[00:00:03] Speaker 03: The first argued case this morning is number 18, 1883, in Ray Riggs. [00:00:10] Speaker 03: Mr. Bauer. [00:00:21] Speaker 02: May it please the court. [00:00:23] Speaker 02: Although this is not the first appeal to this court from a case in which 37 CFR 41.50B has been applied, it is the first appeal in which certain aspects of the procedure have been challenged. [00:00:39] Speaker 02: What I'd like to do is to try to specify exactly what aspects of that procedure we are challenging. [00:00:46] Speaker 02: what the issues and disputes are between the parties, what issues are not in dispute between the parties, and exactly the relief that we are looking for in terms of the board's order in this case. [00:01:00] Speaker 02: The initial order from the board entered a new ground of rejection, a 101 rejection. [00:01:11] Speaker 02: It was necessitated by the Supreme Court's opinion in Alice, which came down after the briefs were made. [00:01:20] Speaker 06: At oral arguments, appellants acknowledged that Alice was applicable and such a... I understand your argument to be that the board did not have the authority to address the 101 issue. [00:01:37] Speaker 06: Do I understand that correctly? [00:01:39] Speaker 02: No, no, no, that's not in dispute. [00:01:41] Speaker 02: They certainly have the authority to address that issue. [00:01:46] Speaker 02: And nor do we dispute that the court has authority to do that, nor do we dispute that they may set forth an order stating the reasons why they think Alice is applicable in setting it forth. [00:02:04] Speaker 02: But where we do have disagreement, [00:02:07] Speaker 02: is where the procedure in the order contains aspects which are prejudicial to the appellants. [00:02:17] Speaker 02: And the appellants wish to avoid any prejudice from the procedure. [00:02:21] Speaker 06: What exactly do you think prejudiced your client? [00:02:25] Speaker 02: Well, there's several different aspects, one of which is that the appellants are being required to request the reopening of prosecution. [00:02:39] Speaker 02: They're not simply being required to respond to the new grounds of rejection. [00:02:44] Speaker 02: They have to ask that prosecution be reopened. [00:02:47] Speaker 06: And why is that a problem? [00:02:49] Speaker 02: Well, the parties are not in dispute that remand is something different than reopening prosecution. [00:02:55] Speaker 02: When a matter is remanded to the court, for example, because there's intervening legal authority, the scope of the remand is limited to that issue. [00:03:07] Speaker 02: For example, and this is Section 101, so this is a law which is in flux. [00:03:13] Speaker 02: If there was a patent infringement trial in which Alice had come down subsequent to trial and Section 101 wasn't necessarily considered, [00:03:23] Speaker 02: You wouldn't order the entire trial to be repeated. [00:03:26] Speaker 02: You would ask that there be a briefing on the 101 issue. [00:03:32] Speaker 06: Your concern is that other issues would be raised by the patent examiner other than 101? [00:03:38] Speaker 02: Yes. [00:03:39] Speaker 02: We're concerned that prosecution is reopened. [00:03:41] Speaker 02: That means we are starting back from square one. [00:03:44] Speaker 02: The examiner is free to make any additional rejections that the examiner thinks is appropriate, irrespective of any relationship to the 101 issue. [00:03:56] Speaker 03: So the board affirmed the rejections under 103, but your position is that it should nonetheless have been remanded? [00:04:07] Speaker 02: On the obviousness rejection, because there is a new 101 rejection made by the board through no fault of the appellants, they have to have the opportunity to respond to that new 101 rejection before the examiner. [00:04:27] Speaker 02: Under the Gould case, there's no reason to address the 103 rejection. [00:04:33] Speaker 02: because irrespective of how that is determined, we still have to go back on the 101 rejection. [00:04:39] Speaker 02: So under GOO, the appropriate thing to do is to address the 101 rejection. [00:04:45] Speaker 02: The 103 rejection remains in the case. [00:04:49] Speaker 02: And if it returns to the board, then the 103 rejection will be addressed at that time on its merits. [00:04:57] Speaker 03: In the argument at the hearings before the PTAB, was 101 discussed at all? [00:05:04] Speaker 02: Only