Practicing Under The New Patent Interference Rules And New Rule 131
PRACTICING UNDER THE NEW PATENT INTERFERENCE
RULES AND NEW RULE 131
by Charles L. Gholz 
The extensive amendments to the interference rules effective April 21, 1995, have made numerous changes to the rules. While most of those changes are theoretically non-substantive, they are going to make a tremendous difference to the "look and feel" of interference practice. Moreover, CAPJ McKelvey is already at work on a new package of proposed amendments which may be effective before the year is out. In fact, perhaps the most significant lesson to be learned is that, after a lengthy period of stagnation in the rules, the Office is now willing to consider frequent rule changes in an attempt to "fine tune" and continuously improve the rules.
There is no single thread that runs through all of the rule changes. However, the most common apparent "ulterior motive" in the rule changes is to speed things up. That is, of course, in response to the frequent complaints from the bar that new rule interferences, which were designed to be much speedier than old rule (i.e., pre-1985) interferences, were in danger of becoming just as slow as old rule interferences.
As for new 37 CFR 1.131, it is primarily a straightforward extension of the previous 37 CFR 1.131 to permit proof of inventive activities in NAFTA and GATT countries.
II. Practicing Under The New Patent Interference Rules
A. Suggestions of Claims to Applicants
The whole make-or-break letter practice became unnecessary in most cases with the adoption in 1985 of the practice of grouping all the claims that define the same patentable invention with a single count. Over the intervening years, the make-or-break letter practice has been gradually sinking into desuetude, and more and more interferences are simply declared without warning.
Now 37 CFR 1.605 has been amended to provide in relevant part that:
If no claim in an application is drawn to the same patentable invention claimed in another application or patent, the examiner may suggest that an applicant present a claim drawn to an invention claimed in another [sic; the other] application or patent for the purpose of an interference with another [sic; the other] application or a [sic] patent. [Emphasis supplied.]
However, it will presumably be a very rare case where an examiner will have an occasion to do that. In the ordinary case, the examiner will simply come to the conclusion that the two cases interfere, fill out a PTO form 850, and forward the files to the board. That should save several months in the overall process.
However, the amendment to 37 CFR 1.605 is not without a cost. Under the previous practice, when one received a make-or-break letter, that allowed one to carefully review the file, polish up the specification and claims in the privacy of ex parte practice, and, if appropriate, file a certified translation of a foreign priority application along with a request that one be given the benefit of the filing date of the foreign priority application in the declaration of the interference. Now one will have to file a 37 CFR 1.633(c)(2) motion to amend one's claims and a 37 CFR 1.633(f) motion for the benefit of the foreign priority date. Not only is that going to be more expensive, but the fact that, as the movant, one has the burdens of proof and persuasion means that one will be unable to accomplish the desired result (i.e., a claim amendment or the obtaining of the benefit of the foreign filing date) in many situations where one was formerly able to do so.
B. Purported Overruling of In re Sasse
37 CFR 1.607(a) has been amended by adding a new requirement (contained in 37 CFR 1.607(a)(6)) that an applicant requesting an interference with a patent:
Explain [ ] how the requirements of 35 USC 135(b) are met, if the claim presented or identified under paragraph (a)(4) of the section was not present in the application until more than one year after the issue date of the patent.
The intended effect of the amendment is to overrule or vitiate In re Sasse, 629 F.2d 675, 207 USPQ 107 (CCPA 1980) (Rich, J.), which held that the PTO cannot make ex parte rejections based on 35 USC 135(b). That is, under Sasse, the patentee can raise failure to comply with 35 USC 135(b) by way of a 37 CFR 1.633(a) motion, but the PTO cannot reject claims on the basis of non-compliance with 35 USC 135(b). Practically speaking, this has meant that the PTO has had to declare interferences in situations where, prior to Sasse, it would not have done so.
