In Re Berwyn E. Etter
756 F.2d 852
Fed. Cir.
1985
Check Treatment

In re Berwyn E. ETTER, Appellant.

No. 84-1213.

United States Court of Appeals, Federal Circuit.

Feb. 27, 1985.

MARKEY, Chief Judge.

Nies, Circuit Judge, concurred with opinion in which Smith and Bissell, Circuit Judges, joined.

ceeding under 40 U.S.C.A. § 258a. A straight condemnation (Section 257) pro-ceeding is sought not to dispute a price submitted by the government, but to estab-lish the proper price. It is not conducted after the transfer of title; it provides the predicate for the transfer of title. If the price arrived at by the court is more than the government is willing to pay, it may abandon the condemnation proceeding and allow the landowner to keep the land.

To me this clearly demonstrates that when the government takes title following a “straight” condemnation proceeding, it has “prevailed” in every sense of the word. It has taken title to the land that it initially sought, and it has received the calculation of just compensation that it initially re-quested. As the government‘s complaint in a “straight” condemnation neither estab-lishes nor accompanies the deposit of a price for the land, the fact that the govern-ment might have preferred a lower price---or might have offered one to the landowner prior to commencing the condemnation pro-ceeding-has no relevance to the outcome of the proceeding. The landowner who has received a higher rate of compensation than the government might have preferred has not prevented the government from achieving either of its objectives in filing the action.

This interpretation of “prevailing party” is, moreover, the only one which is consist-ent with 42 U.S.C.A. § 4654, the pre-exist-ing statute governing the award of attor-ney‘s fees in “straight” condemnation cases. That provision states that a land-owner may recover costs and litigation ex-penses, including attorney‘s fees, in con-demnation cases in which the government‘s power to take the land is denied or in which the government abandons the condemna-tion proceeding. The majority contests the charge of inconsistency, stating that its interpretation of “prevailing party” under the EAJA only “supplements” the awards available under Section 4654. But there is no doubt that the majority‘s position is inconsistent insofar as it alters the congres-sional judgment implicit in Section 4654 as to when a landowner may be said to have prevailed in a “straight” condemnation pro-ceeding. See (Rubin, J., dis-senting). Such interference with the pre-existing statutory scheme, which is pro-scribed by the “saving” and “exceptions” clauses of the EAJA, 28 U.S.C.A. § 2412(d)(1)(A), can be avoided by the rec-ognition that, when the government takes title to land following a “straight” condem-nation proceeding, it “prevails” under the EAJA as well as under Section 4654.

Donald H. Zarley (argued), Zarley, McKee, Thomte, Voorhees & Sease, Des Moines, Iowa, for appellant. With him on brief was Mark D. Hansing, Des Moines.

Thomas E. Lynch (argued), Associate Sol., U.S. Patent & Trademark Office, Washington, D.C., for appellee. With him on brief were Joseph F. Nakamura, Sol. and Jere W. Sears, Deputy Sol., Wash-ington, D.C.

Martin Fleit (argued), Fleit, Jacobson, Cohn & Price, Washington, D.C., for inter-venor. With him on brief was Allen S. Melser, Washington, D.C.

Before MARKEY, Chief Judge, and FRIEDMAN, RICH, DAVIS, BALDWIN, KASHIWA, BENNETT, MILLER, SMITH, NIES, NEWMAN, and BISSELL, Circuit Judges.

MARKEY, Chief Judge.

Appeal from a decision of the Board of Appeals (board) of the United States Patent and Trademark Office (PTO) affirming the examiner‘s final rejection in a reexamina-tion proceeding of claims 1 through 9, all of the claims of United States Patent No. 4,133,034 (the ‘034 patent), issued January 2, 1979 to Berwyn E. Etter, as nonpatenta-ble under 35 U.S.C. § 103 in view of prior art. We affirm.

Background

The ‘034 patent concerns a method and device for assimilating utility meter data at meter locations. Anthony Goodfellow, who had applied for and been refused a license under the ‘034 patent, filed a patent appli-cation on a utility meter reading device, copying the claims of the ‘034 patent to provoke an interference.1 The examiner refused to institute an interference because he found Goodfellow‘s claims unpatentable in view of U.S. Patent No. 3,932,730 (Am-brosio), U.S. Patent No. 4,016,542 (Azure), and U.S. Patent No. 4,115,870 (Lowell). On February 4, 1982, Goodfellow requested reexamination of the ‘034 patent, citing that prior art. That request was granted, and, on August 13, 1982 the examiner, hav-ing completed an ex parte examination, de-clared all claims of the ‘034 patent nonpa-tentable. Etter asserts that all of the claims stand or fall together.

