Application of Milton E. Herr , 377 F.2d 610 ( 1967 )

RICH, Judge

(concurring).

The Board of Appeals wrote a carefully reasoned opinion (Mar. 29, 1965) in this case and, a year afterward, gave extensive en banc consideration to the problem of res judicata in the Patent Office. Ex parte Budde, 150 USPQ 469 (Mar. 14, 1966).¹ The en banc consideration was stated to have been “because of the importance of the legal issue,” and it is indeed important. It is also a question of some difficulty and much confusion.

In deciding this case the board majority placed primary reliance on two of our decisions, Lundberg and Prutton.. As to the first it said:

In our opinion, the case of In re Lundberg et al., 47 CCPA 1140, 1960 C.D. 478, 761 O.G. 582, 280 F.2d 865, 126 USPQ 412, is most authoritative and best expresses the principles which should guide us.

As to the other it said:

In re Prutton, supra [40 CCPA 975, 204 F.2d 291, 97 USPQ 447] is,, in our opinion, extremely pertinent * * *

******

It is our view that the case of In re Prutton dictates affirmation of the res. judicata rejection in the present case.

In Budde the board again felt itself bound by Lxtndberg and Prutton. The solicitor’s brief likewise relies on these cases.

I am glad to have had the opportunity to consider the extensive dissenting views of Judge Almond who also seems to. feel that Lundberg and Prutton have controlling effect here, along with others of our decisions.

Thus the question before us is, to a large extent, whether Lundberg and Prutton control or whether they are distinguishable and should be distinguished. When we decide, as we do, that a holding of res judicata herein is improper, we at least owe the board, which has tried to follow those precedents, and the bar, some explanation of why we so hold. It does ■ not seem to me sufficient to say merely that neither case is identical in every respect or directly in point. The board thought they were authoritative, pertinent, and controlling, and said so. Herein I try to say why I do not agree. As the author of the Lundberg opinion I feel that I in particular owe an explanation of why I think it does not compel an affirmance here.

As I have often found it necessary to point out, what is said in an opinion is the result of the questions raised and arguments made in the case being discussed. While what is said may make sense in that context it does not necessarily do so when lifted therefrom and applied to a different situation. That is what appellee attempts here with respect to Lundberg. As is being so vociferously pointed out by all those opposed to the result which we of the majority here reach, Lundberg does talk about the claims determining whether the issue in the second case is the same as it was in the first case because in Lundberg that was what determined it. What was said in the opinion was in answer to the appellants’ contention that there was a different issue because the claims were different and in the opinion we were engaged in demonstrating that that particular argument was unsound. No other argument was made to show that there was a different issue.

In Lundberg what the appellants were trying to get us to do was to reconsider the patentability of the invention over the prior art and reverse ourselves on the same question, using as an excuse that there were differences in the claims which made new issues. What we were doing in the opinion was analyzing their arguments and pointing out that despite verbal changes the same patentability issue was still being presented for our consideration in view of the same prior art. Our attention was focused on the claims because the argument was based on them and so, in consequence, was our opinion. Such statements as “If the claimed subject matter is the same, the prior adjudication is binding” were made about the fact situation before us in Lundberg and were not being uttered as rules of general applicability to other fact situations, certainly not as guiding “principles,” which the board appears to have taken them to be.

The net effect of the Lundberg decision was that we will refuse to reconsider the same question of patentability merely because a few immaterial language changes have been made in the claims. Likewise, for the same reasons we felt the examiner and the board were justified in not reconsidering their decisions. The application of the principle of res judicata was but a convenient and conventional legal way of saying that we would not go over the same arguments we had already been over, as though on a rehearing, and that the like view of the Patent Office was justifiable.

The present case does not present a comparable situation. The question now is whether the claimed invention is patentable in view of evidence of unexpected advantageous properties we felt we should not consider in the prior case (whether rightly or wrongly I do not say), plus additional evidence. The issue in the prior case was section 103 obviousness in view of closeness of structure to the reference compound without that evidence. The holding was that the attempted showing of properties did not overcome the obviousness rejection because there was no disclosure of such properties in the specification, for which reason the evidence would not be considered. On this second application the specification does contain the disclosure, the Patent Office has looked at the evidence, and has decided that the claimed compounds are not obvious. The Patent Office has already reviewed the question of patentability on the merits but, having done so, says its former stand, now changed, must be adhered to only because decisions of this court compel it. On this second application, the Patent Office has been entirely satisfied that Herr is entitled to his patent under the patent statute but takes the position that this court says he must not have it. I find nothing in Lundberg to compel such an anomalous result.