briefly, Your Honor, to the extent that we acknowledge that Alice had been decided, there had been several board cases which had been remanded because of Alice. [00:05:18] Speaker 02: And we noted this. [00:05:20] Speaker 02: This is at pages 426 and 427 of the appendix, in which we noted that and actually asked for the remand. [00:05:29] Speaker 02: Alice very quickly acknowledged that it was appropriate. [00:05:33] Speaker 02: But we are concerned that we are being required also to request. [00:05:39] Speaker 02: We have to affirmatively request the reopening of prosecution ourselves. [00:05:44] Speaker 02: Under former rule 196, you didn't have to do that. [00:05:49] Speaker 02: You simply would submit your responses to the rejection to the examiner, and they would be considered. [00:05:56] Speaker 02: Here, we have to affirmatively ask that prosecution be reopened, which we don't want it to be reopened. [00:06:05] Speaker 02: We do think 101 should be addressed, but we don't think we should have to open everything completely. [00:06:10] Speaker 02: And also, we will have to withdraw our appeal. [00:06:14] Speaker 05: I'm a little confused about something. [00:06:16] Speaker 05: I thought that, just correct me if I'm wrong, that the board's first decision followed the normal course and said you have two options in response to our new ground of rejection. [00:06:26] Speaker 05: One of them is reopening, but the other is just filing for rehearing. [00:06:29] Speaker 05: Which is what you did so am I wrong about what the board said? [00:06:34] Speaker 02: We requested You can request free hearing the reasons why that option exists is because there could be purely legal issues in which there is no reason and you did request free hearing right well we we requested reconsideration of the order and [00:06:51] Speaker 02: we did not traverse the 101 rejection in the request for a rehearing. [00:06:57] Speaker 02: In fact, in the request for reconsideration, [00:07:04] Speaker 02: We specifically indicated that we consented to remand to the examiner, but please be very careful because you're saying that your 101 rejection is binding on the examiner. [00:07:17] Speaker 02: Please state what the abstract idea is under the ALICE test, and please make that very clear so that when we're before the examiner, the examiner is not bound to repeat something that wasn't meant. [00:07:30] Speaker 04: Our entire comments on that was one paragraph. [00:07:33] Speaker 04: Is that 446 and 447 of the Joint Appendix? [00:07:36] Speaker 05: Is that right? [00:07:37] Speaker 05: That's what I'm looking at. [00:07:39] Speaker 04: Yes. [00:07:39] Speaker 05: Yes. [00:07:41] Speaker 04: OK. [00:07:41] Speaker 05: And so that does say it's a little bit of, it's part of a rehearing request. [00:07:51] Speaker 05: And it says, you did something wrong about 101, but it doesn't identify, does it? [00:07:59] Speaker 05: Tell me if it does. [00:08:04] Speaker 05: There's no argument that says we have some evidence that we think we would like to introduce or get the examiner to examine that's relevant to the 101 question. [00:08:18] Speaker 05: And if it doesn't say that, why is the opportunity for legal argumentation on rehearing not perfectly sufficient? [00:08:26] Speaker 02: Well, because the order was stating preconditions to submitting evidence. [00:08:36] Speaker 02: The order says that we have to submit our evidence to the board. [00:08:40] Speaker 02: And then after the board considers our evidence, at which point the board is acting like an examiner, not like an appeal body, the board will then remand to the examiner. [00:08:53] Speaker 05: But I'm just thinking in the ordinary court appellate context. [00:08:59] Speaker 05: an appeals court may raise some new issue. [00:09:02] Speaker 05: And if you want to say, not for you to decide, you do need to say, here is the specific kind of factual issue that is relevant to the resolution of the issue. [00:09:14] Speaker 05: And that's not something you can decide. [00:09:17] Speaker 05: But you have to be somewhat concrete about what the point of sending it back to a fact finder is. [00:09:25] Speaker 02: Well, yes, I take your point that yes, we do have to indicate that. [00:09:31] Speaker 02: I think we have indicated. [00:09:32] Speaker 02: We indicated when we brought this up to the board, we indicated that amendments were likely. [00:09:41] Speaker 02: We would like to be able to make amendments. [00:09:44] Speaker 06: What would be the impact of a remand [00:09:50] Speaker 06: on a patent term adjustment request versus a request to reopen prosecution on a patent term adjustment request? [00:09:57] Speaker 02: Yes, Your Honor, that's our sensitivity. [00:09:59] Speaker 02: This application was filed in 2007, has an effective filing date of 2000. [00:10:05] Speaker 02: We are here in 2019. [00:10:07] Speaker 02: Appellants are very sensitive to their patent term adjustments. [00:10:10] Speaker 02: The statute of patent term adjustment for appeals uses the word reverse. [00:10:16] Speaker 02: That's the literal language. [00:10:18] Speaker 02: It's not reverse or if the board makes a new grounds of rejection and you have to request reopening prosecution in order to address that new grounds of rejection, then you get patent term adjustment. [00:10:29] Speaker 02: It doesn't say that. [00:10:30] Speaker 02: So we're concerned that if we make the affirmative action of saying we want to withdraw our appeal [00:10:38] Speaker 02: and reopen prosecution, that's going to be held against us when it comes time for patent term adjustment. [00:10:44] Speaker 02: We could be wrong about that. [00:10:46] Speaker 02: We're not asking the court to make an advisory opinion on that point. [00:10:49] Speaker 02: But that's our sensitivity. [00:10:51] Speaker 02: And our point is, in former rule 196, we didn't have to make those affirmative actions. [00:10:59] Speaker 02: The former rule 196 used the word wave, your right to go before the examiner, meaning that after the board did its order, [00:11:08] Speaker 02: The case was then with the examiner. [00:11:11] Speaker 02: The way this order reads, you have to do something more with the board. [00:11:15] Speaker 02: You have to submit to the board your amendment or your evidence. [00:11:20] Speaker 02: The board has to apparently deem those amendments appropriate to overcoming the one-on-one rejection. [00:11:27] Speaker 02: It's not exactly clear. [00:11:28] Speaker 02: And then it goes to the examiner. [00:11:31] Speaker 02: So that's our concern is that patent term adjustment is going to be adversely affected. [00:11:36] Speaker 02: And what we want, when I get to the relief that we want, we want to just be able to make our amendments, submit our evidence, and that be it. [00:11:45] Speaker 02: We don't want to have to do that intermediary step. [00:11:48] Speaker 02: And going back, Judge Toronto, to your point, we should be able to challenge that aspect of the board's order without waiving our right to proceed on the merits before the examiner. [00:12:03] Speaker 02: We wanted to challenge the conditions [00:12:05] Speaker 02: that were being placed upon us by this procedure. [00:12:09] Speaker 02: And the Patent Office agrees that the standard is prejudiced. [00:12:17] Speaker 02: It's on page 20 of their brief that it's agreed that the appropriate standard is the appellate not be prejudiced. [00:12:25] Speaker 02: So you can make a new grounds of rejection, so long as opponents are not prejudiced. [00:12:29] Speaker 02: Now, back in the days of former rule 196, we didn't have patent term adjustment. [00:12:35] Speaker 02: We didn't have 20 years from filing patent term. [00:12:40] Speaker 02: So the prejudice is something that wasn't, in this case, is something that wasn't specifically contemplated, but we would, nevertheless, be prejudiced. [00:12:51] Speaker 02: And that's why I say that we're looking for limited relief. [00:12:54] Speaker 05: Can I just ask, where in your rehearing petition did you say to the board, we think that the formulation of the options at the end of the board's decision is incorrect and we should be able to contest the 101 somehow without reopening? [00:13:21] Speaker 05: The request for a hearing is, what, 437 and pages that follow. [00:13:25] Speaker 04: There were two requests for a hearing. [00:13:27] Speaker 04: I see. [00:13:27] Speaker 04: Where's the second one? [00:13:37] Speaker 02: Pages 446. [00:13:40] Speaker 02: While appellant's consent to abort remand to the examiner for the purposes of considering the 101 rejection, the decision does more than merely remand the appeal. [00:13:51] Speaker 02: Because the new grounds of rejection would be binding on the examiner without waiving any rights, we request that the board reconsider and revise portions