When I commented that the proposed amendment to 37 CFR 1.607(a) was ultra vires, the PTO responded as follows:
The comment argues that In re Sasse, 629 F.2d 675, 207 USPQ 107 (CCPA 1980), precludes an examiner from relying on § 135(b) to refuse to declare an interference and that Sasse can only be overruled by statute or decision of the Federal Circuit in banc, citing Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). The argument in the comment is not persuasive. Sasse held that a claim added in violation of § 135(b) cannot be rejected by [the] PTO under that statute; it did not hold that [the] PTO cannot refuse to declare an interference where all of an applicant's claims that are proposed to correspond to the count fail to satisfy the statute. In fact, the court specifically held that the effect of § 135(b) is that "a procedural statutory bar arises proscribing the instigation of interferences after a specified time interval." 629 F.2d at 680, 207 USPQ at 110 (original emphasis).
However, I remain unpersuaded. If the PTO cannot reject the applicant's claims, what is it going to do" As the court said in Markman v. Westview Instruments, Inc., 52 F.3d 967, 985 n. 14, 34 USPQ2d 1321, 1334 n. 14 (Fed. Cir. 1995) (in banc), "There is no discretion on the part of the PTO as to whether or not to grant the patent -- if the statutory requirements are met, a patent is issued." So, should the PTO allow the application, thereby knowingly issuing two patents drawn to the same invention" Of course not!
Obviously, the court's decision in Sasse placed the PTO in an embarrassing position. However, until such time as the court overrules Sasse, I think that the PTO's only solution is to declare the interference and to allow the patentee to raise the 35 USC 135(b) issue by way of a 37 CFR 1.633(a) motion.
C. The Expanded PTO Form 850
In many interferences, the way that the counts are formulated and the way that the claims are grouped with the counts are mystifying -- to say the least. Now, however, 37 CFR 1.609 has been amended to require the examiner to supply the following information in the PTO form 850:
(1) The proposed count or counts and, if there is more than one count proposed, explaining why the counts define different patentable inventions;
(2) The claims of any application or patent which correspond to each count, explaining why each claim designated as corresponding to a count is directed to the same patentable invention as the count;
(3) The claims in any application or patent which do not correspond to each count and explaining why each claim designated as not corresponding to any count is not directed to the same patentable invention as any count . . . .
The CAPJ has warned the bar not to expect a great deal of detail in the examiners' explanations, and no doubt he is correct. However, if the examiners give us anything substantive at all, we will be miles ahead of where we are now in terms of preparing our 37 CFR 1.633(c) motions. At least we will be able to point to and, if appropriate, criticize the examiners' logic or lack of logic.
D. Money Sanctions
One of the changes to the interference rules that has attracted the most attention is the addition to 37 CFR 1.616 of a new sanction:
Awarding compensatory expenses and/or compensatory attorney fees . . . .
The CAPJ has indicated that he anticipates that this power will be seldom used, and I hope that he is right -- notwithstanding an occasional daydream involving boiling opposing counsel in oil or the like. Interference practice is extremely civil, and many if not most of the people handling interferences are members of the regular interference bar. However, we do get a wild man (or woman) now and again!
One obvious question is how the board will decide on the amount of monetary sanctions -- particularly in light of all the trouble that the Federal Circuit has had deciding on monetary sanctions. I (among others) put that question to the PTO and received the following answer:
Other comments questioned how the Board intends to handle proof of amounts of compensatory expenses and/or attorney fees and expressed the hope that attorney fee awards will not be de facto discriminatory as between highly paid outside counsel and in-house counsel without fees or billing records. The matter of how to prove amounts of compensatory expenses and/or attorney fees will be handled on a case-by-case basis.
Not much help there, but perhaps we will have a published opinion or two on the subject in due course.
