Jurisdiction Of The Board Of Patent Appeals And Interferences To Decide Infringement Questions Under The Doctrine Of Equivalents

JURISDICTION OF THE BOARD OF PATENT APPEALS AND INTERFERENCES TO DECIDE INFRINGEMENT QUESTIONS UNDER THE DOCTRINE OF EQUIVALENTS¹

by Charles L. Gholz ²

I. Introduction

In his article entitled "The Patent invalidity/Infringement Parallel: Symmetry or Semantics?," 71 JPTOS 895 (1989), Roy H. Wepner, Esq. discussed a number of interesting parallels between doctrine of equivalents issues and obviousness issues. However, I think that there is at least one more PTO practice parallel involving the doctrine of equivalents that Mr. Wepner did not discuss. Specifically, I think that it is possible that a decision of the Board of Patent Appeals and Interferences on an interference-in-fact issue can have a res judicata effect in a subsequent infringement litigation. Or, to express the same thought in a more eye-catching fashion, I think that the board has jurisdiction to decide infringement questions under the doctrine of equivalents -- at least in some cases. This no doubt startling assertion is based on a parallelism I see between the definition of the board's jurisdiction that one can derive from 37 CFR 1.601(i) and (n) and the doctrine of equivalents, when both are considered in light of the definition of interference estoppel contained in 37 CFR 1.658(c).

II. Interference-in-Fact Issues in the PTO

37 CFR 1.601(i) defines an interference as "a proceeding instituted in the Patent and Trademark Office before the Board to determine any question of patentability and priority of invention between two or more parties claiming the same patentable invention." 37 CFR 1.601(n) in turn defines the terms "same patentable invention" and "separate patentable invention" as follows:

Invention "A" is the "same patentable invention" as an invention "B" when invention "A" is the same as (35 U.S.C. 102) or is obvious (35 U.S.C. 103) in view of invention "B" assuming invention "B" is prior art with respect to invention "A". Invention "A" is a "separate patentable invention" with respect to invention "B" when invention "A" is new (35 U.S.C. 102) and non-obvious (35 U.S.C. 103) in view of invention "B" assuming invention "B" is prior art with respect to invention "A".

In the PTO, interferences are declared between or among applications or between or among at least one application and one or more unexpired patents when an examiner determines that they each contain at least one otherwise patentable claim to the same patentable invention.³ In the words of 37 CFR 1.601(i):

An interference may be declared between two or more pending applications naming different inventors when, in the opinion of an examiner, the applications contain claims for the same patentable invention. An interference may be declared between one or more pending applications and one or more unexpired patents naming different inventors when, in the opinion of an examiner, any application and any unexpired patent contain claims for the same patentable invention.

However, the preliminary determination of the examiner is not conclusive. 37 CFR 1.601(j) states that:

An "interference-in-fact" exists when at least one claim of a party which corresponds to a count and at least one claim of an opponent which corresponds to the count define the same patentable invention.

and 37 CFR 1.633(b) states that a party may file:

A motion for judgment on the ground that there is no interference-in-fact. A motion under this paragraph is proper only if: (1) The interference involves a design application or patent or a plant application or patent or (2) no claim of a party which corresponds to a count is identical to any claim of an opponent which corresponds to that count. See § 1.637(a).

Finally, throughout the following, bear in mind that 37 CFR 1.658(c) provides that:

A judgment in an interference settles all issues which (1) were raised and decided in the interference, (2) could have been properly raised and decided in the interference by a motion under § 1.633(a) through (d) and (f) through (j) or § 1.634 and (3) could have been properly raised and decided in an additional interference with a motion under § 1.633(e). A losing party who could have properly moved, but failed to move, under §§ 1.633 or 1.634, shall be estopped to take ex parte or inter partes action in the Patent and Trademark Office after the interference which is inconsistent with that party's failure to properly move, except that a losing party shall not be estopped with respect to any claims which correspond, or properly could have corresponded, to a count as to which that party was awarded a favorable judgment.

While the PTO does not purport to indicate in its rules the res judicata and collateral estoppel (or claim preclusion and issue preclusion) effect of board decisions in subsequent litigation, the courts have not hesitated to give the board's decisions such effect. See generally Gholz, "Collateral Estoppel Effect of Decisions by the Board of Patent Interferences," 65 JPOS 67 (1983).

