Huston v. Ladner, 91-1515

• Decision Date: 01 September 1992
• Docket Number: No. 91-1515,91-1515
• Parties: James S. HUSTON and Herman Oppermann, Appellants, v. Robert C. LADNER, Robert E. Bird and Karl Hardman, Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1564

973 F.2d 1564

23 U.S.P.Q.2d 1910

James S. HUSTON and Herman Oppermann, Appellants, v. Robert C. LADNER, Robert E. Bird and Karl Hardman, Appellees.

No. 91-1515.

United States Court of Appeals, Federal Circuit.

Sept. 1, 1992.

James F. Haley, Jr., Fish & Neave, New York City, argued, for appellants. With him on the brief, was Denise L. Loring.

Jorge A. Goldstein, Sterne, Kessler, Goldstein & Fox, Washington, D.C., argued, for appellees. With him on the brief, was Steven Kreiss.

Before NEWMAN, PLAGER, and LOURIE, Circuit Judges.

LOURIE, Circuit Judge.

Huston appeals from the Board of Patent Appeals and Interferences decision in Patent Interference 102,562 granting summary judgment in favor of Ladner. Because we find that Huston failed to show that the Board abused its discretion in holding that the appellant did not show "good cause" under 37 C.F.R. § 1.617(b) to justify submission of additional evidence, we affirm.

BACKGROUND

The present dispute involves an interference between Ladner's U.S. Patent 4,946,778 (the '778 patent), assigned to Genex Corporation, and Huston's U.S. Patent Application 07/052,800 (the '800 application), assigned to Creative Biomolecules, Inc. (Creative). The subject matter of the interference concerns a method of producing a single chain polypeptide that binds antigen and is defined by a single count.

Huston provoked the interference. Because his effective filing date was more than three months subsequent to that of Ladner, Huston was required to submit evidence under 37 C.F.R. § 1.608(b). ¹ This material was filed by Creative's then-patent counsel and it attempted to demonstrate a prima facie case for priority over Ladner. The Examiner concluded that it did not do so. The Examiner declared the interference and simultaneously issued to Huston an Order to Show Cause under 37 C.F.R. § 1.617(a) why summary judgment should not be entered against him. ² Huston filed his response to the Order pursuant to 37 C.F.R. § 1.617(b), ³ accompanied by additional evidence of priority in the form of declarations by the inventors and corroborating witnesses. The response included the declarations of the president of Creative, Charles Cohen, and substituted lead counsel for Huston, James Haley. It attempted to show "good cause" why the additional evidence was not submitted with the initial priority showing by asserting that Creative's attorney misrepresented his competence and ability in interference matters and was grossly negligent in filing the original submission.

A hearing was conducted before the Board, which affirmed the Examiner's decision that the original showing was inadequate. The Board stated that it could not consider the additional evidence submitted in response to the Order because Huston

                had failed to show good cause why the evidence was not presented initially.   The Board specifically rejected Huston's argument that there was good cause for not presenting the evidence earlier.   The Board stated that the response did not include a showing that the additional evidence was unavailable and that it could not have been submitted with the initial showing
                

DISCUSSION

The issue presented in this appeal is whether the Board abused its discretion in holding that Huston did not show the required "good cause" for failing to present the additional evidence with the initial priority showing submitted under 37 C.F.R. § 1.608(b). "The determination whether a party seeking to initiate an interference has shown 'good cause' for his failure to present the additional evidence at the time of his initial submission is a matter within the discretion of the Board." Hahn v. Wong, 892 F.2d 1028, 1034, 13 USPQ2d 1313, 1318 (Fed.Cir.1989). An abuse of discretion may be found when the Board's decision is clearly unreasonable, based on an erroneous conclusion of law or a clearly erroneous finding, or the record is devoid of any evidence upon which the Board rationally could have based its decision. See A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1039, 22 USPQ2d 1321, 1333 (Fed.Cir.1992) (in banc).

Huston contends that he was entitled to supplement the original showing because the original attorney misrepresented to Creative his competence and ability to present Huston's prima facie showing under 37 C.F.R. § 1.608(b) and because he acted in a reckless and grossly negligent manner in filing the original evidence. The Board carefully considered these arguments and found that Huston had failed to satisfy the good cause requirement.