Claim 1 is representative:

A method of assimilating utility meter data at the meter locations, comprising, accumulating on an input information electronic storage means customer pro-file information for a plurality of me-ter customers, said profile information including the customer identity and ac-count information,

placing said input information electronic storage means in a portable computer capable of being manually carried to the site of a given meter, said portable computer having an output informa-tion storage means and having the ca-pability of updating, printing and presenting various of said customer profile information for said meter cus-tomers before and after receiving cur-rent customer profile information,

actuating said computer to segregate and to visually present from the cus-tomer profile information for a plurali-ty of meter customers stored on said input information electronic storage means at least the meter number and customer identity information of a giv-en meter customer,

imposing into said computer the current meter reading of said given meter cus-tomer at the site of the meter being read,

actuating said computer to calculate the charge for utility usage based upon the previous meter reading and said current meter reading,

actuating said computer to print a bill for said meter customer at the site of said meter based upon said calculation and imposing on said output information storage means the updated customer profile information,

and depositing said bill at the service address of said given meter customer.

The Examiner‘s Rejection on Reexamination

The examiner held that the subject mat-ter of the ‘034 claims would have been obvious in view of Ambrosio, which disclos-es the use of cards as input information storage means, and Lowell, which teaches use of random access memory (RAM) as an input information electronic storage means for storing customer information (identity, account information, etc.) for a plurality of customers, or alternatively, in view of Am-brosio and Azure, which teaches use of a solid state memory as an input information electronic storage means for storing cus-

tomer information for a plurality of cus-tomers.

Finding that the environment of use for the devices of Ambrosio, Azure, Lowell, and the ‘034 patent (viz. on-site utility me-ter reading) was the same, and that Azure and Lowell discuss their inventions as be-ing improvements over systems of the Am-brosio type, the examiner concluded that it would have been obvious to employ the memory system of either Azure or Lowell (i.e., solid state devices such as RAMs or ROMs) in place of the input information storage device taught by Ambrosio (i.e., billing cards). In effect, the rejection rest-ed on the view that the teachings of Am-brosio and Azure or of Ambrosio and Lo-well would have made the claimed inven-tions of the ‘034 patent obvious.

The examiner accepted Etter‘s contention that the ‘034 patent enjoyed a statutory presumption of validity, 35 U.S.C. § 282, during reexamination, but viewed the pre-sumption as having been overcome. Fur-ther, he said the presumption had been weakened by prior art (Azure and Lowell) not earlier cited to nor considered by the PTO.

Azure and Lowell were considered by the examiner as not “merely cumulative” of the prior art cited during the original pros-ecution, but were clearly more pertinent because they taught use of input informa-tion electronic storage means to store cus-tomer meter information for a plurality of utility customers.

The Board‘s Opinion

On appeal to the board, as before this court, Etter urged three grounds for rever-sal: (1) that the presumption of validity attaches in reexamination proceedings, and the examiner failed to carry the heavier burden thus imposed; (2) that Azure was obsolete technology, and thus constituted less pertinent art than that cited to the examiner during prosecution;2 and (3) that affidavits of Ambrosio and Gray showed that the invention of the ‘034 patent would not have been obvious.

Respecting the presumption of validity, the board noted numerous reasons for hold-ing that it did not attach to claims undergo-ing reexamination. Saying that the burden of showing nonpatentability is the same on the examiner in any examination, and the board did not see how that burden would be increased in a reexamination proceeding. It further held that the evidence was such as to require affirmance of the rejection because it would sustain the examiner‘s burden, regardless of whether the pre-sumption was or was not applied.

Concerning Azure, the board agreed with the examiner that it was more pertinent than the art considered during the initial prosecution, and concluded that “the collec-tive teachings of Ambrosio and Azure would have provided a much stronger sug-gestion for combining the teachings to pro-vide the subject matter” of the invention than would the teachings of the earlier cited art.

The board considered the Ambrosio and Gray affidavits unpersuasive because they showed “a total lack of appreciation of the legal concept of obviousness.”3

Issues

(1) Must the presumption of validity, 35 U.S.C. § 282, be applied to claims involved in reexamination proceedings?

(2) Did the board err in affirming the examiner‘s rejection?

OPINION

(A) Presumption of Validity

Etter‘s basic contention-that § 282 must be applied in reexamination proceed-

ings-misconstrues the purposes for which that statute and the reexamination statutes were enacted. Review of the statutes, leg-islative history, regulations, and case law compels the view that § 282 is not applica-ble to claims about which “a substantial new question of patentability,” 35 U.S.C. § 305, is under consideration in a reexami-nation proceeding. Though the board deci-sion here would be correct in any event, we discuss the issue because of its foundation-al relationship to Etter‘s appeal and the need for clarification of guidance offered the board and bar.

