Many laws are designed with the concept for fairness in mind. After all, the court of equity was a predecessor to our current legal system. Patent law is no different. Before the Court of Appeals for the Federal Circuit, the case In re Stepan Company centered on this issue and a patentee’s right to administrative due process.
The Stepan Company was the assignee of a U.S.patent which taught “polyol-based resin blends and the methods of using them to create closed-cell polyurethane and polyisocyanurate-based foam.” Essentially this patent was used to manufacture thermal insulation installed in the walls of buildings. Concluding a reexamination proceeding, the patent examiner invalidated the patent’s claims as anticipated under §102(b) or obvious under §103(a). On appeal, the Board of Patent Appeals and Inferences affirmed the invalidation.
Both the examiner and the Board relied on a prior art patent reference to either anticipate Stepan’s patent or, in combination with other references, show obviousness.
However, the examiner used the prior art reference under §102(b) which includes patents or publications in existence more than one year prior to the filing date of the patent in question. On the other hand, the Board used the prior art under §102(a) which includes patents or publications “before the invention thereof by the applicant.” The examiner never put forth a §102(a) argument during the reexamination proceeding.
On appeal, the Federal Circuit Court needed to determine whether the Board had relied on a new ground of rejection when affirming the examiner’s decision. It is well
established that “if the appellant has not had a full and fair opportunity to litigate the Board’s actual basis of rejection, the administrative validity proceedings…should be allowed to continue.” Stepan argued that since the Board raised a new ground of rejection to which it had no opportunity to respond, its administrative due process was violated. The Patent Office responded by asserting that the decision by the Board was not new ground of rejection. Since the examiner had raised a §102 rejection during the reexamination proceeding, “the thrust of the rejection was the same.” Additionally, Stepan had fair opportunity to argue the point before the Board.
The Court rejected these arguments. In doing so, the Court stated that by “making and relying on new fact findings…the Board relied on a new ground of rejection.” Alternatively, the Patent Office argued that by failing to request a rehearing, Stepan had waived its administrative due process. The Court was not convinced by this argument either. The appellant is only required to take action, and therefore prevent a wavier, after the Board makes a new ground of rejection. In this case, the Board “did not designate the new…rejection as a new ground of rejection.” Therefore, Stepan had no affirmative obligation. In concluding, the Court vacated the Board’s decision and remanded.
2010-1261 (Oct. 5, 2011).
Patent No. 6,359,022
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