In Re Construction Equipment Co. ( 2011 )

United States Court of Appeals
for the Federal Circuit
__________________________
(Reexamination No. 90/008,447)
IN RE CONSTRUCTION EQUIPMENT COMPANY
__________________________
2010-1507
__________________________
Appeal from the United States Patent and Trademark
Office, Board of Patent Appeals and Interferences.
__________________________
Decided: December 8, 2011
Corrected Format Version Issued: December 15, 2011
__________________________
PETER E. HEUSER, Schwabe Williamson & Wyatt PC,
of Portland, Oregon, argued for appellant. With him on
the brief was DEVON ZASTROW NEWMAN.
FRANCES M. LYNCH, Associate Solicitor, United States
Patent and Trademark Office, of Alexandria, Virginia,
argued for appellee. With her on the brief was RAYMOND
T. CHEN, Solicitor, and JANET A. GONGOLA, Associate
Solicitor.
__________________________
IN RE CONSTRUCTION EQUIPMENT 2
Before NEWMAN, PROST, and O’MALLEY, Circuit Judges.
Opinion for the court filed by Circuit Judge PROST.
Dissenting opinion filed by Circuit Judge NEWMAN.
PROST, Circuit Judge.
Construction Equipment Company (“CEC”) appeals
from reexamination proceedings in which the United
States Patent and Trademark Office (“PTO”) rejected
numerous claims sought by CEC. Ex parte Constr. Equip.
Co., No. 2009-5265, 2009 WL 2807871 (B.P.A.I. 2009)
(“BPAI Op.”), reh’g denied, 2010 WL 2157846 (B.P.A.I.
May 28, 2010) (“Reh’g Denial”). Because we agree with
the PTO’s conclusion that the claims at issue were obvi-
ous over the prior art, we affirm.
I
CEC is the owner of U.S. Patent No. 5,234,564 (“’564
patent”). The ’564 patent is entitled “Mobile Screen
Assembly for Rubble and Debris,” and is directed to a
vehicle for screening rocks and plant matter (among other
things) based on size from, for example, soil or dirt at a
construction site.
3 IN RE CONSTRUCTION EQUIPMENT
’564 patent fig.1. Material to be sorted is placed in the
hopper 30. It is carried up by transport conveyor 26 and
dropped onto screen assembly 90, which sifts it. Sorted
material either descends down chute 120, or is carried
away by conveyors 130 or 168, according to where in the
sifting process the sorted material left the main stream.
The proceedings at issue began in January 2007 when
the PTO received a request for ex parte reexamination of
the ’564 patent. 1 The requestor sought reexamination of
claims 1, 2, and 5–8, alleging that they were unpat-
entable. Upon finding that the request raised a substan-
tial new question of patentability concerning those claims,
the PTO began reexamination proceedings.
CEC made various amendments and added claims.
This appeal concerns claims 1, 2, 5–10, 13, 14, 19, and 20,
as amended. By the end of reexamination in October
2007, all these claims stood rejected by the Examiner as
obvious under 35 U.S.C. § 103 in view of the various
references cited in the reexamination request. CEC
appealed to the Board of Patent Appeals and Interfer-
ences, which generally affirmed the Examiner’s rejections.
BPAI Op. CEC sought rehearing, which the Board de-
nied. Reh’g Denial. CEC timely appealed to this court.
We have jurisdiction over the Board’s decisions under 28
U.S.C. § 1295(a)(4)(A).
1 CEC claims that the request was initiated by
a company called Powerscreen International Distribution
Ltd. (“Powerscreen”). CEC had asserted the ’564 patent
against Powerscreen in the late 1990s and obtained an
injunction against further infringement. Constr. Equip.
Co. v. Powerscreen Int’l Distrib. Ltd., 45 U.S.P.Q.2d 1206(D. Or. 1997), aff’d without op., 243 F.3d 559 (Fed. Cir.
2000). According to CEC, that injunction remains in
effect.
IN RE CONSTRUCTION EQUIPMENT 4
II
This court reviews the Board’s factual findings for
substantial evidence and its legal determinations de novo.
5 U.S.C. § 706(2)(E); In re Gartside, 203 F.3d 1305, 1316
(Fed. Cir. 2000). The determination of what a reference
teaches is one of fact, as is the existence of a reason for a
person of ordinary skill to combine references. Rapoport
v. Dement, 254 F.3d 1053, 1060 (Fed. Cir. 2001); see also
Gartside, 203 F.3d at 1316.
