Lead Opinion
Opinion for the court filed by Circuit Judge LOURIE. Dissenting opinion filed by Circuit Judge NEWMAN.
Baxter International Inc. (“Baxter”) appeals from the decision of the Board of Patent Appeals and Interferences (“the Board”) affirming the examiner’s rejections of claims 26-31 of U.S. Patent 5,247,-434 (“the '434 patent”) for obviousness under 35 U.S.C. § 103(a). See Ex parte Baxter Int’l, Inc., No. 2009-006493,
Background
I.
This patent appeal relates to hemodialysis machines that can function in place of a patient’s kidney to cleanse the blood of toxins using a solution called a dialysate. During hemodialysis, the patient’s blood is pumped though the hemodialysis machine and the dialysate acts to absorb the toxins. To ensure that the process does not filter essential nutrients from the blood, a hemodialysis machine must facilitate the monitoring and control of a number of parameters.
Baxter owns the '434 patent, entitled “Method and Apparatus for Kidney Dialysis,” which discloses and claims a hemodialysis machine integrated with a touch screen user interface that allows an operator to monitor and control a number of parameters. Figure 8 of the patent, reproduced below, depicts an exemplary touch screen interface:
FIG. 8
As depicted above, the interface allows an operator to monitor and control a number of treatment parameters, such as the dialysate temperature, and the patent details the computer system that interfaces with the touch screen to control the delivery of the dialysate and other liquids. Claim 26 of the patent, reproduced below, recites the elements of the integrated hemodialysis machine:
26. A hemodialysis machine comprising:
(a) means for controlling a dialysate parameter selected from a group consisting of dialysate temperature and dialysate concentration, and means for delivering the dialysate to a dialysate compartment of a hemodialyzer; and
(b) a user/machine interface operably coupled to said dialysate-delivery means, the user/machine interface comprising a touch screen adapted to display an indicium corresponding to a parameter pertinent to operation of the hemodialysis machine for performing hemodialysis and to permit the user, by touching the indicium, to cause a change in the parameter.
'434 patent, col.40 11.29-43 (emphases added). Dependent claim 30 includes an additional means plus function limitation, reciting that the hemodialysis machine further comprises a “means for delivering an anticoagulant to a patient.” Id. col.40 11.60-64. Finally, dependent claims 27, 30, and 31 recite that the touch screen provide “indicium soliciting” specific information from the machine’s user: “programmed settings of a time-varying machine-operating parameter” (claim 27); “input from the user corresponding to a rate of anticoagulant delivery” (claim 30); or “a programmed setting of an alarm limit about the machine-operating parameter” (claim 31). Id. col.4011.44-47, 60-68.
The '434 patent has been subject to litigation. In 2003, one of Baxter’s competitors, Fresenius, filed a declaratory judgment action in the United States District Court for the Northern District of California, seeking, among other claims, a declaration that the patent’s claims were invalid. Fresenius Med. Care Holdings, Inc. v. Baxter Int’l, Inc., No. C 03-1431 SBA,
Upon the entry of a final judgment, Fresenius appealed. We affirmed the district court’s grant of judgment as a matter of law, but for “somewhat different reasons than those articulated by the district court.” Fresenius USA, Inc. v. Baxter Int’l, Inc.,
III.
In 2006, in parallel with the Fresenius litigation, the United States Patent & Trademark Office (“PTO”) began to reexamine the '434 patent, stimulated by Fresenius. In the course of those proceedings, the examiner found that a number of references rendered obvious claims 26-31 of the patent, including, among other references, the CMS 08 Manual, the Sarns 9000 Manual, U.S. Patent 4,370,983 (“Lichtenstein”), and U.S. Patent 4,710,166 (“Thompson”). Specifically, with regard to claims 26-29 and 31, the examiner concluded that those claims would have been obvious in light of the combined teachings of the CMS 08 Manual, Lichtenstein, the Sarns 9000 Manual, and two other references not at issue on appeal. Board Decision,
Baxter appealed the examiner’s final rejections to the Board. After briefing and oral argument before the Board but prior to issuance of the Board’s decision, we decided the Fresenius case. Shortly thereafter, Baxter petitioned the Director of the PTO to remand the reexamination to the examiner to consider the rejections in light of our Fresenius decision. The Director denied the petition but ordered the Board to consider our decision in Fresenius.
