Agilent Technologies, Inc. v. Waters Technologies Corp.

United States Court of Appeals
for the Federal Circuit
______________________
AGILENT TECHNOLOGIES, INC.,
Appellant
v.
WATERS TECHNOLOGIES CORPORATION,
Appellee
______________________
2015-1280
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board, in No. 95/001,947.
______________________
Decided: January 29, 2016
______________________
JOHN M. GRIEM, JR., Carter Ledyard & Milburn LLP,
New York, NY, argued for appellant.
ERIK PAUL BELT, McCarter & English, LLP, Boston,
MA, argued for appellee. Also represented by KIA LYNN
FREEMAN, DEBORAH M. VERNON.
______________________
Before MOORE, O’MALLEY, and TARANTO, Circuit Judges.
O’MALLEY, Circuit Judge.
Agilent Technologies, Inc. (“Agilent”) seeks review of a
final decision of the United States Patent and Trademark
2 AGILENT TECHNOLOGIES v. WATERS TECHNOLOGIES
Office Patent Trial and Appeal Board (“the Board”) in an
inter partes reexamination of U.S. Patent No. 6,648,609
to Terry A. Berger et al. (“the ’609 patent”). The thresh-
old question is whether Agilent is the right party to
appeal the reexamination decision. Because Aurora SFC
Systems, Inc. (“Aurora”), not Agilent, is the third-party
requester, Agilent lacks a cause of action to bring this
appeal. We, therefore, dismiss Agilent’s appeal.
I. BACKGROUND
A. The ’609 patent
We include some background information about the
claimed invention to provide context. The ’609 patent
relates to chromatography systems that use highly com-
pressed gas, compressible liquid, or supercritical fluid. In
liquid chromatography, a sample is first mixed with a
liquid and this mixture then flows through a chromatog-
raphy column that is typically packed with absorbent
particles or gel. The ’609 patent is directed to using a
pump as a pressure source for supercritical fluid chroma-
tography (“SFC”), a more efficient and advanced form of
chromatography. SFC uses pumps to regulate the flow of
compressible fluids, such as supercritical carbon dioxide,
through the column. Accurately controlling the flow in
this system is difficult and typically requires an expensive
pump.
The ’609 patent provides an alternative system for
SFC that allows for the effective use of a less expensive
and less precise pump than was required by the prior art.
The system regulates the flow of the compressible fluid
using pressure regulators and a restriction in the flow
stream. A forward-pressure regulator (“FPR”) is installed
directly downstream of the pump. Downstream of the
FPR, the flow is restricted with a precision restrictor,
which is also called an orifice. Downstream of the orifice
is a back-pressure regulator (“BPR”). “The series of an
FPR-orifice-BPR is designed to control the pressure drop
AGILENT TECHNOLOGIES v. WATERS TECHNOLOGIES 3
across the orifice, which dampens out oscillation from
noisy pressure signals caused by large ripples in the flow
leaving the pump.” ’609 patent col. 4 ll. 32-36. A differen-
tial pressure transducer can also be installed on the flow
lines around the restrictive orifice to “control” the pres-
sure drop across the orifice. As originally issued on
November 18, 2003, the ’609 patent had 11 claims, with
two independent claims, 1 and 9, directed to a system.
Claims 1 and 9 differed in their use of the word “restric-
tor” or “orifice,” this difference being immaterial for the
appeal. Dependent claim 4 added a differential pressure
transducer to control pressure drops across the restrictor.
B. Procedural History
In 2011, Appellee Waters Technologies Corporation
(“Waters”) brought suit against Aurora for, inter alia,
infringement of the ’609 patent in the United States
District Court for the District of Delaware in Waters
Technologies Corp v. Aurora SFC Systems, Inc., No. 1:11-
cv-00708-JEI-KW.
On March 27, 2012, Aurora filed a request for inter
partes reexamination of all claims of the ’609 patent. The
Request cited new prior art, including U.S. Patent No.
4,799,511 to Azimov (“Azimov”) and U.S. Patent No.
5,952,556 to Shoji (“Shoji”). On July 9, 2012, in response
to an initial Office Action rejecting all the claims of the
’609 patent, Waters amended independent claims 1 and 9
to incorporate claim 4 and added dependent claims 12 and
13, which recite the system of claims 1 and 9 respectively,
with the additional limitation: “wherein the flow stream
comprises CO2.”
According to Agilent, on or about August 2012, it ac-
quired substantially all of Aurora’s assets. Appellant Br.
8-9. As part of that acquisition, Agilent says it agreed to
be bound by the outcome of the two reexamination pro-
ceedings, including the ’609 reexamination and the pend-
ing patent infringement litigation. Id. At that point in
4 AGILENT TECHNOLOGIES v. WATERS TECHNOLOGIES
time, nothing was filed identifying Agilent in the reexam-
ination. In fact, after the examiner issued its Action
Closing Prosecution (“ACP”) on September 24, 2012 and
Waters filed its response, Aurora, not Agilent, submitted
third-party comments.