Applying that standard here, we see error of neither
fact nor law in the Board’s analysis of these claims’ pat-
entability. Reviewing the record prior art, we agree with
the Board that every limitation of each claim on appeal is
found in one or another of the available references. We
further agree one of ordinary skill in the art would have
been able to combine the available references in such a
way as to practice the alleged invention of each claim.
And we agree that such a person would have had a reason
to make such combinations, for the reasons set forth by
the Board and by the Examiner.
As CEC itself admits, the basic concepts of sifting and
sorting material are not new. Neither are the concepts of
carrying material via conveyors, or of positioning the
sorting machine on a trailer, as the ’564 patent does.
CEC’s alleged invention consists entirely of combining
known elements into a machine that, while possibly new,
was nevertheless obvious and therefore unpatentable. 2
2 In its briefing and at oral argument, CEC
stated its intention, should this court affirm the Board
opinion, to oppose any attempt Powerscreen might make
to have its injunction against practicing the ’564 patent
lifted by the district court. CEC suggested that because
Powerscreen had a full and fair opportunity to litigate the
5 IN RE CONSTRUCTION EQUIPMENT
We find the Board’s opinion supported by substantial
evidence and without legal error. 3 The opinion of the
Board therefore stands affirmed.
’564 patent’s validity, it should be estopped from seeking
to avoid the injunction irrespective of that patent’s fate in
reexamination. We express no opinion on whether Pow-
erscreen might or might not be entitled to seek abrogation
of the injunction.
3 We are unpersuaded by the dissent’s contention
that this court should hold the reexamination proceedings
in this case unconstitutional, or barred by considerations
of res judicata or issue preclusion. This is so for three
reasons. First, the notion that the reexamination was
ipso facto unlawful was neither briefed nor argued by any
party, at any stage of this case. The appellate courts of
the federal judiciary have a well-established practice of
declining to take up arguments not timely made by the
parties. Singleton v. Wulff, 428 U.S. 106, 121 (1976);
Boggs v. West, 188 F.3d 1335, 1337–38 (Fed. Cir. 1999).
“This [rule] is essential in order that parties may have the
opportunity to offer all the evidence they believe relevant
to the issues . . . ; it is equally essential in order that
litigants may not be surprised on appeal by final decision
there of issues upon which they have had no opportunity
to introduce evidence.” Hormel v. Helvering, 312 U.S.
552, 556 (1941). In this case neither CEC nor, crucially,
the PTO has had an opportunity to submit evidence or
argument addressing the concerns laid out in the dissent.
To upset, as the dissent proposes, the entire reexamina-
tion proceeding on the strength of arguments not previ-
ously contemplated by the parties seems to us an
indiscreet application of judicial power.
Second, we disagree that either constitutional princi-
ples or the common-law doctrines of claim or issue preclu-
sion would bar reexamination of the ’564 patent. In re
Swanson, 540 F.3d 1368 (Fed. Cir. 2008), is highly in-
structive.
In that case, we found no error in the PTO’s holding
that reexamination could be instituted on the strength of
a reference that the requesting party had unsuccessfully
asserted as prior art in litigation involving the same
IN RE CONSTRUCTION EQUIPMENT 6
AFFIRMED
patent, even where this court had affirmed the district
court’s judgment of validity. Id. at 1379. Swanson in-
cluded detailed discussion of the reexamination statutes
and legislative history thereof. Id. at 1376–77. It specifi-
cally noted that the district court’s judgment, which this
court affirmed, was not incompatible with the Examiner’s
rejection of claims on reexamination. The reason was
that the district court’s judgment was not that the patent
was valid per se, but that the accused infringer had failed
to carry his burden to prove it invalid. Id. at 1379; see
also Stevenson v. Sears Roebuck & Co., 713 F.2d 705, 710
(Fed. Cir. 1983) (holding that, for this reason, issue pre-
clusion is generally not applicable in patent validity
judgments). There was therefore no contradiction be-
tween the affirmed litigation judgment and the Exam-
iner’s rejection during reexamination.
On the thin record before us, we see no reason why
Swanson would not control this case. In both cases, the
reexamination was initiated by a party that had previ-
ously failed to prove the patent invalid in litigation. We
also note that, in this case, the reexamination involved
numerous references, combinations, and even claims not
treated by the district court. Compare Constr. Equip. Co.
v. Powerscreen Int’l Distrib. Ltd., No. 96-1574, slip op. (D.
