Hyatt v. Dudas

• Decision Date: 28 June 2007
• Docket Number: No. 2006-1171.,2006-1171.
• Citation: 492 F.3d 1365
• Parties: Gilbert P. HYATT, Plaintiff-Appellee, v. Jon W. DUDAS, Director, Patent and Trademark Office, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

492 F.3d 1365

Gilbert P. HYATT, Plaintiff-Appellee, v. Jon W. DUDAS, Director, Patent and Trademark Office, Defendant-Appellant.

No. 2006-1171.

United States Court of Appeals, Federal Circuit.

June 28, 2007.

J. Robert Chambers, Wood, Herron & Evans, L.L.P., of Cincinnati, Ohio, argued

for plaintiff-appellee. With him on the brief were Wilma A. Lewis and Michael I. Coe, Crowell & Moring LLP, of Washington, DC, and Gregory L. Roth, of La Palma, California. Of counsel were Dennis R. Gallagher, Crowell & Moring LLP, of Irvine, California, and Richard G. Taranto, Farr & Taranto, of Washington, DC.

John M. Whealan, Solicitor, United States Patent and Trademark Office, of Arlington, Virginia, argued for defendant-appellant. With him on the brief were Thomas W. Krause and William G. Jenks, Associate Solicitors.

Before MICHEL, Chief Judge, ARCHER, Senior Circuit Judge, and DYK, Circuit Judge.

MICHEL, Chief Judge.

The Patent and Trademark Office ("PTO") appeals an order of the United States District Court for the District of Columbia in a civil action filed by Gilbert P. Hyatt against Jon W. Dudas, Director of the PTO, under 35 U.S.C. § 145. See Hyatt v. Dudas, 393 F.Supp.2d 1 (D.C.Cir. 2005). For the reasons set forth in this opinion, we reverse.

I. BACKGROUND

Hyatt has filed numerous patent applications and continuation applications since the 1970s. Five of these are at issue in this case, all continuation applications with lineages that can be traced back for decades. All five share the same specification, and they generally claim devices comprising various configurations of electronic components.

At one stage of prosecution, Hyatt withdrew all of the proposed claims and substituted over 1,100 new claims based on the same specification. The PTO examiner initially rejected a number of these claims for failing the written description requirement of 35 U.S.C. § 112 because while each individual element was disclosed in that specification, nowhere did Hyatt specify the particular configurations or combinations of elements claimed. The examiner relied on and followed the PTO's Manual of Patent Examining Procedure ("MPEP") § 2163.04(I)(B) to set forth the basis for this initial rejection, i.e., the PTO's prima facie case. In his office action, the examiner chose representative claims for specific analysis and then concluded that the rest of the claims at issue suffered the same defect.¹ Hyatt was then directed to respond to the PTO's prima facie case.

Rather than respond to the merits of the rejection by explaining where in the specification the cited combinations of components could be found, Hyatt instead merely challenged the adequacy of the PTO's prima facie case. Unpersuaded, the examiner made final the rejection, and Hyatt appealed to the Board of Patent Appeals and Interferences ("Board"). The Board upheld the rejection, holding that a prima facie case had been established. Hyatt then filed a § 145 action in district court challenging the Board's decision. The district court held that the PTO's explanation of its prima facie case for lack of written description was inadequate, and remanded to the PTO for further prosecution. The PTO then timely filed this appeal.

II. DISCUSSION

The basic question presented in this case is when and how the PTO may require additional information from an applicant when determining whether to reject an application based on lack of written description. In Star Fruits S.N.C. v. United States, 393 F.3d 1277, 1283 (Fed. Cir.2005), we held that the PTO has the authority to "compel disclosure of information that the examiner deems pertinent to patentability." In order to invoke this authority and place the burden on the applicant, the PTO must first establish a prima facie case for the rejection. In re Oetiker, 977 F.2d 1443, 1445 (Fed.Cir.1992).

The district court held that, in its rejection of the claims at issue for lack of written description, the PTO "used vague and unspecific language" and had "fallen somewhat short of its obligation to `state clearly and specifically' its objections to patentability." Hyatt, 393 F.Supp.2d at 11. Thus while the district court's opinion did not explicitly hold that MPEP § 2163.04(I)(B) is unlawful, its decision must be understood to implicitly hold that compliance with that guideline is inadequate as a matter of law to establish a prima facie case and place the burden on the applicant to provide further information. The validity of this holding is the issue now before us.