I do not mean to imply that the fact the Patent Office has already considered the merits of the rejection has anything to do with our decision here. I shall discuss later its obligation to do so.

In re Prutton, the other case principally relied on below and in the dissent, was cited in Lundberg. The question in Prutton was whether the issue was the same as the issue passed on by the Court of Appeals for the District of Columbia on a parent application, of which the application on appeal was a continuation-in-part. As Judge Almond’s dissenting opinion tends to indicate, the facts in Prutton are much closer to those here than the facts of Lundberg. As here, on the second application the board accepted affidavit evidence not before it on the first application and reversed a rejection on a reference while sustaining the res judicata rejection.² This court approved. The Prutton opinion, citing a number of cases, seems to derive from them a rule, which it followed, to the effect that the claims of the second application must be “patentably different” from the claims previously adjudicated in order to avoid a holding of res judicata. It then embarked on a determination of whether the claims were patentably different and, finding they were not, affirmed the res judicata rejection, notwithstanding the opinion of the board that the claims were patentable over the reference. I cannot clearly distinguish Prutton from this case and therefore I have great sympathy with the view of the board that it dictates an affirmance. I likewise necessarily sympathize with the dissent. My position on Prutton, after giving it and the precedents it relies on in turn careful study, is that it reached the wrong conclusion and should be overruled. In my opinion, at least with respect to the reference the board found to be overcome by the affidavit evidence on the new application, a new issue of patentability was presented and a decision thereon in applicant’s favor would not “nullify the decision of the Court of Appeals in the earlier case.” That court had a different issue before it, a different patentability problem.

As the opinion of the board here, with its reference to many cases pro and con, and any independent examination of the question, will amply demonstrate, the past history of res judicata in ex parte Patent Office cases is a history of inconsistency. The Fourth Edition of Mc-Crady’s Patent Office Practice deals with the subject in Sec. 138, amply footnoted with citations, the general tenor of which is that the Patent Office may or may not apply res judicata in any given situation, prefacing the discussion with the statement that

The Patent Office is not a “court”, and because it is not a court it cannot render a “judgment”, hence its decisions or other actions cannot give rise to “res judicata” in the strict legal sense of that term.

There next follows a quotation from one of the earliest cases in the field, Barratt v. Duell, 14 App.D.C. 255, 1899 C.D. 320 (cited by Judge Almond as “In re Barratt’s Appeal”) which set at an early date the noncommittal tone of the subsequent accumulated decisions on this subject. Therein the court concluded by saying:

In what we have said we do not desire it to be understood that the Patent Office may not, if it thinks proper so to do, entertain and adjudicate a second application for a patent after the first application has been rejected. What we decide is, that it is not incumbent upon the office as a duty to entertain such applications, and that, if it refuses to entertain them, it has a perfect legal right so to do. [Emphasis added.]

I suggest, in passing, that the statement is meaningless unless taken to mean that on a new application the Office need not reconsider on the merits the same arguments previously made on an earlier application since I know of no way in which it can refuse to “entertain and adjudicate” any complete application filed with the prescribed fee. It is necessary, even to arrive at a res judicata rejection, to “entertain” an application and consider it to the extent of carefully determining its relation to the previous application. By the time an examiner has finished consideration of this point, as illustrated by what happened in both this case and Prutton, he may very well be in a position to say that on the record the claims are patentable under the statute and that he would allow them but for decisions of the court that he should apply “res judicata” to deny them.

Res judicata is a judicial doctrine the purpose of which is to settle disputes and put an end to litigation, enforcing ultimate repose. This is a matter of public policy, and a good one when applied to the situations for which it was designed. But the ex parte prosecution of patent applications cannot properly be characterized as either dispute or litigation. Moreover, there is another public interest to be considered, inherent in the patent laws, which is to bring patentable inventions into the open through granting patents on them.³ And in addition to the technological disclosure aspect of the patent grant is the further service to the public it performs in providing an incentive to commercialize the invention, thereby giving the public not only knowledge but usable commodities. Society stands to lose when a patent is refused on an invention patentable under the statute.

This patenting process has little in common with the settlement of disputes between wrangling private parties and certainly its object is not to bring about peaceful repose in society. Its object is, on the contrary, to produce industrial and economic ferment and to goad inventors and entrepreneurs into activity through basic psychological appeals to self-interest. The public interest calls for the grant of patents on every invention patentable according to the tests laid down in the patent statutes. The Patent Office has ruled that such an invention is present here and has raised only the legal theory of res judicata as an obstacle to its patenting. In doing so I think it misapplies the theory.

