By Aditya Kumar and Swaraj Singh Raghuwanshi
Introduction
On July 26, 2024 , the US Court of Appeals for the Federal Circuit (hereinafter referred to as “Court”) decided an appeal from a decision of the Patent Trial and Appeal Board (hereinafter referred to as “Board”), an administrative law body within the United States Patent and Trademark Office (hereinafter referred to as “patent office”). The appeal was filed to challenge the scope of 37 CFR § 42.73(d)(3)(i) (hereinafter referred to as “regulation”) and the authority of the patent office to apply said regulation to decide on substantive matters.
What is Nomination?
In the instant case, a US patent No. 7,461,353 was granted to Softview LLC (hereinafter referred to as “appellant”) in respect of the US patent Application No. 11/045,757 titled “Scalable display of internet content on mobile devices”. The patent relates to displaying internet content on mobile devices and particularly recites apparatus and methods for zoom enabling the display of content in an internet browser by retrieving and translating HTML, XML, and other internet content to vector representations of that content. Following the grant, various phone manufacturers, including Apple, Motorola (hereinafter referred to as “appellees”), Kyocera, HTC, etc., challenged the patent’s validity by initiating various proceedings including ex parte re-examination , pre-AIA inter partes re-examination (hereinafter referred to as “reexamination”), and post-AIA inter partes review (hereinafter referred to as “IPR”) before the patent office to invalidate the subject patent. Apple filed multiple requests including re-examination request (proceeding No. 95/000,634) and ex parte re-examination (proceeding No. 90/009,994), and Motorola and Kyocera filed IPR requests (proceeding Nos. 95/002,132 and IPR2013-00007). The Board initiated IPR proceedings and stayed all re-examination proceedings.
The Board vide its order dated March 27, 2014, allowed IPR requests and held 18 claims (claims 1, 33, 36, 43, 48, 51, 42, 58, 59, 66, 118, 138, 139, 149, 183, 252, 283 and 317) out of 319 claims unpatentable over the cited prior art, and an IPR certificate was issued on January 12, 2016, cancelling the challenged claims. Also, the Board lifted the stay on re-examination proceedings on November 27, 2015, and subsequently thereto, the appellant amended 107 claims during the ex parte re-examination proceeding No. 90/009,994 by merely combining limitations from various cancelled claims, e.g., amended claim 5 included features from cancelled claims viz., device claim 1 and method claims 118 and 138. During the re-examination proceedings, the Board rejected the examiner’s conclusion that claims were obvious given the cited prior art and person skilled in the art. Rather, the Board relied on the regulation i.e., 37 CFR § 42.73(d)(3)(i) , to reject the claims including both issued as well as amended claims. The Board while rejecting all claims under the said regulation held that both issued and amended claims were not “patentably distinct” from those found unpatentable in the earlier IPR proceedings. The Board identified that each claim was either covering the subject matter of a cancelled claim or merely a combination of limitations previously invalidated on obviousness grounds in the earlier IPR proceedings.
Following the Board’s order, the appellant challenged the applicability of the regulation to issued claims and contended patent office’s authority to apply the regulation to substantive matters. Firstly, the appellant questioned the applicability of the regulation and contended that the Board had inappropriately applied the common law collateral estoppel principles to the issued claims. The appellant contended that the term “not patentably distinct” in said section means “substantially the same”, thereby making only those claims unpatentable which are substantially the same as the cancelled or invalidated claims. Secondly, the appellant challenged the statutory authority of the patent office to issue regulations on substantive matters.
The appellant favoured an afresh comparison of claims with prior art rather than cancelling the claims based on the earlier IPR decision. Whereas, the appellees submitted that under 35 USC § 316(a)(4) , the director of the patent office has the authority to prescribe regulations by establishing and governing IPR under the section and the relationship of such review to other proceedings under this title.