The Board specifically found that Huston's claim of misrepresentation by the attorney as to his ability to make a prima facie showing of priority was unsupported by the evidence. Huston v. Ladner, Interference No. 102,562, Slip Op. 13-14 (Bd.Pat.App.Int.1991). The Board went on to find that the attorney "did not appreciate the rule with regard to making the original showing complete and the substantive requirements of the law." Id. The Board held that this dispute was controlled by the rule set forth in Hahn, where we stated, "ignorance by a party or counsel of the provisions of the rules or the substantive requirements of the law does not constitute good cause" why the additional evidence was not presented initially. Hahn, 892 F.2d at 1034, 13 USPQ2d at 1319.

The Board also found that Huston's response to the Order did not include any showing that the additional evidence was unavailable and could not have been submitted with the initial showing, Huston v. Ladner, Interference No. 102,562, Slip Op. 11 (Bd.Pat.App.Int.1991). The Board properly recognized that if the evidence was not available when the original showing was filed, this would have been a valid excuse for not filing the evidence. However, because Huston did not show this excuse or any other valid excuse, the Board held that the additional evidence must be excluded. Id. at 14.

The Board recognized that the new interference rules embodied a policy of the Patent and Trademark Office (PTO) to ensure prompt resolution of patent interferences by encouraging applicants to prepare an original showing which is as complete as possible. The rules were intended to reduce the time and expense for the parties and the Board by imposing a stricter standard for filing additional evidence after entry of an order to show cause is made. 49 Fed.Reg. 48416, 48423 (December 12, 1984), Off.Gaz.Pat.Office 385, 392 (Jan. 29, 1985). In rejecting Huston's argument, the Board indicated that it relied on this policy and was furthering it. Huston v. Ladner, Interference No. 102,562, Slip Op. 13 (Bd.Pat.App.Int.1991). We see no error in the Board's or the examiner's implementation of the rules.

Huston argues that Creative should not suffer the consequences of his attorney's acts because Huston did not knowingly and freely acquiesce in his attorney's conduct. There is certainly no merit to the contention that dismissal of petitioner's claim because of his counsel's unexcused conduct imposes an unjust penalty on the client. Petitioner voluntarily chose this attorney as his representative in the action, and he cannot now avoid the consequences of the acts or omissions of this freely selected agent. Any other notion would be wholly inconsistent with our system of representative litigation, in which each party is deemed bound by the acts of his lawyer-agent and is considered to have 'notice of all facts, notice of which can be charged upon the attorney.'

                Huston argues that even though Cohen's affidavit makes it clear that he took care in selecting his attorney to handle the interference, Creative should not be held responsible for his attorney's acts.   This argument runs counter to established Supreme Court precedent holding that
                

Link v. Wabash R.R. Co., 370 U.S. 626, 633-34, 82 S.Ct. 1386, 1390, 8 L.Ed.2d 734 (1962) (citation omitted). The attorney's conduct in this case was properly chargeable to Huston.

Huston argues that the remedy for his attorney's negligent conduct should be that he should be able to resubmit the evidence to make a prima facie showing of priority over the Ladner patent. This remedy is unavailable to Huston because he failed to meet the good cause requirement of 37 C.F.R. § 1.617(b).

In addition, Huston cites Jackson v. Washington Monthly, 569 F.2d 119, 123 (D.C.Cir.1977), In re Lonardo, 17 USPQ2d 1455, 1458 (Commr.Pats.1990) and United States v. Cirami, 563 F.2d 26, 34 (2nd Cir.1977) as permitting Huston to escape the consequences of his attorney's acts. These cases do not bind us. Even if we were inclined to follow them, the record evidence here does not bring this case within their holdings.

The question is not whether we, had we been on the Board, would have voted to grant Huston's petition. As the dissent so ably demonstrates, the record before us might well have supported such a decision. Our question is much narrower: can we say that the decision to the contrary was an abuse of the Board's discretion? We conclude that we cannot.

If we were to hold that an attorney's negligence constitutes good cause for failing to meet a PTO requirement, the PTO's rules could become meaningless. Parties could regularly allege attorney negligence in order to avoid an unmet requirement. The dissent refers to "repeated misrepresentations" by counsel, noting assurances that a rejection would be "no problem" and that it is "routine." Whether these are examples of bad judgment, inexperience, or lack of competence, we cannot find them to be grounds for avoidance of the rules. We therefore hold that the Board did not abuse its discretion in finding that Huston's allegations of attorney misrepresentation and gross negligence failed to establish "good cause" under 37 C.F.R. § 1.617(b).

Following oral argument, Ladner moved for sanctions against Huston on the basis of what it asserts are later-discovered facts concerning misrepresentations by Huston before this court. The motion is denied.

We do not...