E. Sanctions for Failure to Provide Foreign Discovery
One of the other changes to the interference rules that attracted a great deal of attention was the addition of 37 CFR 1.616(c), which reads as follows:
To the extent that an administrative patent judge or the Board has authorized a party to compel the taking of testimony or the production of documents or things from an individual or entity located in a NAFTA country or a WTO member country concerning knowledge, use, or other activity relevant to proving or disproving a date of invention (§1.671(h)), but the testimony, documents[,] or things have not been produced for use in the interference to the same extent as such information could be made available in the United States, the administrative patent judge or the Board shall draw such adverse inferences as may be appropriate under the circumstances, or take such other action [as may be] permitted by statute, rule, or regulation, in favor of the party that requested the information in the interference, including imposition of appropriate sanctions under paragraph (a) of this section.
However, this is almost a non-issue until such time as the board gets real discovery powers. If we can't get meaningful discovery orders against an individual or entity located in the U.S., why would we think that we will be able to get meaningful discovery orders against an individual or entity located outside the U.S.?
F. Preliminary Motions in Response to an Order to Show Cause Under 37 CFR 1.617(a)
If an APJ decides that a 37 CFR 1.608(b) showing is deficient, the interference is declared, but the applicant is concurrently put under a 37 CFR 1.617(a) order to show cause why judgment should not be entered against it. Such orders have led to the early termination of many an interference requested by an attorney or agent who was not familiar with the requirements of 37 CFR 1.608(b). However, even if the attorney or agent who prepared the 37 CFR 1.608(b) showing was familiar with the requirements of 37 CFR 1.608(b), he or she could get into serious trouble if (1) the count was not what he or she had asked for, (2) the applicant was not given the benefit of a filing date that the attorney or agent had expected it to get, or (3) the patentee was given the benefit of a filing date that the attorney or agent had not expected it to get.
To handle situations where the attorney or agent knew what he or she was doing but still got into trouble, 37 CFR 1.617(b) has been amended to provide that a response to a show cause order under 37 CFR 1.617(a) "may include an appropriate preliminary motion under § 1.633(c), (f)[,] or (g). . . ." In addition, 37 CFR 1.617(d) has been amended to provide that the opponent or all of the opponents "may oppose any preliminary motion filed under § 1.633(c), (f)[,] or (g) by the applicant within a time set by the administrative patent judge," and 37 CFR 1.617(e) has been amended to provide that, "Within a time authorized by the administrative patent judge, an applicant may file a reply to any . . . opposition filed by any opponent."
G. Clarification of the Standards for Amending Preliminary Statements
The case law has long drawn a major distinction based on whether a motion for leave to amend a preliminary statement was filed before or after the preliminary statements were opened. However, 37 CFR 1.628(a) did not. According to it, prior to the recent amendment:
The motion [for leave to file a corrected preliminary statement] . . . shall show that the correction is essential to the ends of justice. . . .
- As amended, however, 37 CFR 1.628(a) says that:
If filed on or after the date set by the administrative patent judge for service of preliminary statements, the motion [for leave to file a corrected preliminary statement] shall . . . show that correction of the error is essential to the interest of justice.
If the motion is filed before the date set by the APJ for service of preliminary statements, all that is required is that "The motion shall be supported by an affidavit stating the date the error was first discovered, shall be accompanied by the corrected [preliminary] statement[,] and shall be filed as soon as practical after discovery of the error."
H. Overruling of In re Van Geuns
In re Van Geuns held that claims designated as corresponding to a count fall with the count if the count is anticipated by the prior art, but that, if the count is unpatentable over the prior art, the patentability of the claims designated as corresponding to the count must be determined on a claim-by-claim basis -- thereby overruling a large number of board opinions. The court's ruling in Van Geuns was extremely controversial, and the PTO published an earlier proposal to overrule it. However, that proposal encountered a great deal of opposition and was never implemented. Now, however, the PTO has overruled Van Geuns very elegantly by providing in amended 37 CFR 1.633(a) that a 37 CFR 1.633(a) motion "shall separately address each claim alleged to be unpatentable." That is, patentability/validity questions in interferences are to be determined on a claim-by-claim basis, just like patentability/validity questions in any other context.
