Federal Circuit Reverses BPAI Anticipation and Obviousness Rejection for Insubstantial Evidence

Also Finds Time to Appeal Begins From the Mailing Date as Opposed to Date Printed On Opinion

In In re McNeil-PPC, Inc., 91 USPQ2d 1576 (Fed. Cir. 2009), McNeil owns U.S. Patent 6,310,269, which claims a tampon for feminine hygiene with a solid fiber core, where the core is denser than the radially projecting “ribs” and the ribs are narrower at their base than at their distal end.  McNeil requested that the PTO re-examine its patent on the basis of unexamined Japanese application No. 55-168330 by Tetsu Sasaki (hereinafter “Sasaki”).  Sasaki discloses the process of making a tampon blank via stitching layers of material and then molding the blank into a finished tampon.  The Examiner rejected claims 1 and 3 as anticipated by Sasaki and claim 4 as obvious over Sasaki.  McNeil appealed to the Board of Patent Appeals and Interferences (BPAI), arguing that Sasaki failed to disclose key elements of his claim (the relative densities and coarseness of the core and ribs on the tampon, and ribs that were narrower at the base than at the proximal end).

The BPAI affirmed the Examiner’s rejection and denied McNeil’s request for a rehearing.  The date of the Board’s decision was May 30, 2008.  The date of mailing, as per the mailing sheet for the order, was June 2, 2008.  Further, the online “Transaction History” for the re-examination contains two entries both dated May 30, 2008: “Mail BPAI Decision on Reconsideration – Denied” and “Dec on Reconsideration – Denied.”  Finally, the image file wrapper (hereinafter “IFW”) lists the “Mail Room Date” of the decision as June 2, 2008.  McNeil filed the notice of appeal to this court on August 1, 2008.  The Director responded that the appeal was untimely because it was filed more than sixty days after the Board made its final decision on May 30, 2008.

Patent Owner’s Appeal was Timely As Measured from Mailing Date

Before turning to the merits of the case, the Federal Circuit addressed the issue of the timeliness of McNeil’s appeal.  The Federal Circuit first stated that it could not grant extensions of time for an appeal (citing In re Reese, 359 F.2d 462, 463 (CCPA 1966) (per curiam)).  The Court noted that Congress gave the Director authority to set the timing for an appeal in 35 U.S.C. § 142, allowing the Director to prescribe a time no less than 60 days after the date of decision during which the appellant could appeal the decision of the BPAI.  Accordingly, the Director set a time for appeal, if a request of rehearing or reconsideration had been made to the Board, as within two months after action on the request.  (37 C.F.R. § 1.304(a)(1)).

The Court held that the issue of timeliness hinged on whether the Date of Decision was the date of decision noted on the Board’s decision, or the date that the decision was mailed to the applicant.  The Federal Circuit then opined that there was little information to guide the Court as to whether to attribute meaning to the date of decision appearing on the Board’s written decision.  The Court stated that the Director failed to explain the Board’s internal procedures for issuing opinions, or whether the June 2, 2008 mailing date reflects the first time that the decision was released to the public.  The Federal Circuit did take into account an unchallenged declaration from a now-retired member of the Board Jeffrey Nase, which was presented by McNeil.

The Federal Circuit summarized Nase’s declaration as follows.  Historically, the date that the PTO mailed a document was the date that triggered a response period.  Before August 2006, the date decided was hand-stamped on the front of opinions.  In August 2006, the Board began to have the decision date typed on the front of opinions.  Nase found it to be unclear why the date on the opinion and the mail date differed, unless the mail room was slow or a member of the Board panel had decided to revise or reconsider the opinion over the weekend of May 31 and June 1, 2008.  Nase opined that if the PTO had intended this minor formatting change to have substantive effect, there would have been public notice of the change (which there was not).

The Court noted the PTO’s argument that it would be contrary to the language of both 35 U.S.C. § 142 and 37 C.F.R. § 1.304(a)(1) to deem the date of the decision to be the date that the order was mailed.  However, the Court dismissed this argument as superficial due to the import of the inner workings of the agency.  Rather, the Federal Circuit asserted that, based upon the evidence, only when an opinion is released to the public is it truly decided and safe from possible revision.  The Court did note that the PTO’s position was supported by the entries on the “Transaction History” page indicating that the case was decided and opinion mailed May 30, 2008.  However, the Court found that the parties do not dispute that the decision was mailed on June 2, 2008, making the “Transaction History” date both inaccurate and moot.

