Exxon Corp. v. Phillips Petroleum Co.
| Decision Date | 20 September 2001 |
| Docket Number | 00-1174,DEFENDANT-CROSS,PLAINTIFFS-APPELLANTS,Nos. 00-1173,s. 00-1173 |
| Parties | (Fed. Cir. 2001) EXXON CORPORATION (NOW KNOWN AS EXXONMOBIL CORPORATION) AND EXXON CHEMICAL PATENTS, INC.,, v. PHILLIPS PETROLEUM COMPANY,APPELLANT. DECIDED: |
| Court | U.S. Court of Appeals — Federal Circuit |
Appealed from: United States District Court for the Southern District of Texas Judge Vanessa D. Gilmore
E. Edward Bruce, Covington & Burling, of Washington, Dc, argued for plaintiffs-appellants. With him on the brief was Christopher N. Sipes.
S. Leslie Misrock, Pennie & Edmonds Llp, of New York, New York, argued for defendant-cross appellant. Of counsel on the brief were Stanton T. Lawrence III, Paul J. Zegger, and Carl P. Bretscher, Pennie & Edmonds Llp, of Washington, Dc; and Roy W. Hardin, Locke Liddell & Sapp Llp, of Dallas, Texas. Of counsel was Wayne Fisher, Fisher, Boyd, Brown, Boudreaux & Huguenard, L.L.P., of Houston, Texas.
Before Newman, Circuit Judge, Friedman, Senior Circuit Judge, and Linn, Circuit Judge.
Exxon Mobil Corporation and Exxon Chemical Patents (together "Exxon") appeal the judgment of invalidity of United States Patent No. 5,324,800 (the '800 patent) on the ground of anticipation. 1 Phillips Petroleum Company has filed a conditional cross appeal on the issue of interference estoppel. We reverse the judgment of invalidity, affirm the ruling on the cross appeal, and remand for further proceedings.
In response to Exxon's suit for infringement of the '800 patent, Phillips asserted, inter alia, the defense of patent invalidity based on anticipation by a published foreign patent having the same text as the '800 patent. This publication is an invalidating reference under 35 U.S.C. §102(b) if Exxon is not entitled to the benefit of earlier United States application filing dates because of an asserted break in the chain of copending continuing applications. The district court found that Exxon had indeed broken the chain of copendency, and entered final judgment of patent invalidity.
The chain of applications leading to the '800 patent is as follows: Exxon's initial application was filed in the United States on June 6, 1983. A continuation application was filed on April 29, 1985. Some of the subject matter of this application was involved in an interference proceeding, which was decided adversely to Exxon. A third application was filed on December 22, 1989. A fourth application was filed on August 30, 1991, and became the '800 patent. At issue is the continuity of pendency of this fourth application with the third application, which "went abandoned" on November 1, 1991.
The fourth application was filed in accordance with the procedures of 37 C.F.R. §1.60 as then in effect. The prosecution record contains a form entitled "37 CFR 1.60 CONTINUATION OR DIVISIONAL FILING FORM" bearing the PTO date stamp August 30, 1991. It is marked as a "continuation" of Serial No. 455,484 filed on December 22, 1989, and as "enclos[ing] a copy of the prior application . . . and the oath or declaration as originally filed." Attached was a copy of the Serial No. 455,484 specification including claims 1-11, and the declaration by the inventors.
In the section of the form marked "CLAIMS AS FILED, LESS ANY CLAIMS CANCELLED BY AMENDMENT BELOW" Exxon inserted "10" Total Claims including "3" Independent Claims. $630.00 was the fee for an application with no more than 20 total claims including no more than 3 independent claims. The form authorized charging $630.00 to Exxon's deposit account.
At the form's printed text: "Cancel in this application original claims ____ of the prior application before calculating the filing fee" Exxon had typed "1-11" in the blank space. Since at least one claim was required for filing purposes, it was incorrect to instruct cancellation of claims 1-11. On a copy of the form in the PTO records, marked as Amendment "A," a line was drawn through the typed entry 1-11, and "2-11" was hand-written, initialed, and dated 10/7/91. A document captioned "Patent Application Fee Determination Record" contains the hand-written entry "one claim for filing purposes only."
