U.S. Court of Appeals for the Federal Circuit, In Re: John Bradley McDonald, Docket 21-1697

 

Patents (U.S.)

 

Procedure

 

 

Application for Reissue of an U.S. Patent

 

Reissue Application

 

Reissue Declaration

 

Recapture Rule

 

Continuation Application

 

Equity

 

 

 

 

Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. 14/658,050.

 

 

 

(…) While the application leading to the ’901 patent was pending, Mr. McDonald filed a continuation application, which ultimately issued as the ’111 patent. J.A. 44–72. The claims in the continuation application included “processor” limitations like those added to the parent application to overcome the § 101 patent eligibility rejection. J.A. 1636–43.

 

 

In 2015, Mr. McDonald filed a reissue application seeking to broaden the claims of the ’111 patent. J.A. 114, 128–29. Specifically, Mr. McDonald amended claim 1 of the ’111 patent as follows (…)

 

 

(…) Notably, the reissue application included amendments to remove the “processor” limitations that Mr. McDonald had previously added. J.A. 131–39, 331–39, 428–38.

 

 

(…) Mr. McDonald contends that the Board erred in rejecting reissue claims 1–7, 10, 12–14, and 29–38 under 35 U.S.C. § 251 as being an improper recapture of surrendered subject matter. Appellant’s Br. 15. He also contends that the Board erred by rejecting all the reissue claims as being based on an Inventor Reissue Declaration that was defective for failing to identify an error that is correctable through reissue. Id.

 

 

A.

The Reissue Statute and the Recapture Rule

 

Over a century ago, the Supreme Court recognized that a patentee may seek reissue of a patent if she erroneously claimed less than she had a right to claim in the original patent. See, e.g., Leggett v. Avery, 101 U.S. 256 (1879). Subsequently, the reissue statute was codified to delineate the circumstances where a patent may be reissued: when it “is, through error without any deceptive intention, deemed wholly or partly inoperative or invalid.” 35 U.S.C. § 251. Stemming from the reissue statute, the recapture rule provides that a reissue will not be granted to “recapture” claimed subject matter that was surrendered during prosecution to obtain the original claims. In the context of pre-AIA2 § 251, we have explained what errors can be appropriately corrected through reissue and what limitations are imposed by the recapture rule. See Greenliant Sys., Inc. v. Xicor LLC, 692 F.3d 1261, 1267 (Fed. Cir. 2012) (“A patentee may surrender a patent and seek reissue enlarging the scope of the original patent’s claims if through error without any deceptive intent he claimed less than he had a right to claim in the original patent and he applies for reissue within two years from the grant of the original patent.” (cleaned up)); Ball Corp. v. United States, 729 F.2d 1429, 1436 (Fed. Cir. 1984) (“The recapture rule bars the patentee from acquiring, through reissue, claims that are of the same or of broader scope than those claims that were canceled from the original application. On the other hand, the patentee is free to acquire, through reissue, claims that are narrower in scope than the canceled claims.” (emphasis in original)).

 

 

We have further expounded upon the limits and the equitable underpinnings. The reissue statute is “based on fundamental principles of equity and fairness.” In re Weiler, 790 F.2d 1576, 1579 (Fed. Cir. 1986). Nonetheless, “the reissue statute was not enacted as a panacea for all patent prosecution problems, nor as a grant to the patentee of a second opportunity to prosecute de novo his original application.” Id. at 1582. Congress struck a balance between “the competing interest of providing a patentee with an opportunity to correct errors of inadequate claim scope with the public interest in finality and certainty of patent rights, and legislated in favor of allowing the patentee to correct its errors through broadening, if necessary.” In re Youman, 679 F.3d 1335, 1342 (Fed. Cir. 2012).

