to the effect (1) "that the purpose of the equipment supported by a coupler mount assembly is to obviate the need for a caboose at the end of a train. . ."[5]; (2) "that, therefore, the coupler mount assemblies on the count would never in reality be attached to a caboose, but generally would be attached to the coupler of a freight car"[6]; and (3) "that the suspension system is much better on a caboose, which is intended to carry passengers, than that on a freight car, and that consequently while the devices tested by Union Switch in May of 1983 performed satisfactorily when attached to cabooses, those devices would have failed if attached to a freight car.[7] Second, the party Schmid offered the testimony of an employee of a railroad company that had subsequently bought coupler mount assemblies within the scope of the count from the assignee of the party Blosnick to the effect that those assemblies had failed and that "major modifications of those assemblies were required before they were found suitable for use."[8]

The district court excluded both categories of evidence proffered by the party Schmid.[9]

Having excluded the party Schmid's new evidence, the district court merely reviewed the board's decision on the evidence before the board. Not surprisingly (since the party Schmid was no longer relying on the theory that it has relied on before the board), it affirmed the board's decision, and the appeal to the Federal Circuit followed.

On appeal, the parties' arguments were addressed to the propriety of the exclusion of the two categories of new evidence proffered by the party Schmid. However, the court did not reach those issues. Instead, it held that, even if that evidence had been introduced, the party Blosnick would still have been entitled to judgment .[10]

The Federal Circuit's starting point was its holding that "The issue of reduction to practice is a question of law which this court reviews de novo."[11] It then turned to each category of evidence proffered by the party Schmid and ruled that, even if it had been introduced, it would not have effected the result reached by the district court.

With respect to the use-on-a-caboose versus use-on-a-freight-car issue, the court first offered a useful tutorial on when simulations can constitute actual reductions to practice:

It is true, as DSL points out, that proof of actual reduction to practice requires a showing that "the embodiment relied upon as evidence of priority actually worked for its intended purpose." Newkirk v. Lulejian, 825 F.2d 1581, 1582, 3 USPQ2d 1793, 1794 (Fed. Cir 1987). This is so even if the "intended purpose" is not explicitly set forth in the counts of the interference. See, e.g., Elmore v. Schmitt, 278 F.2d 510, 125 USPQ 653 (CCPA 1960); Burns v. Curtis, 172 F.2d 588, 80 USPQ 587 (CCPA 1949). On the other hand, tests performed outside the intended environment can be sufficient to show reduction to practice if the testing conditions are sufficiently similar to those of the intended environment. Tomecek v. Stimpson, 513 F.2d 614, 618, 185 USPQ 235, 239 (CCPA 1975).[12]

In this case, the court apparently agreed with the party Schmid that the tests relied on by the party Blosnick as constituting an actual reduction to practice were "outside their intended environment."[13] However, it held that they adequately simulated the intended environment because "The report for Test No. 4 indicates that the 'vibration equipment showed shocks of over 15 G's,' but that the coupler mount assembly still operated successfully,"[14] while a report authored by the inventor Schmid indicated that "a coupler mount assembly must be able to withstand "continuous shock and vibration at low frequencies and high amplitude with peak loads to 20 g'."[15] Thus, the answer to the key question of how good is good enough in this case was that peak loads of over 15 g's were "close enough" to peak loads of 20 g's.[16]

As for the proffered evidence to the effect that the commercial devices subsequently sold by the party Blosnick's assignee did not work in their intended environment, the court conceded that "some cases have held that events occurring after an alleged actual reduction to practice can call into question whether reduction to practice has in fact occurred."[17] However, the court relied on the maxim that "there is . . . no requirement that an invention, when tested, be in a commercially satisfactory stage of development in order to reduce the invention to practice."[18] Relying on that maxim, it held that "A failure of several commercial devices allegedly made according to the Blosnick application long after the reduction to practice is insufficient to convince us that a device, meeting the limitations of the count, was not adequately tested to establish a reduction to practice."[19]

B. The Testimony of a Technician Who Performed the Tests Relied Upon
as an Actual Reduction to Practice Is Not Necessary to Verify or Corroborate
the Testimony of the Non-Inventor Scientist Responsible for the Test