The Board affirmed the examiner’s rejections of claims 26-31. Regarding our Fresenius decision, the Board discussed the holding of the case and concluded that “[although claims 26-31 were not proven
Turning to the merits of the examiner’s rejections, the Board found that the CMS 08 Manual describes the “control of Na, K, and HC03 flow rates using a control unit that may be programmed in ten minute intervals (i.e., a microprocessor) and a pump driven by a stepper motor,” a disclosure that met the corresponding structure in the specification identified by Baxter and the examiner for the “means for controlling” limitation. Board Decision,
The Board also affirmed the examiner’s findings regarding the “soliciting” limitations in claims 27, 30, and 31. With respect to claim 27, the Board found that the CMS 08 Manual disclosed that a user can adjust or control time-dependent hemodialysis parameters such as the ultrafiltrate rate and the concentration of substances in the dialysate. Board Decision,
Following the Board decision, Baxter requested rehearing, which the Board denied. Board Rehearing Decision,
Baxter timely appealed, and we have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).
Discussion
I.
The scope of our review in an appeal from a Board decision is limited. We review the Board’s factual findings for substantial evidence and review the Board’s legal conclusions de novo. In re Kotzab,
Although the ultimate determination of obviousness under 35 U.S.C. § 103 is a question of law, it is based on several underlying factual findings, including the differences between the claimed invention and the prior art. Graham v. John Deere Co.,
II.
A.
As an initial matter, the PTO argues that Baxter waived its arguments regarding the “means plus function” limitations in claims 26 and 30 because it failed to timely present those arguments to the Board. Baxter responds that it presented those issues to the Board in its opening brief, its reply brief, and at oral argument. Baxter also argues that the Director allowed Baxter to pursue those arguments in its order denying Baxter’s petition to remand the case from the Board to the examiner.
We agree with the PTO that Baxter waived its arguments regarding the “means for delivering an anticoagulant” limitation in claim 30 by failing to timely raise them before the Board. Absent exceptional circumstances, see In re DBC,
Ultimately, Baxter failed to raise the “means for delivering an anticoagulant” limitation before the Board, and, contrary to Baxter’s arguments, the Director’s order denying Baxter’s petition did not preserve for appeal arguments relating to a claim limitation that Baxter never put at issue before the Board. Finally, Baxter has not presented an exceptional circumstance that would allow us to consider arguments that it failed to present to the Board. We accordingly decline to address them.
The record does indicate, however, that Baxter timely raised its arguments regarding the examiner’s analysis of limitation (a) of claim 26 as well as the substantive merit of those rejections, at least regarding the rejections based on the CMS 08 Manual. J.A. 7883:42a-45a. While those arguments did not specifically name the cases that Baxter primarily relies upon on appeal, we do not require such case specificity to preserve a point of error for appeal. See Nelson v. Adams USA Inc.,
B.
Regarding claim 26, Baxter raises a number of arguments on appeal. First,
The PTO responds that a structural analysis was performed for the “means for controlling” and “means for delivering” limitations. It also argues that substantial evidence shows that the CMS 08 Manual and Lichtenstein disclose the structure corresponding to the challenged means plus function limitations. Finally, the PTO argues that the lower court’s decision and this court’s decision in Fresenius do not control the reexamination proceeding because the PTO and the court system apply different approaches to determine invalidity and patentability.