Though the board and intervenor stated strong bases for denying applicability of the presumption in reexamination proceed-ings, the board did recognize that it must in any event show a basis for its rejection of claims in any type of examination. Appar-ently for that reason, the solicitor indicated a willingness to accept applicability of § 282 in reexamination proceedings. It is true that the question has “tempest in a teapot” overtones, for the PTO will reject or cancel claims it considers unpatentable, as is its duty, whether § 282 is or is not considered applicable. The need for clarity in the law and for avoidance of unneces-sary disputes, however, has prompted this court to consider the question in banc.

Section 282 provides that “[t]he burden of establishing invalidity of a patent or any claim thereof shall rest on the party assert-ing such invalidity.” (Emphasis added.). As this court noted in :

The presumption, like all legal pre-sumptions, is a procedural device, not substantive law. It does require the de-cisionmaker to employ a decisional ap-proach that starts with the acceptance of the patent claims as valid and that looks to the challenger for proof of the con-trary. Thus the party asserting inval-idity not only has the procedural burden of proceeding first and establishing a prima-facie case, but the burden of per-suasion on the merits remains with that party until final decision.... With all evidence in, the trial court must deter-mine whether the party on which the statute imposes the burden of persuasion has carried that burden. [Emphasis add-ed.]

.

The foregoing description in Stra-toflex coincides with the inclusion of § 282 in Chapter 29 of title 35, entitled “Reme-dies for Infringement of Patent, and Other Actions“. Both recognize that the pre-sumption is operative to govern procedure in litigation involving validity of an issued patent. A statute setting rules of proce-dure and assigning burdens to litigants in a court trial does not automatically become applicable to proceedings before the PTO. Nor can it acquire an independent eviden-tiary role in any proceeding.

As said in the legislative history of Chap-ter 30 of title 35 (“Prior Art Citations to Office and Reexamination of Patents“), reexamination “will permit any party to petition the patent office to review the effi-cacy of a patent, following its issuance, on the basis of new information about pre-ex-isting technology which may have escaped review at the time of the initial examina-tion of the application.” House Report No. 66-1307, 96th Cong., 2d Sess. (1980), 3-4, reprinted in 1980 U.S.Code Cong. & Ad.News 6460, 6462 (emphasis added). Reexamination is thus neutral, the patentee and the public having an equal interest in the issuance and maintenance of valid pat-ents.

The statute, 35 U.S.C. § 305, provides that “reexamination will be conducted ac-cording to the procedures established for initial examination under the provisions of sections 132 and 133 of this title.” The actual reexamination is conducted ex parte. 37 CFR 1.550(a) (1983). Patent claims are reexamined only in light of patents or printed publications under 35 U.S.C. §§ 102, 103, and only new or amended claims are also examined under 35 U.S.C. §§ 112 and 132. 37 CFR 1.552; MPEP

§ 2258.4 The focus of the limited proceed-ings under Chapter 30 thus returns essen-tially to that present in an initial examina-tion, i.e., to a time at which no presumption of validity had been created.

The innate function of the reexa-mination process is to increase the reliabili-ty of the PTO‘s action in issuing a patent by reexamination of patents thought “doubtful.” House Report at 3. When the patent is concurrently involved in litigation, an auxiliary function is to free the court from any need to consider prior art without the benefit of the PTO‘s initial considera-tion. In a very real sense, the intent un-derlying reexamination is to “start over” in the PTO with respect to the limited exami-nation areas involved, and to re examine the claims, and to examine new or amend-ed claims, as they would have been con-sidered if they had been originally exam-ined in light of all of the prior art of record in the reexamination proceeding. That in-tent is reflected in 35 U.S.C. § 303, which requires the Commissioner to determine whether “a substantial new question of patentability” has been raised, and in 35 U.S.C. § 304, which provides for initiation of reexamination by the Commissioner sua sponte.

The intent that reexamination proceed-ings and court actions involving challenges to validity be distinct and independent is reflected in the legislative history of § 303, which notes that denial of a request for reexamination does not deprive the reque-stor (if not the patent owner) “of any legal right” to contest validity in subsequent court proceedings. House Report at 6466. That “legal right” may be exercised as a matter of right, but determination of whether a “substantial new question of patentability” exists, and therefore wheth-er reexamination may be had, is discretion-ary with the Commissioner, and, as § 303 provides, that determination is final, i.e., not subject to appeal.5

That a patentee may request reexamina-tion, and has the opportunity in the PTO of distinguishing art newly cited by the exam-iner, 37 CFR 1.530(c), and may amend his claims under reexamination, 35 U.S.C. § 305, further distinguish reexamination from litigation. It is of no moment that the examiner‘s burden of showing a basis for rejection in the examination and reexa-mination processes is not described in the “clear and convincing” terms applicable un-der § 282 to a litigant challenging validity of an issued patent. During the examina-tion processes, allowances of claims raise no presumption and may be withdrawn. That one challenging validity in court bears the burden assigned by § 282, that the same party may request reexamination upon submission of art not previously cited, and that, if that art raises a substantial new question of patentability, the PTO may during reexamination consider the same and new and amended claims in light of that art free of any presumption, are con-cepts not in conflict. On the contrary, those concepts are but further indication that litigation and reexamination are dis-tinct proceedings, with distinct parties, pur-poses, procedures, and outcomes. In the former, a litigant who is attacking the va-lidity of a patent bears the burden set forth in § 282. In the latter, an examiner is not

attacking the validity of a patent, but is conducting a subjective examination of claims in the light of prior art.