Incidentally, why do I think that the PTO lacks the authority to overrule In re Sasse but has the authority to overrule In re Van Geuns? Because In re Sasse is the court's interpretation of a statute, whereas In re Van Geuns is the court's interpretation of a PTO rule. The PTO can't change the statute, but it can change its own rules if it doesn't like how the court has interpreted them.
I. Partial Overruling of In re Spina
In re Spina held 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." This holding treated a claim copied in order to provoke an interference rather like a cowbird in a nest of robins. That is, it was found in the alien nest, but it never lost its identity as an interloper. This led to bizarre interpretation problems, including interpreting the same language in two different claims in the same application differently -- because one claim was copied from someone else's patent and was therefore interpreted in light of the specification of that patent, while the other was an "indigenous" claim and was therefore interpreted in light of the specification of that patent. Moreover, since few claims are copied literally, it led to bizarre attempts to decide whether a claim was close enough to the base claim (i.e., the claim upon which it was modeled) so that the rule of In re Spina applied or whether it was different enough from the base claim so that the rule of In re Spina did not apply.
Happily, the rule of In re Spina is now a thing of the past, at least in most cases. According to amended CFR 1.633(a):
In deciding an issue raised in a motion filed under this paragraph (a), a claim will be construed in light of the specification of the application or patent in which it appears.
Query: Why is this rule of interpretation limited to 37 CFR 1.633(a) motions? There is at least an equal need to overrule In re Spina with respect to 37 CFR 1.633(b) and (c) motions!
J. Partial Adoption of Blackmore v. Hall
Blackmore v. Hill, 1905 C.D. 561 (Comm'r 1905), makes the point that the same claim can mean different things when appended to different specifications, because the claim language is interpreted in light of the specification to which it is appended. The PTO has now recognized that principle in 37 CFR 1.633(b) -- but, curiously, only when the claim language in questions is in means-plus-function format. According to amended 37 CFR 1.633(b):
When claims of different parties are presented in "means plus function" format, it may be possible for the claims of the different parties not to define the same patentable invention even though the claims containing the same literal wording.
Query: Why doesn't the PTO recognize that the same is true of claims not in means-plus function format? The then Commissioner said that ninety years ago, it was true then, and it's still true now!
K. Second Round 37 CFR 1.633(h) Motions
Under 37 CFR 1.633(i), an applicant interferent whose claim is attacked in a first round 37 CFR 1.633(a) motion has a right to file a second round 37 CFR 1.633(c)(2) motion to amend that claim. However, prior to the recent amendments, a patentee interferent whose claim was attacked in a first round 37 CFR 1.633(a) motion did not have the right to file a second round 37 CFR 1.633(h) motion to amend that claim. Now, however, 37 CFR 1.633(i) has been amended to provide that:
When a motion is filed under paragraph (a), (b), or (g) of this section. an opponent, in addition to opposing the motion, may file . . . a motion to add a reissue application to the interference under paragraph (h) of this section.
However, while this is certainly good news for patentee interferents, once again there is a cost. A patentee interferent in this situation that fails to file a timely second round 37 CFR 1.633(h) motion will be estopped under 37 CFR 1.658(c) to do so in post-interference ex parte practice.
L. Automatically Deferring Decision on Most Preliminary Motions to Final Hearing
The APJ's have always had discretion to defer selected ones of the preliminary motions to final hearing. However, under amended 37 CFR 1.640(b):
Unless an administrative patent judge or the Board is of the opinion that an earlier decision on a preliminary motion would materially advance the resolution of the interference, decision on a preliminary motion shall be deferred to final hearing.
This is going to make an enormous change in the practice! My prediction is that the APJ's will very seldom be "of the opinion that an earlier decision on a preliminary motion would materially advance the resolution of the interference. . . ." Instead. in most cases we will be going straight into the testimony period as soon as the preliminary motions, oppositions, and replies are all in. That will obviously mean that we will save the eighteen months to two years that it is currently taking to get decisions on preliminary motions, but it will also mean that we will be taking priority testimony in many cases which would currently go to final hearing on a patentability/validity issue without our ever taking priority testimony.
