President & Fellows of Harvard College v. Lee ( 2014 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
PRESIDENT AND FELLOWS OF HARVARD
COLLEGE,
Plaintiff-Appellant,
AND
E.I. DU PONT DE NEMOURS AND CO.,
Plaintiff-Appellant,
v.
MICHELLE K. LEE, Deputy Director,
United States Patent and Trademark Office,
Defendant-Appellee.
______________________
2013-1628
______________________
Appeal from the United States District Court for the
Eastern District of Virginia in No. 12-CV-1034, Judge
Liam O’Grady.
______________________
Decided: October 29, 2014
______________________
DONALD R. DUNNER, Finnegan, Henderson, Farabow,
Garrett & Dunner, L.L.P., of Washington, DC, argued for
plaintiff-appellant E.I. DuPont de Nemours and Compa-
2 PRESIDENT & FELLOWS OF HARVARD v. LEE
ny. With him on the brief were RONALD A. BLEEKER and
ANDREW J. VANCE. Of counsel on the brief for plaintiff-
appellant President and Fellows of Harvard College was
CHRISTOPHER B. MEAD, London & Mead, of Washington,
DC.
DENNIS C. BARGHAAN, JR., Assistant U.S. Attorney,
United States Attorney’s Office, Eastern District of Vir-
ginia, United States Department of Justice, of Alexandria,
Virginia, argued for defendant-appellee. With him on the
brief was DANA J. BOENTE, United States Attorney. Of
counsel on the brief were NATHAN K. KELLEY, Solicitor,
MEREDITH H. SCHOENFELD, and MARY L. KELLY, Associate
Solicitors, United States Patent and Trademark Office, of
Alexandria, Virginia.
______________________
Before LOURIE, MOORE, and O’MALLEY, Circuit Judges.
MOORE, Circuit Judge.
The President and Fellows of Harvard College and
E.I. du Pont de Nemours and Company (collectively,
Harvard) appeal from the district court’s grant of sum-
mary judgment affirming the United States Patent and
Trademark Office’s (PTO) finding that U.S. Patent No.
5,925,803 had expired as a result of a terminal disclaimer
and refusal to enter new claims during the reexamination
of the patent on that basis. Because the district court
properly found that the PTO’s determination that the
patent had expired was not arbitrary, capricious, an
abuse of discretion, or contrary to law, we affirm.
BACKGROUND
This appeal relates to the family of patents directed to
the “Harvard mouse” inventions. These patents disclose
inventions related to a transgenic research animal (pref-
erably a rodent such as a mouse) with an activated onco-
PRESIDENT & FELLOWS OF HARVARD v. LEE 3
gene sequence, i.e., a gene sequence which, when incorpo-
rated into the genome of the animal, makes the animal
highly susceptible to developing cancer. U.S. Patent No.
4,736,866, col. 1, ll. 31–42; U.S. Patent No. 5,087,571, col.
1, ll. 35–46; ’803 patent, col. 1 ll. 35–39. The ’866 patent
was the first Harvard Mouse patent.
The second Harvard Mouse patent, the ’571 patent,
was filed as a divisional of the ’866 patent. During prose-
cution of the ’571 patent, the PTO rejected certain claims
for obviousness-type double patenting in view of the
claims of the ’866 patent. Harvard responded to the
double patenting rejection by filing a terminal disclaimer;
it made no substantive arguments against the rejection
except for pointing to the terminal disclaimer. Harvard’s
terminal disclaimer disclaimed any portion of the term “of
any patent granted on the above-identified application or
on any application which is entitled to the filing date of
this application under 35 U.S.C. § 120.” J.A. 1271–72
(emphasis added). It stated that the applicant intended
that it “run with any patent so granted” and that it bind
any of its successors or assignees. Id. The terminal
disclaimer also stated that “[a]ccompanying this disclaim-
er is the fee set forth in 37 C.F.R. § 1.20(d).” J.A. 1272.
In its submission to the PTO, which included the terminal
disclaimer, Harvard authorized the PTO to charge any
fees to its attorney’s deposit account. Upon receipt of the
terminal disclaimer, the PTO placed a copy in the official
prosecution history of the ’571 patent and withdrew its
obviousness-type double patenting rejection, “in view of
Applicant’s arguments.” J.A. 5347.
The ’803 patent at issue in this case is the third Har-
vard Mouse patent and was filed as a continuation of the
’571 patent. During an ex parte reexamination of the ’803
patent, the examiner rejected the claims on double pa-
tenting grounds and found that the ’803 patent had
expired based on the terminal disclaimer filed during
prosecution of the ’571 patent. In response to the PTO’s
4 PRESIDENT & FELLOWS OF HARVARD v. LEE
rejection, Harvard filed an amendment adding several
new claims, arguing that the ’803 patent had not expired
based on the terminal disclaimer and that the double
patenting rejection was improper. In the next office
action, the examiner withdrew the claim rejections and
issued a notice of intent to issue a reexamination certifi-
cate for the original claims of the ’803 patent. However,
the examiner refused to allow Harvard to add new claims,
reasoning that the ’803 patent had expired based on the
terminal disclaimer entered during prosecution of the ’571
patent and that new claims cannot be entered into an
expired patent. See 37 C.F.R. § 1.530(j).
