February 2013
Board Erred in Refusing to Consider Alternative Grounds That Were Fully Raised Before the Examiner During Reexamination
| Judges: Newman (author), Lourie, Prost |
| [Appealed from Board] |
In Rexnord Industries, LLC v. Kappos, No. 11-1434 (Fed. Cir. Jan. 23, 2013), the Federal Circuit affirmed the Board’s determination of no anticipation but reversed the Board’s determination of nonobviousness in the inter partes reexamination of U.S. Patent No. 6,523,680 (“the ’680 patent”). The ’680 patent is directed to a mechanical conveyor belt that is formed of rows of belt modules interlinked by transverse rods. The spaces between the belt modules are blocked by plastic webs to prevent the spaces from pinching small items such as a finger, and are specifically recited as being less than 10 mm in diameter. The figure below shows the belt formed by the interlinked modules, with the “less than 10 mm” space marked as “Example Space”:
The owner of the ’680 patent, Habasit Belting, Inc. (“Habasit”), sued Rexnord Industries, LLC (“Rexnord”) for patent infringement. Rexnord requested inter partes reexamination of the ’680 patent, and the district court stayed Habasit’s infringement action pending completion of the reexamination. On reexamination, the examiner found all claims of the ’680 patent unpatentable for anticipation and obviousness. According to the examiner, the claims were obvious over prior art references Thompson and Palmaer, which showed a space small enough to prevent pinching of small objects, and prior art reference Horton, which taught all of the other elements of the independent claims.
Habasit argued to the Board that the 10 mm maximum dimension of space was not stated in any reference and, in fact, some reference belts have no space. Rexnord responded that a 10 mm maximum space was inherent in the structures described in the references, and that Thompson taught extending a web portion to at least partially cover gaps between modules, preventing objects from getting pinched. The Board reversed the examiner, finding the ’680 patent claims not anticipated and not obvious over the cited references because the references did not state the dimensions of space between modules. The Board noted that the examiner had not identified where the prior art disclosed that the space between modules had a diameter of less than 10 mm, as required by the claims.
Rexnord requested rehearing, arguing that the Board overlooked the examiner’s analysis in the rejection of the claims over Horton in view of Thompson, and that the Board ignored that the space of less than 10 mm between the modules was inherently present in the Palmaer and Thompson references. The Board concluded that Rexnord had waived its inherency arguments for anticipation, and that Rexnord’s arguments as to why constructing a space as recited in the claims would have been obvious were not the rationale of the examiner’s rejection. Rexnord appealed to the Federal Circuit.
“On judicial review, the correctness of the decision appealed from can be defended by the appellee on any ground that is supported by the record, whether or not the appellant raised the argument.” Slip op. at 13.
On appeal, Rexnord argued that the Palmaer and Thompson references anticipated or rendered obvious the ’680 patent claims because the “less than 10 mm” space was inherent in the prior art belts. The PTO defended the Board’s finding and argued that a space of less than 10 mm was not necessarily present in any reference belt. The Federal Circuit agreed with the Board that the precise “less than 10 mm” size limitation was not inherent in the references, because neither reference showed the limitation and that it would necessarily be recognized. However, the Court held that the Board erred in holding that it would not have been obvious to limit the space to the 10 mm maximum, reasoning that the references all stated that the space between modules should be limited against small objects and to prevent pinching of fingers.
The Court disagreed with the PTO that the Board did not have to consider other grounds that had been presented during the reexamination but that had not been raised on appeal to the Board. The PTO defended the Board’s refusal to consider Rexnord’s argument that it would have been a “mere design choice” in view of prior art references to create a 10 mm space, because Rexnord presented that argument for the first time in its request for rehearing. The Court rejected this argument, concluding that Rexnord’s “mere design choice” argument was not new. The Court found that the references had been presented to the examiner, that the issue was fully raised before the examiner, and that the references were not again a patentability issue until after the Board reversed the examiner. The Court noted that Rexnord was not the appellant before the Board, and that as an appellee, Rexnord could defend the correctness of the decision appealed from on any ground supported by the record, whether or not Habasit as the appellant raised the argument.
The Court held that all of the structural elements of the claims were shown in the prior art references, including a space small enough to avoid pinching of fingers, and that the 10 mm dimension was a design choice that accounted for the size of small objects such as fingers. The Court held that the Board erred in declining to consider the references presented for reexamination and Rexnord’s arguments in support of the examiner’s decision. The Court reversed the Board’s decision as to obviousness and affirmed the Board’s decision as to anticipation.