M. Order to Show Cause Under 37 CFR 1.641
The previous wild and wooly practice under 37 CFR 1.641 has been considerably regularized and clarified by amended 37 CFR 1.641, which now provides that, in response to an APJ's 37 CFR 1.641 show cause order:
each party may present its views, including any argument and any supporting evidence, and, in the case of the party whose claim may be unpatentable, any appropriate preliminary motions under §§ 1.633(c), (d)[,] and (h).
(b) If a party timely files a preliminary motion in response to the order of the administrative patent judge, any opponent may file an opposition (§ 1.638(a)). If an opponent files an opposition, the party may reply (§1.638(b)).
(c) After considering any timely filed views, including any timely filed preliminary motions under §1.633, oppositions[,] and replies, the administrative patent judge shall decide how the interference shall proceed.
N. Opening Testimony Substantially Limited to Affidavits
Prior to the recent amendments, one had the option of presenting one's opening testimony either by affidavits or by depositions. If one put the evidence on by way of depositions, one's opponent was at an enormous disadvantage (remember, there is no real discovery in interferences, so the opponent didn't know what a witness was going to say until he or she heard the witness), but there was always the chance that one's witness would put his or her foot in his or her mouth. If one put the evidence on by way of affidavits, the testimony probably went in
in the best possible style, but one's opponent would be loaded for bear by the time that cross examination rolled around.
Thus, the previous system had pros and cons for the parties ‹ but the pros were apparently outweighed by one enormous con for the board. It is ten times harder to make sense out of a deposition transcript than it is to make sense out of a testimonial affidavit. Accordingly, we now have 37 CFR 1.672(a), which reads as follows:
Unless testimony must be compelled under 35 U.S.C. 24, compelled from a party, or compelled in a foreign country, testimony of a witness shall be taken by affidavit in accordance with this subpart. Testimony which must be compelled under 35 U.S.C. 24, compelled from a party, or compelled in a foreign country shall be taken by oral deposition.
Comment: This change is another one which should speed interference practice up. The APJ's will be able to review the records much faster now than they did before, which should shorten the average time from final hearing to decision.
III. Practice Under New Rule 131
A. Extension of 37 CFR 1.131 to Inventive Activities Taking Place in a NAFTA or a WTO
Country After the Effective Dates
37 CFR 1.131(a) has been amended in a fairly straightforward fashion to permit proof of inventive activities in a NAFTA or WTO country. As amended, 37 CFR 1.131(a) is broken into two subsections, the first of which reads as follows:
(1) When any claim of an application or a patent under reexamination is rejected under 35 U.S.C. 102(a) or (e), or 35 U.S.C. 103 based on a U.S. patent to another which is prior art under 35 U.S.C. 102(a) or (e) and which substantially shows or describes but does not claim the same patentable invention, as defined in 37 CFR 1.601(n), or on reference to a foreign patent or to a printed publication, the inventor of the subject matter of the rejected claim, the owner of the patent under reexamination, or the party qualified under 37 CFR 1.42, 1.43[,] or 1.47, may submit an appropriate oath or declaration to overcome the patent or publication. The oath or declaration must include facts showing a completion of the invention in this country or in a NAFTA or WTO member country before the filing date of the application on which the U.S. patent issued, or before the date of the foreign patent, or before the date of the printed publication. When an appropriate oath or declaration is made, the patent or publication cited shall not bar the grant of a patent to the inventor or the confirmation of the patentability of the claims of the patent, unless the date of such patent or printed publication is more than one year prior to the date on which the inventor's or patent owner's application was filed in this country.
Nothing very exciting there.
B. Transitional Problems
The second subsection of 37 CFR 1.131(a) reads as follows:
(2)A date of completion of the invention may not be established under this section before December 8, 1993, in a NAFTA country, or before January 1, 1996, in a WTO Member [sic; member] country other than a NAFTA country.
There are at least two interesting points here.
