In re Constr. Equip. Co.

• Decision Date: 15 December 2011
• Docket Number: No. 2010–1507.Reexamination No. 90/008,447.,2010–1507.Reexamination No. 90/008,447.
• Parties: In re CONSTRUCTION EQUIPMENT COMPANY.
• Court: U.S. Court of Appeals — Federal Circuit

100 U.S.P.Q.2d 1922

665 F.3d 1254

In re CONSTRUCTION EQUIPMENT COMPANY.

No. 2010–1507.Reexamination No. 90/008,447.

United States Court of Appeals, Federal Circuit.

Dec. 8, 2011.As Corrected Dec. 15, 2011.

Peter E. Heuser, Schwabe Williamson & Wyatt PC, of Portland, OR, argued for appellant. With him on the brief was Devon Zastrow Newman.

Frances M. Lynch, Associate Solicitor, United States Patent and Trademark Office, of Alexandria, VA, argued for appellee. With her on the brief was Raymond T. Chen, Solicitor, and Janet A. Gongola, Associate Solicitor.

Before NEWMAN, PROST, and O'MALLEY, Circuit Judges.

Opinion for the court filed by Circuit Judge PROST. Dissenting opinion filed by Circuit Judge NEWMAN.

PROST, Circuit Judge.

Construction Equipment Company (“CEC”) appeals from reexamination proceedings in which the United States Patent and Trademark Office (“PTO”) rejected numerous claims sought by CEC. Ex parte Constr. Equip. Co., No. 2009–5265, 2009 WL 2807871 (B.P.A.I.2009) (“ BPAI Op.”), reh'g denied, 2010 WL 2157846 (B.P.A.I. May 28, 2010) (“ Reh'g Denial ”). Because we agree with the PTO's conclusion that the claims at issue were obvious over the prior art, we affirm.

I

CEC is the owner of U.S. Patent No. 5,234,564 (“'564 patent”). The '564 patent is entitled “Mobile Screen Assembly for Rubble and Debris,” and is directed to a vehicle for screening rocks and plant matter (among other things) based on size from, for example, soil or dirt at a construction site.

Image 1 (4.5" X 1.83") Available for Offline Print

'564 patent fig.1. Material to be sorted is placed in the hopper 30. It is carried up by transport conveyor 26 and dropped onto screen assembly 90, which sifts it. Sorted material either descends down chute 120, or is carried away by conveyors 130 or 168, according to where in the sifting process the sorted material left the main stream.

The proceedings at issue began in January 2007 when the PTO received a request for ex parte reexamination of the '564 patent.¹ The requestor sought reexamination of claims 1, 2, and 5–8, alleging that they were unpatentable. Upon finding that the request raised a substantial new question of patentability concerning those claims, the PTO began reexamination proceedings.

CEC made various amendments and added claims. This appeal concerns claims 1, 2, 5–10, 13, 14, 19, and 20, as amended. By the end of reexamination in October 2007, all these claims stood rejected by the Examiner as obvious under 35 U.S.C. § 103 in view of the various references cited in the reexamination request. CEC appealed to the Board of Patent Appeals and Interferences, which generally affirmed the Examiner's rejections. BPAI Op. CEC sought rehearing, which the Board denied. Reh'g Denial. CEC timely appealed to this court. We have jurisdiction over the Board's decisions under 28 U.S.C. § 1295(a)(4)(A).

II

This court reviews the Board's factual findings for substantial evidence and its legal determinations de novo. 5 U.S.C. § 706(2)(E); In re Gartside, 203 F.3d 1305, 1316 (Fed.Cir.2000). The determination of what a reference teaches is one of fact, as is the existence of a reason for a person of ordinary skill to combine references. Rapoport v. Dement, 254 F.3d 1053, 1060 (Fed.Cir.2001); see also Gartside, 203 F.3d at 1316.

Applying that standard here, we see error of neither fact nor law in the Board's analysis of these claims' patentability. Reviewing the record prior art, we agree with the Board that every limitation of each claim on appeal is found in one or another of the available references. We further agree one of ordinary skill in the art would have been able to combine the available references in such a way as to practice the alleged invention of each claim. And we agree that such a person would have had a reason to make such combinations, for the reasons set forth by the Board and by the Examiner.

As CEC itself admits, the basic concepts of sifting and sorting material are not new. Neither are the concepts of carrying material via conveyors, or of positioning the sorting machine on a trailer, as the '564 patent does. CEC's alleged invention consists entirely of combining known elements into a machine that, while possibly new, was nevertheless obvious and therefore unpatentable.² We find the Board's opinion supported by substantial evidence and without legal error.³ The opinion of the Board therefore stands affirmed.

AFFIRMED

NEWMAN, Circuit Judge, dissenting.