The Prutton opinion rests on the following precedents as authority, which I list and shall discuss in chronological order: Blackford v. Wilder, 28 App.D.C. 535, 1907 C.D. 491; In re Edison, 30 App.D.C. 321, 1908 C.D. 327; In re Ellis, 24 CCPA 759, 86 F.2d 412, 31 USPQ 380 (1936); and Hemphill Co. v. Coe, 74 App.D.C. 123, 121 F.2d 897. Citing Ellis three times, Hemphill twice, and the others once, the court appears to derive its “patentably different” rule merely from certain words in those opinions without too much thought for their context, a rule clearly in conflict with the result we now reach. Since Barratt v. Duell, supra, is referred to in each of the above cases except Ellis, and in Judge Almond’s dissent, I will first comment on it.

Barratt was a case in the Court of Appeals for the District of Columbia in 1899 when that court was the sole reviewing court for the Patent Office. The same court had previously considered an earlier application on the same invention. Barratt v. Seymour, 11 App.D.C. 177, 1897 C.D. 506. In that first case the court’s opinion had suggested that the applicant file a bill in equity under R.S. 4915, a procedure then permitted even after appeal. Instead, he filed a new application “for the same subject matter * * * with more full and ample specifications and drawings, a more thorough showing of the prior condition of the art, and evidence bearing on the patentability of the alleged invention.” The Commissioner rejected on the ground of “res adjudicata” by reason of the court decision and also for “want of patentable novelty.” The court affirmed. The court’s inconclusive view of the binding effect of its prior decision has been quoted above. What seems to impress the author of the dissenting opinion here is the series of questions the court asked itself:

* * * after exhaustion of the manifold right of appeal allowed to him by the great liberality of the patent laws [there were more appeals then than now], why should a second application be allowed or entertained ? [2] Is there any reason why the determination of the matter should not be regarded as conclusive? [3] If a second application could be regarded as proper, why not ten or twenty successive applications? [4] Where are the applications to stop, and what would become of the public business, if it were in the power of one person to obstruct the operations of the Patent Office by repeated and persistent applications ? These questions answer themselves.

Far from being an able expression of the public policy considerations which should apply, this impresses me as a burst of rhetoric considerably removed from reality. Answering these questions in sequence, [1] Allowing and entertaining an application must be distinguished. The Patent Office has to entertain every application. Allowance depends on compliance with the statutory prerequisites. The second application may comply whereas the first did not. If I apply for a driver’s license, I have to pass eye and driving tests. I may fail. If I come back with glasses and the requisite skill, should my new application be entertained and allowed? Or am I forever barred because I appealed the first denial? [2] Yes, there is every reason why the first determination should not be conclusive. The applicant may be bringing the required statutory quid pro quo which he did not bring before. [3] Why not ten or twenty? To be realistic, why not two or three? Is this not authorized practice? [4] The applications will stop when the application offers nothing new and the applicant is merely repeating himself, whereupon the Office will be justified in merely denying them for the same reasons as previously stated. No applicant will keep this up very long. As for what will become of the public business, one applicant filing a new application every year or two, out of 90,000 a year, will not much impede the business of the Office, especially when the examiner need not make a new search. These seem to me to be the answers to the court’s questions in Barratt and I do not find much support in them for application of res judicata. It seems to me a proper function of the Patent Office to send applicants away patentless until they have learned what they must do to comply with the law. They do not always know. It is sometimes unclear. The law has a way of changing. Ex parte Budde, supra, Brenner v. Manson, 383 U.S. 519, 86 S.Ct. 1033, 16 L.Ed.2d 69.

There is no law to prevent filing applications and every application filed is required by law to be examined. 35 U.S.C. § 131. What is there to be gained by telling an examiner- — who has perhaps not been to law school — to reject a second application which is not materially different from one previously rejected, whether or not appealed, for “res judicata” instead of for the same reasons applied in the first case, whatever they may have been? See 35 U.S.C. § 132. Apparently the Patent Office has never made up its mind on this point. Compare MPEP 201.07, 201.11, and 706.03 (w). If the same reasons do not apply because the situation is different in some legally critical way, perhaps the application should be allowed. The matter is not one which can be suitably controlled by a single general rule, such as “patentably different” claims, whatever that means.

