Print PDF

On Inter Partes Reexamination, the Board Lacks Jurisdiction to Consider Arguments Based on References Determined by the Director as Not Raising a Substantial New Question of Patentability

October 02, 2012

Decision icon Decision

Last Month at the Federal Circuit - November 2012

Judges: Rader, Lourie (author), Wallach

[Appealed from: Board]

In Belkin International, Inc. v. Kappos, No. 12-1090 (Fed. Cir. Oct. 2, 2012), the Federal Circuit affirmed the Board’s decision on inter partes reexamination that it lacked jurisdiction to consider arguments based on three references that the Director of the PTO (“the Director”) had previously determined did not raise substantial new questions of patentability.

Belkin International, Inc. (“Belkin”) filed a request for inter partes reexamination of U.S. Patent No. 7,035,281 (“the ’281 patent”). In the request, Belkin alleged substantial new questions of patentability based on four prior art references. The Director determined that only one of the four references (“Peirce”) raised such a question, and ordered reexamination of the ’281 patent. Belkin did not petition for review the Director’s determination that the other three references did not raise substantial new questions of patentability.

During the reexamination proceeding, the examiner issued an Action Closing Prosecution and a Right of Appeal Notice addressing only Peirce. Belkin appealed to the Board, arguing that the examiner should have made rejections involving the other three references. The Board found that it did not have jurisdiction to decide whether the three references raised substantial new questions of patentability, because the Director’s determination to the contrary was statutorily nonappealable under 35 U.S.C. § 312(c). The Board also found that because there had been no final decision on patentability regarding the three references, appeal under 35 U.S.C. § 315(b) and 37 C.F.R. § 41.61 was unavailable. Belkin appealed the Board’s decision to the Federal Circuit.

On appeal, the Federal Circuit held that the Board did not err, because issues determined by the Director to not raise substantial new questions of patentability are nonappealable. The Court reasoned that inter partes reexamination is a two-step process, and that the statute makes clear that the first step of determining whether there is a substantial new question of patentability is “final and non-appealable.” Slip op. at 6 (quoting 35 U.S.C. § 312(c)). “The statutory framework . . . requires that an issue must raise a ‘substantial new’ question of patentability, as determined by the Director, with respect to cited prior art before it can be considered during inter partes reexamination.” Id. The Court stated that a requester who disagrees with the Director’s determination that certain prior art does not raise a substantial new question of patentability is permitted under 37 C.F.R. § 1.927 only to petition the Director for review.

The Court held that once the Director determined that Peirce raised a substantial new question of patentability, the Director was entitled to order reexamination on the limited issue of answering that question. “Belkin, at that point, could only raise the [other] three references if they were necessary to rebut findings of fact by the examiner or as a response to the patent owner relevant to answering that single patentability question.” Slip op. at 8 (citing 37 C.F.R. § 1.948(a)). The Court noted that Belkin did not argue that the three references were cited for such a purpose, and held that the Board was correct not to consider previously raised and rejected issues based on the three references.

The Court disagreed with Belkin’s argument that “such a result is inconsistent with the appeals statutes, 35 U.S.C. §§ 134(c) and 315(b), and the regulations such as 37 C.F.R. § 41.61(a)(2).” Slip op. at 8. The Court reasoned that there was no final decision favorable to patentability regarding the issues based on the three references. “To allow an otherwise non-appealable decision by the Director to become appealable simply by raising it a second time during the later reexamination would impermissibly circumvent the statutory bar on appeals.” Id. at 9.

The Court was also not persuaded by Belkin’s argument that it did not petition for review because, based on MPEP § 2648, it believed that the claims would be reexamined in view of all prior art. The Court explained that the MPEP provision does not discuss the preclusive effect of a determination that an issue does not raise a substantial new question of patentability, and noted that the MPEP does not have the force of law. The Court dismissed Belkin’s argument that its interpretation was supported by 37 C.F.R. § 1.104, stating that “the ‘available prior art’ cited by the regulation is only that which the Director has indicated constitutes a substantial new question of patentability.” Slip op. at 10.

The Court also found unwarranted Belkin’s concerns that once reexamination is granted, the requester must put forward all eligible prior art or be estopped from later asserting the invalidity of any claim found patentable and valid during reexamination under 35 U.S.C. § 315(c). The Court noted that the question of whether the estoppel statute would preclude citation to prior art that the Director had determined did not raise a substantial new question of patentability was not before it. “Suffice it to say here that the courts have the final say on unpatentability of claims, not the PTO.” Slip op. at 11. The Court thus affirmed the Board’s decision to not consider the issues that the Director found did not raise a substantial new question of patentability.

Summary authored by Liang (Ray) Huang, student associate at Finnegan.