 

 

In addressing pre-AIA § 251, we have explained that the statute provides the public with two safeguards against such broadening. First, “the public is on notice for two years following the issuance of a patent that the patent can be broadened to recapture matter ‘dedicated to the public’ through error.” Id. Analogously, “‘the recapture rule’ prevents a patentee from regaining through reissue subject matter surrendered during prosecution, thus ensuring the ability of the public to rely on a patent’s public record.” Vectra Fitness, Inc. v. TNWK Corp., 162 F.3d 1379, 1384 (Fed. Cir. 1998). Second, reissue is limited to “instances where the patentee could demonstrate an ‘error without any deceptive intention.’” In re Youman, 679 F.3d at 1342; see also MBO Lab’ys, Inc. v. Becton, Dickinson & Co., 602 F.3d 1306, 1314 (Fed. Cir. 2010) (“Without a rule against recapture, an unscrupulous attorney could feign error and re-draft claims in a reissue patent to cover a competing product, thereafter filing an infringement suit.”); Mentor Corp. v. Coloplast, Inc., 998 F.2d 992, 996 (Fed. Cir. 1993) (“Error under the reissue statute does not include a deliberate decision to surrender specific subject matter in order to overcome prior art, a decision which in light of subsequent developments in the marketplace might be regretted.”).

 

 

(…) See, e.g., Medtronic, Inc. v. Guidant Corp., 465 F.3d 1360, 1372–73 (Fed. Cir. 2006) (“The deliberate surrender of a claim to certain subject matter during the original prosecution of the application for a patent made in an effort to overcome a prior art rejection is not such ‘error’ as will allow the patentee to recapture that subject matter in a reissue.”

 

 

(…) MBO Lab’ys, 602 F.3d at 1316 (“The public’s reliance interest provides a justification for the recapture rule that is independent of the likelihood that the surrendered territory was already covered by prior art or otherwise unpatentable.”

 

 

(…) Accordingly, we affirm. The Board properly applied the recapture rule to bar Mr. McDonald’s attempt to reclaim claim scope already surrendered during prosecution. Because Mr. McDonald deliberately—not erroneously or inadvertently—added the “processor” limitations during prosecution of the original claims to overcome the § 101 rejection, the recapture rule does not permit him to now remove those limitations to broaden his claim.

 

 

B.

The Defective Inventor Reissue Declaration

 

Mr. McDonald also contends that the Board erred by rejecting the reissue claims as based on a defective inventor reissue declaration. A reissue declaration must “specifically identify at least one error pursuant to 35 U.S.C. § 251 being relied upon as the basis for reissue.” 37 C.F.R. § 1.175(a). The Board found that “the statement of error in the Reissue Declaration relates to an error that is uncorrectable by reissue.” McDonald, 2020 WL 2990970, at *12. We agree with the Board. The error pinpointed in the Inventor Reissue Declaration—the existence of the allegedly unnecessary “processor” limitations—is uncorrectable by reissue because doing so would violate the recapture rule. Mr. McDonald’s argument on the defectiveness of the declaration rises and falls with his argument on the violation of the recapture rule.

 

 

 

(U.S. Court of Appeals for the Federal Circuit, Aug. 10, 2022, In Re: John Bradley McDonald, Docket 21-1697)

U.S. Supreme Court, Peter v. NantKwest, Inc., Docket No. 18-801, J. Sotomayor, Unanimous

Attorney’s Fees

American Rule

Baker Botts, 576 U. S., at ___ (slip op., at …)

Patents

Pathways to challenge an adverse decision by the United States Patent and Trademark Of­fice (PTO)

Salaries of attorney and paralegal employees of the PTO

The PTO moved for reimbursement of expenses that included—for the first time in the 170-year history of §145—the pro rata salaries of PTO attorneys and a paralegal who worked on the case.

Section 145 of the Patent Act affords applicants “dissat­isfied with the decision of the Patent Trial and Appeal Board” an opportunity to file a civil action in the United States District Court for the Eastern District of Virginia. 35 U. S. C. §145. The statute specifies that “all the ex­penses of the proceedings shall be paid by the applicant.” Ibid. The question presented in this case is whether such “expenses” include the salaries of attorney and paralegal employees of the United States Patent and Trademark Of­fice (PTO). We hold that they do not.

The Patent Act creates two mutually exclusive pathways to challenge an adverse decision by the PTO. The first per­mits judicial review by direct appeal to the United States Court of Appeals for the Federal Circuit. §141. There is “no opportunity for the applicant to offer new evidence” in a §141 proceeding, and the Federal Circuit “must review the PTO’s decision on the same administrative record that was before the agency.” Kappos v. Hyatt, 566 U. S. 431, 434 (2012); 35 U. S. C. §144.