The examiner then issued a Right of Appeal Notice
(“RAN”), rejecting all remaining claims of the ’609 patent
on various grounds. The examiner found that amended
independent claims 1 and 9 were anticipated by Azimov
and that new dependent claims 12 and 13 were obvious in
view of Azimov and the Admitted Prior Art of the ’609
patent. The examiner also noted that the specification
itself showed that pumping carbon dioxide through a
pressure regulator and restrictors was well-known.
Waters filed a notice of appeal to the Board, and Au-
rora cross-appealed on March 8, 2013. The cross-appeal
notice took issue with the examiner’s failure to adopt the
proposed rejection of claims 1, 2, 9-11, 12, and 13 over
Azimov in view of Shoji. Aurora filed a request to change
the real party in interest from Aurora to Agilent on April
26, 2013. Agilent’s counsel began participating in the
proceedings along with counsel for Aurora.
The Board reversed all of the examiner’s rejections.
Aurora SFC Sys., Inc. v. Waters Techs. Corp., No. 2014-
003320, 2014 WL 4923558, at *17 (P.T.A.B. Sept. 29,
2014). According to the Board, Azimov did not anticipate
the independent claims because it does not disclose a
“differential pressure transducer.” The Board’s disagree-
ment with the examiner stemmed from the Board’s con-
struction of the word “control” to mean “to adjust to a
requirement” or to “regulate.” Id. at *6. This construc-
tion excludes shutting off a pressure drop across the
orifice, which is all the Azimov reference’s flow switch is
capable of doing. Id. at *10. The Board adopted the new
ground of rejection proposed in the cross-appeal as to
claims 1, 2, and 9-11, however, because Shoji teaches a
AGILENT TECHNOLOGIES v. WATERS TECHNOLOGIES 5
differential pressure transducer capable of controlling the
pressure drop across the orifice. The Board declined to
enter a new ground of rejection for claims 12 and 13
because the cross-appellant did “not explain how either
Azimov or Shoji, or a combination of the two, teaches or
suggests” the limitation of the flow stream comprising
CO2. Id. at *17. The Board’s decision listed Aurora as the
third-party requester and Aurora’s counsel as counsel for
the third-party requester.
Agilent appealed to this court. Waters moved to dis-
miss the appeal for lack of standing. A motions panel
denied the motion, directing the parties to address the
issue in their briefs instead.
II. DISCUSSION
The parties dispute our jurisdiction over this appeal.
Agilent asserts that we have jurisdiction over this appeal
under 35 U.S.C. § 141. 1 Waters disagrees, arguing that,
while § 141 is the right statute, Agilent is the wrong party
to bring this appeal because Aurora—not Agilent—is the
third-party requester of the inter partes reexamination.
Although the parties frame this dispute as one relat-
ing to jurisdiction, it is properly framed as one relating to
whether Agilent has a cause of action. Jurisdiction and
standing are concepts distinct from each other, though
they are related for Article III purposes, and distinct from
having the right to maintain a cause of action. 2 These are
1 Agilent correctly notes that, because the inter
partes reexamination was filed before the Leahy-Smith
America Invents Act, Pub. L. No. 112-29, 125 Stat. 284
(2011), discontinued such proceedings, the pre-AIA ver-
sions of the relevant provisions apply.
2 Davis v. Passman, 442 U.S. 228, 239 n.18 (1979)
(“Thus it may be said that jurisdiction is a question of
whether a federal court has the power, under the Consti-
6 AGILENT TECHNOLOGIES v. WATERS TECHNOLOGIES
not interchangeable terms and should be used with care.
“[I]t is well settled that the failure to state a proper cause
of action calls for a judgment on the merits and not for
a dismissal for want of jurisdiction.” Engage Learning,
Inc. v. Salazar, 660 F.3d 1346, 1353 (Fed. Cir. 2011)
(quoting Bell v. Hood, 327 U.S. 678, 682 (1946)).
The question the parties raise, in fact, is whether Ag-
ilent is a member of a class of litigants that may enforce a
legislatively created right or obligation created under 35
U.S.C. § 141. “If a litigant is an appropriate party to
invoke the power of the courts, it is said that he has a
‘cause of action’ under the statute, and that this cause of
action is a necessary element of his ‘claim.’” Davis, 442
U.S. at 239; see also Shapiro v. McManus, 136 S. Ct. 450,
455 (2015) (“We have long distinguished between failing
to raise a substantial federal question for jurisdictional
purposes . . . and failing to state a claim for relief on the
merits”). “Whether petitioner has asserted a cause of
action, . . . depends not on the quality or extent of her
injury, but on whether the class of litigants of which
petitioner is a member may use the courts to enforce the
right at issue.” Davis, 442 U.S. at 239 n.18. We turn to
that properly identified question.
The parties agree that Agilent’s right to appeal, if
any, comes from 35 U.S.C. § 141. We, therefore, turn to
tution or laws of the United States, to hear a case; stand-
ing is a question of whether a plaintiff is sufficiently
adversary to a defendant to create an Art. III case or
controversy, or at least to overcome prudential limitations
on federal-court jurisdiction; cause of action is a question
of whether a particular plaintiff is a member of the class
of litigants that may, as a matter of law, appropriately
invoke the power of the court; and relief is a question of
the various remedies a federal court may make available.”
