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PTO Board Erred in Refusing to Consider Arguments by Inter Partes Reexam Appellee

Friday, January 25, 2013
An inter partes reexamination challenger was improperly barred by the Board of Patent Appeals and Interferences from presenting an obviousness argument, the U.S. Court of Appeals for the Federal Circuit ruled Jan. 23 (Rexnord Industries L.L.C. v. Kappos, Fed. Cir., No. 2011-1434, 1/23/13).

After an examiner concluded that the reexamined patent's claims were obvious, the BPAI overturned the judgment based only on arguments present in the patent owner's brief. The Federal Circuit held that judicial review of an appeal should allow the appellee to raise any ground supported by the record.


Examiner Favors Challenger; Board Favors Patentee
Habasit Belting Inc. was granted a patent (U.S. Patent No. 6,523,680) on a particular configuration of a conveyor belt that prevents fingers from getting caught. The claims define a space between links of less than 10 millimeters.

Habasit filed a patent infringement claim against Rexnord Industries L.L.C. The litigation was stayed after Rexnord requested inter partes reexamination at the Patent and Trademark Office.

The examiner assigned to the reexamination used prior art that mentioned preventing fingers from penetrating the conveyor belt grid, though none mentioned a specific space size. The examiner found the claims obvious under that prior art, as applied by a person of ordinary skill in the art.

Habasit appealed to the BPAI, arguing inter alia that the 10 mm dimension was not stated in any reference. In response, Rexnord argued that a maximum space was inherent in the structures described in the references and that 10 millimeters was an obvious “design choice.”

The BPAI reversed the examiner's decision, finding the claims not anticipated and not obvious. It then rejected Rexnord's request for a rehearing. The board said that Rexnord had waived its inherency arguments with respect to anticipation, and that the “design choice” arguments relevant for an obviousness analysis need not be considered because they “were not the rationale of the Examiner's rejection.”

Rexnord appealed.


Anticipation, Yes; Obviousness, No
Judge Pauline Newman first agreed with the BPAI as to anticipation in that “the precise less-than-10 mm size limitation is not inherent in [two earlier issued patents], for neither reference shows this limitation and that it would necessarily be recognized.”

However, the court rejected the PTO's contention that, as to obviousness, the board did not have to consider Rexnord's design-choice arguments since they had not been raised by Habasit's appeal.

The court said, “[Rexnord's] 'new theory' was not new.” The court reviewed the record and saw four separate references to design-choice arguments in Rexnord's request for inter partes reexamination. “When Habasit appealed the examiner's decision, Rexnord was not barred from presenting this argument in defense of the examiner,” the court said.

The PTO argued that the Federal Circuit's rule is to not entertain arguments outside those presented in the appellant's opening brief, justifying the board's similar rule. But the court said that view of the appellate process was incorrect.

“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,” the court said, citing Jaffke v. Dunham, 352 U.S. 280, 281 (1957).

Turning back to the design-choice argument, the court reviewed the examiner's reasoning and found no error.

“All of the structural elements of the claims are shown in the references,” the court said. “A space that is small enough to avoid pinching of fingers is taught in the prior art, with the 10 mm dimension a design choice that takes account of the size of fingers and other small objects.”

Concluding that the board's refusal to consider the argument was error, the court reversed as to obviousness and reinstated the examiner's reexamination decision.

Judges Alan D. Lourie and Sharon Prost joined the court's opinion.

David R. Cross of Quarles & Brady, Milwaukee, Wis., represented Rexnord. The PTO was represented by Mary L. Kelly of the PTO's Office of the Solicitor, Alexandria, Va. Matthew T. Bailey of McKeena Long & Aldridge, Washington, D.C., represented Habasit.

By Tony Dutra


Text is available at /uploadedFiles/Content/News/Legal_and_Business/Bloomberg_Law/Legal_Reports/13Jan23(1).pdf.

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