In , this court said that claims subject to reexamination will “be given their broadest reasonable inter-pretation consistent with the specification, and limitations appearing in the specifica-tion are not to be read into the claims.” . That standard is applied in considering rejections entered in the course of prosecution of original applications for patent. See . As noted in Yamamoto:

[a]n applicant‘s ability to amend his claims to avoid cited prior art distin-guishes proceedings before the PTO from proceedings in federal district courts on issued patents. When an appli-cation is pending in the PTO, the appli-cant has the ability to correct errors in claim language and adjust the scope of claim protection as needed. This oppor-tunity is not available in an infringement action in district court....

The same policies warranting the PTO‘s approach to claim interpretation when an original application is involved have been held applicable to reissue pro-ceedings because the reissue provision, 35 U.S.C. § 251, permits amendment of the claims to avoid prior art. [Citation omitted.] The reexamination law gives patent owners the same right ...

.

Claims in a reissue application en-joy no presumption of validity. . Though reis-sue and reexamination proceedings are dis-tinct, the focus of both is on curing defects which occurred during a proceeding in the PTO, which was responsible for original issuance of the patent.

Etter cites language in , as appearing to require application of § 282 in reexamination proceedings. At oral argument, the PTO solicitor indicated that Andersen has been understood by and accepted in the PTO as establishing that requirement.

The court in Andersen dealt with Ander-sen‘s argument that any doubt must be resolved in his favor under (1) a judicially imposed “rule of doubt,” or (2) as “part of the presumption of validity.” The court rejected (1), citing , and re-jected (2), noting that the presumption does not embrace a rule of doubt. The court agreed with Andersen‘s statement that reexamination should not circumvent the burden “placed on an infringer during liti-gation.” As above indicated, that is a truism, the litigation and reexamination processes being distinct. The court‘s dis-cussion of the workings of the presumption in the face of new art, and the cases cited, all related to operation of the presumption in litigation.

Nonetheless, recognizing that Andersen may be and has been read as holding that claims must be presumed valid under § 282 in reexamination proceedings, the court has sua sponte taken this case in banc to clarify the law as set forth in this opinion.

No statutory language and no legislative history indicates any support for a require-ment that the provisions of 35 U.S.C. § 282 must be applied in the consideration of claims involved in reexamination proceed-ings. Indeed, all available indications are to the contrary. We hold, therefore, that § 282 has no application in reexamination proceedings.

It is at best incongruous to apply a trial court procedural rule to the examination of claims in the PTO. Moreover, because this court and one of its predecessors has con-sistently held that the PTO examiner has the burden of showing a basis under the statute, 35 U.S.C., for each rejection, injec-tion of the presumption into the examina-tion process could add nothing but legalis-tic confusion.

This court has repeatedly pointed out that the § 282 presumption is a rule of

procedure placing the burden of persuasion on him who attacks a patent‘s validity. There is no such attacker in a reexamina-tion, and hence no one on whom that bur-den may be placed.6 In litigation, where a patentee cannot amend his claims, or add new claims, the presumption, and the rule of claim construction (claims shall be con-strued to save them if possible), have im-portant roles to play. In reexamination, where claims can be amended and new claims added, and where no litigating ad-versary is present, those roles and their rationale simply vanish.

The patent right is a right to ex-clude. The statute, 35 U.S.C. § 261, says that “patents shall have the attributes of personal property.”7 The essence of all property is the right to exclude, and the patent property right is certainly not incon-sequential. It is, nonetheless, created by a grant from the government. When a “sub-stantial question” exists respecting the cor-rectness of that grant, it does not conflict but coincides with the nature of the grant-ee‘s right when the government reexam-ines the propriety of the grant it has made, and thereafter reaffirms the grant, substi-tutes a new grant (amended or new claims), or withdraws the grant in whole or in part (the last being subject to review in this court).

(B) The Merits

The examiner and the board correctly determined that: (1) Ambrosio discloses all features of Etter‘s claims, except “input information electronic storage means [for accumulating] customer profile information for a plurality of customers;” (2) Azure discloses that feature; (3) the overall result

of the inventions of Ambrosio, Azure, and Etter is the same; and (4) Etter‘s claimed inventions would have been obvious in view of the collective teachings of Ambrosio and Azure which would have provided “a much stronger suggestion for combining the teachings to provide the subject matter of claim 1” than would the prior art cited during the original prosecution.