The second pathway allows applicants to file a new civil action against the Director of the PTO in federal district court. §145. Unlike §141, §145 “permits the applicant to present new evidence . . . not presented to the PTO.” Kap­pos, 566 U. S., at 435. The district court “acts as a factfinder when new evidence is introduced in a §145 proceeding” and must make de novo determinations that take into account “both the new evidence and the administrative record be­fore the PTO.” Id., at 444, 446. The parties may appeal the district court’s final decision to the Federal Circuit. 28 U. S. C. §1295(a)(4)(C).

Because §145 does not limit an applicant’s ability to in­troduce new evidence to challenge the denial of a patent, Kappos, 566 U. S., at 439, it can result in protracted litiga­tion. As a condition for permitting such extensive review, the Patent Act requires applicants who avail themselves of §145 to pay “all the expenses of the proceedings.” 35 U. S. C. §145.

The PTO moved for reimbursement of expenses that included—for the first time in the 170-year history of §145—the pro rata salaries of PTO attorneys and a paralegal who worked on the case.

This Court’s “‘basic point of reference’ when considering the award of attorney’s fees is the bedrock principle known as the ‘“American Rule”’: Each litigant pays his own attor­ney’s fees, win or lose, unless a statute or contract provides otherwise.” Hardt v. Reliance Standard Life Ins. Co., 560 U. S. 242, 252–253 (2010) (quoting Ruckelshaus v. Sierra Club, 463 U. S. 680, 683 (1983)). The American Rule has “roots in our common law reaching back to at least the 18^th century.” Baker Botts, 576 U. S., at ___ (slip op., at 3) (citing Arcambel v. Wiseman, 3 Dall. 306 (1796)); see also Summit Valley Industries, Inc. v. Carpenters, 456 U. S. 717, 721 (1982) (observing that the American Rule “has been consist­ently followed for almost 200 years”); Alyeska Pipeline, 421 U. S., at 257 (referring to the presumption against shifting attorney’s fees as a “general” rule).

(…) Sebelius v. Cloer, 569 U. S. 369 (2013), confirms that the presumption against fee shifting applies to all statutes—even those like §145 that do not explicitly award attorney’s fees to “prevailing parties.”

(…) §145 has all the marks of the kind of adversarial litigation in which fee shifting, and the pre­sumption against it, is common; the statute authorizes fil­ing a separate civil action where new evidence can be intro­duced for de novo review by a district judge. Thus, the presumption against fee shifting not only applies, but is particularly important because §145 permits an unsuccess­ful government agency to recover its expenses from a pre­vailing party. Reading §145 to award attorney’s fees in that circumstance “would be a radical departure from longstand­ing fee-shifting principles adhered to in a wide range of con­texts.” Ruckelshaus, 463 U. S., at 683.

The American Rule thus provides the starting point for assessing whether §145 authorizes payment of the PTO’s legal fees.

To determine whether Congress intended to depart from the American Rule presumption, the Court first “looks to the language of the section” at issue. Hardt, 560 U. S., at 254. While “the ab­sence of a specific reference to attorney’s fees is not dispositive,” Key Tronic Corp. v. United States, 511 U. S. 809, 815 (1994), Congress must provide a sufficiently “specific and explicit” indication of its intent to overcome the Amer­ican Rule’s presumption against fee shifting. Alyeska Pipe­line, 421 U. S., at 260.

The reference to “expenses” in §145 does not invoke attor­ney’s fees with the kind of “clarity we have required to de­viate from the American Rule.” Baker Botts, 576 U. S., at ___ (slip op., at 4).

(…) Reading the term “expenses” alongside neighboring words in the statute, however, supports a conclusion ex­cluding legal fees from the scope of §145.

(…)  The modifier “all” does not expand §145’s reach to include attorney’s fees. Although the word conveys breadth, it cannot transform “expenses” to reach an outlay it would not otherwise include. Cf. Rimini Street, Inc. v. Oracle USA, Inc., 586 U. S. ___, ___–___ (2019) (slip op., at 6–7) (“The adjective ‘full’ in §505 therefore does not alter the meaning of the word ‘costs.’ Rather, ‘full costs’ are all the ‘costs’ otherwise available under law”).

