Court Upholds PTO Determination That Reissue Cannot Cure Improper Terminal Disclaimer
By Kevin E. Noonan --
Despite thirty years of efforts by the Federal Circuit to bring consistency and transparency to patent law (and the last dozen years of the Supreme Court's efforts to the contrary), in many respects patent law remains "full of traps for the unwary." A recent Federal Circuit decision, affirming final rejection by the U.S. Patent and Trademark Office in a narrowing reissue application illustrates one such trap (and a particular type of unwariness).
The case involved a reissue application filed under 35 U.S.C. § 251 for U.S. Patent No. 7,236,568, having claims directed to "[a m]iniature x-ray source with improved output stability and voltage standoff." During the original prosecution, applicants had filed a terminal disclaimer over the claims of U.S. Patent No. 6,658,086. As with all terminal disclaimers, the one at issue attested that the claims of the later '568 patent would be enforceable "only for and during such period" as the earlier '086 and '568 patents were co-owned. 37 C.F.R. § 1.321(c). This provision is intended to prevent an accused infringer from being sued by separate patent owners having claims that are not patentably distinct. (This consideration also explains why terminal disclaimer practice survives the change in patent law from the previous regime awarding a 17 year patent term for each patent to the current law, where the term of a granted patent in the U.S. is twenty years from the earliest filing date -- with some not relevant exceptions. This change voided the alternative purpose of terminal disclaimers, that is to prevent a patentee from extending the statutory patent term by obtaining claims of patentably-indistinct scope having overlapping 17-year terms.)
The reason patentees filed the reissue application was that the two patents were not and never were co-owned. As part of the reissue procedure, the inventors filed a "reissue declaration," purporting to set forth an "error" in the patent that made it defective and that was to be cured by reissue, said error being the filing of the terminal disclaimer (as set forth in the opinion, in this first declaration the applicants stated that they "inadvertently and without deceptive intent filed a Terminal Disclaimer over [the '086 patent], which was not commonly owned by the owners of [the '568 patent] currently at issue." There was no offer to file a "corrected" terminal disclaimer. This assertion was insufficient, the examiner deciding that it was "not an error upon which a reissue can be based." In response to rejection by the examiner, applicants filed a petition with the Commissioner for Patents to permit them to replace the terminal disclaimer of record with one identical in all respects except that the replacement did not contain the provision (as noted, required by PTO regulations) that the '568 patent would be enforceable only during such time that it was commonly owned with the '086 patent. The Office denied this petition a total of three times, each time on the grounds that the statement was required in a valid terminal disclaimer.
In response to PTO rejection of the reissue as being unsupported by a proper declaration, applicants submitted a substitute, setting forth as the defect allowance of the '568 patent claims in the first place, due to the defective terminal disclaimer. In their response, applicants cancelled several of the granted claims and submitted substitute claims, which were not accepted, and after additional submissions during prosecution finally submitted narrower claims amended to overcome the asserted obviousness-type double patenting grounds (as well as another attempt to file a terminal disclaimer lacking the "co-owned" language), illustrating the pitfall here: wherein such claims in a co-pending continuation application or that had been granted in a patent defective on other grounds might have been considered; here, applicants could not satisfy the predicate grounds for permitting them to file a reissue application in the first place. This last attempt was also unsuccessful; the examiner rejected the proffered claims on the grounds that the alleged "defect" (the terminal disclaimer) was not a proper basis for filing a reissue application. This rejection was affirmed by the Patent Trial and Appeal Board (in a decision that emphasized the "voluntary and intentional" aspects of a terminal disclaimer filing) and appeal to the Federal Circuit followed.
The Federal Circuit affirmed, in an opinion by Judge Taranto joined by Judges Bryson and Hughes. Starting with the text of the statute, the opinion grounds its decision to affirm on the panel's determination that the asserted basis for error, that the terminal disclaimer was "ineffective or invalid" is "simply incorrect in the most straightforward sense," i.e., because any defect could be "cured" by having the two patents be co-owned. The Court also found the terminal disclaimer to be valid, insofar as it contained all the required assertions and averments necessary to be given effect by the PTO to overcome the asserted obviousness-type double patenting rejection. In addition, the terminal disclaimer fulfilled the policy objective of preventing third party accused infringers from being subject to "multiple infringement suits by different assignees asserting essentially the same patented invention," citing In re Hubbell, 709 F.3d 1140, 1145 (Fed. Cir. 2013).
The Court identified the asserted defect in the terminal disclaimer to be that the patentees could not enforce the patent "themselves" (i.e., absent common ownership with the '086 patent) and that this was not the outcome the patentees desired to achieve. This is, the panel says, not a basis for reissue but rather "no more than a statement of a now-regretted choice," which was not a proper ground for reissue or "error" as the statue required. This is because the nexus between the error and the patent defect is that the specification, drawings or claims are defective (or, for the claims, unduly broad) due to the error. While not stating that defects resulting from "applicant's choices" can never be the basis for a reissue application, the Court does assert that "not every choice that produces inoperativeness or invalidity by reason of a specification, drawing, or claiming problem (within the meaning of section 251) can qualify" but only those based on error. Drawing on case law, the opinion states that:
[F]or purposes of narrowing re-issue-qualifying choices to those involving "error," it is important whether deficient understandings, by the applicants or their agents, gave rise to the patenting choice that reissue is being invoked to correct. In the authorities that the applicants here feature, false or inadequate understandings about then-existing facts or law evidently underlay the aspects of the original patent sought to be altered by reissue.
The Court has previously held that reissue was unavailable for an applicant had not been able to identify any "deficient understanding" behind the error; "[i]n such cases, the reissue application was held inadequate as being no more than an effort to reverse a later-regretted choice made in obtaining the original patent," citing Miller v. Bridgeport Brass Co., 104 U.S. 350, 355 (1881); In re Serenkin, 479 F.3d 1359, 1364 (Fed. Cir. 2007); In re Mead, 581 F.2d 251, 257 (CCPA 1978); and In re Orita, 550 F.2d 1277, 1280 (CCPA 1977).
Here, the Court concludes, "the applicants have not identified any deficient understanding as leading to the issuance of [the] original claims with the terminal disclaimer," and hence there was no basis under the statute for a reissue examination. The Court characterizes the facts as showing that the applicants had the choice of amending the claims to overcome the obviousness-type double patenting rejection, or filing a terminal disclaimer. Having chosen to do the latter, and without any showing of any misunderstanding regarding what they were doing, or any mistake with regard to the ownership status of the prior patent and their application:
[T]he applicants -- knowing that the patents were not commonly owned -- intentionally surrendered a possible right (the ability to obtain all or some of the '568 patent claims in a form enforceable independently of the '086 patent) in exchange for a benefit (overcoming an obviousness-type double-patenting rejection of several of the proposed claims).
All the patentees are trying to do here is "simply to revise a choice they have made," and, without more, this is not an "error" that the reissue statute was enacted to remedy.
In re Dinsmore (Fed. Cir. 2014)
Panel: Circuit Judges Taranto, Bryson, and HughesOpinion by Circuit Judge Tarnato