Opinion · Court of Appeals for the Federal Circuit
Star Fruits s.n.c. v. United States
393 F.3d 1277
- Type
- Opinion
- Court
- Court of Appeals for the Federal Circuit
- Jurisdiction
- Federal
- Date
- 2005-01-03
- Topic
- general
upholding examiner demand, under 37 C.F.R. § 1.105, for “information that the applicant is in the best position to most cheaply provide” | interpreting the USPTO’s counterpart patent rule on information requests and holding that “[s]o long as there is some legitimate reason for seeking the information … the applicant has a duty to respond.” | interpreting the USPTO’s counterpart patent rule on information requests and holding that “[s]o long as there is some legitimate reason for seeking the information … the applicant has a duty to respond.” | “[The PTO’s] interpretation of its own regulations is entitled to substantial deference and will be accepted unless it is plainly erroneous or inconsistent with the regulation.” | “[a]n agency’s interpretation of its own regulations is entitled to substantial deference and will be accepted unless it is plainly erroneous or inconsistent with the regulation” | “An abuse of discretion occurs where the decision is based on an erroneous interpretation of the law, on factual findings that are not supported by substantial evidence, or represents an unreasonable judgment in weighing relevant factors.” | discussing analogous Rule 1.105 in patent examination
Citator
- Cited by
- 28 opinions
Error: Bad annotation destination
United States Court of Appeals for the Federal Circuit
04-1160
STAR FRUITS S.N.C. and
INSTITUTE OF EXPERIMENTAL BOTANY,
Plaintiffs-Appellants,
v.
UNITED STATES and DEPARTMENT OF COMMERCE,
Defendants-Appellees,
and
PATENT AND TRADEMARK OFFICE and
JON DUDAS, Director, Patent and Trademark Office
and Under Secretary of Commerce for Intellectual Property,
Defendants-Appellees.
Patrick H. Ballew, Stratton Ballew PLLC, of Yakima, Washington, argued for
plaintiffs-appellants.
Stephen Walsh, Associate Solicitor, United States Patent and Trademark Office,
argued for defendants-appellees. With him on the brief were John M. Whealan,
Solicitor, and Linda Moncys Isacson, Associate Solicitor.
Appealed from: United States District Court for the Eastern District of Virginia
Judge Leonie M. Brinkema
United States Court of Appeals for the Federal Circuit
04-1160
STAR FRUITS S.N.C. and
INSTITUTE OF EXPERIMENTAL BOTANY,
Plaintiffs-Appellants,
v.
UNITED STATES and DEPARTMENT OF COMMERCE,
Defendants-Appellees,
and
PATENT AND TRADEMARK OFFICE and
JON DUDAS, Director, Patent and Trademark Office and
Under Secretary of Commerce for Intellectual Property,
Defendants-Appellees.
__________________________
DECIDED: January 3, 2005
__________________________
Before NEWMAN, CLEVENGER and DYK, Circuit Judges.
Opinion for the court filed by Circuit Judge CLEVENGER. Dissenting opinion filed by
Circuit Judge NEWMAN.
CLEVENGER, Circuit Judge.
Star Fruits S.N.C. and Institute of Experimental Botany ("Star Fruits") appeal the
decision of the United States District Court for the Eastern District of Virginia denying
Star Fruits's motion for summary judgment and granting summary judgment in favor of
the United States. Star Fruits S.N.C. v. United States, 280 F. Supp. 2d 512
(E.D. Va.
2003). Because the United States Patent and Trademark Office ("the Office") did not
act unlawfully when it deemed Star Fruits's patent application abandoned for failing to
respond to a Requirement For Information under 37 C.F.R. § 1.105
, we affirm the
judgment of the district court.
I
The facts of this case are straightforward. Star Fruits filed U.S. Patent
Application No. 09/557,043, directed to a variety of peach tree. A subsequent Office
Action included a "Requirement For Information Under 37 C.F.R. 1.105." Specifically,
the Office sought "any information available regarding the sale or other public
distribution of the claimed plant variety anywhere in the world" and "copies of the
application, published proposed denomination and published Breeder's Right grant."