Section 145’s plain text thus does not overcome the Amer­ican Rule’s presumption against fee shifting to permit the PTO to recoup its legal personnel salaries as “expenses of the proceedings.”

(…) That “expenses” and “attorney’s fees” appear in tandem across various statutes shifting litigation costs indicates that Congress understands the two terms to be distinct and not inclusive of each other.

(…) While some other statutes refer to attorney’s fees as a subset of expenses, they show only that “expenses” can in­clude attorney’s fees when so defined. See, e.g., 28 U. S. C. §361 (authorizing “reasonable expenses, including attor­neys’ fees”); §1447(c).

Simply put, in common statutory usage, the term “ex­penses” alone has never been considered to authorize an award of attorney’s fees with sufficient clarity to overcome the American Rule presumption.

Because Congress failed to make its intention (…) clear in §145, the Court will not read the statute to “contravene fun­damental precepts of the common law.” United States v. Rodgers, 461 U. S. 677, 716 (1983).

For the foregoing reasons, we conclude that the PTO can­not recover the pro rata salaries of its legal personnel under §145 and therefore affirm the judgment of the Court of Ap­peals for the Federal Circuit.

(U.S. Supreme Court, December 11, 2019, Peter v. NantKwest, Inc., Docket No. 18-801, J. Sotomayor, Unanimous)

Medtronic, Inc. v. Mirowski Family Ventures, LLC, Docket 12-1128

Patents: declaratory judgment: when a licensee seeks a declaratory judgment against a patentee that its products do not infringe the licensed patent, the patentee bears the burden of persuasion on the issue of infringement.

This conclusion is strongly supported by three settled legal propositions: first, a patentee ordinarily bears the burden of proving infringement, see, e.g., Agawam Co. v. Jordan, 7 Wall. 583, 609; sec­ond, the “operation of the Declaratory Judgment Act” is only “proce­dural,” Aetna Life Ins. Co. v. Haworth, 300 U. S. 227, 240, leaving “substantive rights unchanged,” Beacon Theatres, Inc. v. Westover, 359 U. S. 500, 509; and third, “the burden of proof” is a “ ‘substantive’ aspect of a claim,” Raleigh v. Illinois Dept. of Revenue, 530 U. S. 15, 20–21.

Practical considerations lead to the same conclusion. Shifting the burden based on the form of the action could create postlitigation uncertainty about a patent’s scope. It may also create unnecessary complexity by compelling a licensee to prove a negative; here, Mirowski set this dispute in motion by accusing Medtronic of infringement, and there is no convincing reason why burden of proof law should favor the patentee; general considerations relating to the public interest in maintaining a well-functioning patent system are, at most, in bal­ance, and do not favor changing the ordinary burden of proof rule (U.S.S.Ct., 22.01.2014, Medtronic, Inc. v. Mirowski Family Ventures, LLC, Docket 12-1128, J. Breyer, unanimous).

Brevets : jugements déclaratoires : cas d’un preneur de licence qui requiert un jugement déclaratoire à l’encontre du titulaire d’un brevet, en concluant à ce qu’il soit reconnu que ses produits ne constituent pas une violation du brevet objet de la licence : dans une telle situation, il appartient au titulaire du brevet de prouver la violation de son brevet.

Cette solution est supportée avec force par trois principes juridiques bien établis : tout d’abord, le titulaire d’un brevet ordinairement supporte le fardeau de la preuve de la violation de ses droits découlant du brevet. Ensuite, la notion de fardeau de la preuve est de nature substantive et non procédurale, de sorte que la loi fédérale sur les jugements déclaratoires, qui régit des notions de procédure, n’est pas applicable.

Des considérations pratiques conduisent au même résultat. Transférer le fardeau de la preuve sur la base de la nature juridique de l’action en justice est susceptible de créer une incertitude post litige portant sur l’étendue du brevet. Un tel transfert pourrait aussi être sans nécessité la source d’une complexité en contraignant un preneur de licence à apporter une preuve négative. La règle ordinaire portant sur le fardeau de la preuve doit ainsi être maintenue.