Or. June 11, 1998) (reviewing novelty and nonobviousness
of seven claims over three references) J.A. 97 with BPAI
Op. (affirming rejection for obviousness of twelve claims
over various combinations of seven references, two of
which were considered in the Powerscreen litigation).
Thus, even if we were to depart from this court’s prior
holdings concerning waiver, we do not think we would
take up the dissent’s invitation to find the reexamination
proceeding improper.
Finally, the dissent’s suggestion that a finding that a
patent is not invalid in one proceeding against one party
would bar any other validity challenge would be a dra-
matic expansion of the concept of non-mutual offensive
collateral estoppel. We decline to adopt a rule for patent
cases that is inconsistent with all other governing law
regarding collateral estoppel.
United States Court of Appeals
for the Federal Circuit
__________________________
(Reexamination No. 90/008,447)
IN RE CONSTRUCTION EQUIPMENT COMPANY
__________________________
2010-1507
__________________________
Appeal from the United States Patent and Trademark
Office, Board of Patent Appeals and Interferences.
__________________________
NEWMAN, Circuit Judge, dissenting.
This reexamination appeal raises a fundamental ques-
tion—is a final adjudication, after trial and decision in the
district court, and appeal and final judgment in the Federal
Circuit, truly final? Or is it an inconsequential detour along
the administrative path to a contrary result? Although final
decisions of courts of last resort are preclusive within the
courts, is the administrative agency excused? Here the
Patent and Trademark Office did not mention the prior
adjudication of the same issue, although that issue was
finally decided in the courts in 2001. 1 The PTO’s reexami-
nation decision is now before us on appeal, the same issue
that we finally adjudicated eleven years ago.
1 Constr. Equip. Co. v. Powerscreen Int’l Distrib. Ltd.,
243 F.3d 559 (Fed. Cir. 2000), cert. denied, 531 U.S. 1148(2001).
IN RE CONSTRUCTION EQUIPMENT 2
Thus the curious, as well as unconstitutional, situation
whereby this court’s final decision has devolved into an
uncertain gesture, stripped of value in commerce as well as
in law. The panel majority, unperturbed, simply defers to
the agency’s new result as if this history does not exist. I
respectfully dissent.
THE CONSTITUTIONAL PLAN AND THE ADMINISTRATIVE
STATE
The judicial power established in Article III, §1, is “an
inseparable element of the constitutional system of checks
and balances.” N. Pipeline Constr. Co. v. Marathon Pipe
Line Co., 458 U.S. 50, 58 (1982). My colleagues on this
panel object to the intrusion of the Constitution into this
appeal, Maj. Op. at 5–6 n.3, arguing that the role of judicial
rulings in administrative proceedings cannot be considered
because the parties did not raise it in the Patent and
Trademark Office. However, the nation’s fundamental law
is not waivable. The Court has reiterated that “[w]hen
these Article III limitations are at issue, notions of consent
and waiver cannot be dispositive because the limitations
serve institutional interests that the parties cannot be
expected to protect.” Commodity Futures Trading Comm'n
v. Schor, 478 U.S. 833, 851 (1986).
Waiver is inapplicable to “significant questions of gen-
eral impact or of great public concern.” Interactive Gift
Express, Inc. v. Compuserve Inc., 256 F.3d 1323, 1345 (Fed.
Cir. 2001). The constitutional impact of the procedure that
gives rise to this appeal cannot be deemed waived, for it
affects no less than the integrity of judgments and the
separation of powers. Constitutional principles are not
required to be set aside merely because they were not raised
in the administrative forum. See Hormel v. Helvering, 312
3 IN RE CONSTRUCTION EQUIPMENT
U.S. 552, 555–59 (1941) (courts of appeal have the discretion
to consider issues not raised below “as justice may require”).
The plan of the Constitution places the judicial power in
the courts, whose judgments are not thereafter subject to
revision or rejection. Neither the legislative nor the execu-
tive branch has the authority to revise judicial determina-
tions. See Chi. & S. Airlines, Inc. v. Waterman S.S. Corp.,
333 U.S. 103, 114 (1948) (“Judgments, within the powers
vested in courts by the Judiciary Article of the Constitution,
may not lawfully be revised, overturned or refused faith and
credit by another Department of Government.”); Gordon v.
