Effective Date: The procedure set forth in this notice is effective on August 17, 2010.

Applicability Date: The procedure set forth in this notice is applicable to any appeal brief (regardless of whether it is an appellant’s brief, a respondent’s brief, or a rebuttal brief) that is filed in an inter partes reexamination proceeding on or after August 17, 2010.

Brief Summary:  The Chief Judge of the Board of Patent Appeals and Interferences (BPAI) or his designee (collectively, “Chief Judge”), will have the sole responsibility for determining whether appeal briefs filed in inter partes reexamination proceedings (i.e., appellant’s briefs, respondent’s briefs, and rebuttal briefs) comply with the applicable regulations, and will complete the determination before the appeal brief is forwarded to the examiner for consideration. The examiner will no longer review appeal briefs for compliance with the applicable regulations.

SUPPLEMENTARY INFORMATION: Under the streamlined procedure, upon the filing of an appeal brief in an inter partes reexamination proceeding (i.e., an appellant’s brief, a respondent’s brief, or a rebuttal brief), the Chief Judge will review the appeal brief to determine whether the appeal brief complies with 37 CFR 1.943(c) and 37 CFR 41.67, 41.68, or 41.71 before it is forwarded to the Central Reexamination Unit (CRU) or other Technology Center examiner for consideration. The Chief Judge will endeavor to complete this determination within one month from the filing of the appeal brief. To assist parties in complying with 37 CFR 1.943(c), 41.67, 41.68, and 41.71, the BPAI has provided a checklist for notices of appeal and appeal briefs and a list of eight reasons appeal briefs have been previously held to be noncompliant on the USPTO Web site at: http://www.uspto.gov/ip/boards/bpai/procedures/guidance_noncompliant_briefs.jsp.

Read the full notice here: Clarification on the Procedure for Seeking Review of a Finding of a Substantial New Question of Patentability in Ex Parte Reexamination Proceedings

The notice clarifies that Director Kappos has delegated to the Chief Judge of the Board of Patent Appeals and Interferences (BPAI) the authority to review issues relating to the grant of the SNQ.  The Chief Judge can further delegate the SNQ review to a panel of Administrative Patent Judges who are deciding the appeal in the ex parte reexamination proceeding.  As is currently the case, the notice identifies that separate from the BPAI’s consideration of the SNQ issue, a patent owner may file a petition under 37 CFR 1.181(a)(3) to vacate an ex parte reexamination as “ultra vires.”

This right of appeal is not interlocutory.  Instead, for an ex parte reexamination proceeding ordered before June 25, 2010, the patent owner may include a challenge to the finding of an SNQ as a separate ground in an appeal to the BPAI, even if the patent owner did not request that the Central Reexamination Unit (CRU) reconsider the finding of the SNQ during prosecution.

For ex parte reexaminations proceedings ordered on or after June 25, 2010, the patent owner must request that the CRU reconsider the grant of the SNQ as part of a full response to the Office action in order to preserve the issue for appeal.

The notice procedures do not apply to inter partes reexamination proceedings.  A determination by the USPTO in an inter partes reexamination either that no SNQ has been raised or that a reference raises a SNQ is final and non-appealable.  See 35 U.S.C. 312(c).

This change is a good one for the reexamination system.  However, it can be argued that it does not solve the problem of serial ex parte reexaminations filed by third party requesters to harrass the patent owner because it does not provide an interlocutory appeal.  Moreover, it can also be argued that 35 U.S.C. needs to be amended to apply this procedure to a grant of an SNQ in an inter partes reexamination.

According to the Federal Register, the Chief Judge of the Board of Patent Appeals and Interferences (BPAI) or his designee (collectively “Chief Judge”), will have the sole responsibility for determining whether appeal briefs filed in ex parte reexamination proceeding appeals comply with the applicable regulations, and will complete the determination before the appeal brief is forwarded to the examiner for consideration.  The examiner will no longer review appeal briefs for compliance with the applicable regulations.  The USPTO expects to achieve a reduction in ex parte reexamination proceeding appeal pendency as measured from the filing of a notice of appeal to docketing of the appeal by eliminating duplicate reviews by the examiner and the BPAI.