The Office further informed Star Fruits that to the extent Star Fruits did not have or
could not readily obtain the required information, a statement to that effect would "be
accepted as a complete response to the requirement for that item."
Star Fruits declined to provide the required information on the grounds that it was
"not material to patentability of the new variety." The Response accompanying Star
Fruits's refusal to provide the required information did not state that Star Fruits did not
have or could not readily obtain the information. Instead, the Response made clear that
Star Fruits anticipated a rejection of its application under 35 U.S.C. § 102
if it complied
with the Office's requirement, that it viewed the prospective rejection based on the
requested information as contrary to law, and that it refused to provide the information
because it sought to prevent the Office from making the rejection.
The Office viewed Star Fruits's refusal to provide the required information as a
"deliberate omission, not a bona fide attempt at a complete response," and issued a
04-1160 2
Notice of Abandonment. Pursuant to 37 C.F.R. § 1.181
, Star Fruits petitioned the
Director to require the Examiner to accept Star Fruits's Response as complete. The
Director denied the petition, stating:
The threshold for requiring information from applicants under 37 CFR
1.105 is that the information required is reasonably necessary to treat a
matter in an application. The matter may or may not be related to
patentability. The matter here is a matter of patentability and the
information required is necessary for the examiner to make a reasoned
judgment under 35 U.S.C. 102(b) of patentability. Applicant's arguments
have not shown, in rebuttal, that the information requested to be provided
is unnecessary or unreasonable. In contrast, the examiner has shown by
appropriate arguments that the information requested is necessary under
ex parte Thomson, 24 USPQ2d, 1618.
(J.A. at 98.) The Director reset the time period for Star Fruits to respond to the
Requirement For Information to three months. Star Fruits requested reconsideration.
The request was granted, the request for relief from the Requirement For Information
was again denied, and the application was deemed abandoned.
Star Fruits brought suit in the district court. It claimed that the Office abused its
discretion when it denied Star Fruits's petition challenging the Requirement For
Information because, as a matter of law according to Star Fruits, the information the
Office sought could not be used to reject Star Fruits's application. The district court
disagreed, concluding that "such information as may be reasonably necessary to
properly examine or treat the matter," 37 C.F.R. § 1.105
(a)(1), includes information that may not be directly used to reject an assertion of patentability. Star Fruits,280 F. Supp. 2d at 515-16
. It further held that a section 1.181 petition is "the exclusive administrative check on the discretion of individual patent examiners before a determination has been made on the merits of an application," and when the Director concluded that the requirement was proper, "Star Fruits had no choice but to comply."Id. at 516
. 04-1160 3 Accordingly, the district court held that by refusing to provide the required information, Star Fruits abandoned its application.Id. at 517
.
II
Star Fruits appeals. Because this claim, brought pursuant to the Administrative
Procedure Act ("APA"), see 5 U.S.C. §§ 702-706
(2000), involves the Director's duties "[i]n the course of examining or treating a matter in [an application] . . . in a patent, or in a reexamination proceeding,"37 C.F.R. § 105
(a)(1), it raises a substantial question under the patent laws, and, accordingly, we have jurisdiction under28 U.S.C. § 1338
(a) and28 U.S.C. § 1295
(a)(1) (2000). See Helfgott & Karas, P.C. v. Dickenson,209 F.3d 1328, 1333-35
(Fed. Cir. 2000).
We review the district court's grant of summary judgment without deference,
reapplying the same standard as the district court. See Conroy v. Reebok Int'l, Ltd.,
14 F.3d 1570, 1575
(Fed. Cir. 1994). Under the APA, courts "hold unlawful and set aside agency action . . . found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."5 U.S.C. § 706
(2); Arnold P'ship v. Dudas,362 F.3d 1338, 1340
(Fed. Cir. 2004). An abuse of discretion occurs where the decision is based on an erroneous interpretation of the law, on factual findings that are not supported by substantial evidence, or represents an unreasonable judgment in weighing relevant factors.362 F.3d at 1340
.