Harvard petitioned the PTO Director for review, chal-
lenging the examiner’s finding. It argued, in relevant
part, that there was no evidence that it had paid the
requisite terminal disclaimer fee and that, as a result, the
terminal disclaimer was not legally entered into the
prosecution history for the ’571 patent and was therefore
invalid. The Director dismissed Harvard’s petition,
finding that the terminal disclaimer was properly record-
ed and remained in effect, and that thus, the ’803 patent
had expired.
Harvard filed an Administrative Procedure Act (APA)
action in district court challenging the PTO’s refusal to
enter the new claims on the ground that the ’803 patent
had expired. The district court granted summary judg-
ment in favor of the PTO finding that the PTO’s factual
determination that Harvard submitted the requisite fee
with the terminal disclaimer was not arbitrary or capri-
cious or contrary to the law. President and Fellows of
Harvard College v. Rea, No. 12-1034, 2013 WL 2152635,
at *5 (E.D. Va. May 15, 2013). Harvard appeals. We have
jurisdiction under 28 U.S.C. § 1295(a)(1).
DISCUSSION
We review a district court’s grant of summary judg-
ment de novo, applying the same standard as the district
PRESIDENT & FELLOWS OF HARVARD v. LEE 5
court. Burandt v. Dudas, 528 F.3d 1329, 1332 (Fed. Cir.
2008). Accordingly, with respect to actions brought under
the APA, we will “hold unlawful and set aside agency
action, findings, and conclusions found to be arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2)(A). The burden
of showing the agency action was arbitrary and capricious
lies with the plaintiff. See Ohio Valley Envtl. Coal. v.
Aracoma Coal Co., 556 F.3d 177, 192 (4th Cir. 2009).
Harvard argues that the PTO’s finding that the ’803
patent had expired as a result of the terminal disclaimer
was arbitrary and capricious. Harvard argues that to
create an effective, valid terminal disclaimer, a patent
applicant must pay the fee required by law. 35 U.S.C. §
253 (1975); 37 C.F.R. § 1.321(b) (1989). In this case, it
contends that the evidence establishes that Harvard
failed to pay the required terminal disclaimer fee when it
submitted its terminal disclaimer in 1989. First, Harvard
argues that it provided evidence in the form of a declara-
tion from the attorney who handled prosecution of the
’571 patent stating that he did “not believe that a check
for payment of the [t]erminal [d]isclaimer fee was [filed].”
J.A. 5250. He testified that his file for the ’571 patent did
not contain a copy of a check for the terminal disclaimer
fee, and that his standard practice included placing a copy
of any check submitted to the PTO in his files specific to
the patent. Id. He also testified that he could not find
any other evidence in his files showing that a check had
been submitted. Harvard also argues that it submitted a
declaration from the Controller of the firm that handled
the prosecution of the ’571 patent indicating that he was
unable to locate a canceled check for payment of the
terminal disclaimer fee. It further contends that the PTO
had no actual evidence showing that the terminal dis-
claimer fee was paid because the PTO’s records regarding
fee payments only date back to June 1997 and thus do not
cover the relevant period of time.
6 PRESIDENT & FELLOWS OF HARVARD v. LEE
Next, Harvard argues that the PTO’s handling of the
terminal disclaimer establishes that it did not enter the
terminal disclaimer into the official patent prosecution
record, as it would have had Harvard paid the required
terminal disclaimer fee. In particular, it notes that the
PTO did not list the terminal disclaimer on the “Contents”
page of the prosecution history of the ’571 patent or give it
a paper number as specified in the MPEP. MPEP
§ 717.01 (5th ed. Rev. 6, Oct. 1987). Further, it notes that
the PTO failed to give the terminal disclaimer a date
stamp, as required by the PTO rules. 37 C.F.R. § 1.6
(1989). Harvard also points out that neither the issued
’571 patent nor the issued ’803 patent bears any indica-
tion of a terminal disclaimer, even though it argues that it
was the PTO’s regular practice to identify terminal dis-
claimers on the face of the patent. Finally, it notes that
the terminal disclaimer does not bear any marking ac-
knowledging payment of the terminal disclaimer fee, as it
contends it would have had the fee been paid based on the
PTO’s regular practice. It contends that every other
document in the prosecution history that required a fee
included a notation indicating receipt of payment. It
argues that the lack of such a notation on the terminal
disclaimer is evidence that the payment was not submit-
ted.
Harvard further contends that the fact that the exam-
iner withdrew her obviousness-type double patenting
rejection to certain claims of the ’571 patent after the
terminal disclaimer was filed does not establish that
Harvard paid the terminal disclaimer fee. It argues that,
while the examiner withdrew the claim rejections based
on the patentee’s “arguments,” she did not identify the
terminal disclaimer as the reason for withdrawing her
objection. J.A. 5347. It argues that the PTO previously
concluded that the prosecution history was “inconclusive”
as to the examiner’s rationale for withdrawing the obvi-
ousness-type double patenting rejection, and that the
PRESIDENT & FELLOWS OF HARVARD v. LEE 7
PTO cannot now contend that the rejection was with-
drawn based on the terminal disclaimer. J.A. 5340.