Blackford v. Wilder was an interference, an inter partes dispute over priority. So was another case decided by the same court shortly thereafter, Horine v. Wende, 29 App.D.C. 415, 1907 C.D. 615. That there is an essential difference between ex parte and inter partes cases with respect to res judicata in the Patent Office was long ago recognized. Emerson Stringham in “Patent Office Rejections as Res Judicata,” 9 JPOS 399 (1927), said:

It will be appreciated that these two questions are entirely distinct. An interference proceeding has determined for at least some purposes the rights of two parties who have in effect been involved in litigation with each other. The question of whether to reopen a decision that has been made in a contest between private parties is altogether different from the question of the extent to which an applicant for a patent should be regarded as having lost his right to a patent, because he discontinued his efforts to obtain a patent in ex parte proceedings.

In Horine the court, in applying the “principle of estoppel by former adjudication” said (emphasis mine) it was “equally applicable to proceedings of a judicial nature in the Patent Office.” An interference is of such a nature. What is said in opinions in such cases should not be applied unthinkingly to ex parte cases.

In re Edison, decided within two years after the Blackford and Horine cases in the same court, was an ex parte ease involving a second application containing claims at least some of which the Patent Office had held differed only in scope from claims of the earlier application which had been appealed twice to the Examiners-in-Chief and the Commissioner, as was then permitted. The second application had of course been through the same two appeals before reaching the court and had been rejected both for res judicata and unpatentability over the prior art. The court affirmed the former rejection, citing Barratt, Blackford, and Horine, saying “any changes merely broadening claims that have been once determined, do not affect the conclusiveness of the former adjudication.” Apparently there was no change other than the changes in the claims. The case resembles Lundberg. There was no apparent reason for a different decision than on the first application.

In re Ellis does not clearly indicate the legal basis of the affirmance. The claims stood rejected as unpatentable “over subject matter held unpatentable in the abandoned application” of the appellant, prosecuted through the Patent Office, an action under R.S. § 4915 having been commenced but dropped. Referring to the board decision on the abandoned case, the court said “as to all subject matter actually contained in any of its claims, * * * appellant is bound thereby,” citing In re Becker, 74 F.2d 306, 22 CCPA 843, (1934). The latter case involved res judicata as to some claims, the court, in affirming relying on Barratt, Edison, and in addition an inter partes trademark cancellation case. At the same time, the case was before the court on a rejection based on the same references used in the former case and the claims in question were substantially the same. The court in Ellis also cited In re Cole, 82 F.2d 405, 23 CCPA 1057, which was not a res judicata situation but a rejection on counts of a dissolved interference and prior art. At best, Ellis is a somewhat ambiguous precedent.

Hemphill v. Coe was first adjudicated in this court under the name In re Lawson, 70 F.2d 373, 21 CCPA 1091, one holding of the court being that the disclosure in the parent application was inoperative. A second application was filed but was subject to an intervening bar by public use unless the filing date of the parent was available. In considering the new rejection of the second application on the public use bar, the Court of Appeals for the District of Columbia refused to reconsider the question of inoperativeness which had been decided by this court, a question which related, of course, to the identical application on which this court had ruled. In effect, its decision was to accept as final the decision of this court on the inadequacy of the parent application as a disclosure. This seems to be a proper and reasonable application of res judicata principles having little or no bearing on an issue of patentability resting on the adequacy of the later application.

Having reviewed the precedents relied on in Prutton and returning to the decision in that case, it does not seem to me that the precedents support the test there applied of “patentably different” claims or the refusal to accept the finding of the board on new evidence that the claimed invention was a statutorily patentable invention. On policy and sound reasoning, I consider the result in Prutton to have been erroneous, putting aside, of course, the rejections on references which were not passed upon. I would overrule it and I consider that the majority decision here implicitly does so.

There are other decisions with which Judge Smith is dealing in his concurring opinion and which I therefore am not discussing, being content to express agreement with his views.

“A person shall be entitled to a patent unless * * *.” So begins 35 U.S.C. § 102 wherein certain statutory conditions for patentability are recited. Similarly, section 101 says that “Whoever invents or discovers” certain kinds of inventions “may obtain a patent therefor, subject to the conditions and requirements of this title.” An applicant for patent is entitled to a patent as a matter of statutory right when he meets the “requirements and conditions.”