U.S., 69 U.S. 561, 561 (1864) (judgments of Article III courts
are “final and conclusive upon the rights of the parties”). In
Plaut v. Spendthrift Farm, Inc., 514 U.S. 211 (1995), the
Court explained that:
The record of history shows that the Framers
crafted this charter of the judicial department with
an expressed understanding that it gives the Fed-
eral Judiciary the power, not merely to rule on
cases, but to decide them, subject to review only by
superior courts in the Article III hierarchy—with an
understanding, in short, that “a judgment conclu-
sively resolves the case” because “a ‘Judicial Power’
is one to render dispositive judgments.”
Id. at 218–19 (quoting Frank H. Easterbrook, Presidential
Review, 40 Case W. Res. L. Rev. 905, 926 (1990)). The Court
traced the history of judicial finality to Hayburn’s Case, 2
U.S. (2 Dall.) 409 (1792), which “stands for the principle
that Congress cannot vest review of the decisions of Article
III courts in officials of the Executive Branch.” Plaut, 514
U.S. at 218.
IN RE CONSTRUCTION EQUIPMENT 4
With the emergence of the administrative state, “Article
III, §1 safeguards the role of the Judicial Branch in our
tripartite system by barring congressional attempts ‘to
transfer jurisdiction [to non-Article III tribunals] for the
purpose of emasculating’ constitutional courts, and thereby
preventing ‘the encroachment or aggrandizement of one
branch at the expense of the other.’” Schor, 478 U.S. at 850(brackets in original, internal citations omitted). The appli-
cation of this rule is not in dispute, nor is it disputed that
administrative agencies may be authorized to perform
quasi-adjudicatory functions. Id. The issue here arises
because the judicial function has already been performed,
and warrants the finality of the Judicial Power. As the
court explained in Town of Deerfield v. Federal Communica-
tions Commission, 992 F.2d 420, 428 (2d Cir. 1993), revision
by the agency of the district court’s order would render the
previous judgment by the district court “merely advisory”
and thus in violation of the Constitution.
Nor is the previous judgment of this court, on the issue
that was taken to the PTO for reexamination, “merely
advisory.” In enacting the reexamination statute, Congress
did not purport to violate constitutional strictures governing
issues that had previously been finally adjudicated. Con-
trary to the majority’s postulate, this constitutional concern
does not “upset . . . the entire reexamination proceeding,”
Maj. Op. at 5 n.3. The concern arises because in this case
there has already been final disposition of the issue of
validity in Article III courts. Respect for judicial finality,
when there has been a final decision, does not “upset . . . the
entire reexamination proceeding.” Id.RES JUDICATA AND ISSUE PRECLUSION
In addition to the principles of finality based on separa-
tion of powers, the principles of litigation repose are violated
5 IN RE CONSTRUCTION EQUIPMENT
by the reopening in an administrative agency of issues that
were litigated to finality in judicial proceedings. Through-
out the evolving reexamination statutes, no legislation
suggested that reexamination might overtake a final judi-
cial decision, or that the preclusive effect of such decision
may be ignored. The reexamination statutes do not purport
to grant to the PTO the authority to ignore final judgments.
Such an adjudicatory structure would not have been con-
templated by the Congress, and is improperly accepted by
this court.
Waiver is inapplicable against issues of res judicata and
issue preclusion, for preclusion principles serve the powerful
public and private interests of finality in judicial proceed-
ings and the avoidance of inconsistent results. See Clements
v. Airport Auth. of Washoe Cnty., 69 F.3d 321, 330 (9th Cir.
1995) (“Vindication of this public interest is at its zenith in
the realm of issue preclusion. It is the failure to adhere
closely to basic issue preclusion principles that is most
likely to lead directly to the inconsistent results that tend to
undermine confidence in the judicial process.”); Caldera v.
Northrop Worldwide Aircraft Servs., Inc., 192 F.3d 962,
970–72 (Fed. Cir. 1999) (applying principles of collateral
estoppel on appeal, where an administrative board had
determined anew an issue already decided in state court).
