BPAI—What Constitutes a New Ground of Rejection

Vacating decisions of the Board of Patent Appeals and Interferences (BPAI), the U.S. Court of Appeals for the Federal Circuit issued decisions in two cases, ruling that the BPAI had improperly relied on a new ground of rejection without giving applicants a rehearing opportunity.  In re Leithem, Case No. 11-1030 (Fed. Cir., Sept. 19, 2011) (Linn, J.); and In re Stepan, Case No. 10-1261 (Fed. Cir., Oct. 5, 2011) (Prost, J.)

In Leithem, applicants appealed a BPAI decision and rehearing decision, both rejecting claims in a disposable diaper patent application as obvious.   Applicants argued that the claimed diaper could retain absorption using wood pulp extracted with a caustic substance and fluffed to produce fluff pulp.  Traditional diapers also use fluff pulp, but require undesirable chemical agents during manufacture.

During patent prosecution, the examiner rejected the application as obvious over patent references to Pociluyko and Novak.   Pociluyko discloses a traditional diaper, while Novak discloses caustic extraction of wood pulp.  The examiner alleged that Novak also disclosed the fluffing of pulp.  The applicants disagreed, arguing that Novak applied its caustic extraction to wet-laid paper and did not describe fluffing.

The BPAI agreed that Novak only used wet-laid paper, but affirmed the rejection by concluding that the pulp of Novak “may be fluffed.”  In the subsequent rehearing, applicants argued that the BPAI used different reasoning than the examiner.  In response, the BPAI simply stated that by referring to “pulp” in the examiner’s final rejection, during the BPAI appeal and in the BPAI’s initial decision, the “thrust” of the examiner’s rejection had not changed.

The Federal Circuit disagreed and concluded that the BPAI’s finding that Novak’s pulp may be fluffed is different from the examiner’s position that Novak’s pulp was fluffed.  The Federal Circuit found that the BPAI used new grounds of rejection, thus violating applicants’ rights to respond to the new rejection when it is based on new factual findings.

In Stepan, applicants appealed a BPAI decision affirming an examiner’s ruling on reexamination that a patent was invalid as obvious.   The patented technology generally concerns resin blends used to make foam.  However, the reasons for rejecting the patent related to a Rule 131 affidavit submitted by applicants during prosecution.

More particularly, applicants argued that the applied patent reference to Singh was only a § 102(a) reference and provided the affidavit swearing behind Singh.   The application in issue was a continuation-in-part of an earlier application which, based on the priority claim, would have made Singh § 102(a) art.  The examiner maintained that Singh was a § 102(b) reference and ignored the declaration.

The BPAI ruled that applicants could claim priority to the earlier application, and that therefore Singh was only § 102(a) art.   However, the BPAI affirmed the examiner’s rejection, alleging that the content of the affidavit was insufficient to swear behind Singh.

The Federal Circuit again vacated the BPAI decision, concluding that the factual finding on the sufficiency of the affidavit was new and was not a basis of the examiner’s rejection.   The Federal Circuit also rejected the BPAI’s argument that applicants were required to seek rehearing before appealing the issue to the Federal Circuit.  In this regard, the Federal Circuit held that the BPAI must indicate and identify a new ground of rejection so that applicants are given proper notice to seek a BPAI rehearing.