On December 23, 2008, the U.S. Court of Appeals for the Federal Circuit affirmed a district court ruling in Hyatt v. Dudas, a consolidated case (brought under 35 U.S.C. § 145), involving a patent owner’s challenge of a decision by the U.S. Patent and Trademark Office’s (USPTO’s) Board of Patent Appeals and Interferences (the Board) to affirm the rejection of all 2400 claims in 12 separate continuation applications, dating back to the early 1980s.
The district court vacated the Board’s decision and remanded the case to the Board for further consideration. The USPTO appealed the remand order, raising two issues: the extent to which 37 C.F.R. § 1.192(c)(7) permits the Board to affirm the rejections of groups of patent claims based upon its consideration of certain representative claims, and whether the district court’s remand order requires the Board to consider arguments that Gilbert P. Hyatt allegedly waived by failing to raise them before the Board in his initial appeal.
During prosecution of the applications, the most common basis for rejection was that the claims lacked written description support under 35 U.S.C. § 112, first paragraph. Although Hyatt argued that each of his claims should be reviewed independently, he only discussed and argued the rejections of 21 of his claims in his appeal brief (to the Board). On this basis, the Board selected these 21 claims as representative of all 2400 claims on appeal and affirmed the examiner’s rejections of all the claims based on the rejections of the 21 claims.
In the § 145 appeal, the district court agreed with the USPTO that Hyatt failed to separately argue each of his claims, but nevertheless held that the Board improperly selected the 21 claims as representative of Hyatt’s remaining claims because, under § 1.192(c)(7), the Board should not have grouped the claims unless each of the claims shared a limitation that was not disclosed in the specification. Accordingly, the district court remanded the case to the Board with instructions to regroup and reconsider Hyatt’s claims.
"Ground of Rejection"
The Federal Circuit’s decision hinged on the definition of “ground of rejection” as set forth in § 1.192(c)(7). The USPTO argued that “ground of rejection” meant the statutory section under which a claim was rejected. In other words, according to the USPTO, if a grouping consisted of claims which all failed to satisfy § 112, ¶ 1 (regardless of the limitations set forth in each claim) the grouping was proper. Conversely, Hyatt argued that “ground of rejection” meant both the statutory section under which the claim was rejected and the reason why the claim failed to meet that statutory requirement.
The Federal Circuit, relying on In re McDaniel, (293 F.3d 1379, 1383 (Fed. Cir. 2002)) explained that under its precedent, § 1.192(c)(7) was interpreted to mean that the rule operates to relieve the Board from reviewing the myriad of distinctions that might exist among claims which are of no patentable consequence to a contested rejection. In McDaniel, the court held that the USPTO’s interpretation of § 1.192(c)(7) was clearly erroneous and that the Board erred in treating four claims, each rejected under 35 U.S.C. § 103(a), as a commonly rejected group, because each claim was rejected over different references.
The Federal Circuit noted that this interpretation is consistent with the fact that the USPTO bears the initial burden of presenting a prima facie case of unpatentability. Since the USPTO’s Manual of Patent Examination Procedure expressly instructs the examiner to specify which claim limitation is lacking adequate support in the written description, the relevant “ground of rejection” is the USPTO’s identification of a specific limitation that lacks written description support.
As such, the Federal Circuit held that claims rejected for lack of written description do not share a common “ground of rejection” under § 1.192(c)(7) unless the claims share a common limitation that lacks written description support. Accordingly, the Federal Circuit affirmed the district court’s remand order, instructing the Board to regroup and reconsider Hyatt’s claims according to appropriate representative claims.
Turning to the issue of whether the Board (on remand) must consider the grounds of rejection that Hyatt failed to contest in his initial appeal to the Board, the Federal Circuit held that the Board need not consider the waived rejections. The Federal Circuit explained that § 1.192(c)(7) clearly states, “for each ground of rejection which appellant contests and which applies to a group of two or more claims, the Board shall select a single claim from the group and shall decide the appeal as to the ground of rejection on the basis of that claim alone.” Thus, the Federal Circuit concluded that rule places no burden on the Board to reconsider a waived rejection. Accordingly, the Federal Circuit found that the Board is free on remand to apply the rule of waiver to any grounds of rejection not contested by Hyatt in his initial appeal to the Board.