The USPTO’s final Rules of Practice Before the Board of Patent Appeals and Interferences in Ex Parte Appeals includes new rules relating to new grounds of rejection on appeal, and new guidance on what constitutes a “new” ground of rejection in an Examiner’s Answer. Although the new rules only apply to cases in which a Notice of Appeal is filed on or after January 23, 2012, the guidance is based on older Federal Circuit and CCPA decisions (and in accord with the recent Federal Circuit decisions in In Re Leithem, In Re Stepan Co. and cases cited therein) and so should be applicable now.

(See this article for an overview of other aspects of the new rules.)

New Rules—New Rejection In Examiner’s Answer

The current version of 37 CFR § 41.39 (Examiner’s Answer) already provides that an Examiner’s Answer may include a new ground of rejection. The new rules clarify that “any rejection that relies upon any Evidence not relied upon in the Office [A]ction . . . shall be designated . . . as a new ground of rejection.”

Like the current rules, the new rules give appellants two options for proceeding in the face of a new ground of rejection:

  1. Request that prosecution be reopened by filing a reply (with or without amendments or new Evidence)
  2. Request that the appeal be maintained by filing a Reply Brief

According to the commentary published in the Federal Register Notice, new rule 37 CFR § 41.39 provides that “the exclusive procedure for an appellant to request review of the primary examiner’s failure to designate a rejection as a new ground of rejection [is] via a petition to the Director under [37 CFR § 1.181].” Such a petition must be filed within two months of the Examiner’s Answer and before any Reply Brief is filed.  Failure to file such a petition “will constitute a waiver of any arguments that a rejection must be designated as a new ground of rejection,” but the rules create important reasons not to petition in every case.

As explained in the Federal Register Notice, this procedure should be used if an appellant wants to reopen prosecution to introduce new amendments and/or new Evidence. Indeed, appellants should petition only under such circumstances, because if such a petition is granted, the appellant will have to file a reply within two months to reopen prosecution. If no reply is filed, the appeal will be dismissed.

If a petition to designate a new ground of rejection is not granted, the appellant will be given two months to file a Reply Brief. Thus, the new rules provide that the deadline for filing a Reply Brief is the later of two months from the Examiner’s Answer or two months from a decision refusing to grant a petition to designate a new ground of rejection. See new 37 CFR §§ 41.40(c), 41.41(a). Under the new rules, the deadline for filing a Request for Oral Hearing is the earlier of two months from the Examiner’s Answer or when the Reply Brief is filed. See new 37 CFR § 41.47(b).

The new rules also provide that an appellant can effectively withdraw a petition to designate a new ground of rejection by filing a Reply Brief before a decision on the petition is issued. See new 37 CFR § 41.40(d).

New Rules—New Rejection In Board Decision

The current version of 37 CFR § 41.50 (Decisions and Other Actions By The Board) already provides that the Board may include a new ground of rejection in its decision. The new rules appear to set forth the same options for appellants in the face of such a new rejection:

(i) Reopen prosecution by amending the newly rejected claims or submitting new Evidence relating to the rejected claims (or both), in which event the application will be remanded to the examiner.

(ii) Request rehearing, stating with particularity the points believed to have been misapprehended or overlooked in entering the new ground of rejection.

Failure to pursue one of these options within two months of the decision could lead to termination of the appeal as to the rejected claims.

Unlike the current rules, the new rules expressly set forth the procedure for obtaining review of the Board’s failure to designate a rejection as a new ground of rejection. As set forth in new rule 37 CFR 41.50§ (c), appellants can file a Request for Rehearing to raise this issue. The new rules provide that failure to do so “will constitute a waiver of any arguments that a decision contains an undesignated new ground of rejection.”

New Guidance—What Is A New Ground of Rejection?

The Federal Register Notice includes extensive commentary on what constitutes a new ground of rejection in the context of an Examiner’s Answer.  It appears that this commentary will be included in a future update to the MPEP. Consistent with precedent, the overriding principle to be applied when deciding whether a rejection represents a “new” ground of rejection “is whether appellants have had fair opportunity to react to the thrust of the rejection.”

New Evidence = New Ground of Rejection

The guidance provides that if Evidence (such as a new prior art reference) is applied or cited for the first time in an Examiner’s Answer, then the rejection must be designated as a new ground of rejection, under new Rule 37 CFR § 41.39(a)(2). The guidance indicates further:

Even if the prior art reference is cited to support the rejection in a minor capacity, it should be positively included in the statement of rejection and be designated as a new ground of rejection.