We agree with the PTO that substantial evidence supported the Board’s findings on claim 26. Regarding Baxter’s arguments that the examiner did not specifically determine the corresponding structure for the “means plus function” limitations in limitation (a), the record indicates that both the examiner and Baxter agreed that the corresponding structure disclosed in the specification for the “means for controlling” limitation included a microprocessor and a concentrate pump. Board Decision,
Turning to Baxter’s specific arguments regarding the teachings disclosed in the references, we conclude that substantial evidence supports the Board’s finding that the prior art discloses limitation (a) of claim 26. Regarding the “means for controlling” limitation, the CMS 08 Manual discloses a “computer modeling system” with a “[processor” and describes that “electrolyte concentrations” are delivered via “stepper motor driven line pumps” that can be “programmed in ten minute intervals.” J.A. 284, 288, 290. Even if Baxter could overcome the Board’s express finding that Baxter “did not assert that Lichtenstein lacks any structure corresponding” to limitation (a) of claim 26, Board Decision,
Substantial evidence also supports the Board’s finding that the prior art disclosed structure corresponding to the “means for delivering the dialysate” limitation. While Baxter argues that the specific pumps in the CMS 08 Manual do not deliver dialysate to a dialysate compartment of a hemodialyzer but instead perform other functions, the reference discloses a “dialysate mixing system” that must be connected to a hemodialyzer, which necessarily requires the dialysate to be pumped between the machines. J.A. 292-99. In addition, on their face, the pumps identified by the examiner in the CMS 08 Manual appear similar in structure and functionality to the “concentrate” pumps and pump lines that Baxter identified as corresponding structure in the '434 patent for this “means plus function” limitation. J.A. 7883:10a (identifying concentrate pump 22 and “the associated structure”). Further, even if Baxter’s arguments regarding Lichtenstein are properly before us, that reference also teaches that a pump delivers dialysate through a flow meter into the dialysate side of a dialysis container used in connection with hemodialysis equipment. Lichtenstein, col.12 11.60-61, col.13 11.41-47.
We also reject Baxter’s argument that the Board erred because it “ignored” our decision in Fresenius and failed to “give serious consideration” to the district court’s Fresenius decision. Opening Br., Baxter Int’l Inc. at 36, 41,
This case thus illustrates the distinction between a reexamination and a district court proceeding. In Fresenius, we upheld the district court’s grant of judgment as a matter of law because the patent challenger failed to meet its burden to prove invalidity by clear and convincing evidence — it “failed to present any evidence ... that the structure corresponding to the means for delivering dialysate limitation [in claim 26], or an equivalent thereof, existed in the prior art” and did not identify “the structure in the specification that corresponds to the means for delivering dialysate” or compare the identified structure to those structures present in the prior art. Fresenius,
Lest it be feared that we are erroneously elevating a decision by the PTO over a decision by a federal district court, which decision has been affirmed by this court, the following additional comments must be made. When a party who has lost in a court proceeding challenging a patent, from which no additional appeal is possible, provokes a reexamination in the PTO, using the same presentations and arguments, even with a more lenient standard of proof, the PTO ideally should not arrive at a different conclusion.
However, the fact is that Congress has provided for a reexamination system that permits challenges to patents by third parties, even those who have lost in prior judicial proceedings. Usually one would expect that any such reexamination, such as the one before us, would raise new issues. In this case, the patent examiner relied on new prior art that had not been raised in the prior district court proceeding. Why Fresenius did not present that prior art before the district court we do not know. But the Director apparently found that a substantial new question of patentability had been raised and the examiner was then entitled to conduct a reexamination on the basis of the new art presented and her search of the prior art. Thus, this case is not about the relative primacy of the courts and the PTO, about which there can be no dispute. Finally, we could not conclude that the PTO was barred from conducting the reexamination of the '434 patent because of the final judgment in Fresenius without overruling Ethicon and Swanson, which we cannot do. See Hometown Fin., Inc. v. United States,
C.
Lastly, Baxter argues that the Board erroneously construed the term “soliciting” in claims 27, 30, and 31 and, under a correct construction of that term, the rejections of those claims were not supported by substantial evidence. In particular, Baxter argues that the Board implicitly construed “soliciting” in an over-broad manner to encompass a touch screen user interface that allows a user to adjust or control the machine, a construction that is not supported by the specification. Baxter argues that the term should have been construed to require the machine to actively seek an action by a user.
We disagree. The PTO does not dispute Baxter’s construction of “soliciting” as requiring the touch screen user interface to actively seek an action by the user, and the Board applied a construction identical in scope, requiring the machine interface to prompt the user for entry of specific data. J.A. 40. That requirement finds support
Under that construction, substantial evidence supports the rejections of claims 27, 30, and 31.’ In particular, the CMS 08 Manual discloses the “soliciting” limitation in claim 27 because the reference depicts a user interface that prompts the user to input a variety of time-varying operating parameters, such as the ultrafiltration rate and the sodium electrolyte profile. J.A. 307-08. Similarly, substantial evidence supports the PTO’s finding that the Sarns 9000 Manual teaches the “soliciting” limitation in claim 31 because that reference discloses a user interface that prompts the user to input a pressure alarm limit. J.A. 450.