III
Star Fruits's contention on appeal is that the Director abused his discretion when
he required compliance with the Requirement For Information because it was based on
an erroneous interpretation of law. In particular, Star Fruits contends that the language,
04-1160 4
"such information as may be reasonably necessary to properly examine or treat the
matter," from section 1.105 may not include "any information available regarding the
sale or other public distribution of the claimed plant variety anywhere in the world" and
"copies of the application, published proposed denomination and published Breeder's
Right grant." This is so, according to Star Fruits, because the duty of candor embodied
in 37 C.F.R. § 1.56
, which requires applicants to disclose information material to
patentability, controls section 1.105 requirements. The effect of this, again according to
Star Fruits, is that an applicant need not comply with any section 1.105 requirement that
seeks information that is not material to patentability. Here, Star Fruits extends this
logic by equating the concept of "material to patentability" with information that directly
supports a rejection. Moreover, Star Fruits asserts that the applicant, not the examiner,
decides what information is material to patentability under section 1.56. Thus, in Star
Fruits's view, the Office cannot require information unless the product of the
requirement will result in a rejection and were the Office to require any other
information, section 1.56 affords Star Fruits the power to refuse the requirement. We
respond first, in detail, to Star Fruits's arguments.
A
i
Under 37 C.F.R. § 1.105
the Office can require information that does not directly support a rejection. An agency's interpretation of its own regulations is entitled to substantial deference and will be accepted unless it is plainly erroneous or inconsistent with the regulation. See Eli Lilly & Co. v. Bd. of Regents of the Univ. of Wa.,334 F.3d 1264, 1266
(Fed. Cir. 2003). Here, the Office considered information concerning any
04-1160 5
sale or public distribution of the claimed invention and any information concerning
Breeder's Rights applications or grants as within the authorized scope of a Requirement
For Information under section 1.105.
This interpretation is not plainly erroneous or inconsistent with the regulation.
Congress has delegated to the Office the rulemaking power to "establish regulations,
not inconsistent with law, which—(A) shall govern the conduct of proceedings in the
Office." 35 U.S.C. § 2
(b)(2) (2000) (formerly at35 U.S.C. § 6
(a) (1988), see Merck & Co. v. Kessler,80 F.3d 1543, 1549-50
(Fed. Cir. 1996)); Stevens v. Tamai,366 F.3d 1325, 1333
(Fed. Cir. 2004). Section 1.105 stems from an initiative entitled Changes to Implement the Patent Business Goals. Through notice and comment rulemaking the Office made explicit the inherent authority of Office employees to require information from an applicant. The goal is to "encourage" employees to use that power to "perform the best quality examination possible."65 Fed. Reg. 54,604
, at 54,633 (September 8, 2000) (to be codified at 37 C.F.R. pts. 1, 3, 5, 10); see also64 Fed. Reg. 53,772
(proposed October 4, 1999);63 Fed. Reg. 53,498
(proposed October 5, 1998). The
final rule permits that "the examiner or other Office employee may require the
submission . . . of such information as may be reasonably necessary to properly
examine or treat the matter." 37 C.F.R. 1.105(a)(1) (emphasis added).
We think it clear that "such information as may be reasonably necessary to
properly examine or treat the matter," 37 C.F.R. 1.105(a)(1), contemplates information
relevant to examination either procedurally or substantively. It includes a zone of
information beyond that defined by section 1.56 as material to patentability, and beyond
04-1160 6
that which is directly useful to support a rejection or conclusively decide the issue of
patentability. Several observations militate in favor of this conclusion.
First, under the current regulations an applicant has an affirmative duty to
disclose information material to patentability. See 37 C.F.R. § 1.56
. Because an
applicant already has a duty to disclose this information, it makes no sense for the
Office to promulgate a rule empowering it to "require the submission" of information the
applicant is required to submit in the first instance.
Second, section 1.105 identifies the required information as that information
"reasonably necessary to properly examine or treat the matter" instead of that
information "material to patentability." Under ordinary principles of interpretation, the
choice of different language indicates a different intended meaning.
Third, the plain language of the regulation contemplates requirements for
information that go beyond information required by section 1.56. For example, "any
non-patent literature . . . by any of the inventors, that relates to the claimed invention[,]"
37 C.F.R. § 1.105
(a)(1)(iii) (emphasis added), could include sales brochures, catalogues, or PBR applications or grants. "[A]ny use of the claimed invention known to any of the inventors at the time the application was filed notwithstanding the date of the use,"id.
