Disney Enters., Inc. v. Rea

• Decision Date: 11 April 2013
• Docket Number: No. 1:12cv687 (LMB/TRJ).,1:12cv687 (LMB/TRJ).
• Citation: 940 F.Supp.2d 288
• Parties: DISNEY ENTERPRISES, INC., Plaintiff, v. Teresa Stanek REA, Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the United States Patent and Trademark Office, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

940 F.Supp.2d 288

DISNEY ENTERPRISES, INC., Plaintiff,

v.Teresa Stanek REA, Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the United States Patent and Trademark Office, Defendant.

No. 1:12cv687 (LMB/TRJ).

United States District Court,

E.D. Virginia,

Alexandria Division.

April 11, 2013.

Jeffrey Paul Kushan, Thomas Anthony Broughan, III, Sidley Austin LLP, Washington, DC, for Plaintiff.

Dennis Carl Barghaan, Jr., United States Attorney's Office, Alexandria, VA, for Defendant.

MEMORANDUM OPINION

LEONIE M. BRINKEMA, District Judge.

In this civil action brought pursuant to 35 U.S.C. § 145, plaintiff Disney Enterprises, Inc. (“Disney”) seeks a judgment that it is entitled to a reissue of U.S. Patent No. 5,963,915 (“the '915 patent”) covering the pending claims in United States Reissue Patent Application 09/970,772 (“the ' 772 application”), all of which were rejected as obvious by the United States Patent and Trademark Office (“USPTO”) after extensive administrative proceedings. A one-day bench trial was held, during which the only witnesses were two experts, one testifying on behalf of the plaintiff and the other on behalf of the defendant. Having heard the evidence and reviewed the trial exhibits and the administrative record, the Court makes the following findings of fact and concludes that Disney has failed to prove that it is entitled to the reissue patent it seeks.

I. LEGAL PRINCIPLES

A. Standard of Review and Burden of Proof

This civil action was brought under 35 U.S.C. § 145, which “gives the Court the power to set aside any ruling refusing a patent and determine patentability de novo.” Hitachi Koki Co., Ltd. v. Doll, 620 F.Supp.2d 4, 16 (D.D.C.2009)¹ (citing Mazzari v. Rogan, 323 F.3d 1000, 1004 (Fed.Cir.2003); Newman v. Quigg, 877 F.2d 1575, 1579 (Fed.Cir.1989)) (citation and internal quotation marks omitted). The Supreme Court recently held that § 145 actions “should be conducted according to the ordinary course of equity practice and procedure and ... should be prepared and heard upon all competent evidence adduced and upon the whole merits.” Kappos v. Hyatt, ––– U.S. ––––, 132 S.Ct. 1690, 1699–1700, 182 L.Ed.2d 704 (2012) (quoting Butterworth v. United States ex rel. Hoe, 112 U.S. 50, 61, 5 S.Ct. 25, 28 L.Ed. 656 (1884)) (internal quotation marks omitted). Because “the district court acts as a factfinder when new evidence is introduced in a § 145 proceeding,” it “must assess the credibility of new witnesses and other evidence, determine how the new evidence comports with the existing administrative record, and decide what weight the new evidence deserves.” Id. at 1700. The standard of review of the new evidence must therefore “[a]s a logical matter” be “ de novo because [the district court] is the first tribunal to hear the evidence in question.” Id. Nevertheless, “the district court may, in its discretion, consider the proceedings before and findings of the Patent Office in deciding what weight to afford an applicant's newly-admitted evidence.” Id. at 1700 (quoting Hyatt v. Kappos, 625 F.3d 1320, 1335 (Fed.Cir.2010) (en banc)) (internal quotation marks omitted).

Patent prosecutions before the USPTO employ a “burden-shifting” framework, which is “merely a procedural device that enables an appropriate shift of the burden of production.” In re Jung, 637 F.3d 1356, 1362 (Fed.Cir.2011) (citation and internal quotation marks omitted). During prosecution, the initial burden is on the examiner to establish a prima facie case of unpatentability, which “need not be a full exposition on every conceivable deficiency of a claim.... Rather, its purpose is simply to provide sufficient notice to the applicant to facilitate his effective submission of information.” Hyatt v. Dudas, 492 F.3d 1365, 1370 (Fed.Cir.2007). The burden then shifts to the applicant to produce evidence or argument to rebut that prima facie case. Id. Finally, patentability is “determined on the entirety of the record, by a preponderance of evidence and weight of argument.” In re Glaug, 283 F.3d 1335, 1338 (Fed.Cir.2002).

