Recreative Technologies Corp., In re, 95-1337

• Decision Date: 13 May 1996
• Docket Number: No. 95-1337,95-1337
• Citation: 38 USPQ2d 1776,83 F.3d 1394
• Parties: In re RECREATIVE TECHNOLOGIES CORP.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1394

83 F.3d 1394

38 U.S.P.Q.2d 1776

In re RECREATIVE TECHNOLOGIES CORP.

No. 95-1337.

United States Court of Appeals Federal Circuit.

May 13, 1996.

Timothy J. Martin, Timothy J. Martin, P.C., Lakewood, Colorado, argued for appellant.

James T. Carmichael, Office of the Solicitor, Arlington, Virginia, argued for appellee. Nancy J. Linck, Solicitor, Albin F. Drost, Deputy Solicitor and Murriel E. Crawford, Associate Solicitor, Office of Solicitor, Arlington, Virginia, were on the brief, for appellee.

James A. Lowe and Sandeep Seth, Denver, Colorado, were on the brief, for Amicus Curiae, Preferred Response Marketing, Ltd.

Before ARCHER, Chief Judge, and RICH and NEWMAN, Circuit Judges.

PAULINE NEWMAN, Circuit Judge.

Recreative Technologies Corp. ("Recreative") appeals the decision of the Patent and Trademark Office ("PTO") Board of Patent Appeals and Interferences holding claims 1, 2, and 4 of United States Patent No. 4,912,800 ("the '800 patent"), upon reexamination, to be unpatentable. ¹ We conclude that the Board exceeded the statutory authorization that governs reexamination. We reverse the decision of the Board, and remand for further proceedings consistent with this opinion.

BACKGROUND

The '800 patent is directed to a cleaning device for use by golfers. The device is structured to be secured to a golf bag for use to clean items such as golf clubs, balls, and shoes. The cleaning device is comprised of several elements including a water absorbent towel body, a brush member secured to the towel body and a mounting means to releasably mount the towel body/brush to a golf bag. After Recreative sued Preferred Response Marketing ("Preferred") for infringement, Preferred requested reexamination of the '800 patent, citing as new references five patents and three publications, and stating that these new references raised a substantial new question of patentability. The PTO granted the request for reexamination.

On reexamination the examiner rejected claims 1, 2, 4-7, and 17 as unpatentable on the ground of obviousness, 35 U.S.C. § 103, in view of a reference to Ota. The examiner did not reject any claim on any of the eight new references cited by Preferred, and did not cite any reference other than Ota. The examiner confirmed original claims 13-16 and 18-20 and held patentable original claims 3 and 8-12. The Ota reference had been cited in the original examination on the same ground, obviousness, and the claims had been held patentable over Ota.

Recreative appealed the reexamination rejection to the Board. The Board reversed the examiner's rejection of claims 1, 2, 4-7, and 17, holding that the claims were not obvious in view of Ota. However, the Board sua sponte rejected claims 1, 2, and 4 based on the same Ota reference, but now under 35 U.S.C. § 102, for lack of novelty. This appeal followed.

DISCUSSION

The Reexamination Statute

Recreative states that the PTO had no authority to reject the claims, on reexamination, on the same ground on which the application was examined and the claims allowed during the original prosecution. Recreative states that the reexamination statute limits reexamination to "a substantial new question of patentability," and does not authorize repetition of a rejection on the same grounds that had been resolved in favor of the applicant during the original examination. 35 U.S.C. § 303 requires the examiner to determine whether a "substantial new question of patentability" is raised by the reexamination request. Only if a new question of patentability is raised, can the patent be reexamined.

Recreative states that the examiner merely repeated the same rejection for obviousness, based on the same Ota reference, as during the initial examination. Recreative states that it had successfully traversed the rejection based on the Ota reference in the initial examination, and that the reexamination statute was written to limit reexamination to new questions.

