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Schulze v. Green

February 13, 1998

DALE R. SCHULZE AND JON A. SHERMAN, APPELLANTS,
v.
DAVID T. GREEN, HENRY BOLANOS, ROBERT J. GEISTE, WAYNE P. YOUNG, STEPHEN W. GERRY AND FRANK M. RENDE, III, APPELLEES.



Appealed from:Patent & Trademark Office Board of Patent Appeals and Interferences

Before Michel, Lourie, and Rader, Circuit Judges.

The opinion of the court was delivered by: Michel, Circuit Judge.

(Interference No. 103,319)

Dale R. Schulze and Jon A. Sherman (collectively, "Appellants") appeal the decision of the Patent and Trademark Office's (the "PTO's") Board of Patent Appeals and Interferences (the "Board") entering final judgment against them in an interference on the ground of unpatentability under 35 U.S.C. § 102(f). Green v. Schulze, Interference No. 103,319 (B.P.A.I. Nov. 7, 1996) (decision on Final Hearing). Judgment was rendered against Appellants based on the motion for final judgment of the party Green et al. *fn1 (collectively, "Green" or "Appellees") which asserted that Appellants' failure to refile promptly their motion to correct inventorship during the interference, after their initial filing was dismissed as facially deficient under the regulations, required Appellants' patent application claims to be declared unpatentable in the interference judgment. Appellants timely and properly appealed to this court, and the appeal was submitted for our decision following oral argument on October 9, 1997.

We hold the Board erred in rendering judgment against Appellants because notice that judgment would be based solely on failure to refile during the interference was inadequate. The Board was correct, however, in concluding that Appellants failed to comply with the filing requirements of 37 C.F.R. § 1.48 (1997) and failed to heed the Administrative Patent Judge's (the "APJ's") statement that the motion to correct inventorship could be refiled at any time during the interference. Nevertheless, the APJ never informed Appellants that the issue had to be or at least would be resolved inter partes, even though Appellants had advised the APJ that they intended to await the resumption of ex parte examination to refile their motion. Because Appellants were entitled to clear notice that they had to make the correction of inventorship in the interference and to a reasonable opportunity to do so before final judgment in the interference could be entered against them, the interference judgment is vacated and the case is remanded for the Board to set a fixed period of time for Appellants to renew their motion to correct inventorship. BACKGROUND

In March 1994, the PTO declared Interference No. 103,319 between a patent application naming as inventors Schulze and Sherman and U.S. Pat. No. 5,156,315 (the "'315 patent") issued to Green. The '315 patent is assigned to United States Surgical Corporation. Schulze and Sherman, employees of Ethicon, Inc., copied claims from the '315 patent into their pending application in order to provoke the interference. The Count set forth by the PTO corresponded to all of the '315 patent claims and all of the pending application claims.

In June 1994, the parties filed their sealed preliminary statements, and Appellants filed, inter alia, a motion under 37 C.F.R. § 1.634 (1997) to correct the inventorship of their application. Appellants represented therein that the invention described by the Count was solely the work and invention of Schulze without the aid of Sherman. Green opposed Appellants' motion to correct inventorship for failure to comply with the filing requirements of 37 C.F.R. §§ 1.48 and 1.639, and also filed a motion requesting a testimony period on the issue of inventorship. Appellants opposed Green's motion to take testimony. The APJ dismissed Appellants' motion to correct the inventorship without prejudice for failure to comply with the requirements of 37 C.F.R. § 1.48 *fn2 and granted limited testimony on the issue of Appellants' inventorship. Green v. Schulze, slip op. at 5, 8 (Feb. 14, 1995) (decision on preliminary motions). In dismissing the motion to correct inventorship, the APJ stated that "he parties are reminded that a motion under 37 C.F.R. § 1.634, since it is not a preliminary motion, can be filed or refiled at any appropriate time in an interference." Id. at 5 (emphasis added). Appellants, however, did not refile their motion to correct inventorship under 37 C.F.R. § 1.634, nor did they request reconsideration under 37 C.F.R. § 1.640(c) (1997) of the decision dismissing their motion.

