Kubota v. Shibuya, 92-1485

• Decision Date: 08 July 1993
• Docket Number: No. 92-1485,92-1485
• Citation: 999 F.2d 517,27 USPQ2d 1418
• Parties: Yuichi KUBOTA and Ako Watanabe, Appellants, v. Yoshiyuki SHIBUYA, Shigeo Daimon and Kazuo Okamura, Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

Page 517

999 F.2d 517

27 U.S.P.Q.2d 1418

Yuichi KUBOTA and Ako Watanabe, Appellants, v. Yoshiyuki SHIBUYA, Shigeo Daimon and Kazuo Okamura, Appellees.

No. 92-1485.

United States Court of Appeals, Federal Circuit.

July 8, 1993.

Steven B. Kelber, Oblon, Spivak, McClelland, Maier & Neustadt, P.C., Arlington, VA, argued, for appellants.

Michael G. Gilman, Nikaido, Marmelstein, Murray & Oram, Washington, DC, argued, for appellees. With him on the brief was Robert B. Murray.

Fred E. McKelvey, Sol. and Richard E. Schafer, Associate Sol., Office of the Solicitor, Arlington, VA, were on the brief for amicus curiae, U.S. Patent Trademark Office.

Before PLAGER, Circuit Judge, COWEN, Senior Circuit Judge, and LOURIE, Circuit Judge.

LOURIE, Circuit Judge.

Yuichi Kubota and Ako Watanabe (hereinafter "Kubota") appeal from the February 27, 1992 decision of the United States Patent and Trademark Office Board of Patent Appeals and Interferences, as supplemented on reconsideration on May 15, 1992, awarding judgment in Interference No. 102,094 to Yoshiyuki Shibuya, Shigeo Daimon and Kazuo Okamura (hereinafter "Shibuya"). We vacate and remand.

BACKGROUND

This interference was declared on January 30, 1989 between an application of Shibuya assigned to Daikin Industries, Ltd. and U.S. Patent 4,632,866 to Kubota, with which Shibuya's application was copending, assigned to TDK Corporation. The claimed subject matter relates to a magnetic recording medium including, inter alia, magnetic iron carbide particles. Claims 1-5 of Kubota and claims 12-22 of Shibuya were designated as corresponding to a single count which reads as follows:

In a magnetic recording medium comprising a substance coated with a magnetic paint composition having magnetic powder dispersed in a binder,

the improvement wherein the magnetic powder is a mixture of (a) magnetic metal particles and (b) magnetic iron carbide particles and/or magnetic metal particles having an iron carbide coating on the surface thereof, with the weight ratio of (a) to (b) being in the range between 99.5:0.5 and 20:80.

(Emphasis added).

The Kubota patent was accorded an effective filing date of April 5, 1984, by virtue of a During the preliminary motion period, Kubota filed four motions, including one under 37 C.F.R. § 1.633(g) (1992), ¹ attacking Shibuya's priority date. Kubota argued that Shibuya's Japanese application did not comply with 35 U.S.C. § 112 (1988), first paragraph, because it did not enable one of ordinary skill in the art to make the iron carbide particles of the count. Specifically, Kubota noted that the sole disclosure of how to make the critical iron carbide particles was as follows:

                claim of priority to a Japanese patent application filed on that date.   Shibuya claimed the benefit of Japanese patent application Serial No. 39,941, filed March 1, 1984.   In the declaration of interference, Shibuya was accorded the benefit of that date and thus was made senior party
                

The acicular particles containing iron carbide used in the present invention include particles disclosed in Japanese Patent Application No. 171765/1983 filed by the present applicant.

(Emphasis added). Kubota stated that the referenced 1983 foreign application was unpublished and thus insufficient for purposes of incorporating "essential material," Manual of Patent Examining Procedure (MPEP) 608.01(p) (1989), thereby making inadequate a disclosure of how to make the iron carbide particles.

The Examiner-in-Chief (EIC) agreed that Shibuya had improperly relied on the referenced 1983 application to incorporate essential material because that application was not within the category of documents that could be permissibly incorporated by reference. MPEP 608.01(p). The EIC thus granted Kubota's motion, reversed the order of the parties, and issued an order to Shibuya to show cause why judgment should not be entered against him. Shibuya responded and the matter came before the Board.