The Federal Register Notice cites the 1970 CCPA decision in In re Hoch in support of this point.

Changing the “basic thrust of the rejection” = New Ground of Rejection

The guidance cites the 1976 CCPA decision in In re Kronig for the proposition that even if new Evidence is not cited, a new position or rationale that changes the “basic thrust of the rejection” can amount to a new ground of rejection. On the other hand, the guidance notes that Examiners “need not use identical language . . . to avoid triggering a new ground of rejection.”  For example, the guidance cites CCPA and Federal Circuit precedent for the proposition that responding to the appellant’s arguments, explaining why the appellant’s arguments are ineffective, or a “mere difference in form of expression of the reasons” may not amount to a new ground of rejection.

The guidance also sets forth the following examples, but cautions that whether or not a rejection constitutes a “new ground of rejection” is a highly fact-specific question.

Factual Situations That Constitute a New Ground of Rejection

  1. Changing the statutory basis of rejection from Sec. 102 to Sec. 103.
  2. Changing the statutory basis of rejection from Sec. 103 to Sec. 102, based on a different teaching.
  3. Citing new calculations in support of overlapping ranges.
  4. Citing new structure in support of structural obviousness.
  5. Pointing to a different portion of the claim to maintain a “new matter” rejection.

Factual Situations That Do Not Constitute a New Ground of Rejection

  1. Citing a different portion of a reference to elaborate upon that which has been cited previously.
    If the Examiner’s Answer cites a different portion of an applied reference which goes no farther than, and merely elaborates upon, what is taught in the previously cited portion of that reference, then the rejection does not constitute a new ground of rejection.
  2. Changing the statutory basis of rejection from Sec. 103 to Sec. 102, but relying on the same teachings.
    If the Examiner’s Answer changes the statutory basis of the rejection from Sec. 103 to Sec. 102, and relies on the same teachings of the remaining reference to support the Sec. 102 rejection, then the rejection does not constitute a new ground of rejection.
  3. Relying on fewer than all references in support of a Sec. 103 rejection, but relying on the same teachings.
    If the Examiner’s Answer removes one or more references from the statement of rejection under Sec. 103, and relies on the same teachings of the remaining references to support the Sec. 103 rejection, then the rejection does not constitute a new ground of rejection.
  4. Changing the order of references in the statement of rejection, but relying on the same teachings of those references.
    If the Examiner’s Answer changes the order of references in the statement of rejection under Sec. 103, and relies on the same teachings of those references to support the Sec. 103 rejection, then the rejection does not constitute a new ground of rejection.
  5. Considering, in order to respond to applicant’s arguments, other portions of a reference submitted by the applicant.
    If an applicant submits a new reference to argue, for example, that the prior art “teaches away” from the claimed invention and the Examiner’s Answer points to portions of that same reference to counter the argument, then the rejection does not constitute a new ground of rejection.

Example 4 raises the most concerns to me. For example, if changing the order of references amounts to changing which reference is cited as the primary reference and which references are cited as the secondary references, the thrust of the rejection very well could be different, particularly if the Examiner’s Answer also articulates a new reason to modify the (newly) primary reference based on the teachings of the secondary references. If the appellant has not had a “fair opportunity” to address the rejection as formulated in the Examiner’s Answer, it should be designated as a new ground of rejection.

Missing The Real Mark

It is all well and good that the USPTO is promulgating rules to ensure that patent applicants’ due process rights are protected on appeal, but providing applicants with a mechanism to reopen prosecution after an application has undergone years of examination, an appeal conference, and Board review does not address the real problem—the need for Examiners to identify strong grounds of rejection in the first instance, including the need for substantive supervision of junior Examiners.

This issue was raised in comments submitted with reference to statistics presented in the November 15, 2010 Notice of Proposed Rulemaking. As summarized in the Federal Register Notice one comment stated that

The USPTO should analyze what these statistics mean with respect to the rest of the examination process, including training efforts to improve quality of final rejections.

Another comment noted that

The percentage of cases that were reopened or allowed after filing a request for a pre-appeal conference or an appeal brief are “unacceptably high” [and warrant review of] the entire appeal process, including the steps that lead to an appeal, i.e., final office actions and after final practice.

Although the USPTO acknowledged these comments, I find its reply non-responsive:

The USPTO thanks the public for their thoughtful comments on ways to improve the patent process. While these suggestions are outside the scope of the proposed rule making, the USPTO appreciates this input.