In this case the rules of res judicata and issue preclusion
are involved, for this reexamination was requested by
Powerscreen, the defendant in the prior district court rul-
ing, the appellant in the prior Federal Circuit appeal, and
the petitioner for certiorari. Powerscreen could not have
relitigated the question of obviousness in any court. See
San Remo Hotel, L.P. v. City & Cnty. of S.F., 545 U.S. 323,
336 n.16 (2005) (“Under res judicata, a final judgment on
the merits of an action precludes the parties or their privies
from relitigating issues that were or could have been raised
IN RE CONSTRUCTION EQUIPMENT 6
in that action. Under collateral estoppel, once a court has
decided an issue of fact or law necessary to its judgment,
that decision may preclude relitigation of the issue in a suit
on a different cause of action involving a party to the first
case.”). There is no assertion here of the “extraordinary
circumstances” contemplated by Fed. R. Civ. P. 60(b), a rule
that reflects the courts’ inherent power to reopen their own
judgments in the interest of justice. See Liljeberg v. Health
Servs. Acquisition Corp., 486 U.S. 847 (1988):
Rule 60(b)(6) . . . grants federal courts broad author-
ity to relieve a party from a final judgment “upon
such terms as are just,” provided that the motion is
made within a reasonable time and is not premised
on one of the grounds for relief enumerated in
clauses (b)(1) through (b)(5). The Rule does not par-
ticularize the factors that justify relief, but . . . it
provides courts with authority “adequate to enable
them to vacate judgments whenever such action is
appropriate to accomplish justice,” while also cau-
tioning that it should only be applied in “extraordi-
nary circumstances.”
Id. at 863–64 (citations omitted).
The doctrines of preclusion relate to the re-litigation of
issues that have been actually litigated and decided. A
party who took part in the earlier litigation cannot ordinar-
ily be prejudiced by subsequently being bound by that
decision. See Clements, 69 F.3d at 330 (“Where the plain-
tiffs have had a full and fair opportunity to actually litigate
the issue and did in fact litigate it, they can not ordinarily
be prejudiced by subsequently being held to the prior de-
termination.”). The interest in finality is highlighted in this
case, where this court previously upheld the validity of
Construction Equipment’s patent, the same patent that the
7 IN RE CONSTRUCTION EQUIPMENT
panel majority today holds to be invalid on the same issue.
When Powerscreen was sued by Construction Equipment for
infringement, the defense included a challenge to the ’564
patent’s validity on the ground of obviousness. The case
was tried in the United States District Court for the District
of Oregon. In the district court, Powerscreen cited refer-
ences that showed various components of the patented
machine, and argued that it would have been obvious to
select these components and put them together in one
machine. In its ruling of non-obviousness, the district court
discussed the cited references and explained its conclusions.
For example:
[T]he combination of the prior art as suggested by
Defendants, which merely combines the loader of
the Royer Trommel with the screening device of the
Eriksson Patent situated in the opposite direction,
would not produce a viable machine. . . . The sche-
matic drawing of the combination offered by Defen-
dants includes necessary deviations from the prior
art but does not indicate how these alterations are
obvious from the prior art or teachings. . . . Accord-
ingly, the court finds Defendant’s portrayal of the
obvious combination of the Erikkson [sic] Patent
and Royer Trommel does not encompass the ele-
ment of depositing the coarsest material from the
top screen beyond the opposite end of the machine.
Constr. Equip. Co. v. Powerscreen Int’l Distrib. Ltd., Civ. No.
96-1574-AS (D. Or. June 11, 1998), slip op. at 17–19. The
district court ruled that the ’564 patent was valid, enforce-
able, and willfully infringed by Powerscreen, and entered
final judgment.
Powerscreen appealed to the Federal Circuit, again with
full briefing of the issue of obviousness. Powerscreen ar-
IN RE CONSTRUCTION EQUIPMENT 8
gued that the claims of the ’564 patent are invalid under
§103 based on several combinations of references. With
respect to the proposed combination of the Eriksson Patent
with either the Trommel 620 or the Royer Trommel prior
art, Construction Equipment responded that
Powerscreen does not attempt to show such teach-
ings, but instead merely contends . . . that it would
have been obvious “to modify existing machine de-
signs by simply exchanging one type of screen as-
sembly with another.” . . . Without any suggestion
in the prior art that the best features of Eriksson,
Royer and the Trommel 620 would have been com-
bined in the manner recited in claim 5, Power-
screen’s obviousness argument must fail, as the
district court so held at JA2009-2011.
Appellee Br. 44–45. The Federal Circuit affirmed the dis-
trict court’s judgment. Constr. Equip. Co. v. Powerscreen
Int’l Distrib. Ltd., 243 F.3d 559 (Fed. Cir. 2000), cert. de-
nied, 531 U.S. 1148 (2001).
