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Director's Forum: A Blog from USPTO's Leadership

Monday Sep 24, 2012

PTAB and Patentability Challenges

Blog by Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos

Recently, some commentators have questioned whether the new Patent Trial and Appeal Board can consider patentability challenges brought under 35 U.S.C. § 101 in post-grant review proceedings or covered business method review proceedings. I'd like to address the issue squarely and clearly in this blog, and I apologize in advance that for extreme clarity I am going to use "lawyer-ese" in this blog.
 
The commentators note that, under the AIA, any ground that could be raised under 35 U.S.C. § 282(b)(2) or (3) can be raised in a post-grant review or (with exceptions not relevant here) in a covered business method review.
 
Those grounds include:

(2) Invalidity of the patent or any claim in suit on any ground specified in part II as a condition for patentability.

(3) Invalidity of the patent or any claim in suit for failure to comply with—(A) any requirement of section 112, except that the failure to disclose the best mode shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable; or (B) any requirement of section 251.

The commentators note correctly that § 101 is not included in § 282(b)(3). However they also assert that § 101 is not included in § 282(b)(2) even though § 101 is included “in part II” of Title 35. In their view, § 101 is not “specified in part II as a condition for patentability” because the title of § 101 is “Inventions patentable,” unlike §§ 102 and 103, which have titles including the term “Conditions for patentability.”
 
We disagree. As we described in our final rules implementing post-grant review and covered business method review in the Federal Register, in our view the “grounds available for post-grant review include 35 U.S.C. 101 and 112, with the exception of compliance with the best mode requirement.” 77 Fed. Reg. 48,680, 48,684 (Aug. 14, 2012). This interpretation is consistent with both the relevant case law and the legislative history.
 
Both the Supreme Court and the Federal Circuit have concluded that § 101 is a condition for patentability. In Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 12 (1966), the Supreme Court stated that the 1952 Patent Act “sets out the conditions of patentability in three sections,” citing 35 U.S.C. §§ 101, 102, and 103. The Supreme Court has also addressed invalidity under § 101 when it was raised as a defense to an infringement claim under § 282. See Mayo Collab. Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1305 (2012).
 
If that were not clear enough, the Federal Circuit expressly rejected the argument – raised by the dissenting judge in the case – that § 101 is not a “condition for patentability” under § 282, stating that “the defenses provided in the statute, § 282, include not only the conditions of patentability in §§ 102 and 103, but also those in § 101.” Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1330 n.3 (Fed. Cir. 2012) (internal quotation marks omitted) (citing Aristocrat Techs. Austl. PTY Ltd. v. Int’l Game Tech., 543 F.3d 657, 661 (Fed. Cir. 2008)).

The Federal Circuit in Dealertrack also made clear that the use of the term “Conditions for patentability” in the titles of §§ 102 and 103, but not § 101, did not change the result, relying on the Supreme Court’s pronouncement in Pennsylvania Department of Corrections v. Yeskey, 524 U.S. 206, 212 (1998) (quoting Trainmen v. Baltimore & Ohio R.R. Co., 331 U.S. 519, 528-529 (1947)), that a statute’s title “is of use only when it sheds light on some ambiguous word or phrase” in the statute and that it “cannot limit the plain meaning of the text.” Id. (quoting Trainmen v. Baltimore & Ohio R.R. Co., 331 U.S. 519, 528-529 (1947)).
 
The legislative history of the AIA also makes clear that Congress intended the PTAB to consider challenges brought under § 101 in post-grant reviews. For example, a key House Committee Report states that “the post-grant review proceeding permits a challenge on any ground related to invalidity under section 282.” H.R. Rep. No.112-98, at 47 (2011). On the Senate side, Senator Kyl also included “section 101 invention issues” among those “that can be raised in post-grant review.” 157 Cong. Rec. S1375 (daily ed. Mar. 8, 2011).
 
So, the courts and Congress have indicated quite clearly, in our view, that the PTAB should consider patentability challenges brought under § 101 in post-grant and covered business method reviews. Unless the courts or Congress tell us otherwise, we will do so.

Comments:

Director Kappos. We have been discussing this issue in several posts on Patently-O. While I do not agree that the issue is as clear as you suggest here, I do think that you have come to the correct conclusion in the end. I expect that your conclusions will be vindicated by the courts within the next couple of years. I like this issue because it challenges notions of how patent attorneys think about the law and forces us to really read the statute and identify sources of authority. Dennis

Posted by Dennis Crouch on September 24, 2012 at 05:30 PM EDT #

Dear Director Kappos, Thank you very much for your Blog, and particularly the your Blog of today on patent challenges under Section 101. I heartily agree with the position stated in the your Blog of today that Section 101 challenges are within the ambit of that which is to be considered by the PTAB in post-grant reviews. Moreover, I respectfully submit that in ex parte reexamination and inter partes review, the Office is obligated to consider each claim's effective filing date, and in so doing, the Office is obligated to consider whether each claim has support in earlier applications under 35 USC 112, and whether each claim is patent eligible subject matter under Section 101. For example, if a claim is added on the filing of an RCE (or an old, old Rule File Wrapper Continuation) and that claim is not entitled to support under Section 112 or is not patent eligible subject matter under Section 101, then the claim is only entitled to the date it was filed, not the date of any earlier application in the lineage of the patent being challenged. This is part of what I was raising in my testimony on 6 September 2012. The, in my view, failure and indeed the outright avoidance, by the Office in reexamination of determining whether such late-added claims have Section 112 and 101 support and eligibility, and hence, in my view, the failure and avoidance of determining each claim's filing date, that I have observed in actual practice, despite the plain language of the Statute, is what I was also, in part, flagging up in my 6 September testimony. The question of whether a claim has Section 112 and 101 support and eligibility and hence the determination of a each claim's filing date is important in properly examining each claim in ex parte reexamination or inter partes review under Sections 102 and 103 of the Statute because determining each claim's filing date is the first step in determining that which is prior art to each claim. Accordingly, while I applaud your Blog of today, I welcome working with the Office on the Office actively determining each claim's Section 112 and 101 support and eligibility in earlier applications and hence each claim's effective filing date, in all ex parte reexamination proceedings and all inter partes reviews. In this respect, I will gladly cite at least one recent instance where, in my personal view, the issue was avoided by the Office. But moreover, thank you and everyone at the USPTO for all the hard work you do in endeavoring to carry out statutory obligations, including the difficult task of implementing the AIA. And thank you for considering my views and having me -- and the public overall -- involved in the process of AIA implementation. Sincerely, and respectfully submitted, /Thomas J Kowalski/ Thomas J Kowalski, Reg No 32,147

Posted by Thomas J Kowalski on September 25, 2012 at 10:12 AM EDT #

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