Read the full notice at http://edocket.access.gpo.gov/2010/pdf/2010-12534.pdf.

The Foundation filed the inter partes reexamination request in July 2006. The Office ordered the reexamination in September 2006 as to all three claims in the patent.  The substantial new question of patentability was based on multiple references and the adopted rejections included section 102 and 103 rejections.  After several amendments to the challenged claims,  the examiner allowed all the challenged claims as amended, and WARF prevailed before the Central Reexamination Unit (“CRU”).  The Foundation appealed to the Board. 

In a 41-page opinion, the Board grappled with a range of issues, including anticipation, the proper standard of obviousness, product-by-process limitations and enablement questions.  In the end, the Board reversed most of the examiner’s decisions in favor of patentability, affirming only the examiner’s decision not to adopt one of the proposed grounds of rejection in the original request.  The Board’s reversal of the examiner’s determinations not to make proposed rejections is characterized as a “new ground of rejection” pursuant to 37 C.F.R. § 41.77(a).  As a result, the case is not ripe for judicial review by the U.S. Court of Appeals for the Federal Circuit.  Rather, WARF must either reopen prosecution with an amendment or new evidence or request rehearing.  Only after exhausting those options may WARF appeal to the Federal Circuit.

Merits of the case aside, this inter partes reexamination is notable in several respects.  First, the case highlights the ability of third parties, such as the Foundation, that are not involved in any active or threatened dispute with the patent owner, to use reexamination as a vehicle to challenge the validity of a patent for its own purposes.  Other entities have availed themselves of reexamination in a similar fashion, including, for example, the Electronic Freedom Foundation through its Patent Busting project.  Second, the case highlights the difficulties a patent owner faces on appeal to the Board, even if it achieved success before the CRU.  Third, it shows the difficulty of obtaining judicial review in inter partes reexamination.  As occurred here, if the Board reverses an examiner’s decision that is favorable to patentability, the reexamination must at least go through another round of briefing or even prosecution before an appeal may be taken to the Federal Circuit.  This is but one reason why no appeal from an inter partes reexamination has yet made it all the way through the Federal Circuit.  The complete case cite is The Foundation for Taxpayer & Consumer Rights v. Wisconsin Alumni Research Foundation, No. 2010-1854 (B.P.A.I. Apr. 29, 2010).

This paper will be part of the course materials for the upcoming 5th Annual Advanced Patent Law Institute on January 21-22, 2010 hosted at the USPTO.

“We are pleased to provide cutting edge data and analysis on this important developing area of patent reexamination,” said Robert Greene Sterne, founding director of SKGF, paper co-author, and recognized expert on patent reexaminations.  “Previously unavailable, this data and our analysis confirms what we have known anecdotally: the next big battle ground in reexamination is going to be appeals from the CRU.”

Jon E. Wright, SKGF director, paper co-author and former CAFC clerk observed, “The CAFC is going to be confronting a flood of reexam appeals from the CRU.  The Court is going to have to decide critical issues involving reexams to make the system more timely, balanced and effective.”

Lori A. Gordon, SKGF director, paper co-author, and seasoned reexamination attorney with domain experience in electronics and communications noted, “Our data collection and analysis provides the first ever explanation of what is really happening at the CRU in terms of appeals to the BPAI.  The BPAI is experiencing very significant backlogs in appeals from normal patent examination.  The addition of a significant number of time-critical appeals from the CRU will further test the BPAI’s ability to process reexam appeals with the required ’special dispatch.’”

Paper co-author and SKGF associate Byron L. Pickard added that “Other areas of interest are district court review of reexam rulings under the Administrative Procedure Act and possible mandamus actions.  These areas of reexam law may prove critical as the reexam process matures.”

Download the full paper here: Appeals from the Central Reexamination Unit

The Sigram Schindler case seeks to clarify the statutory provisions governing appeals from the Board of Patent Appeals and Interferences (“the Board”) in ex parte reexamination.  The statutory provisions governing appeal are ambiguous.  One section appears to allow patent owners to challenge Board decisions in the U.S. District Court for the District of Columbia, while another section appears to only allow appeals from the Board to the United States Court of Appeals for the Federal Circuit (“Federal Circuit”).