Seven years later Powerscreen requested reexamination
on the ground of obviousness, citing the same references and
additional references, placing strongest reliance on the same
references that had been cited in the litigation. However,
when an issue has been litigated and judgment entered in a
court of last resort, “[t]he underlying rationale of the doc-
trine of issue preclusion is that a party who has litigated an
issue and lost should be bound by that decision and cannot
demand that the issue be decided over again.” In re Free-
man, 30 F.3d 1459, 1465 (Fed. Cir. 1994) (in a reexamina-
tion completed after litigation, the PTO gave preclusive
effect to the district court’s ruling on claim scope, although
the Board stated that it did not agree with the district
court). These fundamentals of judicial authority and admin-
9 IN RE CONSTRUCTION EQUIPMENT
istrative obligation are not subject to the vagaries of shifts
in the burden or standard of proof in non-judicial forums, as
the panel majority proposes. Although this aspect was
weighed in In re Swanson, 540 F.3d 1368 (Fed. Cir. 2008), a
lower standard of proof in an administrative agency cannot
override the finality of judicial adjudication. The burden of
proof assigned to administrative bodies is a matter of policy
and procedure, not a change in substantive law. Adminis-
trative burdens do not override the Judicial Power of dispo-
sitive judgment.
Conservation of judicial and administrative resources
also counsels against relitigation of issues that have been
fully adjudicated and finally decided. Although the admin-
istrative agency boards have a “quasi-judicial” flavor, “the
same principles of efficiency which justify application of the
doctrine of collateral estoppel in judicial proceedings also
justify its application in quasi-judicial proceedings.” Gray-
bill v. U.S. Postal Serv., 782 F.2d 1567, 1571 (Fed. Cir.
1986) (holding that Maryland court decision had preclusive
effect on Merit Systems Protection Board proceedings).
The public interest in finality is particularly compelling
in the context of commercial investment and property
rights. The adverse effect on the patent incentive, due to
uncertainty as to the validity of a duly granted patent, is
notorious, and permeates the hearing record of the recently
enacted America Invents Act. The reexamination that is
here sustained, after final judgment in the courts, contra-
venes the policy of the reexamination procedures that
applied in this case. The panel majority apparently misper-
ceives this concern, for the question is not whether all “non-
mutual offensive collateral estoppel” must be barred, Maj.
Op. at 5–6 n.3. The question here is not of non-mutuality,
for this reexamination was initiated by the same party that
was defendant in the district court and Federal Circuit. The
IN RE CONSTRUCTION EQUIPMENT 10
question is whether the administrative agency is bound by
prior final adjudication of the same issue—a question that
has been definitively answered by the Supreme Court. See
Burson v. Carmichael, 731 F.2d 849, 854 (Fed. Cir. 1984)
(“There is no support in law for repeated bites at the apple.
On the contrary, the law whenever possible reaches for
repose.”).
Here, the question of obviousness had been finally de-
cided, and Powerscreen is precluded from reopening the
same issue in another forum. Whether viewed as res judi-
cata or issue preclusion, reexamination on this issue is not
available.
THE REEXAMINATION STATUTE
The reexamination statute, in its various evolving
forms, did not and does not purport to authorize departure
from the principles of judicial review and judicial finality.
The statute authorizes the return of an issued patent to the
administrative agency so that the patent examiners can
conduct a more thorough examination than may have oc-
curred the first time around. The purposes remain as
initially conceived, to provide a less costly way of removing
or restricting patents that should not have been granted or
that were granted too broadly, to permit such challenge
even before litigation-inducing controversy has arisen, and
also to enable patentees to bring overlooked references into
the examination process. See Patent Reexamination: Hear-
ing on S. 1679 Before the Senate Comm. on the Judiciary,
96th Cong. 15–16 (1979) (statement of Comm’r Sidney
Diamond) (“Reexamination would eliminate or simplify a
significant amount of patent litigation. In some cases, the
PTO would conclude as a result of reexamination that a
patent should not have issued. A certain amount of litiga-
tion over validity and infringement thus would be com-
11 IN RE CONSTRUCTION EQUIPMENT
pletely avoided.”); 126 Cong. Rec. 30,364 (1980) (statement
of Sen. Bayh) (“Reexamination would allow patent holders
and challengers to avoid the present costs and delays of
patent litigation. . . . Patent reexamination will also reduce
the burden on our overworked courts by drawing on the
expertise of the Patent and Trademark Office.”); 126 Cong.
