Cooper Techs: PTO’s Interpretation of “Original Application” Given Chevron Deference

Cooper Techs. v. Dudas (Fed. Cir. 2008)

Inter partes reexamination is relatively new. The 1999 AIPA provides that it is available for "any patent that issues from an original application filed in the United States on or after" November 29, 1999. Cooper's original patent application was filed prior to the 1999 deadline, but a continuation application was filed after the deadline. The debate here was whether the continuing application should be considered an "original application" under the statute. The PTO argued that the continuation should be considered an original application and that its interpretation should be given a high level of deference.

On appeal, the CAFC affirmed. In doing so, the court first found that PTO's interpretation of "original application" is was a procedural determination leading the court to grant Chevron-level deference to the PTO's interpretation.

We have also previously held that 35 U.S.C. § 2(b)(2) does not authorize the Patent Office to issue "substantive" rules. See Merck & Co. v. Kessler, 80 F.3d 1543 (Fed. Cir. 1996). "A rule is 'substantive' when it 'effects a change in existing law or policy' which 'affect[s] individual rights and obligations.'" … In this case, the Patent Office's interpretation of "original application" does not effect any change in existing law or policy; rather, it is a prospective clarification of ambiguous statutory language regarding a matter of procedure. It is therefore "interpretive"--rather than "substantive"--under the definitions put forward in Animal Legal Defense Fund. We conclude that the Patent Office had the authority under 35 U.S.C. § 2 to interpret section 4608, because that interpretation both governs the conduct of proceedings in the Patent Office, not matters of substantive patent law, and is a prospective clarification of ambiguous statutory language.

….

Because the Patent Office is specifically charged with administering statutory provisions relating to "the conduct of proceedings in the Office," 35 U.S.C. § 2(a)(2)(A), we give Chevron deference to its interpretations of those provisions. See Lacavera ("Because the PTO is specifically charged with administering this statute, we analyze a challenge to the statutory authority of its regulations under the Chevron framework."); see also Bender v. Dudas, 490 F.3d 1361 (Fed. Cir. 2007) (applying Chevron framework to Patent Office regulations for the conduct of proceedings in the Patent Office); Ethicon, Inc. v. Quigg, 849 F.2d 1422 (Fed. Cir. 1988) (same).

Under the familiar two-step Chevron analysis, "[w]e always first determine 'whether Congress has directly spoken to the precise question at issue.'" Hawkins v. United States, 469 F.3d 993, 1000 (Fed. Cir. 2006) (quoting Chevron, 467 U.S. at 842). "We do so by employing the traditional tools of statutory construction; we examine the statute's text, structure, and legislative history, and apply the relevant canons of interpretation." Delverde, SrL v. United States, 202 F.3d 1360, 1363 (Fed. Cir. 2000). "If we find 'that Congress had an intention on the precise question at issue, that intention is the law and must be given effect . . . .'" Hawkins, 469 F.3d at 1000 (quoting Chevron, 467 U.S. at 843 n.9.) If we conclude that "Congress either had no intent on the matter, or that Congress's purpose and intent is unclear," Delverde, 202 F.3d at 1363, then we proceed to step two, in which we ask "whether the agency's interpretation is based on a permissible construction of the statutory language at issue," Hawkins, 469 F.3d at 1000.

….

We conclude that the Patent Office's interpretation of section 4608 is permissible and therefore entitled to deference.

This is a relatively minor case, and the true issue is whether it provides any indication of how the court will proceed in Tafas v. Dudas.

Comments

[EG]

The issue in the Cooper Technologies case is quite different from that in GSK/Tafas. In Cooper Technologies, we're dealing with when a procedure (inter partes reexam) is applicable. As the Federal Circuit observed, the interpretation of what "original application" means by the USPTO relates only to that procedure (not a substantive right of the applicant) where Congress, the USPTO and even the Federal Circuit was ambiguous on what "original application" meant. That's why the USPTO got Chevron deference for its interpretation. Note also that the Federal Circuit stressed that the interpretation of "original" by the USPTO came out soon after the legislation was enacted, was a permissible interpretation, and wasn't even changed after subsequent Congressional amendment of the section that this term was in.

GSK/Tafas is an entirely different animal. What the USPTO has done, for example, in interpreting 35 USC 120 for the claim-continutation limitation Rules is long after that statute came into being, and is inconsistent with prior interpretations of this section by both the Federal Circuit and the USPTO. The USPTO is also affecting a substantive right of the applicant, and the Federal Circuit has repeatedly said the USPTO has no such authority. You won't see the Federal Circuit giving the USPTO Chevron deference in GSK/Tafas.

[T]

Was "original application" ambiguous? I don't think so. I think it clearly meant "not the application for re-examination, the other application, the original application". The drafters weren't even consciously aware of continuations. They were only trying to clearly specify which of the applications (the one for which re -exam is sought and the re exam application itself) was being addressed.

[patent leather]

Is this good news for the Aristocrat v IGT case? (good news being a reversal of the district court). I think so.

[TJ]

Given the panel, this was not a surprising decision. A big Federal Circuit showdown on whether the PTO gets Chevron deference occurred a few years ago in Dethmers Mfg. v. Automatic Equip. Corp. (2002). En banc on the issue was denied on a tie 6-6 vote. Here, the panel was Michel, Lourie and Linn, and both Lourie and Linn dissented in Dethmers. The only surprise is that they managed to pick up Michel's vote for an opinion that rather strongly endorses deference to the PTO. The panel on Aristocrat v. IGT is significantly different. And we have no idea what the panel in Tafas is going to be.