More specifically, the statutory basis for appeals to the Federal Circuit for ex parte reexamination is 35 U.S.C. § 306.  Therein, the statute states that the patent owner may seek court review of Board decisions “under the provisions of sections 141 to 145 of this title.”  Sections 141-144 deal with appeals to the Federal Circuit, while Section 145 allows a civil action against the Director in the United States District Court for the District of Columbia.

However, allowing a civil action in ex parte reexamination appears to be inconsistent with Section 141 itself.  Specifically, Section 141 states that “[a] patent owner, or a third-party requester in an inter partes reexamination proceeding, who is in any reexamination proceeding dissatisfied with the final decision in any appeal to the [Board] under section 134 may appeal the decision only to the [Federal Circuit].”  Section 141 thus appears to foreclose any civil action under section 145.  The ambiguity exists because when Congress amended Section 141 in 2001, it appears to have neglected to also amend Section 306.

Sigram Schindler seeks to clarify this statutory ambiguity by challenging the PTO rules implementing the 2001 amendment as unlawful and, according to the Complaint, asking that they “be set aside as having been adopted in excess of the PTO’s statutory authority.”  The vehicle for this regulatory challenge is an ex parte reexamination initiated by Cisco Systems Inc., which challenges Sigram Schindler’s 2005 patent for a telecommunications network data transmission method and related network switch.  The ability to challenge any Board decision under Section 145 could be beneficial to patent owners because of the ability to potentially enter new evidence.

On Oct. 21, the PTO filed a motion for summary judgment to dispose of the case.  The basis for the summary judgment motion is primarily jurisdictional.  The PTO argues in its motion that Sigram Schindler lacks standing because the BPAI has not yet ruled on the reexamination.  The PTO also believes that allowing challenges to Board decisions of ex parte reexaminations under Section 145 would “eliminate or outright ignore the unequivocal statutory language Congress specifically placed into the Patent Act.”  As noted above however, the statutory provisions are not entirely clear.

As a final matter, we note that the statutory basis for appeals to the Federal Circuit for inter partes reexamination is 35 U.S.C. § 315.  Unlike the ex parte reexamination appeal statute, Section 315 states that the patent owner and the third party requester “may appeal under the provisions of sections 141-144.”  Thus, there is no ambiguity for inter partes reexamination and appeals from the Board may only be taken to the Federal Circuit.

The SAFOCO Inc. inter partes reexaminations are believed to be the first inter partes reexaminations to reach the United States Court of Appeals for the Federal Circuit.  The third party requester Cooper Cameron brought the appeal from the Board of Patent Appeals and Interferences (“the Board”).  The appeal was docketed on July 8, 2009, and styled by the Federal Circuit as Cooper Cameron v. SAFOCO Inc., as is normal in inter partes cases, such as interferences.

However, on July 14, the Patent and Trademark Office Solicitor Raymond Chen sent a letter to the Clerk of the Federal Circuit asking that the USPTO be a party to the case and that the official caption be revised accordingly.  In support, the Solicitor noted that such an appeal is conducted under the provisions of 35 U.S.C. § 143.  Section 143 states that “[i]n any ex parte case or any reexamination case, the Director shall submit to the court in writing the grounds for the decision of the [USPTO], addressing all the issues involved in the appeal.”  Therefore, according to the Solicitor’s letter, “the Director [of the USPTO] is a party to this appeal, just as in an ex parte appeal.”

On July 21, 2009, the patent owner Safoco filed a notice of intent to participate in the appeal.  However, as of August 21, 2009, the Federal Circuit has not acted on the Solicitor’s letter and the current official caption simply lists the parties to the reexamination proceeding.  For the time being, it appears as if the only parties to the appeal will be the third party requester (appellant) and the patent owner (appellee).

Read the revised official caption here: Revised Official Caption

Read the PTO solicitor letter here: PTO Solicitor Letter (2009-1435)