Rec. 29,901 (1980) (statement of Rep. Hollenbeck) (“As a
result of the provision for reexamination, the potential
conflict can be settled by the Patent Office itself in far
shorter time and at far smaller expense to the challenger or
to the patent holder than would be the case if the only
recourse was through the court system.”).
The reexamination statute seeks to replace or reduce
the expense and encumbrance of litigation; but when the
same issue has already been litigated and finally adjudi-
cated, interested persons should be able to rely on the
judicial decision. Throughout the legislative adjustments to
reexamination, no one suggested that reexamination in the
PTO could override a final judicial decision. Such an uncon-
stitutional act would not have been contemplated by the
Congress, and is improperly endorsed by this court. For the
patent here at issue, the question of obviousness was liti-
gated and decided in the district court, followed by decision
on appeal to the Federal Circuit, and denial of certiorari.
The PTO on reexamination can no more invalidate an
adjudicated valid patent, than can the PTO validate a
patent that has been adjudicated invalid. Nor does the
reexamination statute purport to grant such authority.
THE MERITS
The panel majority decides the merits of this appeal as
if there had been no litigation history, as if the issue of
obviousness had not previously been fully adjudicated. As
in the prior appeal to the Federal Circuit, the various ele-
ments of the patented device were selected from various
IN RE CONSTRUCTION EQUIPMENT 12
references, and the question is whether it would have been
obvious to combine these elements, and in this way. This
time, however, my colleagues find that “one of ordinary skill
in the art would have been able to combine the available
references in such a way as to practice the alleged inven-
tion.” Maj. Op. at 4. This is not the correct analytic crite-
rion.
Precedent warns against hindsight combination
whereby disparate elements are fitted into the template of
the new device with the guidance of the patentee. My
colleagues present a classical illustration of judicial hind-
sight to construct a machine that was not previously known,
a machine that achieved commercial success because it
provided previously unavailable advantages. 2 See In re
Fritch, 972 F.2d 1260, 1266 (Fed. Cir. 1992) (“[I]t is imper-
missible to use the claimed invention as an instruction
manual or ‘template’ to piece together the teachings of the
prior art so that the claimed invention is rendered obvious. .
. . This court has previously stated that ‘[o]ne cannot use
hindsight reconstruction to pick and choose among isolated
disclosures in the prior art to deprecate the claimed inven-
tion.’”). This prohibited analysis is nonetheless adopted by
the panel majority, although unaccompanied by any “articu-
lation of a rational underpinning” for combining the refer-
ences in such a way as to achieve the machine made by the
patentee. See KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398,
2 The invention in the ’564 patent channels oversized
material in a novel way whereby a relatively small machine
can process larger debris than its predecessors, while con-
currently sifting and sorting debris. This machine is de-
scribed as reducing jamming and improving performance
compared with prior art machines, and because of its capac-
ity to handle large debris, it can be made small enough to be
transported to an operating site on roads using a hitch. Its
commercial value attracted imitators, and litigation.
13 IN RE CONSTRUCTION EQUIPMENT
418 (2007) (“[R]ejections on obviousness grounds cannot be
sustained by mere conclusory statements; instead, there
must be some articulated rational underpinning to support
the legal conclusions of obviousness.”).
The Court recognized in KSR that “inventions in most, if
not all instances rely upon building blocks long since uncov-
ered, and claimed discoveries almost of necessity will be
combinations of what, in some sense, is already known.”
550 U.S. at 419. See Ruiz v. A.B. Chance Co., 357 F.3d
1270, 1275 (Fed. Cir. 2004) (“Inventions typically are new
combinations of existing principles or features.”). We are
offered no rationale for the combination now deemed obvi-
ous, other than the patentee’s achievement. On any view of
the posture in which this case reaches us, the panel major-
ity errs in its decision.
CONCLUSION
As a matter of constitutional plan, judicial power, legis-
lative structure, and national innovation policy, a patent
that has been held valid or invalid in court is not subject to
administrative redetermination of the same issue. On these
premises, reexamination in the PTO is not generally avail-
able after the issue of patentability has been litigated to a
final judgment from which no appeal can be or has been
taken. The procedure here accepted is in violation of fun-
damental principles. I respectfully dissent.