Chapter 11 of Title 35 states how application for patent shall be made and chapter 12 opens with section 131 which says:

The Commissioner shall cause an examination to be made of the application and the alleged new invention; and if on such examination it appears that the applicant is entitled to a patent under the law, the Commissioner shall issue a patent therefor. [Emphasis added.]

Sections 120 and 121 expressly recognize the long-standing practice of filing successive applications.

Since every application has to be examined anyway, it does not seem that the doctrine of res judicata or the principles which underlie it have much practical application to ex parte practice in the Patent Office. The dissent herein suggests there is some significance to the fact that appeals have been taken outside the Patent Office to “a Federal appellate tribunal,” seeming to concede that below this level or prior to taking such appeal a different situation may prevail. I am unable to see significance in this distinction. If an applicant is entitled to the examination of a new application, as he certainly is under the statute, it seems to me he is entitled to the concomitant rights of review which go with it. It must be remembered that we have a limited jurisdiction. We never decide the right to a patent. All we decide is whether a particular rejection was right or wrong. Our decision governs “further proceedings in the case.” 35 U.S.C. § 144. In re Johnsen, 359 F.2d 905, 53 CCPA 1401. We cannot tell the Commissioner to issue a patent. Similarly, the courts of the District of Columbia, under 35 U.S.C. § 145, when they disagree with the rejection, can do no more than “authorize the Commissioner to issue such patent on compliance with the requirements of law.” (My emphasis.) They cannot compel him to issue it and they do not direct him to. After a judgment authorizing grant, he may refuse it for new reasons, and sometimes does. Decisions on either type of review do not, therefore, finally settle the right to a patent so far as the Patent Office is concerned. So why should they settle it so far as the applicant is concerned ?

To summarize my views on the applicability of res judicata principles to ex parte patent prosecution, hoping thereby to reduce some of the inconsistencies, I do not regard the principles as wholly inapplicable. Where an appellate court has decided a specific question, for example that the disclosure of an application is inoperative as in Hemphill v. Coe and In re Lawson, or that claims are not supported by the disclosure of an application within the meaning of 35 U.S.C. § 112, as was the case with product claims 36, 38, and 39 in In re Szwarc discussed in Judge Smith’s opinion, the doctrine of collateral estoppel should normally prevent relitigation of that issue. The broader, all-inclusive issue of the patentability of claims, however, depends on numerous factors which may be found in the words of the claims themselves, in the disclosures of the specification, in extraneous evidence, in factors relating to the admissibility of evidence, and possibily elsewhere. A change in any one of these considerations may make the difference between patent-ability and unpatentability and no simple general rule, such as whether the claims alone are “patentably different,” can be controlling.

Res judicata is not the simple principle it may appear to be on first acquaintance and was devised in connection with the litigation of disputes, not with respect to the application for government grant of statutory rights dependent for issuance on compliance with stated conditions. The several policies which underlie it such as putting an end to controversy, conserving the time of the courts, avoiding inconsistent decisions, and encouraging the making of the best case the first time, must be balanced against the policies underlying the patent laws, particularly bringing about the disclosure of technology in issued patents and encouraging the investment of risk capital by granting patent rights, whenever inventions patentable under the statutes are presented. It is not in the public interest to prevent the issuance of patents on such inventions. In the administrative process of patent granting, including appellate review of rejections, estoppel by prior judgment should be applied only in the clearest cases of attempted reargument of previously decided issues.

I vote to reverse in the present case because the issue here is different from that decided on the prior application.

1 . Thirteen members of the board participated, lacking but one member who disqualified himself. Three opinions were written, the two members who had been on the board deciding Ex parte Schott, 136 USPQ 383, disagreeing with the repudiation of that case by the majority. A third member appears to have felt that Schott should have been distinguished on its facts.

2 . There were two additional rejections on sejiarate prior art references, besides the one the board reversed, which the court did not reach because of its affirmance of the res judicata rejection.

3 . In this connection I cannot refrain from commenting on the following incredible passage at the end of the solicitor’s brief:

At the present time no Patent exists on the claimed compounds. If appellant obtains the relief he seeks, namely a patent on those compounds, the public right to be free of the patent monopoly is surely impaired. [Emphasis added.]

The public has no right to be free of a patent monopoly on the compounds unless it has a right to the compounds. The determination of the Patent Office in this very case that they are patentable, in the absence of a holding of res judicata, is proof enough that the public has no right to them, that they are not in the public domain. Why, then, has the public a “right to be free of the patent monopoly” ? If the solicitor means that res judicata' gives the public the right to them, then he is assuming the very point he is trying to prove.