By Donald Zuhn --
Last week, in Natural Alternatives International, Inc. v. Iancu, the Federal Circuit affirmed a determination by the U.S. Patent and Trademark Office Patent Trial and Appeal Board in an inter partes reexamination affirming the Examiner's rejection of the challenged claims of U.S. Patent No. 8,067,381 as being anticipated or obvious over the cited prior art, as well as the Board's denial of the patentee's request for rehearing. The '381 patent is owned by Appellant Natural Alternatives International, Inc. ("NAI").
The inter partes reexamination was requested by Woodbolt Distributors, LLC, which had been involved in district court litigation with NAI concerning the '381 patent. In its request, Woodbolt asserted that the priority claim of the '381 patent was defective because NAI "deliberately and expressly terminated" its claim to the benefit of the first four priority applications by breaking the chain of priority between the fourth and fifth priority applications.
The opinion notes that between 1997 and 2011, NAI filed a chain of eight U.S. patent applications. The first four continuing applications each included a priority benefit statement under 35 U.S.C. § 120 claiming priority back to the filing date of the first U.S. application. In 2003, NAI filed a provisional application during the pendency of the fourth application, and when filing the fifth application in the chain, a continuation-in-part application, claimed the benefit of both the provisional application and the first four continuing applications. NAI then filed a sixth application claiming priority to first five applications and to the provisional application filing date through the fifth application. Four days after filing the sixth application, NAI amended the Cross Reference of Related Applications section of the fifth application to delete the benefit claim to the first four continuing applications leaving only the benefit claim to the provisional application. The sixth through eighth applications contained priority statements seeking the benefit of the first five applications as well as the provisional application. The '381 patent issued from the eighth application.
In the inter partes reexamination, NAI argued that it was irrelevant what happened to the fifth application once the sixth application became entitled to the first application's filing date. The Examiner nevertheless issued a final rejection of the reexamined claims in view of prior art including U.S. Patent No. 5,965,596, which issued from the first continuing application. The Board affirmed the Examiner's rejection, finding that the eighth application was not entitled to the benefit of the first four continuing applications because when the eighth application was filed "[t]he fifth application [was] not entitled to the benefit of the fourth application since the specific reference to the fourth application was deleted in the fifth." The Board subsequently denied NAI's request for rehearing.
On appeal, NAI argued that (1) priority to the first application "vested" with the sixth application once the sixth application met all the criteria of § 120; (2) waiver of priority is limited to the application in which priority was waived (i.e., the fifth) and does not extend to subsequent applications; (3) the Board erroneously viewed priority as a single growing chain rather than multiple fixed chains; and (4) the Board's view of priority claims limits an applicant's ability to amend a priority claim to gain patent term. With regard to NAI's first argument, the Federal Circuit explained that "NAI's 'vesting' argument conflates properly claiming priority and demonstrating entitlement to priority," noting that "[p]atent claims 'are not entitled to an earlier priority date merely because the patentee claims priority,'" citing In re NTP, Inc., 654 F.3d 1268, 1276 (Fed. Cir. 2011). As the opinion points out, "claims in a patent or patent application are not entitled to priority under § 120 at least until the patent owner proves entitlement to the PTO, the Board, or a federal court" (emphasis in opinion).
The Court also noted that its decision in In re Janssen Biotech, Inc., 880 F.3d 1315 (Fed. Cir. 2018), was instructive. In that case, the patentee attempted during reexamination to amend its patent to delete a benefit claim to a parent application. In view of Janssen (and other decisions), the Court indicated that it had "previously acknowledged that amending an earlier-filed parent application may affect the priority of its child applications." The Court therefore concluded that "[t]he Board . . . did not err in determining that the ʼ381 patent was not entitled to claim the benefit of the filing date of the first application under § 120, as the priority claim in the ʼ381 patent was defective from the start."
With regard to NAI's second argument, NAI asserted that MPEP § 201.11 (now § 211) permitted an applicant to change a benefit claim in a pending application, but that such "alteration applies only to the instant application—not other, . . . applications." The Court, however, pointed to the USPTO's argument (the Director had intervened in the appeal) that NAI was reading MPEP § 201.11 "too narrowly," arguing that "the [MPEP] passage does not state that cancellation of a benefit claim may be considered a waiver in only the instant application," and that "the intentional cancellation of a benefit claim pursuant to MPEP § 201.11 can similarly affect another application's entitlement to a benefit claim" (emphasis in USPTO brief). Agreeing with the USPTO, the Court stated that "we have reviewed MPEP § 201.11 and find that nothing in its text limits the scope of waiver to only the instant application" (emphasis in opinion).
With regard to NAI's third argument, the Court noted that NAI failed to "provide any argument to undermine the long-standing interpretation of priority as a single chain, growing with each additional Continuation," adding that "[t]he Supreme Court has previously explained that under § 120, parent and continuing applications 'are to be considered as parts of the same transaction, and both as constituting one continuous application, within the meaning of the law,'" citing Godfrey v. Eames, 68 U.S. 317, 326 (1863). The Court therefore declined to adopt NAI's interpretation of chain of priority.
Finally, with regard to NAI's fourth argument, the Court noted that "NAI's argument suggests that NAI need not trade the benefit of an earlier filing date in order to gain patent term." The Court explained that "[u]nder NAI's theory of priority . . . NAI could gain patent term on its fifth application while simultaneously shielding its child applications (including the eighth application) from their former parents." Rejecting NAI's argument, the Court indicated that "NAI cannot have it both ways."
Finding NAI's arguments to be unpersuasive, the Court affirmed the Board's final decision invalidating the challenged claims of the '381 patent.
In a companion opinion, the Federal Circuit affirmed the Board's final determination affirming the Examiner's rejection of the claims of U.S. Patent No. 8,129,422, which issued from the seventh application in the chain, for the reasons stated in its opinion on the '381 patent.
Natural Alternatives International, Inc. v. Iancu (Fed. Cir. 2018)
Panel: Chief Judge Prost and Circuit Judges Moore and Reyna
Opinion by Chief Judge Prost