A. Jurisdiction

We first turn to the issue of jurisdiction. This Court has exclusive jurisdiction of appeals of § 145 actions under 28 U.S.C. § 1295(a)(4)(C). But it is settled law that a court generally does not have jurisdiction when no final judgment has been rendered, and a remand for further agency proceedings is generally not a final judgment. E.g., Cabot Corp. v. United States, 788 F.2d 1539, 1542 (Fed.Cir.1986) (holding that a remand to an agency for further findings and proceedings is not a "final judgment" that could form the basis for this Court's jurisdiction); see also Smith v. Nicholson, 451 F.3d 1344, 1347 (Fed.Cir.2006) ("We have determined that a remand order . . . is not considered a final judgment and hence is usually not appealable.").

However, certain rare situations require an exception to the otherwise firm final judgment rule. In Sullivan v. Finkelstein, the Supreme Court held that a district court's remand order in a civil action contesting an agency's determination was "final" and immediately reviewable on appeal because it was a "judgment" that terminated the action, set aside the agency's determination, and would be effectively unappealable at a later stage. 496 U.S. 617, 625, 110 S.Ct. 2658, 110 L.Ed.2d 563 (1990). While Sullivan addressed an action under 42 U.S.C. § 405(g), this Court has held that the Sullivan rule is more generally applicable. See Travelstead v. Derwinski, 978 F.2d 1244, 1248 (Fed.Cir. 1992).

We have applied the Sullivan rule judiciously, as the Supreme Court instructed, and specifically only in those situations where denying appellate review would likely result in the permanent loss of the agency's ability to appeal. For example, in Travelstead, we held that this Court had jurisdiction where a lower court interpreted a rule of law (a statute), and its remand to the agency compelled the agency to act contrary to its prior ruling, in effect "deciding that the Secretary could not follow his own regulations." 978 F.2d at 1248 (quoting Monongahela Valley Hosp., Inc. v. Sullivan, 945 F.2d 576, 586 (3d Cir. 1991)) (internal quotations omitted); see also Williams v. Principi, 275 F.3d 1361, 1364 (Fed.Cir.2002) ("[W]e will depart from the strict rule of finality when there [is] a clear and final decision of a legal issue . . . and there must be a substantial risk that the decision would not survive a remand . . . ."); cf. Winn v. Brown, 110 F.3d 56 (Fed.Cir.1997) (finding no jurisdiction when the opportunity to appeal would be preserved after the remand proceeding).

This case presents a similar situation. We understand the district court's order as requiring the PTO to offer something more than what § 2163.04(I)(B) requires to establish a prima facie case of lack of written description and shift the burden to the applicant. As such, should we deny review, the PTO will likely permanently lose its ability to appeal whether or not meeting the requirements of § 2163.04(I)(B) forms a proper and adequate basis for a prima facie case. Under the district court's order, as both parties agreed, the PTO here essentially must drop its rejection for lack of written description because the district court has ruled that the prima facie case it asserted, relying on § 2163.04(I)(B), is inadequate as a matter of law. Since by law the PTO cannot appeal its own decision to not reject claims for lack of written description, we conclude that this case falls under the principle of Sullivan and Travelstead, and as such, we may properly exercise jurisdiction to review the controlling question of law here—whether MPEP § 2163.04(I)(B), as interpreted and applied here, is a lawful standard for the PTO in establishing a prima facie case of lack of adequate written description and shifting the burden to the applicant to provide further information.²

B. MPEP § 2163.04(I)(B)

The provision of the Patent Act that contains the written description requirement is 35 U.S.C. § 112.³ The contours of the written description requirement have been the subject of many opinions of this Court. But this case presents a different question in that we are asked to address not whether Hyatt's proposed claims are actually supported by an adequate written description in these applications, but rather whether the PTO must do more than what MPEP § 2163.04(I)(B) provides to establish a prima facie case of lack of written description in this and every other such case.

As we explained in In re Oetiker, the prima facie case is merely a procedural device that enables an appropriate shift of the burden of production. 977 F.2d at 1445. In the prosecution of a patent, the initial burden falls on the PTO to set forth the basis for any rejection, i.e., a prima facie case. Id. (citing In re Piasecki, 745 F.2d 1468, 1472 (Fed.Cir.1984)). We recognize that it is important to require the PTO to adequately explain the shortcomings it perceives so that the applicant is properly notified and able to respond. Once the applicant is so notified, the burden shifts to the applicant to rebut the prima facie case with evidence and/or argument. Id.

A statement of a prima facie case need not be a full exposition on every conceivable deficiency of a claim. See In re Peterson, 315 F.3d 1325, 1330 (Fed.Cir.2003) (holding that any overlap between a claimed range and one in the prior art is sufficient for a prima facie case of obviousness, even if insufficient to render it unpatentable). Rather, its...