Harking back to his § 282 ar-gument, Etter says the claims were origi-nally allowed over Ambrosio and Jones, and Azure is less pertinent than Jones. Azure and Jones each disclose electronic memory. The board correctly noted, how-ever, that Azure, unlike Jones, discloses use in utility meter reading among possible uses of his input information electronic storage means and is therefore more perti-nent. That Azure disclosure is not, as Et-ter says, mere “hearsay“. Etter‘s argu-ments that Azure does not disclose calcula-tion and does disclose obsolete technology were properly rejected as insufficiently founded. Etter admits that Ambrosio dis-closes calculation. Obsolescence, if estab-lished, need not necessarily defeat a refer-ence for what it discloses in reference to a claimed invention. Further, Etter relies on the opinion affidavit of Gray for his asser-tion that Azure discloses obsolete technolo-gy. Etter‘s assertions that Azure cannot be incorporated in Ambrosio are basically irrelevant, the criterion being not whether the references could be physically com-bined but whether the claimed inventions are rendered obvious by the teachings of the prior art as a whole. ;

. Review of the Ambrosio and Gray affidavits con-firms the correctness of the board‘s charac-terization as merely representing opinions unsupported by facts and thus entitled to little or no weight. See , .

AFFIRMED.

NIES, Circuit Judge, with whom SMITH and BISSELL, Circuit Judges, join, concur-ring.

While I agree with the result reached by the majority, I disagree with the majority opinion insofar as it holds that, in a reexa-mination proceeding, a patent is never ac-corded the presumption of validity. In this case it makes no difference whether the presumption is or is not applied, as the board itself stated. The holding that the claimed invention would have been obvious over art not previously considered is fully justified, had the presumption been recog-nized.

This case illustrates the advantage of the new reexamination procedure. It worked here precisely as proponents of the legisla-tion envisaged. What has resulted, how-ever, in my view, is an easy case making bad law, not unusual with dicta. The ma-jority decision finds a negation of the statu-tory presumption that is not expressed in the statute. Further, the majority opinion cannot be justified on the grounds that it is necessary to achieve the statutory objec-tives. Indeed, this decision can only have a chilling effect on voluntary use of the new procedure by patent owners, which was to be one of its prime objectives. H.R.Rep. No. 1307, 96th Cong., 2d Sess. 4, reprinted in 1980 U.S.Code Cong. & Ad.News 6460, 6463.

After complying with the procedures pro-mulgated by Congress for obtaining a pat-ent, a patent owner is in a position compa-rable to the holder of a deed or title to property. 35 U.S.C. § 261 (1982); ; . That government grant is not to be set aside unless the deciding tribunal is clearly convinced that the grant was in error, hav-ing been predicated on erroneous or incom-plete facts or a wrong application of law.

The statutory provision in 35 U.S.C. § 282 is absolute:

A patent shall be presumed valid.

Nothing in the reexamination chapter, 35 U.S.C. §§ 301-307, states otherwise.1 Nothing in the legislative history indicates that Congress intended a patent owner in-volved in reexamination to “start over” to resecure his patent. On the contrary, the chapter is directed simply to resolution of a new question of patentability under 35 U.S.C. §§ 102 or 103. Specifically, 35 U.S.C. § 304 provides:

§ 304. Reexamination order by Com-missioner

If, in a determination made under the provisions of subsection 303(a) of this title, the Commissioner finds that a sub-stantial new question of patentability af-fecting any claim of a patent is raised, the determination will include an order for reexamination of the patent for res-olution of the question. [Emphasis add-ed.]

As explained in the legislative history:

This “substantial new question” re-quirement would protect patentees from having to respond to, or participate in, unjustified reexaminations. Further, it would act to bar reconsideration of any argument already decided by the Office, whether during the original examination or an earlier reexamination.

H.R.Rep. No. 1307, 96th Cong., 2d Sess. 7, reprinted in 1980 U.S.Code Cong. & Ad. News 6460, 6466.

The presumption of validity dovetails neatly with reexamination to resolve a sub-stantial new question of patentability and its application would fit within the prece-dent of this court in which the presumption of validity has been defined or its effect explained in a series of decisions.2 Indeed, in , the PTO ac-knowledged that the presumption of validi-ty applied.3

The presumption of validity places on the challenger of a patent the burden of com-ing forward with evidence to establish facts which may lead to the conclusion that the patent is invalid. . The challenger bears the burden of proof of such facts, as well as the ultimate bur-den of persuasion on the legal issue of validity. . The PTO acknowledges that it bears these burdens in examination of an original application or in reexamina-tion of patent claims. The PTO does not accept, however, that the quantum of proof of facts is “clear and convincing” evidence, which this court has stated to be imposed by the presumption. .