In Holmwood v. Sugavanam, 948 F.2d 1236, 20 USPQ2d 1712 (Fed. Cir. 1991) (opinion delivered by Circuit Judge Rader for a panel that also consisted of Circuit Judges Newman and Archer), the party Holmwood relied on evidence concerning an alleged actual reduction to practice to antedate the party Sugavanam's British priority date. The tests were conducted by two technicians (Mr. Tippin and Mr. Tillman) under the supervision and direction of a senior scientist (Dr. Zeck). The party Holmwood introduced the results of the tests performed by Messrs. Tippin and Tillman into evidence by way of Dr. Zeck's deposition testimony. Messrs. Tippin and Tillman did not testify, and the party Sugavanam objected to the test results and the related portions of Dr. Zeck's testimony as hearsay.

Curiously, the board admitted the reports prepared by Messrs. Tippin and Tillman into evidence, but then refused to give either the reports or Dr. Zeck's testimony based on those reports "any weight."[20] That resulted in a holding that the party Holmwood had failed to prove an actual reduction to practice before the party Sugavanam's priority date, and that in turn resulted in judgment for the party Sugavanam.

The Federal Circuit reversed. According to it, the "rule of reason" test applicable to evidence about alleged actual reductions to practice "requires the Patent and Trademark Office to examine, analyze, and evaluate reasonably all pertinent evidence when weighing the credibility of an inventor's story."[21] Moreover:

Under the rule of reason, this court cannot ignore the realities of technical operations in modern day research laboratories. Breuer v. DeMarinis, 558 F.2d 22, 29, 194 USPO 308, 314 (CCPA 1977). Recognizing these realities, a junior technician performing perfunctory tasks under the supervision of a senior scientist is not generally necessary to verify the reliability of evidence about scientific methods or data. In the absence of indicia calling into question the trustworthiness of the senior scientist's testimony, the rule of reason permits the Board to rely on the trained supervisor's testimony to ascertain scientific methods or results.[22]

Comment. Although the court said that the rule of reason "permits the Board" to rely on the supervisor's testimony in situations of this type, the fact that the court reversed the board's judgment suggests that the court is actually requiring the board to rely on the supervisor's testimony in such situations "In the absence of indicia calling into question the trustworthiness of the senior scientist's testimony. . . ." Moreover, even though Messrs. Tippin and Tillman had not testified, the court opined that, since they "operated as Dr. Zeck's 'blind hands' to conduct the tests and record the results . . . [, they] could testify to little more than that they followed Dr. Zeck's directions in handling the chemical samples and recording test results. . . [and that, therefore, their testimony] would have been cumulative or inferior to Dr. Zeck's testimony.[23] In view of the improbability that the supervisor's testimony will itself contain "indicia calling into question the trustworthiness of. . . [the supervisor's] testimony. . . .," and in view of the board's reluctance to authorize discovery depositions under 37 CFR 1.687, the court's holding will probably bias parties in the party Sugavanam's position towards calling technicians such as Messrs. Tippin and Tillman as hostile witnesses during their own cases -- in effect conducting discovery during their testimony periods.

C. The Description Requirement of 35 USC 112 Is the Same For a Claim Copied
for Purposes of Provoking an Interference as For a Claim Presented
During Ex Parte Prosecution of a Patent Application

In In re Spina, 975 F.2d 854, 24 USPQ2d 1142 (Fed. Cir. 1992) (opinion delivered by Circuit Judge Newman for a panel that also consisted of Senior Circuit Judge Cowen and Circuit Judge Lourie), the court continued the welcome trend initiated in Chester v. Miller, 906 F.2d 1574, 15 USPQ2d 1333 (Fed. Cir. 1990),[24] by holding that "The description requirement of 35 U.S.C. §112 is the same for a claim copied for purposes of instituting an interference as for a claim presented during ex parte prosecution of a patent application."[25] However, the court regrettably did not treat the issue of written description support totally independently of the pre-interference context in which it arose.[26] Although the court sensibly said that "A claim is not interpreted one way in light of the specification in which it originally was granted, and another way in light of the specification into which it is copied as a proposed interference count,"[27] it also said that:

When interpretation is required of a claim that is copied for interference purposes, the copied claim is viewed in the context of the patent from which it was copied. DeGeorge v. Bernier, 768 F.2d 1318, 1322, 226 USPQ 758, 761 (Fed. Cir. 1985) (if claim language is ambiguous "resort must be had to the specification of the patent from which the copied claim came").[28]

Thus, the view of this panel of the court seems to be that, if the language in a claim copied from a patent for the purpose of provoking an interference is non-ambiguous, the question of whether the application has written description support for the claim is decided independently of the disclosure of the patent from which the claim was copied, but, if the language in the claim is ambiguous, then the claim is first interpreted in light of the specification of the patent before turning to the applicant's specification to see if the applicant has written description support for the so-interpreted claim.

Comment: This opinion unfortunately prolongs the confusion engendered by the patent inconsistency between the court's holdings in DeGeorge v. Bernier and Woods v. Tsuchiya,[29] in which the court expressly refused to interpret count language in light of the specification from which it was taken despite the court's holding that the language of the count was ambiguous.[30] In addition, Spina seems to be flatly contrary to the court's better reasoned opinion in Hemstreet v. Rohland[31]:

If Rohland had intended to limit his claim. . . [in the manner for which he argued on appeal], it seems to us he would likely have . . . [written his claim more narrowly]. Having drawn a broader claim, he ran the risk that others might be able to support the language selected with specifically different structures, and he may not now urge that his language should only be read in light of his disclosure merely because the language originated with him. Kuppenbender v. Riszdorfer, 26 CCPA 1436, 1440-42, 104 F.2d 791, 795-96, 42 USPQ 127-131-32 (1939); Wirkler v. Perkins, 44 CCPA 1005, 1008-09, 245 F.2d 502, 504-05, 114 USPQ 284, 286 87 (1957).[32]

III. Interference Procedure

A. An Undefended Appeal from a Holding of Invalidity or Unpatentability
in an
Interference Is Treated Like an Appeal in an Ex Parte Case

In re Van Geuns, 946 F.2d 845, 20 USPQ2d 1291 (Fed. Cir. 1991) (opinion delivered by Circuit Judge Rader for a panel that also consisted of Circuit Judges Archer and Plager), started life as Van Geuns v. Brown. The appeal stemmed from a one-count interference in the PTO involving Van Geuns's application, Brown's patent, and Brown's reissue application. The board determined that the subject matter of the count was unpatentable over prior art available against both parties, and it accordingly held that all of the claims in Van Geuns's application and in Brown's reissue application corresponding to the count were unpatentable and that all of the claims in Brown's patent corresponding to the count were invalid.[33] Van Geuns then appealed to the Federal Circuit under 35 USC 141 naming Brown as the appellee, while Brown brought a quasi de novo civil action under 35 USC 146 against Van Geuns in the United States District for the District of Delaware.[34] Brown filed two motions (discussed below) as appellee in the Federal Circuit, but he did not file a notice of election under 35 USC 141, which would have required Van Geuns to file a 35 USC 146 quasi de novo civil action against him. For his part, Van Geuns not only entered an appearance in the quasi de novo civil action, he filed a counterclaim (the nature of which is not disclosed in the court's opinion) against Brown.

On appeal, Van Geuns moved to enjoin Brown's "parallel litigation"[35] in the district court. Brown opposed that motion and moved to remand Van Geuns's appeal to the PTO or, in the alternative, to stay the appeal pending completion of the district court litigation.[36] Not surprisingly, Van Geuns's motion was denied.[37] Very surprisingly, however, Brown's motions were denied, not on the merits, but on the ground that Brown was not a party to the appeal.[38]

The basis both for the court's decision denying Brown's motions and for its decision to change the caption of this appeal from Van Geuns v. Brown to In re Van Geuns was its assertion that:

