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In a rare reversal of a patent appeals board ruling, the U.S. Court of Appeals for the Federal Circuit chastised the board for rejecting a patent on a different ground than the one used by the patent examiner. The Sept. 19 unanimous panel ruling in In Re Leithem vacated a board of Patent Appeals and Interferences affirmance of a patent examiner who rejected Phyllis Leithem’s diaper patent for obviousness. It remanded the case to the board “to allow appellants a full opportunity to respond to the new rejection in the first instance.” Circuit Judge Richard Linn wroted the ruling, joined by judges William Bryson and Pauline Newman. “The Board cannot play it so fast and loose in affirming an examiner’s rejection that it disregards procedural safeguards afforded to the applicant,” Linn wrote. In May 2001, Phyllis Leithem and several other named inventors filed a patent application for a diaper with a claim describing the absorbent core as containing at least 25% of fluffed wood fiber pulp, a material similar to a cotton ball, manufactured through a process entailing the fluffing of pulp mechanically instead of by the more expensive chemical crosslinking. In June 2004, a U.S. Patent and Trademark Office examiner rejected the claim as obvious because it modified inventions in two other patents. The first other patent met every element of the Leithem claim except for its description of the method of making fluff pulp. The second disclosed a cold caustic extraction of wood pulp and “a method of making fluff pulp.” Leithem argued that the examiner erred in analyzing the second other patent because it involved technology for a wet-laid paper, a liquid slurry of water and wood pulp, and not a fluff material. In September 2008 the board found that, while the second other patent did not disclose a fluffed pulp, it “may be fluffed for use in an absorbent core.” Based on this analysis, the board sustained the patent examiner’s rejection of the claim as obvious. Leithem’s rehearing petition claimed the board used a new ground of rejection to affirm the examiner’s rejection — that the patent examiner found that the second other patent’s wet-laid pulp was already a fluff pulp. The board found that while the second other patent’s pulp wasn’t fluffed, it could be dried and fluffed, then used in the first patent’s invention. After the board affirmed it’s ruling in July 2010, Leithem appealed to the Federal Circuit. Linn wrote that the board based its rejection on facts not uncovered by the patent examiner about the differences between the prior art and the claimed invention. “Accordingly, fairness dictates that the applicant, in this case Leithem, should be afforded an opportunity to respond to the board’s new rejection,” Linn wrote. Linn also shot down the patent office’s claim at oral argument that Leithem made “a shift in argument” by not offering the same argument about the patent claim as to the board. This argument “highlights the problem when the board relies on a new ground of rejection,” Linn wrote, and “of course Leithem’s argument had to shift” because the board’s rejection addressed a different issue. It’s not uncommon for the board to try to articulate the examiner’s rejection in a different way, but here it was clear that the board was saying something quite different than what the examiner based the rejection upon, said William Spatz, a partner at New York-based Kramer Levin Naftalis & Frankel. Spatz represented Leithem and the other appellants. “The significance of the ruling is that the Federal Circuit has advised the board that even if they rely on the same statutory basis as the examiner and the same prior art as the examiner, if the board’s sustaining finds different facts that the examiner and/or a different rationale, the applicant must be afforded an opportunity to respond,” Spatz said. The PTO declined to comment, according to spokeswoman Jennifer Rankin Byrne. The Federal Circuit ruling “slaps down a too-prevalent board practice of rewriting rejections on new grounds and calling them affirmances, which deprives the patent applicant of their due process,” said Harold Wegner, a partner in the Washington office of Foley & Lardner, who was not involved in the Leithem case. “It’s a great opinion,” Wegner said. “Too many board decisions are based on new grounds disguised as mere affirmances and this [ruling] unmasked this practice.” Sheri Qualters can be contacted at [email protected].

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