Finally, substantial evidence supports the Board’s finding that the CMS 08 Manual or the Sarns 9000 Manual, when combined with Thompson, renders obvious the “indicium soliciting input from the user corresponding to a rate of anticoagulant delivery” limitation in claim 30. As explained above, the CMS 08 Manual and the Sarns 9000 Manual disclose providing an “indicium soliciting” input from a user. Baxter does not contest that Thompson teaches delivering anticoagulants to a patient. See Thompson, col.l 11.9-25. Nor does Baxter contest on appeal that, in view of Thompson’s disclosure, it would have been obvious to one of ordinary skill in the art to modify the user interface described in the CMS 08 Manual or the Sarns 9000 Manual to provide an indicium soliciting input from the user that corresponds to a rate of anticoagulant delivery.
Conclusion
We have considered Baxter’s remaining arguments and conclude that they are without merit. For the foregoing reasons, the Board’s determination that claims 26-31 were not patentable is
AFFIRMED
Dissenting Opinion
dissenting.
The Patent and Trademark Office’s Board of Patent Appeals and Interferences, on reexamination of a patent that had previously been litigated to final judgment in the district court and on appeal to the Federal Circuit, states that “the agency is not bound by the court’s determination.” BPAI Op. at 26. My colleagues appear unperturbed by the agency’s nullification of this court’s final decision. Instead, the court itself ignores our own prior final decision, although it is the law of this case. Thus the court violates not only the constitutional plan, but also violates the rules of litigation repose as well as the rules of estoppel and preclusion— for the issue of validity, the evidence, and the parties in interest are the same in this agency reexamination as in the finally resolved litigation.
No authority, no theory, no law or history, permits administrative nullification of a final judicial decision. No concept of government authorizes an administrative agency to override or disregard the final judgment of a court. Judicial rulings are not advisory; they are obligatory. In San Remo Hotel, L.P. v. City & County of San Francisco,
The general rule implemented by the full faith and credit statute — that parties should not be permitted to relitigate issues that have been resolved by courts of competent jurisdiction — predates the Republic. It “has found its way into every system of jurisprudence, not only from its obvious fitness and propriety, but because without it, an end could never be put to litigation.”
Finality is fundamental to the Rule of Law. In Southern Pacific Railroad v. United States,
This general rule is demanded by the very object for which civil courts have been established, which is to secure the peace and repose of society by the settlement of matters capable of judicial determination. Its enforcement is essential to the maintenance of social order; for the aid of judicial tribunals would not be invoked for the vindication of rights of person and property if, as between parties and their privies, con-elusiveness did not attend the judgments of such tribunals in respect of all matters properly put in issue, and actually determined by them.
Id. at 49,
In Plant v. Spendthrift Farm, Inc.,
The record of history shows that the Framers crafted this charter of the judicial department with an expressed understanding that it gives the Federal Judiciary the power, not merely to rule on cases, but to decide them, subject to review only by superior courts in the Article III hierarchy — with an understanding, in short, that “a judgment conclusively resolves the case” because “a ‘Judicial Power’ is one to render dispositive judgments.”
Id. at 218-19,
Yet this court continues to authorize the Patent and Trademark Office to “revise, overturn, and refuse full faith and credit” to final judgments of the courts, in the words of Chicago & Southern Air Lines,
The theories of preclusion implement the fundamentals of judicial finality, for a final judicial determination controls the issue in all forums. See Federated Dep’t Stores, Inc. v. Moitie,
In enacting the various reexamination statutes, Congress did not purport to violate the constitutional strictures governing finality of judicial process. The possibilities for vexation and abuse were perceived from the initiation of reexamination; when the first reexamination statute was proposed, Patent Commissioner Diamond testified that the statute contained various safeguards and “carefully protects patent owners from reexamination proceedings brought for harassment or spite. The possibility of harassing patent owners is a classic criticism of some foreign reexamination systems and we made sure it would not happen here.” Hearings on H.R. 6933, 6934, 3806 & 215, Industrial Innovation & Patent & Copyright Law Amendments, House Comm, on the Judiciary, 96th Cong., 2d Sess. 594 (1980). Nonetheless, commentators were skeptical; for example, Anthony H. Handal, Re-examination: Some Tactical Considerations — A Private Practitioner’s Viewpoint, 9 AIPLA Q.J. 249 (1981), explained that
a party threatened with litigation has the opportunity to file reexamination requests on the patents concerned, or without doing anything, has the threat of such action to use in any negotiation which may be in progress. Likewise, a threatened party also has the opportunity of putting a number of patents into reexamination which are not even related to the subject matter of the threat. Thus, even where the party threatened with litigation is in a relatively weak position with respect to the asserted patents, he can very viably threaten to retaliate against the patent owner by counter-attacking where the patent owner is in a relatively weak position.