§ 1.105(a)(1)(vii) (emphasis added), could refer to uses that would not affect patentability at all. Likewise, information directed to whether a search was conducted and what was searched, id § 1.105(a)(1)(ii), is not necessarily required by section 1.56. Other requirements for information are also foreseeable under the "reasonably necessary to properly examine or treat the matter" standard. For instance, it might be reasonably necessary for the Office to require an explanation of technical material in a 04-1160 7 publication, such as one of the inventor's publications, or require the applicant's comments on a recent Federal Circuit opinion and how that opinion affects examination. See, e.g., 65 Fed. Reg. at 54,634. Although this information improves the quality and efficiency of examination it is not necessarily information that an applicant is required to provide under section 1.56.1 In sum, we think that the Office's interpretation of37 C.F.R. § 1.105
conforms to the plain language of the regulation.
ii
The duty of candor embodied in 37 C.F.R. § 1.56
does not give the applicant the
power to refuse a Requirement For Information under section 1.105.2 Neither regulation
states that responses to Requirements For Information can be limited, at the applicant's
discretion, to whatever the applicant believes it might have been affirmatively required
to submit under section 1.56.
Moreover, we think the language, "Office . . . may require the submission . . .
of . . . information", 37 C.F.R. § 1.105
(a)(1), very expressly states that the Office, not the
applicant, controls the scope of the requirement. Because the scope of information
"reasonably necessary to properly examine or treat the matter" is broader than that
information the applicant is duty-bound to provide under section 1.56, we are convinced
1
The dissent also cites section 2001.05 of the Manual of Patent Examining
Procedure, which states: "If the information is not material, there is no duty to disclose it
to the Office." This is merely cumulative with Star Fruits's argument that section 1.56
limits section 1.105, since MPEP ' 2001.05 is entitled "Materiality Under 37 C.F.R.
1.56(b)."
2
Of course the duty of candor and the requirement that an applicant
behave equitably in its transactions with the Office still applies to responses to
Requirements For Information.
04-1160 8
that the Office can require the applicant to submit such information when it is known or
readily available.
B
Star Fruits's argument fails to come to grips with the real issue in this case, which
is whether the Office can use section 1.105 to compel disclosure of information that the
examiner deems pertinent to patentability when the applicant has a contrary view of the
applicable law. We answer this question in the affirmative.
The Office is clearly entitled to use section 1.105 to seek information that may
support a rejection. Just as the applicant produces information it deems pertinent to
patentability under section 1.56, the examiner is free to request information under
section 1.105 that the examiner deems pertinent to the issue of patentability. In this
case, the dispute over whether Star Fruits should be compelled to answer the
examiner’s Requirement For Information under section 1.105 boils down to a
disagreement between Star Fruits and the examiner as to the significance of the
information sought to the ultimate question of whether Star Fruits’s application discloses
patentable subject matter.
The Director is charged with the duty of deciding whether a patent should issue
from an application. To perform that duty, the law must be applied to the facts at hand
in any application. That the person charged with enforcement of the law, here an
examiner, may sometimes disagree with the applicant on the theory or scope of the law
to be applied is hardly surprising. So long as the request from the examiner for
information is not arbitrary or capricious, the applicant cannot impede the examiner’s
performance of his duty by refusing to comply with an information requirement which
04-1160 9
proceeds from the examiner’s view of the scope of the law to be applied to the
application at hand. To allow such interference would have the effect of forcing the
Office to make patentability determinations on insufficient facts and information. Such
conduct inefficiently shifts the burden of obtaining information that the applicant is in the
best position to most cheaply provide onto the shoulders of the Office and risks the
systemic inefficiencies that attend the issue of invalid patents. Examination under such
circumstances is neither fair and equitable to the public nor efficient.