After the dismissal of the motion to correct inventorship, the preliminary statements were opened and it became apparent that, by Green's own admission, Green could not prevail on priority. Appellants state that in a telephone conference call with the APJ and Green, Appellants suggested that the APJ place Green under an Order to Show Cause and offered to renew their motion to correct inventorship. Green, however, has not pointed to anywhere in the record where the APJ instructed Appellants to refile their motion or suffer adverse judgment. The APJ did place Green under an Order to Show Cause under 37 C.F.R. § 1.640(d)(3) why judgment should not be entered against it on the ground of priority of invention, and the APJ vacated its order granting limited testimony on the issue of Appellants' inventorship. Subsequent to issuance of the Order to Show Cause, Appellants disclosed that they intended to wait until after judgment in the interference and a return to ex parte examination to refile their motion to amend inventorship under 37 C.F.R. § 1.48. Thereafter, Green filed a second motion for testimony on the inventorship issue, which was denied, and a motion for judgment that subject matter corresponding to the Count was unpatentable to Appellants under 35 U.S.C. § 102(f) for failure to recite the correct inventorship in the application.

In August 1995, the APJ deferred decision on Green's motion for judgment until Final Hearing. The Final Hearing was held before a three judge panel of the Board on September 19, 1996, and the Board rendered a Decision on Final Hearing on November 7, 1996, entering judgment against Green for lack of priority and against Appellants for unpatentability under 35 U.S.C. § 102(f) for failure diligently to correct inventorship pursuant to 37 C.F.R. §§ 1.48 and 1.634. *fn3 Green, slip op. at 11-12 (Nov. 7, 1996). One Judge on the panel Dissented, however, stating that the patentability issue was not ripe for consideration and that Appellants should be given the opportunity to renew their attempt to correct inventorship upon resumption of ex parte examination. Alternatively, the Dissenting Judge would have set a testimony period on the issue of inventorship rather than entering judgment against Appellants. See id. at 17 (Caroff, A.P.J., Dissenting).

Green does not cross-appeal the decision of the Board effectively canceling its patent on the ground of prior invention; Appellants simply appeal the decision against them for failure to correct inventorship during the interference and, hence to establish patentability. Appellants contend they were entitled to attempt to correct inventorship upon resumption of ex parte examination, arguing that Green, having lost on priority of invention, had no assertable legal interest in any impact of correct inventorship on the patentability of Appellants' application claims.

Discussion

I. Evolution of the Authority of the Board

Prior to the 1984 Amendments to the patent statute (the "1984 Amendments"), the Board of Patent Interferences decided questions of priority, but not of patentability. Issues of patentability over the prior art were decided only by the Board of Appeals. See Wu v. Wang, 129 F.3d 1237, 1240, 44 USPQ2d 1641, 1643 (Fed. Cir. 1997) (citing generally In re Van Geuns, 946 F.2d 845, 20 USPQ2d 1291 (Fed. Cir. 1991), and Donald S. Chisum, Chisum on Patents §§ 10.02[4]-[6], 10.09[1] (1997)). Under the old statute and its implementing regulations, if issues of patentability were raised during an interference, the interference would be stayed, examination would resume ex parte to resolve the patentability issue, and thereafter the interference proceeding would resume. If other issues of patentability were still pending at the Conclusion of the interference, as was often the case, the application was once again returned to ex parte examination for resolution of those issues. See Wu, 129 F.3d at 1240, 44 USPQ2d at 1643. Often, prosecution of the application included a decision of the Board of Appeals once examination by the examiner was finished. Thus, both boards and the examiner could be called upon in the prosecution of a single application involved in an interference.

Congress became dissatisfied with the inefficiency of this "start- and-stop" process in which a case could "ping-pong" back and forth between interference and examination proceedings. Therefore, in 1984, Congress combined the Board of Patent Interferences with the Board of Patent Appeals to create the current Board of Patent Appeals and Interferences, and also amended 35 U.S.C. § 135(a) to include the following provision: "The Board of Patent Appeals and Interferences shall determine questions of priority of the inventions and may determine questions of patentability." Patent Law Amendments Act of 1984, Pub. L. No. 98-622, §§ 201-207, 98 Stat. 3383, 3386-89 (1984) (codified as amended at 35 U.S.C. § 135(a) (1994)) (emphasis added). Consolidation of the two boards into one, with authority to consider ...


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