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Federal Circuit affirms USPTO's interpretation of inter partes reexamination statute
August 22, 2008
In a decision Tuesday, the Federal Circuit affirmed a district court's holding that the USPTO's interpretation of the inter partes reexamination procedure was correct, and therefore that all patent applications (other than reissue applications) filed after November 29, 1999 are eligible for inter partes reexamination, even if priority is claimed to an application filed before that date. While the district court did not address the issue of the level of deference due to the USPTO's interpretation of the statute at issue, the Federal Circuit determined the USPTO was entitled to Chevron deference. Because the USPTO's interpretation of the statute was reasonable, the court affirmed inter partes reexamination was available for the patent at issue that claimed priority to an application filed before November 29, 1999, but issued from a continuation application filed after that date.Interestingly, the court spent several pages of its decision laying out the method for determining whether and what level of deference is appropriate to the USPTO in this case. It seems probable that the court was laying out the relevant issues in preparation for hearing the appeal in the Tafas case regarding the USPTO's enjoined claim and continuation rules.More detail of Cooper Techs. Co. v. Dudas after the jump.The plaintiff in this case, Cooper Technologies, owns a patent that issued from an application filed April 14, 2003. That patent, through a series of continuations, claims priority to an application filed March 10, 1993. Another party, Thomas & Betts, requested inter partes reexamination of the patent. The USPTO granted the request, and issued an initial office action rejecting all claims of the patent. Cooper then petitioned to terminate the proceeding, arguing that the patent could not be the subject of inter partes reexamination because it claimed priority to an application filed before November 29, 1999, the statutory cutoff for inter partes reexamination eligibility. The petition was denied, so Cooper filed suit under the Administrative Procedure Act. The district court sided with the USPTO, finding the patent subject to inter partes reexamination because it issued from an application filed after November 29, 1999, even though it claimed priority to applications filed before that date. Cooper appealed.The issue on appeal is the interpretation of the term "original application" in § 4608 of the American Inventors Protection Act (AIPA). According to the statute, inter partes reexamination procedures are available for any patent that issues from an "original application" filed in the United States on or after November 29, 1999.The USPTO has interpreted "original application" to encompass any utility, plant and design applications, including first filed applications, continuations, divisionals, continuations-in-part, continuation prosecution applications and the national stage phase of international applications. Cooper asserts a narrower definition, which would limit "original application" to the first application in a chain of applications from which priority is claimed. On appeal, the Federal Circuit began its analysis with an examination of whether the USPTO's interpretation of "original application" was entitled to Chevron deference. Under 35 U.S.C. § 2, the USPTO has authority to establish regulations to govern the conduct of proceedings before the Office. To comply with § 2, a USPTO rule must be procedural, meaning it must govern the conduct of proceedings in the USPTO rather than affecting substantive rights. The court held the USPTO's interpretation of "original application" related to the conduct of proceedings in the Office within the meaning of § 2, as it did not effect any change in existing law, but was instead a clarification of ambiguous statutory language regarding a procedural matter. Accordingly, the USPTO had the authority under § 2 to interpret the reexamination statute, since the interpretation governs the conduct of proceedings in the PTO and is a clarification of ambiguous statutory language.Having concluded the USPTO's interpretation was not substantive, the court gave Chevron deference to its interpretations of those provisions. Under Chevron, courts apply a two-step analysis to determine whether the agency's interpretation should be affirmed. First, the court determines whether Congress directly spoken to the precise question at issue; if so, Congress's intent is the law and must be given effect. If not, the court determines whether the agency's interpretation is based on a permissible construction of the statutory language at issue. If so, the agency's interpretation is affirmed, even if other interpretations are also reasonable.Under the first step of the Chevron analysis, the question is whether Congress spoke to the issue of whether a patent is subject to inter partes reexamination when it results from an application filed after November 29, 1999 that is a continuation of an application filed before that date. Here, the court determined that there was no such Congressional intent. The court turned to the traditional tools of statutory construction, including the statute's structure, canons of statutory construction, and legislative history. The court concluded that none of these tools assisted in defining "original application." Further, "original application" does not have a single definitive meaning, but rather depends upon the context of its use, and has been used in differing ways in the MPEP and in Federal Circuit decisions. The court therefore concluded that Congress has not directly spoken to the issue, and thus turned to step two of the Chevron analysis.In assessing whether the USPTO applied a permissible construction for the term "original application," the court considered that the USPTO interpreted the term shortly after the AIPA was enacted in 1999, and that Congress had not elected to amend this terminology of the statute following the early interpretation. This supported the conclusion that the USPTO's interpretation was neither unreasonable nor contrary to Congress' intent. The court also rejected each of Cooper's arguments that the USPTO's interpretation would lead to unintended results. Accordingly, the court concluded that the USPTO interpretation of "original application" as meaning any application in an application chain, and not just the first application in a priority chain, is permissible and entitled it to deference. Thus, "original application" includes continuation applications for purposes of eligibility for inter partes reexamination. As a result, the court affirmed the district court's decision. To read the full decision in Cooper Techs. Co. v. Dudas, click here.
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