The Federal Circuit also dismissed the PTO’s reliance on an unpublished order, Barbacid v. Brown, 223 F. App’x. 972 (Fed. Cir. 2007).  In the opinion, the Federal Circuit held that the PTO’s failure to mail its decision to Barbacid when mailing the opinion to the other party did not abrogate the untimeliness of Barbacid’s appeal.  There, the Federal Circuit stated that “[T]he time is not measured from the date of receipt of the Board’s decision but from the date of the decision itself.” However, this Court noted that the opinion did not specify what “the date of the decision” was.  Further, the Federal Circuit noted that Barbacid’s appeal was so late that a few days would not have impacted the timeliness of his appeal. 

The Federal Circuit held that the instant appeal was timely for several reasons.  First, the Court noted that the “Transaction History” page appeared inaccurate and Nase’s declaration provided the most plausible explanation for the conflicting evidence of the action taken on by the Board in response to McNeil’s request for reconsideration.  Further, the IFW entry corroborates the fact that action was taken on June 2, 2008, instead of May 30, 2008.  Thus, the Federal Circuit held that the Board decided this case on June 2, 2008, the date of mailing, making McNeil’s appeal timely.

BPAI’s Anticipation and Obviousness Decision Not Supported By Substantial Evidence

Next, the Federal Circuit turned to the merits of the case.  The Court stated that the standard of review would be one of substantial evidence to support the Board’s determination. (citing In re Graves, 69 F.3d 1147, 1151 (Fed. Cir. 1995)).  The Federal Circuit noted, with added emphasis, that McNeil’s claim 1 (which was chosen as representative of the other claims), was for a tampon for feminine hygiene that comprised an absorbent portion having a “generally cylindrical compressed, solid fibre core from which longitudinal ribs extend radially outward,” where each of the ribs has a proximal end attached to the fibre core, “is compressed less than the fiber core, thereby having a coarser capillary structure than the fibre core,” and is separated from adjacent ribs at the proximal end “by an amount greater than such rib is separated from an adjacent longitudinal rib proximate the distal end.”

The Board had found that Sasaki taught all the limitations of claim 1.  Upon review of the Board’s findings, the Federal Circuit was unsure if the Board understood McNeil’s claim.  First, the Court observed that the Board equated McNeil’s limitation of a tampon “each of the ribs is compressed less than the fiber core, thereby having a coarser capillary structure than the fibre core” with Sasaki’s Figures 8 and 10, which the Board found to reasonably depict the ribs of a tampon “as being compressed less at their distal ends than at their ends proximal to the drawstring at the center of the drawn fiber strips.” (emphasis added by the Court).  The Court noted that the claim required the ribs to be less dense than the core, not the distal ends of the ribs to be less dense than their proximal ends. 

The Federal Circuit failed to find any evidence in Sasaki of the relative compression of any portion of Sasaki’s tampon.   The Court found that Figure 6, which showed relative compression of the strips of absorbent material, depicted a tampon blank, not a finished tampon.  The Court noted that Figures 7 and 8 of Sasaki, which depicted a finished tampon, did not disclose any evidence a core that is denser than the ribs of the tampon.  Further, the Federal Circuit stated that the PTO failed to explain how the change in shape from the tampon blank to the finished tampon necessarily made the ribs less dense than the tampon core.   The Federal Circuit noted that the Board’s initial decision stated that “compressed masses [are] formed at equal intervals along the axial line direction on the outside circumferential surface of the tampon.” However, the Court found that Sasaki made no comparison between the “compressed masses” and a core.  Further, the Court observed that it was not clear that Sasaki even disclosed a “core,” pointing to Sasaki’s Figure 8 to show that Sasaki’s tampon was composed of six ribs and no core.  The Court held that there was not substantial evidence (or even any evidence) that Sasaki disclosed ribs “compressed less than the fiber core” or “a generally cylindrical compressed, solid fibre core.”  Thus, the Federal Circuit reversed the Board’s rejections based on Sasaki.