Disney implied during closing arguments that the USPTO bears the burden of re-establishing such a prima facie case in this § 145 proceeding:

[T]he central story here is whether the person with skill ... would have concluded at the first instance in what we call a prima facie case, whether that case, that invention is obvious. If that is not, that is not established by the evidence, the rejection of the PTO are [sic] incorrect; and under this proceeding, you have the authority to direct the PTO to issue Disney the patent.

Trial Tr. [Dkt. No. 70] at 234:17–25. That argument is unsupported by case law and “appears to urge the Court to improperly allow the meaning of ‘ prima facie case’ in the context of ordinary litigation to supplant its meaning in patent prosecution.” Alberts v. Kappos, 917 F.Supp.2d 94, 106 (D.D.C.2013). The Federal Circuit has explained that “the prosecution and litigation contexts are distinct.” In re Cyclobenzaprine Hydrochloride Extended–Release Capsule Patent Litig., 676 F.3d 1063, 1080 n. 7 (Fed.Cir.2012). Moreover, if § 145 proceedings are to be “conducted according to the ordinary course of equity practice and procedure,” Hyatt, 132 S.Ct. at 1700, it is the plaintiff and not the USPTO that bears the burden of proof. See also Alberts, 917 F.Supp.2d at 106–07 (indicating that the Court did not believe that the USPTO had the burden of re-establishing a prima facie case in § 145 proceedings, while also finding that the USPTO would have met such a burden).

Accordingly, Disney bears the burden of proving by a preponderance of the evidence that it is entitled to a reissue patent covering the pending claims in the '772 application. See, e.g., Johnsen v. Brenner, 253 F.Supp. 919, 923 (D.D.C.1966) (noting in a § 145 action that the burden of proof was borne by the patent applicant).

B. Reissue Patents

Under 35 U.S.C. § 251(a), reissue patents are available “[w]henever any patent is, through error, deemed wholly or partly inoperative or invalid ... by reason of the patentee claiming more or less than he had a right to claim in the patent.” Applying for a reissue patent is therefore a means of attempting to correct or amend a patent that has already been issued. See Manual of Patent Examining Procedures (“MPEP ”) § 1400.01 (8th ed. rev. Aug. 2012); see also Medrad, Inc. v. Tyco Healthcare Grp. LP, 466 F.3d 1047, 1052 (Fed.Cir.2006) (holding that “any error that causes a patentee to claim more or less than he had a right to claim” is correctable through reissue).

An application for reissue “constitute[s] an offer to surrender [the original] patent, and the surrender shall take effect upon reissue of the patent”; however, “[u]ntil a reissue application is granted, the original patent ... remain[s] in effect.” 37 C.F.R. § 1.178(a). If the reissue is granted, it will be valid only “for the unexpired part of the term of the original patent.” 35 U.S.C. § 251(a); see also MPEP § 1405 (“The maximum term of the original patent is fixed at the time the patent is granted. While the term may be subsequently shortened, ... it cannot be extended through the filing of a reissue.”).

Although a reissue application may not include any “new matter,” 37 C.F.R. § 1.173; accord35 U.S.C. § 251(a), it is examined in the same manner as a newly submitted application and is generally subject to the same requirements. See37 C.F.R. § 1.176(a). As a consequence, “the claims in a reissue application are subject to any and all rejections which the examiner deems appropriate,” regardless of “whether the claims are identical to those of the [original] patent or changed from those in the [original] patent.” MPEP § 1445.

C. Obviousness Standard

Under the patent statute, an invention that would have been obvious to a person of ordinary skill in the relevant art at the time of the invention is not patentable. Specifically:

A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, ² if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.

35 U.S.C. § 103; see alsoPub. L. No. 112–29 § 3, 125 Stat. 284, 287. An obviousness analysis concerns the patent's claims, not the embodiments described in the specification. See, e.g., Jackson Jordan, Inc. v. Plasser Am. Corp., 747 F.2d 1567, 1578 (Fed.Cir.1984) (“The claims, not the particular embodiments, must be the focus of the obviousness inquiry.” (emphasis in original)); see also KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 419, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007) (“In determining whether the subject matter of a patent claim is obvious, neither the particular motivation nor the avowed purpose of the patentee controls. What matters is the objective reach of the claim.”). During examination, claims must be given “their broadest reasonable interpretation consistent with the specification, and ... claim language should be read in light of the specification as it would be interpreted by one of ordinary skill in the art.” In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed.Cir.2004) (quoting In re Bond, 910 F.2d 831, 833 (Fed.Cir.1990)) (omission in original) (internal quotation marks omitted).

Obviousness is a question of law based on underlying facts, which include “the scope and content of the prior art ...; differences between the prior art and the claims at issue ...; and the level of ordinary skill in the pertinent art.” Graham v. John Deere Co. of Kan. City, 383 U.S. 1, 17, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966). Objective evidence of nonobviousness must...