Our precedent holds that the presump-tion of validity is not weakened or de-stroyed during litigation by presentation of more relevant art not considered by the PTO, but may be more easily overcome if such art is presented. . This follows from the absence

of a decision on such matter by the admin-istrative expert, the PTO examiner, to which deference must be given. at 1359, 220 USPQ at 770. The situation in reexamination falls precisely within this concept. If reexamination concerns only a question of patentability not previously considered by the PTO, a fortiori, there is no prior decision to which deference is due and the presumption can be more easily overcome. But deference should be re-quired in reexamination with respect to a matter which was previously considered or is substantially the same, e.g., basing a rejection on a new reference which is not materially different from one which has been overcome. The legislative history quoted above expresses a clear intent, con-sistent with the presumption of validity, that patents are not to be examined de novo. The legislative history quoted by the majority relates only to previously un-considered matters. However, concerning matters which are essentially the same as those previously considered which may be re-raised during reexamination, a patentee is entitled to more respect for his property than the majority decision recognizes. In-deed, the majority‘s analysis and certain statements in the legislative history which speak of enhancing the presumption of va-lidity by reexamination4 seem to equate the presumption of validity with the presump-tion of administrative regularity or correct-ness, a concept which our precedent has specifically rejected. .

The majority justifies its position that the presumption does not apply in reexami-nation on the ground that reexamination is

an ex parte proceeding, while the presump-tion is appropriate only in inter partes disputes. The record in this case shows that an alleged infringer in litigation forced the reexamination, filed a brief analyzing the art in connection with its request to the PTO, filed a reply to the patent owner‘s objection, was served with copies of the examiner‘s actions and the patent owner‘s responses, and was permitted to intervene and brief matters in this court. The record here does not disclose that affidavits ac-companied the alleged infringer‘s request for reexamination or his reply to the patent owner‘s statement, but this type of submis-sion is allowed by such person. To charac-terize reexamination in its entirety as an ex parte proceeding under such circumstanc-es, while technically correct, ignores reali-ty. It is, in my view, more appropriate to view it here as collateral to the pending litigation, although without res judicata effect against the alleged infringer if the claims are held valid. 3 Chisum, Patents § 11.07[4][f], at 11-128 (1984).

I agree with the majority that reexamina-tion should work in such a manner that it will be “neutral.” However, the decision today, in my view, will make patent owners resistent to reexamination. The deck is stacked against them by this decision and by . The court has made reexamination into a pro-ceeding which affords advantages to an infringer over his position in court.

Delay itself is an advantage to an in-fringer of greater economic power than the patent owner, and the lack of res judicata effect against the infringer gives that par-ty two opportunities to attack the patent. These advantages are inherent in reexami-nation and must be accepted as the quid pro quo for the perceived benefits of reex-amination. We need not, however, go fur-ther and, as a matter of statutory interpre-tation, also change the rules by which va-lidity is to be judged to the infringer‘s benefit. An infringer may well have evi-dence which is sufficient to meet the low threshold of “a substantial new question of patentability“, but not sufficiently per-suasive in court to overcome the presump-tion of validity, including the burden of clear and convincing proof. This might be particularly true where evidence is sub-mitted to the PTO in the form of affidavits of experts or others who thereby escape the testing of cross examination.

With respect to claim construction, claims in litigation are to be “so construed, if possible, as to sustain their validity.” , citing ; . Claims in reexamination, on the other hand, “will be given their broadest reasonable interpretation.” . Thus, claims may be valid and in-fringed in court but invalid in the PTO and, a fortiori, not infringed. It is small solace to a patent owner in that situation that he may amend his claims in reexamination and secure narrower new claims. Upon amend-ment, his claims are subject to complete examination and an infringer has the bene-fit of intervening rights to the extent af-forded under 35 U.S.C. § 252 pursuant to 35 U.S.C. § 307(b).

Given this court‘s interpretation of prop-er reexamination procedure, the obvious strategy of an infringer would be to force the patentee back to the PTO where the patentee‘s presumptive advantage, as well as claim construction advantage, is elimina-ted.

The majority‘s analysis focuses on the aspect of reexamination dealing with the threshold determination that “a substantial new question of patentability” has been raised. The majority then continues its analysis of this case as if reexamination itself is a “limited examination” directed to that question. However, our court has also analogized reexamination to reissue proceedings. . In reissue, examination is not limited to the question

raised by the patent owner. 37 C.F.R. § 1.176. The PTO has taken a similarly expansive view of the scope of reexamina-tion in its regulations and in its stated operating procedures.

Reexamination, as interpreted by the PTO, is a two step process involving: (1) the determination that there is “a substan-tial new question of patentability“, and (2) reexamination itself. The latter step is not constrained, in the PTO view, by the for-mer. In a very real sense, once reexamina-tion is ordered (an unreviewable decision), the patent holder “starts over” under the PTO view on all § 102 and § 103 issues with respect to all claims, amended or un-amended, whether or not related to the new question.