The Federal Circuit also dismissed the PTO’s argument that McNeil waived arguments about Sasaki’s lack of a “generally cylindrical compressed, solid fibre core” and “coarser capillary structure than the fibre core.”  Specifically, the PTO asserted that it waived arguments regarding Sasaki’s lack of a core because McNeil, in its appeal brief, argued only that two key elements (relative rib compression and spacing from adjacent ribs) were missing from Sasaki.  The Federal Circuit disagreed, noting that McNeil included arguments about the core in its brief.  Thus, McNeil did not have to explicitly assert that the core was missing from Sasaki, because the brief mentioned in passing that “Sasaki does not disclose, teach, or suggest a tampon, wherein ‘each of the ribs is compressed less than the fiber core, thereby having a coarser capillary structure than the fibre core.’” (emphasis added).

The Court noted that the Sasaki figures also failed to disclose any relative coarseness of different portions.  Further, the Court stated that the lack of a core was discussed earlier in the opinion.   The Court also observed that Figure 8 showed some spacing between the bottommost ribs, and arguably disclosed spacing between other ribs.  However, the Court noted that this disclosure of Sasaki did not overcome the failing of Sasaki to teach the other features of McNeil’s invention.  The Court held that it was not clear that Sasaki disclosed “a core nor which portions of Sasaki’s tampon the Board considered to be the ribs and which the Board considered to be the core.”  The Court stated that there was not substantial evidence to support the Board’s determination that Sasaki disclosed ribs separated from each other “at the proximal end by an amount greater than” at “the distal end.” Thus, the Court reversed the Board’s rejections of claims 1, 3 and 4 for lack of substantial evidentiary support.

The Federal Circuit held that McNeil’s appeal of his rejection at the BPAI was timely because it was within two months of the date that the decision was mailed to him.  Further, the Federal Circuit reversed the Board of Patent Appeals and Interferences’ rejection of claims 1, 3 and 4 of McNeil’s re-examination application for lack of substantial evidentiary support based on the lack of the prior art’s disclosure of a fibre core, which was mentioned but not explicitly disputed by the appellant.

Judge Dyk’s Dissent

The dissent disagreed with the majority’s opinion with regards to timeliness only.  Specifically, it observed that the decision of the BPAI clearly stated on its face that it was decided May 30, 2008.  The dissent found that because McNeil did not appeal until August 1, 2008, two days after the regulatory period for review from a decision of May 30, 2008, the appeal was untimely filed and should not have been granted jurisdiction.   The dissent noted that the jurisdiction of the Federal Circuit is statutorily limited by the timeliness regulations of the PTO, and quoted 35 U.S.C. § 142 to show that an appeal must be filed within such time as prescribed by the Director after the date of the decision from which the appeal is taken.  The dissent also cited to the Supreme Court, which stated that statutorily limited times for filing a notice of appeal are “mandatory and jurisdictional.” Bowles v. Russell, 551U.S. 205, 127S. Ct. 2360, 2363 (2007).

Next, the dissent noted that 35 U.S.C. § 142 sets forth a time for filing the notice of appeal as within two months after action on the request for rehearing or reconsideration.  The dissent asserted that the notice accompanying the promulgation of 35 U.S.C. § 142 characterized the relevant date as the date of “decision on reconsideration.”  54 Fed. Reg. 29,548, 29,550 (July 13, 1989). The dissent then observed that the majority also correctly noted that the term “action on the request” has the same meaning in this context as “date of the decision” and that the issue was what the phrase “date of the decision” means.

The dissent then reviewed the four sources for dates referenced by the parties in the case (the date of decision on the Board’s opinion, the PTO’s online Transaction History, the IFW wrapper entry of the “Mail Room Date”, and a “mailing sheet” attached to the paper copy of the opinion when mailed to McNeil).  The first two sources refer to a date of May 30, 2008, while the last two reference June 2, 2008.  The dissent notes that the only dispute is about which of these dates represents the “date of decision” as reflected in the statute and regulations.  