IV
Star Fruits alternatively argues that the information sought is not relevant to the
examination process and that the request was therefore improper. APA challenges in
cases like this are not properly directed to prospective patentability determinations. A
claim that the Office is abusing its discretion in seeking information from an applicant
because the Office might (or will) use that information to enter a rejection is a
preemptive challenge to the Office's patentability determination. Assuming the Office
intended to enter a rejection under 35 U.S.C. § 102
(b), the correctness vel non of that rejection is not properly challenged by Star Fruits withholding information from the Office. Instead, Star Fruits must await a rejection under section 102(b) and then litigate the propriety of that rejection before the proper forum for such a complaint, in the first instance, the Board of Patent Appeals and Interferences, not the district court. See35 U.S.C. § 134
(a) (2000). Preempting the Office's decision-making by refusing
reasonable requirements for information is not a course calculated to achieve a timely
and equitable determination of whether a patent should be granted.
04-1160 10
In the matter at hand, the Examiner's Requirement For Information was not
unreasonable and was within the scope of section 1.105. Accordingly, there is no
abuse of discretion or arbitrary or capricious conduct in the Director's decision to refuse
to grant Star Fruits's petition under 37 C.F.R. § 1.181
either initially or on
reconsideration. Star Fruits abandoned its application.
As noted above, the district court viewed the section 1.181 petition process as
the "exclusive administrative check" on the discretion of examiners to seek information
from applicants under section 1.105. The district court feared finding itself in the
position of a "super patent examiner" were it called upon to second-guess the actual
examiner by deciding whether the required information could support a section 102(b)
bar to patentability. 280 F. Supp. 2d at 516
. To the extent the district court deemed
itself powerless to review the final action of the Office deeming Star Fruits’s application
as abandoned, it erred.
Whether information sought by an examiner under section 1.105 could or would
lead to a rejection of the application on its merits does not, for the reasons we have
expressed, define the limits of the information that lawfully may be sought by an
examiner. So long as there is some legitimate reason for seeking the information under
section 1.105, the applicant has a duty to respond. If the examiner deems the
information sought pertinent to the legal inquiry the examiner must conduct, the fact that
the examiner's theory is incorrect is no ground on which the applicant may refuse to
comply with a request for information. The Office is authorized under section 1.105 to
require any information that is either relevant to patentability under any nonfrivilous legal
theory, or is reasonably calculated to lead to such relevant information.
04-1160 11
If the Director decides, on challenge under section 1.181, that a requirement for
information is proper, the applicant may challenge that decision under the APA. The
scope of APA review is not, as the district court feared, to test the examiner’s theory of
the case or the examiner’s findings of fact. The district court, on APA review, does not
enmesh itself in the decision-making process of the examiner. Its function, instead, is
simply to guard against the possibility of arbitrary or capricious behavior by examiners in
seeking information.
Given the review process, first by the examiner and then by the Director, each
receiving argument from the applicant, we think it unlikely that many requirements for
information will be unreasonable or beyond the scope of section 1.105. However,
without mentioning specifics, we imagine that there may be cases where the Office
might abuse its discretion or behave arbitrarily and capriciously in connection with a
requirement for information. For that reason, this decision should not be read as
affirming a holding that no APA claim is possible after the Director's action.
V
Because the Requirement For Information was within the scope of 37 C.F.R. § 1.105
and not unreasonable, the judgment of the district court is affirmed.
AFFIRMED
04-1160 12
United States Court of Appeals for the Federal Circuit
04-1160
STAR FRUITS S.N.C. and
INSTITUTE OF EXPERIMENTAL BOTANY,
Plaintiffs-Appellants,
v.
UNITED STATES and DEPARTMENT OF COMMERCE,
Defendants-Appellees,
and
PATENT AND TRADEMARK OFFICE and
JON DUDAS, Director, Patent and Trademark Office
and Under Secretary of Commerce for Intellectual Property,
Defendants-Appellees.
NEWMAN, Circuit Judge, dissenting.
I respectfully dissent. Star Fruits challenges the PTO's change in law and practice,
whereby in 2001 the agency decided to hold that foreign sale or use of a plant that has
foreign Breeder's Rights registration may bar United States patentability of that plant. The
examiner informed Star Fruits that its United States application was subject to rejection on
this ground. Star Fruits challenged that position by declining to provide the PTO with
foreign sales and use information, whereupon the examiner refused to continue the
examination and declared the application abandoned. Star Fruits filed a petition to the
Director, the only available path of review of the examiner's action. The Director upheld the
PTO's view of the law. Star Fruits then appealed to the district court under the
Administrative Procedure Act, arguing that the agency's action was an improper procedure
and not in accordance with law.
