Portola Packaging, Inc., In re

• Decision Date: 07 April 1997
• Docket Number: No. 96-1376,96-1376
• Citation: 42 USPQ2d 1295,110 F.3d 786
• Parties: , 42 U.S.P.Q.2d 1295 In re PORTOLA PACKAGING, INC.
• Court: U.S. Court of Appeals — Federal Circuit

Page 786

110 F.3d 786

65 USLW 2695, 42 U.S.P.Q.2d 1295

In re PORTOLA PACKAGING, INC.

No. 96-1376.

United States Court of Appeals,Federal Circuit.

April 7, 1997.

Julian Caplan, San Francisco, California, argued for appellant. With him on the brief were C. Michael Zimmerman and Janet E. Muller.

Nancy J. Linck, Solicitor, Patent and Trademark Office, Arlington, Virginia, argued for appellee. With her on the brief were Albin F. Drost, Deputy Solicitor, and Kevin T. Kramer, Associate Solicitor.

Before MICHEL, LOURIE, and CLEVENGER, Circuit Judges.

LOURIE, Circuit Judge.

Portola Packaging, Inc. appeals from the decision of the Patent and Trademark Office (PTO) Board of Patent Appeals and Interferences holding, after reexamination, that claims 1, 3-5, 7, and 8 of U.S. Patent 4,496,066 are unpatentable. In re Portola Packaging, Inc., No. 95-4121 (Bd. Pat.App. & Int. Feb. 16, 1996). Because the board exceeded its statutory authority by basing its decision solely on prior art previously considered by the PTO, we reverse.

BACKGROUND

On July 27, 1983, Joseph J. Bullock, III filed an application directed to a flexible bottle neck/cap combination. During the examination of that application, claims 1 and 2 were rejected under 35 U.S.C. § 102 (1994) as anticipated by, inter alia, U.S. Patent 3,204,799 to Hunter, and claims 3-6 and 8-11 were rejected under 35 U.S.C. § 103 (1994) as obvious based on, inter alia, the combined teachings of U.S. Patent 4,202,455 to Faulstich and two other references. In response to this rejection, Bullock amended the existing claims and added several new claims. Eight of these claims issued in the '066 patent, which was later assigned to Portola.

On October 27, 1993, a request to reexamine the '066 patent was filed by a third party, who purported to raise three substantial new questions of patentability: (1) whether claims 1, 3, 5, and 7 were anticipated by the Hunter patent; (2) whether those claims were anticipated by U.S. Patent 4,177,906 to Von Hagel; and (3) whether all of the claims of the '066 patent were rendered obvious by the combined teachings of the Faulstich patent and, inter alia, either the Hunter patent or the Von Hagel patent. The PTO granted the request. During reexamination, the examiner first rejected all of the claims as anticipated by, inter alia, the Von Hagel patent. In response, Portola canceled claims 2 and 6, and incorporated their subject matter into claims 1 and 5, respectively. The examiner subsequently rejected claims 1, 3-5, 7, and 8, inter alia, as obvious over the combined teachings of the Faulstich and Hunter patents. The board affirmed the examiner's rejection solely on that ground. Portola now appeals to this court. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A) (1994) and 35 U.S.C. §§ 141, 306 (1994).

DISCUSSION

Portola argues that on reexamination the rejection based solely on the combined teachings of the Faulstich and Hunter patents was improper. Portola asserts that the reexamination statute, in light of its legislative history, does not permit rejections based solely on prior art that was before the PTO in an earlier examination. Accordingly, Portola does not dispute the statutory propriety of the initial bases for reexamination or the initial rejection on reexamination to the extent that it was based on the Von Hagel patent. However, Portola does contest the examiner's final rejection under § 103 and the board's decision affirming that rejection, neither of which relies on the Von Hagel patent. Portola requests that we reverse the board's decision and direct the PTO to issue a Certificate of Reexamination under 35 U.S.C. § 307(a) (1994), confirming the patentability of the amended claims.

