December 2008 LAST MONTH AT THE FEDERAL CIRCUIT Table of Contents During Ex Parte Reexamination, Evidence That Sales Were a Direct Result of the Unique Characteristics of the Claimed Invention Was Necessary to Demonstrate Nonobviousness Based on Commercial Success In re DBC No. 08-1120 (Fed. Cir. Nov. 3, 2008) [Appealed from Board] ................................................................................................................2 Patent Properly Considered During Reexamination Results in Obviousness-Type Double Patenting Rejection In re Basell Poliole fi ne Italia, S.P .A. No. 07-1450 (Fed. Cir. Nov. 13, 2008) [Appealed from Board] ................................................................................................................5 REVIEW AND DOWNLOAD THE FULL TEXT OF EACH OPINION AT WWW.FINNEGAN.COM
SPOTLIGHT INFO: In In re DBC , No. 08-1120 (Fed. Cir. Nov. 3, 2008), the Federal Circuit af fi rmed the Board’s determination on reexamination that the claims were obvious and found that DBC, LLC (“DBC”) had waived its constitutionality challenge of the appointment of the APJs who presided over the appeal before the Board. Regarding the obviousness rejection, the Court held that DBC’s sales evidence of commercial success did not overcome the prima facie case of obviousness because it failed to show that the driving force behind those sales was the claimed combination, and not just the marketing efforts employed. Regarding the constitutionality challenge, the Court addressed the issue raised by Professor John F. Duffy in an article published in 2007 that the legislation enacted in 2000 delegating the power to appoint APJs to the Director of the PTO rather than the Secretary of Commerce—as required under the Appointments Clause—was unconstitutional. DBC raised this issue on appeal, but the Federal Circuit found that DBC waived the issue by not raising it before the Board. Moreover, the Court chose not to exercise its discretion to hear the issue, given, among other reasons, the remedial legislation passed in August 2008 that redelegated the power of appointment to the Secretary of Commerce. See full summary below. can provide dietary or health bene fi ts During Ex Parte Reexamination, when consumed by humans or animals.” Evidence That Sales Were a Slip op. at 2 (alterations in original). The Direct Result of the Unique ’333 patent further states that studies have Characteristics of the Claimed isolated in the mangosteen tree and its fruit chemical constituents known as xanthones, Invention Was Necessary to which are biologically active compounds Demonstrate Nonobviousness potentially able to provide a variety of health Based on Commercial Success bene fi ts. The PTO granted a third party’s request James A. Tartal for ex parte reexamination of the ’333 patent. During reexamination, the examiner Judges: Linn (author), Dyk, Stearns rejected all claims of the ’333 patent as (District Judge sitting by designation) obvious over a combination of seven prior art references, including Japanese [Appealed from Board] Patent 11043442 (“JP ’442”) and Japanese Patent 08208501 (“JP ’501”). Of the seven In In re DBC , No. 08-1120 (Fed. Cir. Nov. 3, references, JP ’442 was the only reference 2008), the Federal Circuit af fi rmed the not before the original examiner. To provide Board’s rejection of all claims of U.S. Patent objective evidence of nonobviousness, No. 6,730,333 (“the ’333 patent”) as obvious DBC submitted three declarations that and further held that DBC, LLC (“DBC”) attempted to demonstrate the success of the waived challenging the appointment of the commercial embodiment of the patented APJs who presided over its appeal. invention, known commercially as XanGo TM juice. The examiner was not persuaded by The ’333 patent is directed to a nutraceutical DBC’s evidence and made the rejection fi nal. composition comprising a mixture of the DBC appealed the examiner’s fi nal rejection pulp and pericarp of the mangosteen fruit. to the Board, which af fi rmed the examiner’s The ’333 patent de fi nes a nutraceutical obviousness rejection of the pending claims. as “any compound[] or chemical[] that PAGE 2 PAGE 3 LAST MONTH AT THE FEDERAL CIRCUIT, DECEMBER 2008 LAST MONTH AT THE FEDERAL CIRCUIT, DECEMBER 2007
under the Appointments Clause of the “We have held on a number U.S. Constitution. of occasions that evidence of The Court found that DBC waived the commercial success alone is issue by failing to raise it before the Board, not suf fi cient to demonstrate noting that it is well established that a party nonobviousness of a claimed generally may not challenge an agency decision on a basis that was not presented invention. Rather, the proponent to the agency. The Court explained that the must offer proof ‘that the sales requirement that a party object to an agency were a direct result of the unique before attacking that agency’s action in court characteristics of the claimed serves two primary purposes. First, it gives the agency an opportunity to correct its invention—as opposed to other own mistakes before it is haled into federal economic and commercial factors court, and thus discourages disregard of the unrelated to the quality of the agency’s procedures. Second, it promotes patented subject matter.’” judicial ef fi ciency, as claims generally can be resolved much more quickly and Slip op. at 18 (quoting In re Huang , economically in proceedings before the 100 F.3d 135, 140 (Fed. Cir. 1996)). agency than in litigation in federal court. DBC appealed, contending that the Board The Federal Circuit, noting that it retains erred in fi nding a prima facie case of discretion to reach issues raised for the fi rst obviousness based on a substantial new time on appeal, further determined that this question of patentability, and that even if was not an exceptional case that warranted the Board properly found a prima facie case consideration of the Appointments Clause of obviousness, it erred by concluding that issue despite its tardy presentation. The DBC’s evidence of commercial success was Court reemphasized that while the issue insuf fi cient to rebut the prima facie case. could have been raised before the Board, DBC also argued that even if the Board it was not. The Court also noted that correctly af fi rmed the examiner’s rejection of legislation in August 2008 redelegated the the claims as obvious, its decision must be power of appointment to the Secretary of vacated because two members of the panel Commerce, thereby eliminating the issue that heard the appeal were unconstitutionally of unconstitutional appointments going appointed. forward. The Court stated that because Congress’s action meant that its decision On appeal, the Federal Circuit rejected would not affect cases decided by future DBC’s fi rst argument that the Board’s panels of the Board, this further argued decision must be reversed because two against exercising discretion to address the members of the panel that heard the issue. Additionally, DBC made no allegation appeal were unconstitutionally appointed. of incompetence or other impropriety Under the theory advanced by DBC, regarding the APJs who heard its appeal, legislation enacted in 2000 delegating and those same APJs were reappointed by the power to appoint APJs to the Director the Secretary of Commerce, acting under the of the PTO instead of the Secretary of new statute. The Court concluded that such Commerce was constitutionally in fi rm circumstances did not warrant the exercise PAGE 3 PAGE 4 WWW.FINNEGAN.COM WWW.FINNEGAN.COM
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