The district court held that it could not review internal examination practices, and
dismissed the appeal. My colleagues state that they do not agree with the ground of the
district court's dismissal, but instead of remanding to the district court they have themselves
decided the appeal, on grounds not distinguishable from that of the district court. Thus this
court holds that the examination demand must be complied with, and does not mention the
issue of law that underlies the dispute: the issue of whether foreign sales and use are
relevant to patentability in the United States. Star Fruits extensively argued this issue in the
PTO, and this is the issue that was presented to the district court, Star Fruits stating that
the PTO's ruling is contrary to statute:
35 U.S.C. §102
. A person shall be entitled to a patent unless --
***
(b) the invention was patented or described in a printed publication in this or
a foreign country or in public use or on sale in this country, more than one
year prior to the date of the application for patent in the United States, . . .
(Emphasis added.) Star Fruits cites Gandy v. Main Belting Co., 143 U.S. 587, 593
(1892) (foreign sales do not bar patentability) and In re LeGrice,301 F.2d 929, 935
(CCPA 1962)
("if section 102(b) was to be given a different interpretation as to plant patents, it should
have been expressly qualified by Congress so that descriptions of plants in printed
publications would have been judged by different standards than those so long recognized
by leading text writers and the courts"). Thus Star Fruits states that the PTO's decision is
contrary to statute and precedent. Star Fruits also cited the PTO's regulation for
examination, which states that:
04-1160 2
37 C.F.R. §1.105
Requirements for information.
(a)(1) . . . the examiner or other Office employee may require the submission
. . . of such information as may be reasonably necessary to properly examine
or treat the matter, . . .
(Emphasis added.) For materiality, in addition to 35 U.S.C. §102
Star Fruits cited the
Manual of Patent Examination Procedure:
MPEP 2001.05 . . . If the information is not material, there is no duty to
disclose it to the Office.
Star Fruits argues that the demanded information of foreign sales and distribution was not
"reasonably necessary," for it was not "material" to patentability. The statute is not
mentioned by the panel majority, who simply hold that information must be provided unless
the demand is "arbitrary or capricious." The APA criterion of "contrary to law" is not
mentioned.
Despite its broad power to grant or deny patents, the Patent and Trademark Office
does not have the responsibility, or the authority, to depart from the law, or to make or
change the policy embodied in the law, or to reinterpret the statute in a way that departs
from congressional intention or judicial interpretation. Judicial review under the
Administrative Procedure Act serves to test agency compliance with statute and precedent.
An agency change of law, particularly a change that was not subjected to notice-and-
comment rulemaking before its implementation, is not immune from APA review. My
colleagues' rule that the patent applicant's only recourse is to comply with the request for
information and undergo full examination to final rejection, with appeal available only
through the PTO Board of Appeals, bypasses and forecloses APA procedures. When an
agency unilaterally makes a major and far-reaching change in law, the entire administrative
04-1160 3
process need not be forced to proceed on the incorrect law, a process that may consume
years, in order to challenge the change in law. I know of no reason for denying to the
invention community the full scope of APA procedures, now that the Court has confirmed in
Dickinson v. Zurko, 527 U.S. 150
(1999), that the APA applies to the Patent and Trademark
Office. The question of law was decided by the PTO Director on Star Fruits' petition, and
was properly taken to the district court for substantive review.
The new rule and examination practice adopted by the PTO is at least facially
inconsistent with statute and precedent. It is a significant change in long-standing practice.
This change was not subjected to notice-and-comment rulemaking, but simply to internal
arrogation. In such a context, judicial review protects the rights affected by the agency
action. See, e.g., American Power & Light Co. v. SEC, 329 U.S. 90, 105
(1946) ("Private
rights are protected by access to the courts to test the application of the policy in the light of
these legislative declarations."). The Administrative Procedure Act implements this
obligation.