When might the decisions of the board on interference-in-fact questions decide infringement issues in subsequent litigation? Consider, for instance, the following two scenarios, both of which are based on the famous case of Moore v. McGrew, 170 USPQ 149 (POBI 1971).

A. The First Scenario

One inventor (A) has invented a particular chemical compound having an oxygen radical at a particular place in the compound. The other inventor (B) has invented the same chemical compound except that it has a sulfur radical at the place where A's compound has an oxygen radical.⁴ An examiner concludes that, while each compound is novel and nonobvious over the prior art, each is an example of a well known category of compounds which is well known to have both oxy and thio (sulfur) species, that the oxy and thio species are well known to differ from each other in certain predictable ways, and that A's oxy species differs from B's thio species in just the same way that the oxy species of this type of compound normally differ from the thio species of this type of compound. Moreover, it is well known in the art that, if one has the oxy species, one can convert it to the thio species and vice versa by a simple process of transmogrification and that both the oxy species and the thio species are useful as paint thinners. Accordingly, the examiner forwards the cases to the board with a proposed count containing an X-radical where A has an oxygen radical and B has a sulfur radical and a tag reciting that X can be either oxygen or sulfur.

In the motion period, B files a 37 CFR 1.633(b) motion for a judgment that there is no interference-in-fact.⁵ In support of that motion, B submits evidence that, while compound of this type are well known as paint thinners, and while A's compound is in fact disclosed to function as a paint thinner, his compound (i.e., the sulfur compound) also (and unexpectedly) cures cancer of the eyeball (as well as being a good paint thinner).

The examiner-in-chief rules on the motion either way; it makes no difference for my argument. However, at final hearing the board rules that there is an interference-in-fact.⁶ To keep this interesting, assume that no judicial review is sought of the board's decision, either by appeal to the Federal Circuit under 35 USC 141 or by a civil action under 35 USC 146.

B. The Second Scenario

The second scenario is, in a sense, the opposite of the first. An interference is declared between C and D based on a single count reciting something altogether different. However, C's case contains disclosure of how to make and use the oxy compound, and D's case contains disclosure of how to make and use the thio compound. During the motion period, C moves under 37 CFR 1.633(c)⁷ to add an additional count 2 identical to the single count in the first scenario and to group at least one of his claims and at least one of D's claims with the new count.⁸ Once again, it makes no difference to my argument which way the examiner-in-chief rules, but assume that the board rules at final hearing that count 2 should not be added to the interference because the party's respective claims that C sought to group with the proposed new count do not interfere-in fact. Additionally, assume once again that the party that lost before the board (in this case, C) does not seek judicial review of the board's decision.

III. The Doctrine of Equivalents in Litigation Against the
Party That Lost in the PTO

The party that won in the PTO either maintains its patent (if it was a patentee during the interference) or eventually obtains a patent (if it was an applicant during the interference). Either way, now assume that the party that lost the interference is manufacturing the subject matter of its claim that was grouped with the count that we have been discussing and that the party that won the interference sues the party that lost for infringement of its (i.e., the winning party's) claim that was grouped with the count.

In the first scenario, assume that B is making the thio compound and that A sues B for infringement of A's patent. Since A's patent only contains a claim to the oxy compound,⁹ A must rely on the doctrine of equivalents to assert that B's manufacture of the thio compound infringes his patent. Can A additionally rely on res judicata or collateral estoppel to prevent B from litigating the doctrine of equivalents issue? That is, can A assert that the board's decision is res judicata on the question of infringement?

In the second scenario, assume that D is making the thio compound and that C sues D for infringement of C's patent. This time, C and D both have a patent. It makes no difference to my argument which one of them won the interference on the original count, but C has a patent with his claim to the oxy compound, and D has a patent with his claim to the thio compound. Thus, once again C must rely on the doctrine of equivalents to assert that D's manufacture of the thio compound infringes his patent. This time, can D rely on res judicata or collateral estoppel to prevent C from litigating the doctrine of equivalents issue? That is, can D assert that the board's decision is res judicata on the question of infringement?

