1) Whether the correct standard of review for Patent and Trademark Office ("PTO") findings of fact is the "arbitrary, capricious" or the "substantial evidence" test.
2) Whether the Board of Patent Appeals and Interferences ("Board") can retain jurisdiction over an interference proceeding after a party withdraws from the proceeding.
3) Whether the Board's holding that the invention in the instant case is unpatentable because of obviousness is supported by substantial evidence.
1) Based on the statutory language of the Administrative Procedure Act ("APA"), and 35 U.S.C. § 144, which requires the Federal Circuit to review an appeal based on the record of the PTO, the "substantial evidence" standard is the appropriate standard of review of PTO fact-findings.
2) Yes. Even when a party attempts to terminate the interference by disclaiming all of its claims relating to interference, the Board should decide issues of priority and patentability when they have been fairly raised and fully developed before the Board.
3) Yes. Substantial evidence supports the Board's finding that motivation existed to combine prior patents to obtain the invention claimed here, and thus the invention is unpatentable as obvious as a matter of law.
Robert Gartside and Richard Norton (collectively "Gartside") appeal from the final decision of the Board holding that several claims of its patent application are unpatentable as obvious. Gartside's application is directed to "cracking processes" that generate low molecular weight, purified hydrocarbons of desired molecular composition by breaking down impure, high molecular weight hydrocarbon feed oil.
The Court first considered the appropriate standard of review for PTO findings of fact, which the Supreme Court left open in Dickinson v. Zurko, 527 U.S. 150 (1999). Based on the statutory language of the APA, and the plenary nature of the record from the PTO, the Court held that the the appropriate standard of review is "substantial evidence," not "arbitrary, capricious." The basic requirement for substantial evidence review is that the agency hearing produce a record that serves as the foundation for the agency's action. "Substantial evidence" is appropriate because the Federal Circuit's review of the Board's decision is confined to the factual record compiled by the Board. The "arbitrary, capricious" standard applies in situations where an agency does not produce a record of its hearings.
Second, the court considered whether the Board can retain jurisdiction over an interference proceeding even after a party withdraws from the interference. Based on Guinn v. Kopf, 96 F. 3d 1419, 40 U.S.P.Q. 2d 1157 (Fed. Circ. 1996), the Court held that even disclaimer of all claims corresponding to a count does not divest the Board of jurisdiction over the interference. The Board did not abuse its discretion in the instant case in deciding the patentability of Gartside's claims, because the issues surrounding the patentability of the claims were fairly raised and fully developed during the proceeding. By deciding patentability the Board avoided yet another round of duplicative arguments before the examiner and achieved a timely resolution to the benefit of the parties and the public in general. Gartside was not denied any procedural safeguards by the Board's refusal to remand to the examiner.
Third, the Court reviewed the Board's holding that Gartside's invention was unpatentable under 35 U.S.C. § 103 because of obviousness. The court holds that substantial evidence supported the Board's fact-finding, and that the Board correctly concluded that the claims were unpatentable under 35 U.S.C. § 103. All of the limitations of the claimed invention were found in prior patents. Sufficient motivation existed in these prior patents for one of ordinary skill in the art to combine several of these prior patented inventions to arrive at the invention claimed here.
The Federal Circuit affirmed the Board's holding that (1) the Board's factual findings relating to its obviousness analysis are supported by substantial evidence, and (2) the Board did not err in concluding that the claims were unpatentable as obvious as a matter of law.
Prepared by the liibulletin-patent Editorial Board.