of the new grounds of rejection. [00:14:02] Speaker 05: So at that point, we... And then you say first and second, and these are both substantive points about the merits of the 101 analysis. [00:14:11] Speaker 05: It's not a procedural point. [00:14:13] Speaker 02: It is asking the patent office to clarify what the abstract idea is, challenge them to say that, and they respond and say, this is the abstract idea. [00:14:24] Speaker 02: It also... [00:14:30] Speaker 02: addresses the fact that there was this computer network limitation in the claim and the board had said human thought alone. [00:14:40] Speaker 06: But where do you preserve specifically the prejudice argument that you're making now? [00:14:47] Speaker 02: I don't think we have to in the request for reconsideration preserve our prejudice [00:14:57] Speaker 06: You don't think you need to raise the argument before the board a challenge to their procedures for whether the case you have to choose between a remand or, I mean, whether they would remand or whether you choose to reopen prosecution or you choose for a rehearing? [00:15:14] Speaker 01: Yes. [00:15:17] Speaker 01: Yes, and I believe we did that, Your Honor. [00:15:36] Speaker 02: I'm sorry, Your Honor, it does escape me at that point if we did make it clear that we're concerned about the prejudice. [00:15:43] Speaker 03: We'll fill that gap on your rebuttal. [00:15:45] Speaker 03: We'll save your rebuttal time. [00:15:47] Speaker 03: Let's hear from the office. [00:15:49] Speaker 00: Thank you. [00:15:56] Speaker 00: Ms. [00:15:56] Speaker 00: Kaepernand. [00:15:58] Speaker 00: Good morning, Your Honors, and may it please the court. [00:16:00] Speaker 00: Riggs does not challenge the merits of the board's determination that the challenge claims are unpatentable under section 101. [00:16:07] Speaker 00: Riggs only raises procedural issues with the board's issuance of its new ground. [00:16:12] Speaker 00: But the board was within its authority to issue the new ground of rejection, and the procedural safeguards were followed here. [00:16:20] Speaker 03: What's troubling here, this is not a contested PTAB [00:16:27] Speaker 03: post issuance. [00:16:29] Speaker 03: This is an appeal under a statute which says that the applicant shall be granted a patent unless, so the burden is on the office to provide the unless. [00:16:44] Speaker 03: And so the issues of due process, an opportunity to respond, and I think we can all take notice that the relationship between the applicant and the examiner [00:16:57] Speaker 03: The give and take of working out what might be patentable is more flexible than by the time you get to the appeal of the board. [00:17:08] Speaker 03: So why wouldn't a remand on a new ground if the board sees fit to raise a new ground? [00:17:16] Speaker 03: I think they didn't have to. [00:17:18] Speaker 03: They could have affirmed if it's not patentable under 103, it doesn't matter. [00:17:24] Speaker 03: Isn't that right? [00:17:25] Speaker 03: 101 can be brought to bear. [00:17:28] Speaker 03: So how did we after this extraordinarily prolonged prosecution, prolonged, expensive, time consuming, taking time on the part of the office as well as the applicant, how did we get to this stage after all of these years where a new ground is raised [00:17:50] Speaker 03: And there is no opportunity to put that ground into the normal give and take of examination. [00:17:58] Speaker 00: Well, in the final rejection here issued in 2012, and the appeal was then raised and it was briefed. [00:18:07] Speaker 00: But before the decision of the board, the Alice decision issued, which changed the test for 101. [00:18:15] Speaker 00: And following the Alice decision, the board issued a new ground of rejection. [00:18:20] Speaker 00: under Section 101, finding all of the challenge claims unpatentable under the two-part test of Alice. [00:18:27] Speaker 00: So that is why the new ground was raised in the board's decision, because the case law changed as to 101 in the interim. [00:18:36] Speaker 03: If they're obliged to recognize a change in law, aren't they obliged to send it to the examiner? [00:18:43] Speaker 03: to apply if this is a change in law. [00:18:46] Speaker 03: That's a separate question. [00:18:48] Speaker 03: I think it's quite relevant because there had been extensive prosecution on issues where it's irrelevant what happens under 101. [00:19:00] Speaker 