With respect to the first step, i.e., deter-mining whether there should be reexamina-tion, PTO regulation 37 C.F.R. § 1.515 pro-vides:

§ 1.515 Determination of the request for reexamination.

(a) Within three months following the filing date of a request for reexamina-tion, an examiner will consider the re-quest and determine whether or not a substantial new question of patentability affecting any claim of the patent is raised by the request and the prior art cited therein, with or without considera-tion of other patents or printed publi-cations. [Emphasis added.]

Turning to the Manual of Patent Exam-ining Procedure (MPEP), one sees that examiners are instructed as follows, when considering a request for reexamination:

§ 2242 Criteria for Deciding Request.

... Material new arguments or interpre-tations can raise “a substantial new question of patentability” as to prior art patents or printed publications already considered by the Office.

§ 2244 Prior Art on Which Determi-nation Is Based.

The determination whether or not “a substantial question of patentability” is present can be based upon any prior art patents or printed publications. Section 303(a) of the statute and 37 CFR 1.515(a) provide that the determination on a re-quest will be made “with or without con-sideration of other patents or printed publications,” i.e., other than those relied upon in the request. The examiner is not limited in making the determination to the patents and printed publications re-lied upon in the request. The examiner can find “a substantial new question of patentability” based upon the prior art patents or printed publications relied upon in the request, a combination of the prior art relied upon in the request and other prior art found elsewhere, or based entirely on different patents or printed publications. The primary source of patents and printed publications used in making the determination are those re-lied upon in the request. However, the examiner can also consider the prior art of record in the patent file from the earlier examination or a reexamination and any patents and printed publications of record in the patent file from submis-sions under 37 CFR 1.501 which are in compliance with 37 CFR 1.98 in making the determination.

* * * * * *

Any question as to whether a substan-tial new question of patentability exists should be resolved in favor of granting the request for reexamination. [Empha-sis added.]

With respect to the scope of the examina-tion on reexamination, the second step, 37 C.F.R. § 1.552(a) provides:

Patent claims will be reexamined on the basis of patents or printed publications. No limitation is found there, or is intended, to limit reexamination to the new question of patentability which started reexamina-tion.5 In making rejections, the examiners are told in the MPEP:

§ 2256 Prior Art Patents and Printed Publications Considered by Examiner in Reexamination.

The primary source of prior art will be the patents and printed publications cited in the request.

The examiner must also consider pat-ents and printed publications

-cited by a reexamination requester un-der § 1.510

-cited in patent owner‘s statement un-der § 1.530 or a requester‘s reply under § 1.535 if they comply with § 1.98

-cited by patent owner under a duty of disclosure (§ 1.555) in compliance with § 1.98

-discovered by the examiner in search-ing

-of record in the patent file from ear-lier examination

-of record in patent file from § 1.501 submission prior to date of an order if it complies with § 1.98. [Emphasis added.]

§ 2216 Substantial New Question of Patentability.

... If a substantial new question of pat-entability is found as to one claim, all claims will be reexamined during the ex parte reexamination process. [Emphasis added.]

The MPEP example of the processing of a “typical” reexamination shows a request for reexamination of claims 1-4 of a patent (MPEP § 2214, at 2200-11); a decision that a new question is raised as to claims 1-3 and no new question as to claim 4 (MPEP § 2246, at 2200-29); and, finally, a decision (1) not to reexamine claims 1-3 because of a court decision; (2) a rejection of issued claim 4; (3) a determination of patentability of issued claim 5; and (4) a rejection of new claim 6 (MPEP § 2262, at 2200-41). Thus, issued claim 4 is lost-although no decision was made that a substantial new question of patentability existed to involve the claim in the reexamination.

Coupling this expansive view of the scope of reexamination with the denial of a presumption of validity gives carte blanche to the Office to “second guess” the original allowance on the basis of the art originally considered or, at least, not materially dif-ferent. This unrestrained view of its pow-er during reexamination was, indeed, ex-pressed by the board in In re DeWitt, No. 581-71, slip. op. at 5 (Bd.App. May 30, 1984), the appeal of which is also decided today, No. 84-1555 (Fed.Cir. Feb. 27, 1985), in which the board opined:

[T]here is no policy reason against the Office reconsidering its own work prod-uct and admit it may have made an er-ror....

This view is too simplistic. The ques-tions of validity of patents over prior art are not clear cut. The conflicting testimo-ny of responsible experts, which this court sees every day in the records of patent cases before it, belies the concept that de-termining an “error” was made will be readily apparent.6 The ultimate decision is a judgment call and the result may well depend on whether one starts with the view that the patent is valid or that reexamina-tion starts on a clean slate. See (judgment of invalidity reversed, in-ter alia, for failure to accord presumption of validity).