The dissent held that the majority’s view that the “date of decision” is the date of mailing instead of the date of decision as clearly written on the opinion is contrary to the plain language of the regulation and against precedent interpreting the nearly identical language of 35 U.S.C. § 142’s predecessor rule.  It observed that the only reason for the majority to reject May 30, 2008 was its theoretical concern that the Board could change the decision at some point after the “Decided” date was affixed to the decision before the decision was mailed.  However, the dissent notes that no evidence of such revision exists.  Further, the plain language of the statute and regulation state that the relevant date is the “date of decision,” not the date of mailing.  In adopting these regulations and statutes, the dissent notes that both the PTO and Congress rejected the date of mailing as determinative.  The dissent then pointed to examples in which the PTO explicitly used and prescribed the mailing date as determinative for setting a time limit for action.  (citing 37 C.F.R. § 1.181(f); § 1.97(c); and § 2.105(a)).

The dissent then pointed to precedent that rejected the majority’s approach.  Specifically, the dissent cited Burton v. Bentley, 14 App. D.C. 471 (C.A.D.C. 1899), in which the Court of Appeals (a predecessor of the District Court of D.C.) addressed the time for appealing a decision of the PTO when the decision date and mailing date differed.  At that time, the prior rule required that appeals from the Patent Office “shall be taken within forty days from the date of the ruling or order appealed from, and not afterward.” (emphasis added).  The court in Burton held that the relevant date was the date that the order was made and signed by the deciding official, and that a delay in mailing the order was irrelevant to the date of decision. The Court of Appeals asserted that the terms of the rules must be allowed their “ordinary meaning and import.”  The Court held that to allow the time limit to be computed from any other act or event other than the date of the order appealed from would be violative of the rule. 

The dissent agreed with the court’s view in Burton, and provided further support for its position from In re Reese. There, the Court of Customs and Patent Appeals (a predecessor of the Federal Circuit) asserted that the “date of the decision appealed from” was the date of the decision on the petition.  In re Reese, 359 F.2d 462, 463 (CCPA 1966).  The dissent also pointed to Barbacid v. Brown, in which the Federal Circuit held in a non-precedential decision that “the time for filing the appeal to this Court is two months from the date of the decision of the Board. The time is not measured from the date of receipt of the Board’s decision but from the date of the decision itself.”  Barbacid v. Brown, 223 F. App’x 972, 973 (Fed. Cir. 2007).  The Federal Circuit rejected the mailing date as determinative of the appeal time limit, despite the appellant’s allegation that he had never been mailed a copy of the decision because of an error by the Board. 

The dissent then pointed out that the existence of any delay in mailing a decision does not impose an unfair burden on the parties because of the lengthy period for appeal and the Board’s ability to extend the time for appeal in situations where there has been excusable neglect.  (citing 37 C.F.R. § 1.304(a)(3)(ii)).  The dissent noted no allegations of inadequate time to prepare an appeal by the appellant.  Thus, the dissent held that because the date of decision in this case was May 30, 2008, the Federal Circuit did not have jurisdiction to review because of the untimely notice of appeal filed August 1, 2008, and advocated dismissal of this appeal.

Significance to Patent Applicants

For practitioners, In re McNeil-PPC presents a useful combination of practical issues.  In regards to timing for response, it is common for the date of decision (either for Board opinions as well as for office actions) to be substantially different from dates on which the opinions or office actions are mailed.  Even when receiving electronic notifications of office actions, there is generally a lag of one to three days between when the Examiner or Board has made their decision (and had their decision counted in the USPTO’s internal system), and the date on which that decision is communicated to the applicant.  The Federal Circuit In re McNeil-PPC confirmed what most practitioners had assumed (and hoped was true) in that the response dates are counted from the notification or mailing date as opposed to the date of decision.

Additionally, patent applicants should be interested in the requirements for substantial evidence as set forth in In re McNeil-PPC.  A common problem in attempting to respond to an Examiner’s action is that it is unsupported by evidence.  Without evidence, it becomes difficult to supply rebuttal evidence as opposed to simply contrary arguments.  In re McNeil-PPC provides a reminder that the USPTO is required to provide evidence in order to maintain a prima facie rejection based upon prior art.



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