COURT DECISION
The Court disregarded the appellant’s contention regarding limiting the regulation to common law principles of collateral estoppel and relied on the appellees’ submissions regarding the power of the patent office to prescribe regulations under 35 USC § 316(a)(4). The court mentioned that the patent office does not have the power to issue substantive rules under 35 USC § 2(b)(2)(A) , but 35 USC 316(a)(4) empowers the patent office to act as a rule-making authority to apply regulations in IPR proceedings and the outcome of any such review to other proceedings also. The court clarified that 35 USC 316(a)(4) does not limit the patent office only to issue procedural rules but also issue a regulation on substantive matters as well and held that [s]ection 42.73(d)(3) of the PTO’s regulations was lawfully promulgated pursuant to the agency’s rulemaking authority under section 316(a)(4) of the Patent Act.. The court highlights that regulation 37 CFR § 42.73(d)(3) prevents patent owners from acting inconsistently with the decision of IPR proceedings.
However, the court agreed with the contention of the appellant that the terms “not patentably distinct” and “substantially the same” are equivalent. The court observed that the application of regulation is limited to those claims which were previously either canceled or held invalidated, but not on the allowed or issued claims. The court mentioned that [B]y its terms, the regulation applies to “obtaining” a claim-not maintaining an existing claim, and affirmed the regulation only to the “amended claims”.
The Court affirmed the Board’s application of the regulation under 37 CFR § 42.73(d)(3)(i) to the amended claims covering limitations of canceled claims, but vacated the refusal of issued claims and remanded them back to the Board for further consideration of the application of the regulation to issued claims.
ANALYSIS
The regulation under 37 CFR § 42.73(d)(3) prescribes that [a] patent applicant or owner is precluded from taking action inconsistent with the adverse judgment, including obtaining in any patent if a claim is not patentably distinct from a finally refused or cancelled claim, which restricts a patent applicant to continue with limitations of refused or cancelled claims via claim amendments which are contrary to a judgment invalidating such claims. Under the common law practice, the collateral estoppel doctrine prevents a party from re-litigating an issue which has already been decided on merits by an adjudicating authority. In the instant case, the Board has powers to apply the regulation of earlier IPR decision to subsequent re-examination proceedings under 35 USC § 316(a)(4), invalidated claims in toto per the decision promulgated in earlier IPR proceedings. However, the decision to refuse the entire granted claim set by the Board was not suitable as the regulation limits the application thereof to only those claims which are not distinct from the refused or cancelled claims.
In case of pre-AIA re-examination proceedings, the claims are examined for novelty or obviousness similar to regular examination procedures by considering the best available prior art references. The filing of re-examination requests was discontinued on September 16, 2012, and replaced with IPR proceedings. However, the re-examination proceedings are continued in pending matters in which such requests were filed before September 16, 2012, and any review request filed after said date has been examined as IPR in accordance with the amended 35 USC § 314. Under IPR proceedings, a patent document is examined to confirm patentability i.e., novelty or non-obviousness under 35 USC § 102 and 103. Thus, except for some procedural compliances, both re-examination and IPR proceedings are provided to confirm the patentability i.e., novelty and non-obviousness of a patent document.
Even if the appellant’s contentions are accepted insofar as to the estoppel of earlier IPR decision to the refused or cancelled claims in the subsequent re-examination proceedings, then in such a case, the objected claims are required to be examined again to determine patentability over the relevant prior art leading to multiple examinations of the same claims, thereby making the earlier IPR proceedings infructuous. Also, the appellant contended that the amended claims were different from the amended claims. However, the Board found that the amended claims contained limitations of the canceled claims, and therefore covered the same scope as the canceled claims.
So far the cancelation of issued claims is concerned, a patent applicant is only precluded from taking action inconsistent with the adverse judgment. The Board in its IPR decision canceled 18 claims, whereas while settling the reexamination proceedings based on the IPR decision, the Board canceled both amended as well as issued claims. The final decision of the Board was not in tandem with the regulation as the estoppel was intended to be applicable only to those claims refused during IPR proceedings, but not the previously issued claims, as the Court mentioned [B]y its terms, the regulation applies to “obtaining” a claim—not maintaining an existing claim. Therefore, to maintain refused claims the amendment must not include any limitations found unpatentable during IPR proceedings, and any such amendment should not expand the scope as it existed before the amendment.