The first interesting point about 37 CFR 1.131(a)(2) is that the PTO has apparently decided not to read the transitional provision of the statute literally. That provision reads as follows:
(2) An applicant for a patent, or a patentee, may not establish a date of invention for purposes of title 35, United States Code, that is earlier than 12 months after the date of entry into force of the WTO Agreement [i.e., that is earlier than January 01, 1996] with respect to the United States by reference to knowledge or use, other activity, in a WTO member country, except as provided in sections 119 and 365 of such title.
Since both Canada and Mexico are WTO member countries well as NAFTA countries, it is arguable that the legislation implementing GATT has taken away from Canada and Mexico what the legislation implementing NAFTA gave them. However, the PTO has apparently decided that that is not the case.
The second interesting point about 37 CFR 1.131(a)(2) is that it arguably authorizes proof of conception and diligence dates prior t December 08, 1993 (for NAFTA countries) and January 01, 1996 (for non-NAFTA WTO countries) so long as the completion of the invention (i.e., the reduction to practice) took place on or after that date.
The next few years of interference practice should see some exciting changes. As for practice under 37 CFR 1.131, there will be little substantive change -- but, of course, the practice will be available in many more cases.
First published in the Journal of Patent and Trademark Office Society, volume 77 (1995), pages 858-70.
.This is a slightly edited version of a paper delivered on May 18, 1995 at the conference entitled GATT-Related Changes in PTO Patent Rules sponsored by the Intellectual Property Owners.
.Copyright 1995 Charles L. Gholz; Oblon, Spivak, McClelland, Maier & Neustadt, P.C. Arlington, Virginia.
.A situation where an applicant once had one or more claims drawn to the same patentable invention as is claimed in the target patent or application but cancelled that claim or those claims pursuant to a restriction requirement would presumably be one such case.
.Kubota v. Shibuya, 999 F.2d at 517, 27 USPQ2d 1418 (Fed. Cir. 1993), discussed in Gholz, A Critique of Recent Opinions of the Federal Circuit in Patent Interferences, 76 JPTOS 649, 667-71 (1994).
.Cf. Gustavsson v. Valentini, 46 PTCJ 198 (PTOBPAI 1993).
.60 Fed. Reg. 14488, 14502-03 (March 17, 1995).
.That is what the PTO did in Gustavsson v. Valentini, supra note 5.
.See State Industries, Inc. v. Mor-Flo Industries, Inc., 948 F.2d 1573, 20 USPQ2d 1738 (Fed. Cir. 1991), for a particularly humorous example of the court's problems with this issue.
.60 Fed. Reg. 14488, 14496, second column (March 17, 1995).
.This is another issue that the CAPJ is supposedly considering.
.See, e.g., Hahn v. Wong, 892 F.2d 1028, 13 USPQ2d 1313 (Fed. Cir. 1990), discussed in Gholz, A Critique of Recent Opinions of the Federal Circuit in Patent Interferences, 73 JPTOS 700, 701-03 (1991), and Huston v. Ladner, 973 F.2d 1564, 23 USPQ2d 1910 (Fed. Cir. 1992), discussed in Gholz, A Critique of Recent Opinions of the Federal Circuit in Patent Interferences, 75 JPTOS 448, 463-65 (1993).
.See, e.g., Fleming v. Bosch, 181 USPQ 761 (PTOBPI 1983).
.These requirements also apply to a motion for leave to file a corrected preliminary statement filed on or after the date set by the APJ for service of preliminary statements.
.988 F.2d 1181, 26 USPQ2d 1057 (Fed. Cir. 1993), discussed in Gholz, A Critique of Recent Opinions of the Federal Circuit in Patent Interferences, 76 JPTOS 649, 654-57 (1994).
.1153 O.G. 59 (August 17, 1993).
.975 F.2d 854, 24 USPQ2d 1142 (Fed. Cir. 1992), discussed in Gholz, A Critique of Recent Opinions of the Federal Circuit in Patent Interferences, 75 JPTOS 448, 456-57 (1993).