IV. The Doctrine of Equivalents in Litigation Against
Third Parties

Now let us further complicate matters by including third parties.

In the first scenario, assume that B's motion was ultimately successful -- that is, that the board held that the thio compound is patentably distinct from the oxy compound. Further assume that your client (who is not B or in privity with B) is making the thio compound, but A sues your client for infringement of his patent, which only contains a claim to the oxy compound. A is relying on the doctrine of equivalents. Can your client rely on Blonder-Tongue estoppel?¹⁰ That is, can you client asset that the board's decision is res judicata on the question of infringement?

In the second scenario, assume that D (who successfully argued that there was no interference-in-fact in the PTO and who has a patent that recites only the thio compound) sues your client (which is making only the oxy compound and which is not C or in privity with C) for infringement of its patent. D is relying on the doctrine of equivalents. Can your client rely on the doctrine of judicial estoppel?¹¹ That is, can your client assert that the board's decision is res judicata on the question of infringement?

V. The Board's Decision May Well Be Entitled to Res
Judicata Effect on the Infringement Issue

For the reasons pointed out in Mr. Wepner's article, the obviousness analysis employed in validity determinations sounds a lot like the analysis employed in doctrine of equivalents determinations. Moreover, 37 CFR 1.601(n) expressly incorporates 35 USC 103 obviousness into the definition used to make interference-in-fact determinations. Accordingly, logic would suggest that the board's decision in each of the cases discussd above is entitled to res judicata effect. However, we need not rely only on sterile logic. Precedent is available as well!

There are two key cases here.

The first key case is Holliday v. Pickhardt, 12 F. 147 (CCSDNY 1882), in which the court indicated that the declaration of an interference in what we would now call a phantom count situation can collaterally stop a defendant from denying infringement. That case differed from the situations discussed above in that it involved a question concerning the identity of the products obtained by two different chemical processes. That is, the Patent Office had found in an interference that the products of the two parties' processes were identical, the party that lost the interference used its process to manufacture a product, and the court held that the determination that the losing party's product was identical to the winning party's patented product was entitled to res judicata effect in the subsequent infringement litigation -- i.e., that the party who had lost the interference was precluded from arguing that its product did not infringe the patent of the party who won the interference. Thus, this opinion does not squarely control the doctrine of equivalents situations discussed above, but it at least is authority for the proposition that a board decision can have res judicata effect on an infringement issue.

The second key case is Coakwell v. United States, 292 F.2d 918, 130 USPQ 231 (Ct. Cl. 1961), in which the Court of Claims held that the decision of the board in an interference is entitled to res judicata effect:

It is obvious that a decree of the District Court [pursuant to 35 USC 146] upholding the action of the Patent Office . . . would be a final adjudication of the question [of priority] and would be res judicata in all other courts, and defendant would not be heard to say in this court that plaintiff was not the first inventor. Where the losing party fails to effectively review the Patent Office action in one of the courts and it becomes final, it is equally binding on the parties.

[The United States, which was the assignee of the losing interferent] has had "its day in court." It had the opportunity to present before the Patent Office and the District Court all the facts and advance all the arguments presented here. It is this opportunity that is the basis of the rule of res adjudicata. We think it should be applied here. Defendant should not be permitted to relitigate an issue already litigated and finally decided.¹²

Since the Coakwell decision is binding on the Federal Circuit under South Corp. v. United States,¹³ it should follow that the Federal Circuit is committed to giving res judicata effect to the interference decisions of the board in subsequent infringement litigation.¹⁴

VI. Conclusion

While the author is aware of no opinion that is squarely on point, it is his opinion that a good argument can be made that the board's decisions on interference-in-fact questions will be entitled to res judicata and collateral estoppel effect in subsequent infringement litigation -- or, to use the words of the title, that the board does have jurisdiction to determine infringement questions under the doctrine of equivalents.

First published in the Journal of Patent and Trademark Office Society (1990), volume 72, pages 334-41.

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Endnotes

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[1].Copyright 1989 by Charles L. Gholz

[2].Partner in Oblon, Spivak, McClelland, Maier & Neustadt, P.C.; Arlington, Virginia.