The district court framed the issue as whether the PTO was legally permitted to retain a claim "for filing purposes," when the applicant erroneously instructed that all claims be cancelled. The court ruled that this PTO action was not within its administrative authority, stating that Baxter Int'l, Inc. v. McGaw, Inc., 149 F.3d 1321, 47 USPQ2d 1225 (Fed. Cir. 1998) requires this result.
A patent application must contain at least one claim in order to comply with 35 U.S.C. §112 () An implementing rule, 37 C.F.R. §1.51(a), 2 provides that a complete application must include "(1) A specification, including a claim or claims . . . ." 37 C.F.R. §1.53(b) states that the applicant is entitled to a filing date as of "the date on which: (1) A specification containing a description pursuant to §1.71 and at least one claim pursuant to §1.75 . . ." is filed.
The Manual of Patent Examining Procedure (MPEP) contains details of the practices and procedures whereby the PTO implements its statutory mission. Relevant to an applicant's instruction to cancel all claims, MPEP §711.01 states that "an amendment canceling all of the claims . . . is regarded as non-responsive and should not be entered." MPEP §714.19 states that "amendment canceling all of the claims and presenting no substitute claim or claims" is among the "types of amendments [that] are ordinarily denied entry." MPEP §714.20 states that while "the general rule prevails that an amendment should not be entered in part . . . the strict observance of its letter may sometimes work more harm than would result from its infraction . . . ." Thus the PTO did not enter the erroneous instruction canceling claims 1-11, but preserved one claim "for filing purposes only." Phillips argues, and the district court held, that the PTO does not have discretion to take this action, citing Baxter, supra.
Exxon argues that this action to preserve one claim is within the PTO's administrative authority. Exxon states that no statute or regulation was violated by the PTO's action, in distinction from the action struck down in Baxter. Exxon stresses that when the Baxter applicant erroneously requested the PTO to cancel all of the claims, the PTO did so; the PTO then notified Baxter that the application was incomplete because it lacked claims, and Baxter filed a set of claims five weeks after the prior application had become abandoned. Baxter then petitioned for the benefit of the date of the original submission, and the PTO granted the petition. The Federal Circuit held that because the PTO cancelled Baxter's claims the statutory requirement that an application must have claims was not met, and that this requirement could not be waived retroactively in order to recover the original filing date.
Unlike the Baxter application, the Exxon application was never without claims, for the PTO did not accept and act on Exxon's erroneous instruction. Exxon argues that the PTO has discretion, in administering patent application procedures, to adopt practices that avert procedural errors. Exxon states that due to this practice the Exxon application was never without a claim.
The district court ruled that the PTO could not administratively correct Exxon's erroneous instruction "for filing purposes only." The court held that Exxon's instruction cancelled claims 1-11 when it was submitted to the PTO, whether or not the PTO carried out the instruction. The court held that "while [the PTO] may have been following its internal procedures in retaining claim 1 in violation of Exxon's instructions, it was not statutorily permitted to do so." The inquiry thus is whether the PTO was statutorily permitted to act to preserve a claim for filing purposes.
Administrative agencies must conform with their governing statutes and regulations. Within this framework, agencies are authorized to adopt rules and procedures by which they implement their responsibilities and fulfill their mission. We thus must consider whether the PTO was entitled to interpret its statutory authority as it had in this case, whereby the applicant's instruction to cancel all claims was administratively modified, thereby averting illegality and implementing the applicant's instruction to file a continuation application.
We have been directed to no statutory or regulatory restraint on the PTO's authority to adopt such a saving procedure. No law or regulation prohibits the PTO from acting to preserve the applicant's compliance with the filing requirements. The PTO is not barred from refusing to enter an improper amendment or execute an illegal instruction. Thus MPEP §711.01 provided that an amendment canceling all claims That the amendment...
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