Id. at 251. When reexamination was later enlarged, an article by William J. Speranza and Michael L. Goldman, Reexamination—The Patent Challenger’s View, 69 J. Pat. & Trademark Off. Soc’y 295 (1987) remarked that reexamination “has potential for misuse by the patent challenger to achieve less-than-noble aims, such as delay or harassment, in an effort to escape liability where no legitimate defense exists.” Id. at 296.
Administrative agency override of judicial final decisions has no counterpart in any other field of subject matter. From the inception of judicial process in the nation, it was established that decisions of Article III courts are not subject to negation by proceedings in the other branches. The validity of the Baxter patent was resolved upon litigation in the district court and on appeal to the Federal Circuit. This judgment cannot be “revised, overturned or refused full faith and credit by another Department of Government.” Chi. & S. Air Lines,
I support the concept of reexamination as an efficient and economical alternative to litigation in appropriate cases. My concern is with the distortion of this purpose, which was designed to provide a path to relief not available through the existing examination process. It was not intended to undermine the finality of judicial process; it was not intended to negate the repose provided by adjudication.
The only patents that are reexamined, like the only patents that are litigated, are patents on inventions that are of value. Most reexamination requests are granted by the PTO.
The reexamination of Baxter’s patent claims 26-29 and 31 was based solely on the same references on which Fresenius relied in the litigation. In response to the panel’s request during oral argument, Baxter’s counsel wrote that “all of the art relied upon by the Examiner to reject claims 26-29 and 31 of the '434 patent (ie., Lichtenstein '983, the Fresenius CMS08 Handbook, the Sarns 9000 Perfusion System Operators Manual, Rubalcaba '578, and Kerns '706, see A9283) had been presented by Fresenius to the district court,” Letter from William F. Lee (February 22, 2012). The PTO Deputy Solicitor wrote that “The Examiner only found Thompson,” Letter from Sydney O. Johnson, Jr. (February 17, 2012); the Thompson reference was cited only against claim 30, for showing the inclusion of an anticoagulant in the dialysis. This aspect does not appear to be significant to the reexamination, but if it were, the failure of Fresenius to present such issue does not negate the finality of the decision upon full adjudication. See Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure: Jurisdiction, § 4426 at 141 (1981) (“Preclusion cannot be avoided simply by offering evidence in the second proceeding that could have been admitted, but was not, in the first.”). Reexamination of the Baxter patent lasted from 2005 to 2010, continuing for a year after final decision in the Federal Circuit.
My colleagues justify the PTO’s authority to overrule judicial decisions on the argument that the standard of proof is different in the PTO than in the courts. That theory is flawed, for obviousness is a question of law, and the PTO, like the court, is required to reach the correct conclusion on correct law. Any distinction between judicial and agency procedures cannot authorize the agency to overrule a final judicial decision. Even if the Federal Circuit were believed to have erred in its prior decision, the mechanism for correcting an unjust decision is by judicial reopening, not by administrative disregard. See Christianson,
The court’s final judgment cannot be overridden by administrative proceeding. I respectfully dissent.
Notes
. A significant number of patents in litigation are also subject to reexamination. USPTO Reexamination Filing Data — September 30, 2011, http://www.uspto.gov/patents/stats/ index.jsp (70% of patents undergoing inter partes reexamination and 33% of patents un
. The PTO reports that in 2007 through 2011 the percentage of reexamination requests granted was 97.1% in FY2007; 94.0% in FY2008; 93.5% in FY2009; 91.7% in FY2010; and 89.3% in FY2011. USPTO Performance and Accountability Report for Fiscal Year 2011, Table 14A at 171, http://www.uspto.gov/ aboul/stratplan/ar/index.jsp. The report does not distinguish whether the requests were filed by the patentee or by a third party.