Print PDF

PTO’s Interpretation That “Original Application” as Used in the Inter Partes Reexamination Statute Includes Continuation Applications Filed After November 29, 1999, Is Reasonable

08-1130
August 19, 2008

Decision icon Decision

Last Month at the Federal Circuit - September 2008

Judges: Michel, Lourie, Linn (author)

[Appealed from: E.D. Va., Judge Brinkema]

In Cooper Technologies Co. v. Dudas, No. 08-1130 (Fed. Cir. Aug. 19, 2008), the Federal Circuit affirmed the district court’s grant of SJ to the PTO, rejecting a challenge to an inter partes reexamination. Specifically, the Court agreed with the PTO’s interpretation that inter partes reexamination is available for all patents in a chain of priority filed after November 29, 1999, not only when the first application in that chain came after the date.

Cooper Technologies Company (“Cooper”) owns U.S. Patent No. 6,984,791 (“the ’791 patent”), which issued from a continuation application filed on April 14, 2003. The initial application in the chain, to which the ’791 patent claimed priority, was filed on March 10, 1993. Thomas & Betts Corporation (“T&B”) filed a request for inter partes reexamination of the ’791 patent, which the PTO granted. Cooper filed a petition seeking to terminate the proceeding, arguing that the statute authorizing inter partes reexamination, the American Inventors Protection Act of 1999, Pub. L. No. 106-113, §§ 4001-4808, 113 Stat. 1501, 1501A-552 to -591 (“AIPA”), applied to only “any patent that issues from an original application filed in the United States on or after” November 29, 1999, and thus did not allow for reexamination of the ’791 patent since the ’791 patent did not issue from an original application filed after November 29, 1999. Instead, Cooper argued that the ’791 patent claims priority to applications filed before November 29, 1999, and thus the earliest or “original” application in the chain was filed before that date.

The PTO applied its interpretation of “original application” as including “first filed applications, continuations, divisionals, continuations-in-part, continued prosecution applications and the national stage phase of international applications,” and denied Cooper’s petition. Slip op. at 2. Cooper responded by filing suit in the district court, challenging the PTO’s interpretation under the APA. T&B intervened. On cross-motions for SJ, the district court concluded that the PTO’s interpretation of “original application” as used in the AIPA was “fully consistent with the term’s established meaning in patent law,” and that the PTO’s interpretation was “not inconsistent with other statutory pronouncements.” Slip op. at 7 (citing Cooper Techs. Co. v. Dudas, No. 1:07-CV-853, slip op. at 9-10 (E.D. Va. Nov. 30, 2007)). Cooper appealed.

On appeal, the Federal Circuit noted that although the district court found it unnecessary to address the appropriate level of deference owed to the PTO’s interpretation of “original application,” it would begin its analysis with an examination of the level of deference that the PTO’s interpretation deserved. The Court, therefore, first addressed whether Chevron deference applied here, and concluded that it did. See Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). The Court reasoned that under 35 U.S.C. § 2, the PTO has authority to establish regulations to “govern the conduct of proceedings in the Office” and that to comply with this section, a PTO rule must be procedural. Slip op. at 9. Here, noted the Court, the PTO interpreted the portion of the AIPA that created inter partes reexamination, and thus its interpretation plainly governed the conduct of proceedings in the PTO within the meaning of § 2.

Further, the Court evaluated whether the rule at issue provided substantive rulemaking—effecting a changein existing law or policy—rather than interpretive. It determined that the PTO’s interpretation did not effect a change in existing law or policy but instead provided “a prospective clarification of ambiguous statutory language regarding a matter of procedure.” Id. at 10. Accordingly, the Court concluded that interpretation of “original application” at issue in the case was within the PTO’s authority.

Next, the Court noted that the exercise of the PTO’s authority was subject to its compliance with 5 U.S.C. § 553. The Court explained that because § 553 did not require formal notice of proposed rulemaking for interpretative rules, the PTO’s interpretation of “original application” did not require formal notice-and-comment procedures. It noted, however, that the PTO did provide notice, and receive and act on comments concerning the “original application” language. Accordingly, the Court concluded that Chevron deference applied to the PTO’s interpretation of “original application.”

Under Chevron, the Court noted that it must first determine whether Congress has spoken to the precise question at issue, namely, whether a patent is subject to inter partes reexamination when it results from an application filed after November 29, 1999, that is a continuation of an application filed before November 29, 1999. The Court noted that if it concludes that Congress either had no intent on the matter, or that Congress’s purpose and intent is unclear, then it must proceed to step two, in which it asks whether the agency’s interpretation is based on a permissible construction of the statutory language at issue. With respect to the first step, the Court determined that Congress had not directly spoken to the precise question at issue. In so concluding, the Court recognized the variable meaning of “original,” a position supported by both parties. The Court noted that “original application” had a variety of definitions within various sections of the MPEP, its prior opinions, and academic writings. The Court also found nothing compelling in the structure of the statute or canons of statutory construction that made Congress’s intended meaning of “original application” clear.

The Federal Circuit turned next to the second step of the Chevron analysis—whether the PTO’s interpretation was permissible. The Court observed that because the PTO expressly interpreted “original application” shortly after enactment of the AIPA, it must give that interpretation “particular weight” under Supreme Court precedent. Id. at 20. With that understanding, the Court rejected Cooper’s three arguments challenging the reasonableness of the PTO’s interpretation. Cooper first argued that under the PTO’s interpretation, a patentee could shield a patent from reexamination by going through the reissue process. The Federal Circuit agreed with the PTO that the interpretation at issue would simply limit reexamination to reissues of original applications filed after the November 26, 1999, deadline and that the interpretation was reasonable. Second, Cooper argued that 35 U.S.C. § 120 requires continuation applications to “have the same effect” as parent applications and that the PTO’s interpretation of “original application” would prevent consistency within a patent family. The Court rejected the argument as stretching prior case law, instead explaining that the consistency required within a patent family by § 120 applied only to the benefit of the earlier filing date. Third, Cooper argued that the PTO’s interpretation of “original application” would permit third-party arguments made during inter partes reexaminations to affect pending ex parte reexamination of the parent. The Federal Circuit declined to enter in what it viewed as balancing risks and benefits—“a quintessentially legislative or regulatory determination of public policy.” Id. at 22.

Finally, the Court recognized that Congress had amended the AIPA to eliminate the possibility that a patent owner could initiate an inter partes reexamination. The Court noted that Congress’s election not to amend the “original application” language when it modified the AIPA suggested that it agreed with the PTO’s interpretation. The Court concluded that the PTO’s interpretation of “original application” to include continuation applications was permissible and therefore entitled to deference. Accordingly, it affirmed the district court’s grant of SJ to the PTO, rejecting Cooper’s challenge to the inter partes reexamination of the ’791 patent.