Adequate access to the courts, to test conspicuous changes in law and policy
initiated by the agency, is fundamental to the administrative state. When a case of "first
impression" arises, as is here acknowledged, the agency has a "duty to explain its
departure from prior norms." Atchison, Topeka & Santa Fe Ry. Co. v. Wichita Board of
Trade, 412 U.S. 800, 808
(1973). The record does not show that the PTO met that duty. See5 U.S.C. §553
(describing procedures to be followed in administrative rule-making). The judicial duty is both to review agency departures from substantive law, and to assure that appropriate procedures are followed. See Abbott Labs. v. Gardner,387 U.S. 136, 154
(1967) ("Where the legal issue presented is fit for judicial resolution, and where a regulation
04-1160 4
requires an immediate and significant change in the plaintiffs' conduct of their affairs with
serious penalties attached to noncompliance, access to the courts under the Administrative
Procedure Act and the Declaratory Judgment Act must be permitted, absent a statutory bar
or some other unusual circumstance . . .").
Judicial review necessarily includes deciding whether the agency's theory of the law
is correct. See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 413-14
(1971) ("In all cases agency action must be set aside if the action was . . . 'not in
accordance with law' or if the action failed to meet statutory, procedural, or constitutional
requirements"); see also FCC v. NextWave Pers. Communications, Inc., 537 U.S. 293, 300
(2003) ("The Administrative Procedure Act requires federal courts to set aside federal
agency action that is 'not in accordance with law,' 5 U.S.C. §706
(2)(A) -- which means, of course, any law, and not merely those laws that the agency itself is charged with administering."); Bowen v. Massachusetts,487 U.S. 879, 911
(1988) ("It seems perfectly
clear that, as 'the reviewing court,' the District Court had the authority to 'hold unlawful and
set aside agency action' that it found to be 'not in accordance with law.'"). The panel
majority dilutes this safeguard by holding that judicial review is available in this case only
for PTO Board of Appeals decisions.
The question of law that underlies this appeal was recently before this court in a
copending case, reported at In re Elsner, 381 F.3d 1125
(Fed. Cir. 2004) (rehearing en
banc denied Nov. 23, 2004). Although that decision remanded the case to the PTO for
further development, it accepted the principle that foreign sales and foreign knowledge may
be relevant to patentability in the United States. That case, recognized all around as of
"first impression," decided the issue of substantive law that underlies Star Fruits' petition.
04-1160 5
That should have mooted this appeal. Instead, the panel majority has expounded on
various aspects of judicial review, unnecessarily and generally inaptly. For example, it is
incorrect to hold that information can be demanded even if it cannot lead to a rejection on
the merits. The PTO nowhere goes that far; the PTO makes clear its position that the
foreign sales information can indeed lead to a rejection on the merits. That is why the
district court erred in refusing to consider this question of law, and why this panel similarly
errs. The court's validation of the PTO's right to demand "sales brochures" and other
hypothetical information -- such as an applicant's comments on a Federal Circuit decision --
is irrelevant and impertinent.
Thus my colleagues err in limiting their review to whether the PTO action was
"arbitrary or capricious," for the APA also requires review to determine whether the action is
in "accordance with law." §706(2)(A). It is incorrect to hold that the applicant must yield to
"the examiner's view of the scope of the law to be applied." Maj. op. at 9. That is a
misperception of the criteria for judicial review under the APA. This is not examiner
discretion; it is a major change of law, a change of economic importance and high
controversy.
In the administrative state, vigilance is required to balance authority and
responsibility among the branches of government. The pragmatism of delegation to
administrative agencies of complex procedures, is balanced against the responsibility of the
courts to assure compliance with law. See INS v. Chadha, 462 U.S. 919
, 953 n.16 (1983) (while administrative agencies "implement, interpret, or prescribe law or policy," the courts "'ascertain whether the will of Congress has been obeyed,' and can enforce adherence to statutory standards") (quoting Yakus v. United States,321 U.S. 414, 425
(1944) and citing 04-1160 6 Youngstown Sheet & Tube Co. v. Sawyer,343 U.S. 579, 585
(1952)). On this appeal under the Administrative Procedure Act the panel majority neither remands to the district court, nor explores the legal and policy-laden issue that is presented. I respectfully dissent. 04-1160 7