[3].Interferences between two or more unexpired patents and not involving any pending application can become the subject of a patent-patent interference in a district court under 35 USC 291, which reads as follows:

The owner of an interfering patent may have relief against the owner of another by civil action, and the court may adjudge the question of the validity of any of the interfering patents, in whole or in part. The provisions of the second paragraph of section 146 of this title shall apply to actions brought under this section.

However, for some unfathomable reason the Federal Circuit has treated patent-patent interference in the district courts very differently than interferences in the PTO on the key question of when claims interfere. See Advance Transformer Co. v. Levinson, 837 F.2d 1081, 5 USPQ 2d 1600 (Fed. Cir. 1988), and Albert v. Kevex Corp., 729 F.2d 757, 221 USPQ 202 (Fed. Cir. 1984), reh'g denied, 741 F.2d 396, 223 USPQ 1 (Fed. Cir. 1984), which indicate that the courts may dismiss counts based on 35 USC 291 alleging a patent-patent interference in situations where the PTO would not hesitate to declare an interference between the same claims. Accordingly, such patent-patent interferences presumably do not give rise to the res judicata effects discussed here.

[4].For my purposes, it does not matter whether A and B are both applicants or whether one of them is a patentee or, if one of them is a patentee, whether that party is the senior party or the junior party. The same res judicata effect should be obtained in each case.

[5].Actually, it is not essential to my argument that B file such a motion. Since 37 CFR 1.658(c) provides that "A judgment is an interference settles all issues which . . . could have been properly raised and decided in the interference by a motion under § 1.633.(a) through (d) and (f) through (j) or § 1.634," the same res judicata effect should attach even if B does not file such a motion, but seeks to raise the issue for the first time in the subsequent infringement litigation.

[6].Under the new rules, it makes no difference whether the board at final hearing affirms or reverses the examiner-in-chief's decision on the motion. See Gholz, A Critique of Recent Opinions of the Federal Circuit in Patent Interferences, 69 JPTOS 656, 678-79 (1987), which discusses the old-rule practice, which drew a distinction based on whether the decision on motion was affirmed or reversed.

[7].37 CFR 1.633 reads as follows in relevant part:

A party may file the following preliminary motions:

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(c) A motion to redefine the interfering subject matter by (1) adding or substituting a count, (2) amending an application claim corresponding to a count or adding a claim in the moving party's application to be designated to correspond to a count, (3) designating an application or patent claim to correspond to a count, (4) designating an application or patent claim as not corresponding to a count, or (5) requiring an opponent who is an applicant to add a claim and to designate the claim to correspond to a count. See §1.637(a) and (c).

[8].Neither C's at least one claim nor D's at least one claim sought to be designated as corresponding to the count has to be in the respective party's case at the time that the interference is declared, at least where each party is an applicant. See 37 CFR 1.633(c)(3) and 1.633(c)(5). Moreover, at least the moving party can be a patentee who simultaneously files a reissue application under 37 CFR 1.633(h) containing a new claim sought to be designated as corresponding to the new count.

[9].It is, of course, fundamental that A does not wind up with a claim of scope equivalent to the count despite the fact that he won the interference. See, e.g., Case v. CPC International, Inc., 730 F.2d 745, 749, 221 USPQ 196, 199 (Fed. Cir. 1984), cert. den., 224 USPQ 736 (1984).

[10].Blonder-Tongue estoppel is so named for Blonder-Tongue Labs, Inc. v. University of Illinois Foundation, 402 U.S. 313, 169 USPQ 513 (1971).

[11].Concerning the doctrine of judicial estoppel, see generally, McSherry v. Giannuzzi, ____F. Supp. ____, ____, 12 USPQ2d 1801, 1805-07 (SDNY 1989).

[12].292 F.2d at 920-21, 130 USPQ at 234.

[13].690 F.2d 1368, 215 USPQ 657 (Fed. Cir. 1982) (in banc).

[14].There used to be a long standing dichotomy in the courts over whether decisions of the PTO in interferences were entitled to res judicata effect in subsequent litigation. See generally Gholz, "Collateral Estoppel Effect of Decisions by the Board of Patent Interferences," 65 JPOS 67 (1983). However, the Coakwell opinion placed the Court of Claims squarely in the camp of those courts that held that the PTO's determinations are entitled to res judicata effect.