Filewrapper-old

USPTO not bound by district court claim construction on reexamination; obviousness affirmed
August 22, 2007

The Federal Circuit today addressed claim construction and obviousness in the context of a reexamination appeal. The patentee argued that the USPTO was bound, in reexamination, to apply the claim construction given the patents by a district court when the patents were in litigation before reexamination. The court found that because the USPTO was not a party to that litigation, issue preclusion could not apply, and therefore the USPTO was not bound by the district court's construction. The court also applied KSR, and affirmed the Board's holding that all claims of both patents would have been obvious over the prior art, as a result of a failure to yield any unpredicted results when combining familiar elements and known methods.More detail of In re Trans Texas Holdings Corp. after the jump.This case involved Trans Texas' appeal of the decision of the Board of Patent Appeals and Interferences ("Board") affirming the examiner's rejection in reexamination of two patents, the '461 patent and the '673 patent. Trans Texas is the assignee of both patents, which describe systems of inflation-adjusted deposit and loan accounts aimed to insulate assets from fluctuations due to inflation as well as provide stability to the financial institution. Trans Texas asserted that because the claims of the patents had been construed by a district court in a previous litigation, collateral estoppel (issue preclusion) prevented the USPTO from applying a different claim construction in the reexamination. The Federal Circuit disagreed, finding that even the more modern form of non-mutual collateral estoppel was not warranted in this case, because the USPTO was not a party to the earlier litigation and cannot therefore be bound by its outcome. Trans Texas asserted in the alternative that the Board erroneously rejected its proffered claim construction. The court did not find any of Trans Texas's proposed claim constructions to be persuasive, noting that "claims are given their broadest reasonable interpretation, consistent with the specification, in reexamination proceedings," and under this standard, the Board's construction was correct. Trans Texas also appealed the Board's obviousness determination. Trans Texas asserted that numerous claims of the '461 patent were non-obvious solely based on its claim construction arguments the court already rejected. The court therefore affirmed the Board's obviousness determination for those claims.With regard to the other claims, the Federal Circuit rejected Trans Texas' other nonobviousness arguments. In particular, the court highlighted the failure to yield any unpredicted results when combining familiar elements and known methods, resulting in a finding of obviousness pursuant to the Supreme Court's recent holding in KSR. The court also rejected Trans Texas' contention that certain prior art references taught away from the invention. As a result, the rejection of all claims of the two patents was affirmed.Specifically, Trans Texas first argued that a prior art reference disclosed deposit accounts responsive to inflation and loan accounts adjusted on a proportional basis with inflation, but failed to disclose the additional limitation of loan accounts adjusted for inflation. However, the court affirmed the Board's determination that the prior art did in fact disclose each and every limitation of the claims. Trans Texas also argued that claims 1-23, 31, 33, and 44 of the '461 patent were non-obvious as a result of the additional limitation of an "annuities" requirement. However, the court found the references the Board relied upon did not teach away from "annuities." Third, Trans Texas argued that claims 9-14 and 16-21 of the '673 patent were non-obvious since the prior art does not teach the limitation "obtaining an asset whose rate of return adjusts with inflation." However, the court again concluded that the Board had sufficient evidence to find that the prior art taught this limitation. Finally, Trans Texas asserted that the prior art did not teach "obtaining . . . a mortgage secured by real estate," or making "balloon" payments. These were the limitations in claims 15, 22-24, 25, and 28 of the '673 patent. Again, the court agreed with the Board, stating that it would have been obvious to combine the loan accounts disclosed in the prior art with the commonplace practice of securing loans with mortgaged real estate, as well as combine the known inflation-adjusted loans with the known practice of making balloon payments.

This case further underscores the importance of unexpected results, teaching away, or some other evidence of nonobviousness post-KSR.

To read the full decision in In re Trans Texas Holdings Corp., click here.

Post has no comments.
Post a Comment




Captcha Image
Return to the Filewrapper Blog
  Newer Posts Older Posts  

Purpose

The attorneys of McKee, Voorhees & Sease, P.L.C. designed this blog as an informational and educational resource about intellectual property law for our clients, other attorneys, and the public as a whole. Our goal is to provide cutting-edge information about recent developments in intellectual property law, including relevant case law updates, proposed legislation, and intellectual property law in the news.

Disclaimer

McKee, Voorhees & Sease, P.L.C. provides this blog for general informational purposes only. By using this blog, you agree that the information on this blog does not constitute legal or other professional advice and no attorney-client or other relationship is created between you and McKee, Voorhees & Sease, P.L.C. Do not consider this blog to be a substitute for obtaining legal advice from a qualified, licensed attorney. While we try to revise this blog on a regular basis, it may not reflect the most current legal developments. We consciously refrain from expressing opinions on this blog and instead, offer it as a form of information and education, however if there appears an expression of opinion, realize that those views are indicative of the individual and not of the firm as a whole

Connect with MVS

Enter your name and email address to receive the latest news and updates from us and our attorneys.

Subscribe to: MVS Newsletter

Subscribe to: Filewrapper® Blog Updates

  I have read and agree to the terms and conditions of McKee, Voorhees & Sease, P.L.C.