Mikkilineni v. Stoll (Fed. Cir. 2010)

By Donald Zuhn --

Earlier this month, the Federal Circuit, in Mikkilineni v. Stoll, affirmed a decision of the District Court for the Eastern District of Virginia dismissing Mikkilineni's challenge of the U.S. Patent and Trademark Office's Interim Patent Subject Matter Eligibility Examination Instructions ("Interim Guidelines").

Plaintiff-Appellant M. R. Mikkilineni filed an application claiming "a method to fall-asleep by learning to use the process-algorithm in the brain [to] transform brain-neurons into a different[]physical state and produce melatonin and serotonin . . . without the use of drugs."  Mikkilineni's claims were rejected under 35 U.S.C. § 101 as being directed to non-statutory subject matter, the Examiner explaining that the rejection was mandated under the Office's Interim Guidelines.  One day after responding to the Examiner's non-final rejection, Mikkilineni filed suit against the Commissioner of Patents, alleging that the Patent Office violated 5 U.S.C. § 553(b)-(c) of the Administrative Procedure Act ("APA") by failing to provide notice and an opportunity to comment with respect to the Interim Guidelines.  The District Court granted the Patent Office's motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and (6).

On appeal, Mikkilineni argued that the Interim Guidelines constituted substantive rules that were improperly promulgated without notice and comment rulemaking, and that the Office improperly rejected his application.  In an opinion issued per curiam, the panel noted that under § 553 of the APA, "substantive" rules require notice and comment and "interpretative" rules do not.  The panel also noted that "[a] rule is 'substantive' where it causes a change in existing law or policy that affects individual rights and obligations and 'interpretive' where it 'merely clarifies or explains existing law or regulations.'"  While Mikkilineni contended that the Interim Guidelines were substantive rules because they substantively deprived him of his rights by requiring the Examiner to reject his claims under § 101, the panel found this argument to be without merit, explaining that the Office's notice requesting comments regarding the Interim Guidelines stated that the Interim Guidelines were interpretive guidance based on the Office's current understanding of the law, "do not constitute substantive rule making and hence do not have the force and effect of law," and that "[r]ejections are and will continue to be based upon the substantive law."  The panel therefore concluded that the Interim Guidelines are interpretive, rather than substantive, and were thus exempt from the notice and comment requirements of § 553 of the APA.  (Interestingly, the panel did not rely on the fact that the Patent Office appears to have subjected the Interim Guidelines to notice and comment rulemaking.)

With regard to Mikkilineni's second argument (that the Patent Office improperly rejected his application), the panel observed that the District Court's dismissal was proper because the Court did not have jurisdiction to review the Examiner's non-final rejection.  The panel noted that when Mikkilineni receives a final rejection from the Office, he can appeal the rejection to the Board, and only after receiving a Board decision affirming that final rejection will he be able to seek judicial review.

Mikkilineni v. Stoll (Fed. Cir. 2010)
Nonprecedential disposition
Panel: Circuit Judges Gajarsa, Linn, and Dyk
Per curiam opinion

Comments

[General Admission]

...the children all snug in their beds with visions of complicated process algorithmic calculations that induce serotonin and melatonin dancing in their heads.

And infringement would be shown how?

[Skeptical]

...so just because the Office proclaims the change "not" to be substantive, we are supposed to agree?

One wonders what the world would be like if we all followed that path. If Tafas and GSK followed that path.

[6]

"On appeal, Mikkilineni argued that the Interim Guidelines constituted substantive rules that were improperly promulgated without notice and comment rulemaking, and that the Office improperly rejected his application. "

Let me guess, this guy had David Boundy as his attorney.

Everything looks like a substantive rule when all you've got is a non-statutory process.

[David Boundy]

No, 6, if Mikkilenini had had a lawyer with some competence in the administrative law, he wouldn't have brought the case. It wasn't me. (I've advised several folks to not bring dumb cases -- some listen, some don't, and they're getting creamed.)

The Federal Circuit got the right result, but goofed a bit around the edges. For example, examination guidelines are "interpretative" not "interpretive" (look at the statute, dears), and the opposite of "interpretative" is "legislative" not "substantive." But we can look past that.

It's also crystal clear that the non-final rejection is not independently reviewable under § 704 first sentence. Once the PTO issues a final action, and if a procedural breach in the examiner's work colored subsequent proceedings, then Mikkilenini has a claim for review of the non-final action under § 704 second sentence, but he's not there yet.

The Office bad a big goof, notice and comment is required under OMB's Good Guidance Bulletin -- but the remedy for that breach does not lie in a court, and it wasn't at issue here.

The case does give us going-forward instruction. We now have a clear adjudication that examination guidelines are "interpretative." That means they have very limited binding authority against applicants--the PTO may not foreclose alternative positions. "Interpretative" also means binding minima against the Office (even the Board, the piratical footnote 8 of the Board's decision in Ex parte Bilski, and the "neither appealable nor petitionable" disclaimer gibberish at the beginning, notwithstanding).

If the PTO maintained consistency with the position it argued here and in Jung, we'd be golden.

Fat chance of that.

[6]

"The Office bad a big goof, notice and comment is required under OMB's Good Guidance Bulletin "

OMB has no power here! And just btw, Kev. just said that they did do notice and commenting. And I seem to remember them doing it.

"No, 6, if Mikkilenini had had a lawyer with some competence in the administrative law, he wouldn't have brought the case. "

Probably true. Nevertheless, you know he got the idea for this challenge somewhere. He didn't just make it up off the top of his head. He's been reading some [redacted] somewhere, some [redacted] talking about Guidelines and Substantive Rule Making to be exact. Take care what your tomfoolery causes others to do.

[6]

I just had quite a thought, what if this is AI's caae?

[David Boundy]

>>> OMB has no power here!

I am well aware that that sentiment pervades a distressingly high fraction of the PTO's staff, junior to quite senior. They don't care all that much about final judgments of courts either, even on issues that the PTO fully litigated and lost fair and square.

[A (happily) infrequent guest]

David,

As you well know (and valiantly uncovered and exposed), the noise that is the Office is above the law.

I commend you on your diligence. Keep up the good work.