Because his [i.e., Van Geuns's] appeal to this court contests only the Board's patentability determinations on claims corresponding to the interference count, Van Geuns' case takes the form of a traditional ex parte appeal to this court from a Board determination. Specifically, Van Geuns' appeal features no adverse entity other than the Commissioner. Brown does not oppose Van Geuns on the question of the interfering subject matter's patentability. Both contend that the interfering claims are patentable. As in all ex parte cases, the entity adverse to Van Geuns is the PTO Commissioner. The Commissioner refuses to grant Van Geuns a patent because the Board found Van Geuns' claims unpatentable in an interference. Thus, the Van Geuns' appeal presents the same issues with the same adverse entities as other ex parte appeals.[39]

From this basis the court reasoned that "Brown is not a party to Van Geuns' appeal in this court on patentability of Van Geuns' claims."[40] That led to the denial of Brown's motions, since "Brown may not move to remand a case to which he is not a party."[41] In addition, the court reasoned that, since the Commissioner, not Brown, was the true appellee in the case before it, not only should the caption of the case be changed, but "the Commissioner must furnish this court a brief justifying the Board's decision to deny Van Guens' application [sic; claims]."[42]

Comments: The court's action in recharacterizing the appeal as an ex parte appeal rather than an inter partes appeal raises some interesting questions.

First, the possibility of inconsistent results is more of a concern than the court seemed to realize. The court said that:

The district court complaint . . . features different issues . . . [than the appeal]. *** [T]he Delaware district court case raises issues beyond the purview of Van Geuns' case. In the first place, Brown's successor seeks district court review of the Board's determination that Brown's claims, not those of Van Geuns, are unpatentable. Further, Brown's successor contests the propriety of the Board's rejection of Brown's charges of inequitable conduct against Van Geuns."[43]

However, while the district court case may "feature" an issue in addition to the issue on appeal to the Federal Circuit, the patentability issue on appeal to the Federal Circuit will of necessity be very closely related to the patentability issue before the district court, since both parties' claims were grouped with the same count. Nevertheless, the Federal Circuit's predecessor had previously accepted the fact that the alternative routes of review of decisions in interferences can lead to inconsistent results,[44] and here the fact that Brown's successor will have the right to submit additional evidence not available to Van Geuns in his appeal could even justify the inconsistent results.

Second, there appears to be no question but that the appeal proceeds as a normal inter partes appeal where the parties disagree over the patentability of the appellant's claim(s) corresponding to the count(s) in the PTO. See, e.g., Chester v. Miller, 906 F.2d 1574, 15 USPQ2d 1333 (Fed. Cir. 1990). However, will the court now require the Commissioner to submit an additional brief,[45] either whenever patentability over the prior art is an issue or in special cases where there are other issues on appeal and the appellee does not contest the patentability over the prior art issue with sufficient vigor?

Third, will the court make its determination of whether or not an appeal from an interference decision "takes the form of a traditional ex parte appeal . . ." based on the parties' positions before the board or the parties' positions before it? In Chester v. Miller and in Van Geuns, the parties' positions below and before the court were the same.[46] However, suppose that, on appeal, Brown had indicated his intent to argue in support of the board's judgment?[47] Would that mean that the appeal would be an ordinary inter partes appeal, a la Chester v. Miller, rather than a galvanized ex parte appeal a la In re Van Geuns?

Fourth, in Perkins v. Kwon, 886 F.2d 325, 12 USPQ2d 1328 (Fed. Cir. 1989), the board entered judgment against both parties, Perkins appealed, Kwon did not oppose the appeal, and the court did not recharacterize the appeal as an ex parte appeal.[48] In future cases, will the court follow the practice it followed in Van Geuns or will it follow the practice it followed in Perkins?[49]

Fifth, if Van Geuns's appeal is ex parte, isn't Brown's civil action equally ex parte?[50] Or does the fact that Brown's complaint in the civil action asserted issues in addition to the 36 USC 103 patentability issues mean that that action remains an inter partes action? However, if the civil action is properly recharacterizable as an ex parte action, shouldn't it have been brought in the United States District Court for the District of Columbia under 35 USC 145 rather than in the United States District Court for the District of Delaware under 35 USC 146?[51] Moreover, if it is an ex parte matter, doesn't it follow that the district court lacks jurisdiction to entertain Van Geuns's counterclaim. [52]

Sixth, 35 USC 141 covers two different types of appeals. The relevant sentence with respect to ordinary ex parte patent appeals is the first sentence, which reads as follows:

An applicant dissatisfied with the decision in an appeal to the Board of Patent Appeals and Interferences under section 134 of this title may appeal the decision to the United States Court of Appeals for the Federal Circuit.