The Commissioner argues that "[o]nce initiated, the scope of reexamination includes reexamination of the patent in view of any pertinent patents and printed publications," new or old. The Commissioner thus contends that the repeat examination on the same ground was proper practice. However, the reexamination statute was designed to exclude repeat examination on grounds that had already been successfully traversed. Thus, the statute, on its face, does not accommodate the Commissioner's position.

The statute authorizes reexamination only when there is a substantial new question of patentability. A second examination, on the identical ground that had been previously raised and overcome, is barred. Thus, once it becomes apparent that there is no new question of patentability, it is improper to conduct reexamination on an old question that had been finally resolved during the initial examination. The Commissioner's argument that a different interpretation should prevail, and that the PTO has authority to reach a different result on reexamination on the identical ground, has led us to review the considerations that underlay the statute at the time of enactment.

Legislative History of Public Law 96-517

The reexamination statute was an important part of a larger effort to revive the United States' competitive vitality by restoring confidence in the validity of patents issued by the PTO. Patlex Corp. v. Mossinghoff, 758 F.2d 594, 601, 225 USPQ 243, 248, aff'd on reh'g 771 F.2d 480, 226 USPQ 985 (Fed.Cir.1985). Congressman Robert Kastenmeier described the reexamination proposal as "an effort to reverse the current decline in U.S. productivity by strengthening the patent and copyright systems to improve investor confidence in new technology." 126 Cong. Rec. 29,895 (1980).

The proponents of reexamination anticipated three principal benefits. First, reexamination based on references that were not previously included in the patentability examination could resolve validity disputes more quickly and less expensively than litigation. Second, courts would benefit from the expertise of the PTO for prior art that was not previously of record. Third, reexamination would strengthen confidence in patents whose validity was clouded because pertinent prior art had not previously been considered by the PTO. Patlex, 758 F.2d at 602, 225 USPQ at 248-49. These benefits are achieved by authorizing the PTO to correct errors in the prior examination:

The reexamination statute's purpose is to correct errors made by the government, to remedy defective governmental (not private) action, and if need be to remove patents that never should have been granted....

* A defectively examined and therefore erroneously granted patent must yield to the reasonable Congressional purpose of facilitating the correction of governmental mistakes.

Patlex, 758 F.2d at 604, 225 USPQ at 250.

However, Congress recognized that this broad purpose must be balanced against the potential for abuse, whereby unwarranted reexaminations can harass the patentee and waste the patent life. The legislative record and the record of the interested public reflect a serious concern that reexamination not create new opportunities for abusive tactics and burdensome procedures. Thus reexamination as enacted was carefully limited to new prior art, that is, "new information about pre-existing technology which may have escaped review at the time of the initial examination of the patent application." H.R.Rep. No. 96-1307, 96th Cong., 2d Sess. 3 (1980), reprinted in 1980 U.S.C.C.A.N. 6460, 6462. No grounds of reexamination were to be permitted other than based on new prior art and sections 102 and 103. As explained in the legislative history, matters that were decided in the original examination would be barred from reexamination:

This "substantial new question" requirement would protect patentees from having to respond to, or participate in unjustified reexaminations. Further, it would act to bar reconsideration of any argument already decided by the Office, whether during the original examination or an earlier reexamination.

Id. at 7, reprinted in 1980 U.S.C.C.A.N. at 6466.

Thus the statute guarded against simply repeating the prior examination on the same issues and arguments. Commissioner Diamond explained the importance of this safeguard:

[The proposed statute] carefully protects patent owners from reexamination proceedings brought for harassment or spite. The possibility of harassing patent holders is a classic criticism of some foreign reexamination systems and we made sure it would not happen here.

Industrial Innovation & Patent & Copyright Law Amendments: Hearings on H.R. 6933, 6934, 3806 & 214 Before the Subcomm. on Courts, Civil Liberties and the Administration of Justice of the House Comm. on the Judiciary, 96th Cong., 2d Sess. 594 (1980) (statement of Sidney Diamond, Cmr. of Patents & Trademarks).

In this case, the Commissioner...