In response, the Commissioner first argues that because the claims of the original application were never rejected under § 103 based on the specific combination of the Faulstich and Hunter patents, the rejection affirmed by the board is a new one that is permitted by the reexamination statute. The Commissioner notes the absence of evidence that the original examiner considered these two references in combination during the original application. Second, the Commissioner argues that because Portola amended Whether the rejection based on the combined teachings of the Faulstich and Hunter patents was permissible under the reexamination statute raises an issue of statutory interpretation, a question of law which we review de novo, see In re Kathawala, 9 F.3d 942, 944, 28 USPQ2d 1785, 1786 (Fed.Cir.1993), without deference to the Commissioner's interpretation, see Merck & Co., Inc. v. Kessler, 80 F.3d 1543, 1549-50, 38 USPQ2d 1347, 1351 (Fed.Cir.1996), cert. denied, --- U.S. ----, 117 S.Ct. 788, 789, 136 L.Ed.2d 730 (1997). The ultimate objective when interpreting a statute is to give effect to the intent of Congress. Thus, our duty is "to find that interpretation which can most fairly be said to be imbedded in the statute, in the sense of being most harmonious with its scheme and with the general purposes that Congress manifested." NLRB v. Lion Oil Co., 352 U.S. 282, 297, 77 S.Ct. 330, 338, 1 L.Ed.2d 331 (1957). In discharging that duty, "we look not only to the particular statutory language, but to the design of the statute as a whole and to its object and policy." Crandon v. United States, 494 U.S. 152, 158, 110 S.Ct. 997, 1001, 108 L.Ed.2d 132 (1990); see also Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 138, 111 S.Ct. 478, 482, 112 L.Ed.2d 474 (1990) ("To discern Congress' intent we examine the explicit statutory language and the structure and purpose of the statute.").

the claims during reexamination, all of the post-amendment reexamination proceedings were authorized by the reexamination statute, and that those proceedings necessarily concerned questions of patentability that are distinct from those addressed during the original examination.

The reexamination statute provides, in pertinent part:

Within three months following the filing of a request for reexamination under the provisions of [35 U.S.C. § 302 (1994) ], the Commissioner will determine whether a substantial new question of patentability affecting any claim of the patent concerned is raised by the request, with or without consideration of other patents or printed publications. On his own initiative, and [at] any time, the Commissioner may determine whether a substantial new question of patentability is raised by patents and publications discovered by him or cited under the provisions of [35 U.S.C. § 301 (1994) ].

35 U.S.C. § 303(a) (1994) (emphasis added). Thus, the resolution of this appeal requires that we determine the meaning Congress intended to attribute to the statutory phrase "a substantial new question of patentability."

This court recently considered the meaning of this statutory phrase in the case of In re Recreative Technologies Corp., 83 F.3d 1394, 38 USPQ2d 1776 (Fed.Cir.1996). In that case, we reversed a decision of the board which held various claims invalid on reexamination. During the examination of the original application, the claims at issue were initially rejected under 35 U.S.C. § 103, based on a single prior art reference, Ota. Even though the PTO granted the request for reexamination based on eight references not considered by the original examiner, the first rejection made during the reexamination was again made under § 103 and was solely based on Ota. Id. at 1395, 38 USPQ2d at 1777. We held that the rejection based on the same prior art reference and the same statutory ground that was overcome during the original examination was barred during reexamination because the question of patentability raised by that rejection was previously considered by the PTO.

In view of Recreative Technologies, the PTO amended the Manual of Patent Examining Procedure (MPEP) which, although it does not have the force of law, provides guidance and instructions to examiners. See Refac Int'l, Ltd. v. Lotus Dev. Corp., 81 F.3d 1576, 1584 n. 2, 38 USPQ2d 1665, 1671 n. 2 (Fed.Cir.1996) ("The MPEP does not have the force and effect of law; however, it is entitled to judicial notice as the agency's official interpretation of statutes and regulations, provided it is not in conflict with the statutes and regulations."). The section entitled "Scope of Reexamination" was amended to narrow the grounds of rejection permitted during reexamination. That section, although not effective with respect to the present reexamination, now provides, in relevant part Once reexamination is ordered based on a proper substantial new question of patentability, grounds of rejection previously considered by the [PTO] may not be raised by the examiner. For this purpose, a ground of rejection was "previously considered" if it:

1. is applied to the same claimed subject matter as a previous rejection in the examination of the original patent or earlier concluded reexamination;

2. relies on the same combination of patents and printed publications as the previous rejection; and

3. applies the same statutory basis as the previous rejection.

MPEP § 2258 (6th ed. rev. 2, July 1996) (citation omitted). Thus, the amended section would permit the rejection affirmed by the board in this case because the rejected claims were amended by Portola during reexamination and the references were not cited in the same combination or with respect to the same statutory basis as during the original examination of the '066 patent.

If we accept Portola's arguments, it follows that PTO practice under MPEP § 2258 is inconsistent with the mandate of the reexamination statute. See Federal Election Comm'n v. Democratic Senatorial Campaign Committee, 454 U.S. 27, 32, 102 S.Ct. 38, 42, 70 L.Ed.2d 23 (1981) ("[T]he courts are the final authorities on statutory construction. They must reject administrative constructions of the statute, whether reached by adjudication or by rulemaking, that are inconsistent with the statutory...