However, although Van Geuns was an applicant, the court could not have thought that this sentence applied because a decision in an interference is not a "decision in an appeal to the Board of Patent Appeals and Interferences under. . . [35 USC 134]." The relevant sentence with respect to ordinary inter partes appeals is the third sentence, which reads in relevant part as follows:

A party to an interference dissatisfied with the decision of the Board of Patent Appeals and Interferences on the interference may appeal the decision to the United States Court of Appeals for the Federal Circuit. . . .

Since both applicant interferents (like Van Geuns) and patentee interferents (like Brown) are "part[ies] to an interference," that language, as construed by the court in this case, would seem to permit either a patentee interferent or an applicant interferent to take an ex parte appeal to the Federal Circuit in situations such as this one. However, the next part of the third sentence of 35 USC 141 dictates the removal procedure:

but such appeal shall be dismissed if any adverse party to such interference, within twenty days after the appellant has filed notice of appeal in accordance with section 142 of this title, files notice with the Commissioner that the party elects to have all further proceedings conducted as provided in section 146 of this title.

The court has now told us that the Commissioner is the adverse party in interference appeals such as this one. Does that mean that the Commissioner can file a notice of election (with himself!) -- which, in this case, would have required Van Geuns to file a civil action against the Commissioner under 35 USC 146 in either the United States District Court for the District of Columbia or the United States District Court for the Eastern District of Virginia? That would certainly seem to follow from the court's holding. However, the second paragraph of 35 USC 146 says that "The Commissioner shall not be a necessary party [to an action under 36 USC 146,] but he shall be notified of the filing of the suit by the clerk of the court in which it is filed and shall have the right to intervene." (Emphasis supplied.) That would mean that the Commissioner would have the right to intervene in a case in which he or she is already a party -- a result which is nonsensical. Since Congress could not have intended that nonsensical result, it is my opinion that the court's reading of 35 USC 141 could not have been intended by Congress.

B. "Good Cause" Excusing Failure to Present Evidence With an Initial Showing
Under 37 CFR 1.608(b)

Unlike most patent prosecution, an applicant's request for an interference with a patent can be a sudden death tactic -- at least for the applicant. In Huston v. Ladner, 973 F.2d 1564, 23 USPQ2d 1910 (Fed. Cir. 1992) (opinion delivered by Circuit Judge Lourie and joined by Circuit Judge Plager; dissent by Circuit Judge Newman), the examiner-in-chief held that the party Huston et al.'s initial 37 CFR 1.608(b) showing was defective and placed it under an order to show cause why judgment should not be entered against it. The assignee of the party Huston et al. thereupon retained new counsel who submitted a supplemental 37 CFR 1.608(b) showing and, pursuant to 37 CR 1.617(b),[53] "attempted to show 'good cause' why the additional evidence was not submitted with the initial priority showing by asserting that . . . [its] attorney misrepresented his competence and ability in interference matters and was grossly negligent in filing the original submission."[54] A panel of the board at final hearing "affirmed the Examiner's decision that the original showing was inadequate"[55] and "stated that it could not consider the additional evidence submitted in response to the Order because Huston had failed to show good cause why the evidence was not presented initially."[56] On appeal, the party Huston et al. did not argue that its initial showing was adequate, and of course whether its combined initial and supplemental showing was adequate was not an issue because the board had refused to let the supplemental showing in. The only issue was whether the board had abused its discretion[57] in holding that the party Huston et al. did not show the required "good cause" for failure to present the additional evidence with its initial 37 CFR 1.608(b) showing.[58]

This case gets downright nasty, at least from the perspective of the party Huston et al.'s prior counsel. According to the court, "Huston contends that he was entitled to supplement the original showing because the original attorney misrepresented to . . . [the party Huston et al.'s assignee] his competence and ability to present Huston's prima facie showing under 37 C.F.R. §1.608(b) and because he acted in a reckless and grossly negligent manner in filing the original evidence."&