For the foregoing reasons, I believe it would be the correct and desirable interpre-tation of the statute to apply the presump-

tion of validity in reexamination in the same manner as in court proceedings, and I would also apply the identical standard for claim construction.7

Alternatively, I urge the majority to limit reexamination to “resolution of the ques-tion,” that is, to the “substantial new ques-tion of patentability” which caused the reexamination to be ordered, in accordance with 35 U.S.C. § 304. Nothing in the stat-ute constrains the Commissioner, of course, from finding more than one substantial new question of patentability. However, under the statute, the Commissioner is required to make such determination. He should not merely allow reexamination to proceed in any direction at the discretion of an examiner. Clearly, reexamination was not designed to allow the PTO simply to reconsider and second guess what it has already done.

Bissell, Circuit Judge, filed concurring opinion.

Notes

1
The ‘034 patent is involved in a civil action filed against a third party (M.D.Fla., Civil Action No. 81-1009. Cir. T-H). That action has been stayed, and an interference involving Etter and that party has been dissolved, in light of the examiner‘s determination that the claims are unpatentable. Thus the outcome here could affect a civil action and two interferences. The directive in 35 U.S.C. § 305 to follow “procedures established for initial examination under the provisions of sections 132 [PTO must give notice of rejection with reasons] and 133 [time for response]” patently have no bearing on the substantive issue here.
2
Etter filed a Rule 131 affidavit of prior inven-torship in respect of Lowell. The examiner withdrew Lowell, but held that Ambrosio in view of Azure remained sufficient to support rejection of all claims. Etter asserts that the issue on appeal is whether the claimed inven-tions would have been obvious under 35 U.S.C. § 103 on Ambrosio in view of Azure. ; ; ; .
3
As intervenor, Goodfellow filed a brief on this appeal, arguing strenuously for non-application of a presumption of validity to claims undergo-ing examination and reexamination. His brief also supported the board‘s view of the prior art and the affidavits. In this case, the board‘s position is that it makes no difference whether the presumption applies or not. In In re DeWitt, No. 581-71, slip op. at 5 (Bd.App. May 30, 1984), the appeal of which is also decided today, No. 84-1555 (Fed. Cir. Feb. 27, 1985), the board took the next step and explicitly held that the presumption did not apply to claims under reexamination.
4
If a patent owner requests reexamination, but desires consideration of wider issues, e.g., prior public use or sale, he must obtain such consid-eration by filing a reissue application. 37 CFR 1.552; MPEP §§ 2212, 2258. The present case involves a non-patentee requestor; it should be remembered, however, that reexamination may be a boon to patentees whose patents may be thereby strengthened, and that the actual reexa-mination procedure itself should be the same whoever be the requestor. See, e.g., Patent Reexamination: Hearings on S. 1679 Before the Comm. on the Judiciary, 96th Cong., 1st Sess. 1, 60 (1979) (testimony of Ar-thur R. Whale) (“[Reexamination] will bring the presumption of validity to the same level with respect to newly cited art.“).
5
The inquiry occasioned by a request for reexa-mination is solely whether a reexamination or-der should issue and is not directed toward resolution of validity. The requestor‘s burden is simply to show a basis for issuance of the order, a burden unrelated to that assigned in § 282. A refusal of reexamination leaves untouched the § 282 presumption to which the patent is enti-tled in the courtroom. Similarly, a reexamina-tion may involve only certain claims, e.g., those in litigation, and the newly cited prior art may bear no relation to other claims, to which the presumption of validity would remain attached in future litigation involving those claims. In publishing the implementing regulations, Acting Commissioner of Patents and Trade-marks Tegtmeyer stated with respect to the scope of reexamination:
6
No third party is involved when reexamina-tion is requested by the patentee or initiated sua sponte by the Commissioner. When a third party (whether or not an alleged infringer, and whether or not suit has been filed) is the reque-stor, that party is heard only on whether “a substantial new question” exists. Absent a “sub-stantial new question“, an alleged infringer can-not “force” a patentee back into the PTO. Con-trary to indications in the concurrence, the reex-amination per se of the claims is entirely ex parte. Whether a requestor, or other party, is permitted to intervene in an appeal to this court (the intervenor being thereby bound by the deci-sion on appeal) is discretionary with this court. In all events, concentration on those instances when an alleged infringer is present at the re-questing stage should not influence a decision on whether § 282 applies in the ex parte reexa-mination proceeding. “Federal courts have a difficult enough time trying to determine whether an invention, nar-rowed by the patent application procedure and fixed in the specifications which describe the invention for which the patent was granted, is patentable.” .
7
A patent is not a “deed“, a term normally used to describe an attribute of real property. Implicit in my opinion, of course, is that no presumption applies to new or amended claims.