The Board reversed the decision of the EIC and reinstated the benefit originally accorded to Shibuya of his 1984 Japanese application on the ground that Kubota had failed to satisfy his burden of proving that Shibuya's Japanese application did not comply with section 112. According to the Board, in any preliminary motion, including a motion attacking the benefit of a priority date under section 1.633(g), the new interference rules place the burden of proof on the moving party. The Board reasoned that since Shibuya was accorded the benefit of a priority date at the outset of the interference, Kubota, as the party filing a preliminary motion attacking that date, then bore the burden of proving that the disclosure in Shibuya's priority document was insufficient under section 112.

The Board found insufficient basis to sustain the EIC's decision since Kubota failed to present "any credible evidence [to the EIC] to at least establish that one skilled in the art could not practice the invention in issue upon reading Shibuya's priority document without resort to the Japanese application (171765/1983) which is incorporated-by-reference in the priority document." Slip op. at 5. Since the Board determined that Kubota failed to show that Shibuya's priority document was insufficient under section 112, it did not address the question whether essential material may be incorporated by reference to an unpublished foreign application. The Board thus reinstated the status originally accorded Shibuya and entered judgment in his favor.

The Board also denied Kubota's request for a limited testimony period to present evidence relevant to meeting his burden of proof, stating that Kubota had an opportunity during the preliminary motion period either to present testimony or to request that the EIC set a time for taking testimony under 37 C.F.R. § 1.639(c) and he did not avail himself of that opportunity.

The issues before us are whether (1) the Board correctly determined that Kubota bore the burden of proof ² on his section 1.633(g) motion and (2) the Board properly

denied Kubota's request for a limited testimony period.

DISCUSSION

I. Burden of Proof

The first issue requires review of the Board's interpretation of its own regulations, the "new" interference rules. ³ Specifically, the Board determined that under section 1.633 of the rules, a party filing a preliminary motion, including a motion attacking the benefit accorded another party under subsection (g), bears the burden of proof as to the requested relief.

The Supreme Court has made clear that an agency's interpretation of its own regulations is due "considerable respect." Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 566, 100 S.Ct. 790, 797, 63 L.Ed.2d 22 (1980). The Commissioner of Patents and Trademarks filed a brief in this case as amicus curiae, stating his interest to be that of ensuring proper interpretation and application of the interference rules pursuant to his statutory authority under 35 U.S.C. § 6 (1988). As to the respective burdens of proof, the Commissioner urges us to affirm the Board's interpretation of the new rules. The Commissioner asserts that a party filing a preliminary motion bears the burden of proof with respect to the requested relief. The Commissioner points to section 1.637, which addresses the requisite content of a preliminary motion, including one attacking the benefit of a filing date. It provides in pertinent part:

(a) Every motion shall include (1) a statement of the precise relief requested, (2) a statement of the material facts in support of the motion, and (3) a full statement of the reasons why the relief requested should be granted.

....

(g) A preliminary motion to attack benefit under § 1.633(g) shall explain, as to each count, why an opponent should not be accorded the benefit of the filing date of the earlier application.

37 C.F.R. § 1.637 (1992). The Commissioner states that, in view of these provisions, if a party fails to state sufficient reasons why relief should be granted, the motion is denied. According to the Commissioner, it necessarily follows that the party filing the preliminary motion has the burden of proof with respect to the motion.

The Commissioner also points to section 1.655(a), which addresses the manner in which the Board renders a final decision. It provides in pertinent part:

The Board may also consider whether any interlocutory order was manifestly erroneous or an abuse of discretion. All interlocutory orders shall be presumed to have been correct and the burden of showing manifest error or an abuse of discretion shall be on the party attacking the order.

37 C.F.R. § 1.655(a) (1992). The Commissioner notes that this provision did not exist under the old rules and, other than the Board's final decision awarding judgment as to all counts, all actions taken in an interference, including the declaration of interference, are interlocutory orders presumed to be correct. According to the Commissioner, it was Kubota, as the party seeking to deprive Shibuya of the priority date accorded him in the declaration of interference, who bore the burden of showing "manifest error or an abuse of discretion." ⁴

Kubota argues that the Board's interpretation is incorrect. While Kubota does not tell us why this interpretation is inconsistent with the rules and thus not entitled to considerable deference, he argues that the EIC's ruling was an interlocutory order which, at final hearing, should have been presumed to be correct. The Commissioner responds that this rule clearly places the burden on Kubota since the declaration of interference was also an interlocutory order presumed to be correct.

We accept the Commissioner's reading of these rules because it is entitled to deference, see Morganroth v. Quigg, 885 F.2d 843, 848, 12 USPQ2d 1125, 1128 (Fed.Cir.1989) (The Commissioner's "interpretation of [the regulatory provisions governing abandonment and revival of patent applications] is entitled to considerable deference."),...