We hold that the district court properly concluded
that the PTO’s factual finding that Harvard paid the
terminal disclaimer filing fee, and that the terminal
disclaimer was therefore effective and binding, was not
arbitrary or capricious. While we might have reached a
different result if we were weighing the evidence in the
first instance, this we cannot do. See Motor Vehicle Mfrs.
Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 43 (1983). We review the record to determine
whether the fact finding was arbitrary and capricious.
The “arbitrary [and] capricious” standard is the “most
deferential of the APA standards of review,” In re Gart-
side, 203 F.3d 1305, 1312 (Fed. Cir. 2000), and is only met
where a reviewing court can conclude with “definite and
firm conviction” that a clear error of judgment or a mis-
take has been committed, PGBA, LLC v. United States,
389 F.3d 1219, 1231 (Fed. Cir. 2004). The touchstone of
the arbitrary and capricious standard is rationality; we
must sustain an agency action evincing rational reasoning
and consideration of relevant factors. Advanced Data
Concepts, Inc. v. United States, 216 F.3d 1054, 1058 (Fed.
Cir. 2000) (citing Bowman Transp., Inc. v. Arkansas-Best
Freight Sys., Inc., 419 U.S. 281, 285 (1974)); Hyundai
Elecs. Indus. Co. v. Int’l Trade Comm’n, 899 F.2d 1204,
1209 (Fed. Cir. 1990) (citing Citizens to Preserve Overton
Park v. Volpe, 401 U.S. 402, 416 (1971)).
We find that the record contains a rational basis to
support the PTO’s factual finding that Harvard paid the
terminal disclaimer fee. First, Harvard expressly stated,
in the terminal disclaimer itself, that “accompanying this
disclaimer is the fee set forth in 37 C.F.R. § 1.20(d).” J.A.
1272. This constitutes evidence, from the relevant time,
that the fee was filed with the terminal disclaimer. Next,
the agency’s factual finding that the terminal disclaimer
fee was submitted is supported by the examination histo-
8 PRESIDENT & FELLOWS OF HARVARD v. LEE
ry. In particular, the examiner withdrew the obvious-
ness-type double patenting rejection only after Harvard
submitted its terminal disclaimer; in fact, the terminal
disclaimer was Harvard’s only response to the double
patenting rejection. While this evidence may be “incon-
clusive,” see J.A. 5340, it nevertheless lends support to the
finding that Harvard submitted the necessary fee. Final-
ly, the PTO recorded the terminal disclaimer without
making any mention of a missing filing fee, which it likely
would have had the fee been absent. Collectively, this
evidence provides a rational basis for the PTO’s factual
finding that the terminal disclaimer fee was filed.
Nor is the contrary evidence upon which Harvard re-
lies so “overwhelming” that it would render the PTO’s
finding arbitrary and capricious. The three declarations
that Harvard relies upon were executed over twenty years
after the operative event and none conclusively establish-
es that the fee was not paid. In particular, two of the
declarations provide only that those individuals were
unable to locate evidence of a check in their records from
twenty years ago, and the third only that the declarant
“did not believe he submitted a check for the terminal
disclaimer.” J.A. 5250.
Harvard’s only other evidence that the fee was not
paid is that the PTO procedurally mishandled the termi-
nal disclaimer, by failing to affix certain notations to the
terminal disclaimer or the ultimate patent, and by failing
to place the terminal disclaimer on the contents page of
the prosecution history. We have previously rejected
similar arguments, finding that a terminal disclaimer was
recorded and valid, regardless of mishandling by the PTO.
See Vectra Fitness, Inc. v. TWNK Corp., 162 F.3d 1379,
1381–82 (Fed. Cir. 1998). In Vectra Fitness, although the
PTO added a terminal disclaimer to the prosecution
history, it failed to enter the terminal disclaimer on the
cover page or contents page of the prosecution history,
and failed to publish the terminal disclaimer in the Offi-
PRESIDENT & FELLOWS OF HARVARD v. LEE 9
cial Gazette as contemplated by PTO regulations. Id. at
1381 (citing 37 C.F.R. § 1.321(a) (1990)). We held that
because “nothing in the statutes or regulations requires
any action by the PTO for a disclaimer to be ‘recorded,’”
the terminal disclaimer applied to the patents-at-issue.
Id. at 1382. In this case, while the PTO may have proce-
durally mishandled the terminal disclaimer when placing
it in the file, this does not render arbitrary and capricious
the PTO’s factual finding that the terminal disclaimer fee
was nonetheless paid.
CONCLUSION
We conclude that the evidence as a whole provides a
rational basis for the PTO’s conclusion that the terminal
disclaimer fee was paid. As such, we find that the district
court properly concluded that the PTO’s decision was not
arbitrary or capricious. We affirm.
AFFIRMED