A federal appeals court has held that a party in a patent appeals board proceeding can raise arguments made to the patent examiner whether or not the appellant raised the arguments. That means a party seeking to disqualify another party’s patent can bring up arguments besides those of the patent owner or those that underpinned the patent examiner’s ruling. The decision was a win for Rexnord Industries, which succeeded in striking down a patent owned by Habasit Belting Inc., which had sued Rexnord for infringement.

On January 23, the U.S. Court of Appeals for the Federal Circuit reversed a ruling by the U.S. Patent and Trademark Office Board of Patent Appeals and Interferences that Habasit’s invention is not obvious. Even though the Federal Circuit did affirm the board’s ruling that the patent’s claims are not anticipated, it’s obviousness ruling invalidates the patent.

In its ruling in the case, Rexnord Industries LLC v Kappos, the Federal Circuit held that the patent appeals board erred by declining to consider Rexnord’s arguments to the patent examiner that Habasit did not raise on appeal.

Habasit sued Rexnord in Delaware federal court a decade ago for infringing its patent for a mechanical conveyor belt.

Rexnord asked the patent office to re-examine the patent, and the district court stayed the case in September 2005.

The examiner found all of Habasit’s claims unpatentable for anticipation and obviousness. In July 2010, the patent appeals board reversed that decision, finding the claims patentable.

In March 2011, the board rejected Rexnord’s rehearing request on the ground that Rexnord’s reasons for why Habasit’s claims were obvious were not the same as the examiner’s reasons.

Judge Pauline Newman wrote the First Circuit opinion, joined by Judges Alan Lourie and Sharon Prost.

“On judicial review, the correctness of the decision appealed from can be defended by the appellee on any ground that is supported by the record, whether or not the appellant raised the argument,” Newman wrote.

She concluded, “The Board erred in declining to consider the references presented for reexamination, and in declining to consider Rexnord’s arguments in support of the examiner’s decision.”

Rexnord’s lawyer, David Cross, a partner at Quarles & Brady, said the ruling stands for the proposition that a “basic rule of appellate practice applies within the patent office as well.”

“If the tribunal below says I win for reason A, but I had also a reason B and a reason C, even if the tribunal below did not address those or…ruled against me on those I can raise those arguments B and C as alternative reasons why I can win on appeal,” Cross said. “The accused infringer can argue that there were other alternative grounds that supported the examiner’s rejection of all the claims.”

Habasit’s lawyer Matthew Bailey, a Washington partner at McKenna Long & Aldridge, declined to comment.

The patent office also declined to comment.

Sheri Qualters can be contacted at squalters@alm.com.