This reexamination appeal raises a fundamental question—is a final adjudication, after trial and decision in the district court, and appeal and final judgment in the Federal Circuit, truly final? Or is it an inconsequential detour along the administrative path to a contrary result? Although final decisions of courts of last resort are preclusive within the courts, is the administrative agency excused? Here the Patent and Trademark Office did not mention the prior adjudication of the same issue, although that issue was finally decided in the courts in 2001.¹ The PTO's reexamination decision is now before us on appeal, the same issue that we finally adjudicated eleven years ago.

Thus the curious, as well as unconstitutional, situation whereby this court's final decision has devolved into an uncertain gesture, stripped of value in commerce as well as in law. The panel majority, unperturbed, simply defers to the agency's new result as if this history does not exist. I respectfully dissent.

The constitutional plan and the administrative state

The judicial power established in Article III, § 1, is “an inseparable element of the constitutional system of checks and balances.” N. Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 58, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982). My colleagues on this panel object to the intrusion of the Constitution into this appeal, Maj. Op. at 1256–57 n.3, arguing that the role of judicial rulings in administrative proceedings cannot be considered because the parties did not raise it in the Patent and Trademark Office. However, the nation's fundamental law is not waivable. The Court has reiterated that “[w]hen these Article III limitations are at issue, notions of consent and waiver cannot be dispositive because the limitations serve institutional interests that the parties cannot be expected to protect.” Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833, 851, 106 S.Ct. 3245, 92 L.Ed.2d 675 (1986).

Waiver is inapplicable to “significant questions of general impact or of great public concern.” Interactive Gift Express, Inc. v. Compuserve Inc., 256 F.3d 1323, 1345 (Fed.Cir.2001). The constitutional impact of the procedure that gives rise to this appeal cannot be deemed waived, for it affects no less than the integrity of judgments and the separation of powers. Constitutional principles are not required to be set aside merely because they were not raised in the administrative forum. See Hormel v. Helvering, 312 U.S. 552, 555–59, 61 S.Ct. 719, 85 L.Ed. 1037 (1941) (courts of appeal have the discretion to consider issues not to consider issues not raised below “as justice may require”).

The plan of the Constitution places the judicial power in the courts, whose judgments are not thereafter subject to revision or rejection. Neither the legislative nor the executive branch has the authority to revise judicial determinations. See Chi. & S. Air Lines, Inc. v. Waterman S.S. Corp., 333 U.S. 103, 114, 68 S.Ct. 431, 92 L.Ed. 568 (1948) (“Judgments, within the powers vested in courts by the Judiciary Article of the Constitution, may not lawfully be revised, overturned or refused faith and credit by another Department of Government.”); Gordon v. U.S., 69 U.S. 561, 561, 2 Wall. 561, 17 L.Ed. 921 (1864) (judgments of Article III courts are “final and conclusive upon the rights of the parties”). In Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 115 S.Ct. 1447, 131 L.Ed.2d 328 (1995), the Court explained that:

The record of history shows that the Framers crafted this charter of the judicial department with an expressed understanding that it gives the Federal Judiciary the power, not merely to rule on cases, but to decide them, subject to review only by superior courts in the Article III hierarchy—with an understanding, in short, that “a judgment conclusively resolves the case” because “a ‘Judicial Power’ is one to render dispositive judgments.”

Id. at 218–19, 115 S.Ct. 1447 ( quoting Frank H. Easterbrook, Presidential Review, 40 Case W. Res. L. Rev. 905, 926 (1990)). The Court traced the history of judicial finality to Hayburn's Case, 2 U.S. (2 Dall.) 409, 1 L.Ed. 436 (1792), which “stands for the principle that Congress cannot vest review of the decisions of Article III courts in officials of the Executive Branch.” Plaut, 514 U.S. at 218, 115 S.Ct. 1447.

With the emergence of the administrative state, “Article III, § 1 safeguards the role of the Judicial Branch in our tripartite system by barring congressional attempts ‘to transfer jurisdiction [to non-Article III tribunals] for the purpose of emasculating’ constitutional courts, and thereby preventing ‘the encroachment or aggrandizement of one branch at the expense of the other.’ ” Schor, 478 U.S. at 850, 106 S.Ct. 3245 (brackets in original, internal citations omitted). The application of this rule is not in dispute, nor is it disputed that administrative agencies may be authorized to perform quasi-adjudicatory functions. Id. The issue here arises because the judicial function has already been performed, and warrants the finality of the Judicial Power. As the court explained in Town of Deerfield v. Federal Communications Commission, 992 F.2d 420, 428 (2d Cir.1993), revision by the agency of the district court's order would render the previous judgment by the district court “merely advisory” and thus in violation of the Constitution.

Nor is the previous judgment of this court, on the issue that was taken to the PTO for reexamination, “merely...