03: So how do we get to this burdensome procedure that [00:19:08] Speaker 03: could very well be meaningless as far as entitlement or not to a patent. [00:19:15] Speaker 00: So under 4150, there are procedural safeguards in place. [00:19:19] Speaker 00: To the extent the board issues a new ground of rejection, they give the applicant the opportunity to either request reconsideration by the examiner on that new ground [00:19:30] Speaker 00: And in that quest, they must present new evidence or an amendment to the claims, or they can seek rehearing before the board. [00:19:39] Speaker 00: And here, Riggs chose the latter. [00:19:40] Speaker 00: Riggs chose to seek rehearing. [00:19:43] Speaker 00: And this is clear in its request for rehearing at page EPPX 446, which Judge Toronto pointed to, where he requests that the board reconsider its rejection under 101 and challenges the merits of the board's decision with an argument. [00:20:00] Speaker 00: but not with any new evidence, but with arguments. [00:20:02] Speaker 00: And the board reconsidered the arguments that Riggs raised and issued a second decision on that request for re-hearing. [00:20:13] Speaker 05: I may have misunderstood, but I thought Mr. Bauer this morning was arguing that [00:20:20] Speaker 05: The either or choice was itself an improper choice. [00:20:24] Speaker 05: Can you address that? [00:20:26] Speaker 00: Sure. [00:20:26] Speaker 00: So the prejudice that Mr. Bauer is arguing now, first, that wasn't raised before the board and that wasn't even raised in his opening brief on appeal here. [00:20:36] Speaker 00: He only raised that prejudice issue in his reply brief. [00:20:40] Speaker 00: So it's been waived. [00:20:42] Speaker 00: But second, there is no prejudice here because the board considered the arguments that he raised as to the patentability of the claims. [00:20:52] Speaker 00: And those arguments were addressed in the first decision and as well as in the second decision regarding the 103 rejection. [00:20:58] Speaker 05: And that there was no factual component that would have required something other than what the board can, without any difficulty, do on its own. [00:21:11] Speaker 00: That's correct, Your Honor. [00:21:13] Speaker 00: If there are no further questions, we ask that the court affirm the board's decision. [00:21:18] Speaker 03: Thank you. [00:21:22] Speaker 03: You have your rebuttal, three minutes. [00:21:31] Speaker 02: In our, with respect to the question of prejudice, that's the standard. [00:21:37] Speaker 02: Our opening brief to this court may not have [00:21:43] Speaker 02: termed in the words prejudice, but we didn't indicate why we thought we were harmed by this order. [00:21:49] Speaker 02: We did explain the patent term adjustment issues. [00:21:52] Speaker 02: We did address the fact that reopening prosecution in its entirety is far more burdensome than simply a remand on a 101 issue. [00:22:03] Speaker 02: And so we did address those issues. [00:22:06] Speaker 02: Judge Stuller, on your question about didn't we waive, I'm not sure that we have to, in our request for reconsideration to the board, make that contention. [00:22:19] Speaker 02: I just wanted to know if you made it. [00:22:20] Speaker 06: I want you to know I didn't say you waived it. [00:22:23] Speaker 06: I didn't ask if you waived it. [00:22:24] Speaker 02: I asked where did you raise it. [00:22:26] Speaker 02: And the reason why we did it is because we knew the Patent Office was not going to withdraw their regulation based on our request for reconsideration. [00:22:34] Speaker 06: I don't want to debate that with you on your rebuttal time, but did you at all explain to them the concern about whether it would impact your request for patent term adjustment? [00:22:52] Speaker 02: We did not raise that in our request for reconsideration. [00:22:56] Speaker 02: Again, I don't think we have to, respectfully. [00:22:59] Speaker 02: And I do think we raised it in our brief to this Court. [00:23:06] Speaker 03: You know, I think that's an important, unintended consequence. [00:23:10] Speaker 03: And I'm not sympathetic to the hyper-technical new rules that no one can comply with. [00:23:18] Speaker 03: However, [00:23:19] Speaker 03: It looks to me as if whatever errors were made would not have affected the result with the affirmance of the examiner's rejection on the merits. [00:23:32] Speaker 02: On the obviousness rejection, Your Honor, is that what you mean on the merits of the obviousness rejection and the merits of the 101 rejection? [00:23:45] Speaker 02: The obviousness rejection was on the appeal. [00:23:51] Speaker 02: We argued that that should be reversed. [00:23:53] Speaker 02: In fact, we think it must be reversed because there is another ruling from the board that these references are not prior art, which we think is binding clearly estoppel and cannot be, in this case, cannot now be decided contrarily. [00:24:10] Speaker 02: So the 103 rejections, our point is, cannot be affirmed. [00:24:14] Speaker 02: But, you know, I think the appropriate, we think the appropriate action is to remand for consideration of the 101 and the 103 issues remain in the case. [00:24:26] Speaker 03: But it's before us, is it not, whether the 103 is subject to affirmance? [00:24:31] Speaker 02: Well, I guess I make the point that if that was reversed, then you still have to go back to the examiner on the 101 issue. [00:24:40] Speaker 02: And the other point, of course, is we do have arguments on the merits of the 103 rejection, why those references are not pry hearts. [00:24:49] Speaker 02: And they're very complicated. [00:24:51] Speaker 02: They involve dynamic drinkware. [00:24:54] Speaker 02: They involve the disclosure. [00:24:56] Speaker 02: They involve retroactive application. [00:24:59] Speaker 06: And they're made in your briefs, the arguments for your arguments challenging the 103 rejection entered by the patent examiner. [00:25:08] Speaker 06: Those arguments were considered by the board, right? [00:25:12] Speaker 06: And they were briefed before this court, right? [00:25:15] Speaker 02: They were briefed before this court. [00:25:18] Speaker 02: At our argument, they did ask us to continue on arguing the 103 rejections. [00:25:23] Speaker 02: So we did contain those arguments are in the record. [00:25:29] Speaker 02: But on the merits, we think that, of course, that they should be reversed. [00:25:33] Speaker 02: And we think that's compelled on the last point about our request for reconsideration. [00:25:41] Speaker 02: We're very concerned about that issue because the patent office has indicated that if you hold that we made an election. [00:25:48] Speaker 02: and we elected to reconsideration rather than remand, then the appeal is going to be terminated. [00:25:55] Speaker 02: And we're going to lose the patent application entirely. [00:25:59] Speaker 02: I understand that's the correct result if someone doesn't comply. [00:26:03] Speaker 02: But I think the request for reconsideration, that's left in place so that if there are purely issues of law, they can be argued. [00:26:16] Speaker 02: There is no requirement at that point that you provide the evidence you want to submit. [00:26:24] Speaker 02: And I tell you, we do have evidence that we do want to submit. [00:26:28] Speaker 02: And we probably will make amendments. [00:26:31] Speaker 02: And the other thing we'll do is we'll probably ask the patent office to examine these claims according to the current standard for 101, which is now different. [00:26:42] Speaker 02: than what the board applied here. [00:26:45] Speaker 04: So. [00:26:46] Speaker 04: And in the current posture of this case, can you file a continuation application? [00:26:52] Speaker 02: We lose our patent term adjustment if we do. [00:26:54] Speaker 02: That's why we don't want to file a continuation. [00:26:58] Speaker 02: So we don't want to do that. [00:27:00] Speaker 02: And on the issue of making that selection, [00:27:07] Speaker 02: Like I said, there's also the request for reconsideration addressed other issues the 103 rejection it was addressed and the The estoppel Argument was put forth for that So I think the the idea that we must elect requests for reconsideration meaning we're traversing the 101 rejection I think it would be a poor result if because of these two paragraphs [00:27:37] Speaker 02: We were considered to have argued the merits of the 101 rejection and our merits would be, our argument would be reduced to these two paragraphs. [00:27:47] Speaker 02: I think that would be an unfortunate result. [00:27:51] Speaker 03: Okay, any more questions? [00:27:53] Speaker 03: Any more questions? [00:27:54] Speaker 03: Thank you. [00:27:54] Speaker 03: Thank you both. [00:27:55] Speaker 03: The case is taken under submission.