(internal citations omitted)).
AGILENT TECHNOLOGIES v. WATERS TECHNOLOGIES 7
the language of the statute. After all, statutory interpre-
tation focuses on the language of the statute itself, and a
statute’s unambiguous language is ordinarily regarded as
conclusive. See Wyeth v. Kappos, 591 F.3d 1364, 1369
(Fed. Cir. 2010).
A patent owner, or a third-party requester in an
inter partes reexamination proceeding, who is in
any reexamination proceeding dissatisfied with
the final decision in an appeal to the Board of Pa-
tent Appeals and Interferences under section 134
may appeal the decision only to the United States
Court of Appeals for the Federal Circuit.
35 U.S.C. § 141. 35 U.S.C. § 315(b) further provides that:
A third-party requester [ ] may appeal under the
provisions of section 134, and may appeal under
the provisions of sections 141 through 144, with
respect to any final decision favorable to the pa-
tentability of any original or proposed amended or
new claim of the patent . . . .
These two statutory provisions thus appear, on their face,
to confer the right to appeal an adverse reexamination
decision only on patent owners and third-party re-
questers.
In its opening brief, Agilent alternately calls itself the
“successor-in-interest” and “privy” of Aurora, and argues
that it, therefore, “enjoys the protection extended by the
statutes.” Appellant Br. 22. Waters responds that Ag-
ilent is, at best, merely Aurora’s privy, that mere privies
do not enjoy the right to appeal under the statutes, and
that Agilent does not become the third-party requester by
being Aurora’s privy. In reply, Agilent abandoned its
original statement that it is Aurora’s privy and argues
that it is, in fact, Aurora’s factual and legal successor-in-
interest and, therefore, that it is the true third-party
requester. After explaining why Agilent was correct to
8 AGILENT TECHNOLOGIES v. WATERS TECHNOLOGIES
abandon its “privy” argument, we evaluate Agilent’s claim
that the asset purchase on which it relies confers on it the
status of a third-party requester for purposes of pursuing
this appeal.
As Waters points out, while § 141 does not reference
privies of third-party requesters when defining the cate-
gories of litigants who may appeal from reexamination
decisions, other statutory provisions governing inter
partes reexaminations specifically mention privies.
Provisions governing estoppel for inter partes reexamina-
tions state:
(a) . . . [O]nce an order for inter partes reexamina-
tion of a patent has been issued . . . neither the
third-party requester nor its privies may file a
subsequent request for inter partes reexamination
of the patent until an inter partes reexamination
certificate is issued . . .
(b) . . . if a final decision in an inter partes reex-
amination proceeding instituted by a third-party
requester is favorable to the patentability of any
original or proposed amended or new claim of the
patent, then neither that party nor its privies may
thereafter request an inter partes reexamination
of any such patent claim on the basis of issues
which that party or its privies raised or could have
raised in such civil action or inter partes reexami-
nation proceeding . . . .
35 U.S.C. § 317 (emphases added). Thus, Congress explic-
itly estops privies from requesting or maintaining certain
inter partes reexaminations against the same patent.
The fact that Congress references privies here, but not in
§ 141, indicates that Congress recognized the difference
between the third-party requester and its privies. Res-
Care, Inc. v. United States, 735 F.3d 1384, 1389 (Fed. Cir.
2013) (“A cardinal doctrine of statutory interpretation is
the presumption that Congress’s ‘use of different terms
AGILENT TECHNOLOGIES v. WATERS TECHNOLOGIES 9
within related statutes generally implies that different
meanings were intended.’” (quoting 2A Norman Singer,
Statutes and Statutory Construction § 46.06 (7th ed.
2007))). Because Congress explicitly provided for appeals
of reexaminations by third-party requesters but not
privies, we conclude that, based on the unambiguous
language of the statutes, mere privies lack a cause of
action to appeal. “[W]hen a statute provides a detailed
mechanism for judicial consideration of particular issues
at the behest of particular persons, judicial review of
those issues at the behest of other persons may be found
to be impliedly precluded.” Pregis Corp. v. Kappos, 700
F.3d 1348, 1358 (Fed. Cir. 2012) (citation omitted).
But Agilent does not stop there; it also calls itself Au-
rora’s successor-in-interest, and, by its reply brief, con-
tends that “Agilent is far more than a ‘mere privy’—it is
the legal and factual successor in interest to Aurora.”
Appellant Reply Br. 12. Agilent maintains that it is the
latter because it bought substantially all of Aurora’s
assets before the reexamination concluded, including
rights relating to the underlying reexaminations. Agilent
contends that this fact alone is sufficient to allow it to
substitute itself for Aurora as the third-party requester,
both for purposes of participation in the reexamination
and for purposes of § 141.
35 U.S.C. § 100(e) defines the term “third-party re-
quester” in Title 35 to mean “a person requesting ex parte
reexamination under section 302 or inter partes reexami-
nation under section 311 who is not the patent owner.”
Agilent asks us to assign significance to the tense of the
verb “request” in § 100(e)—specifically, the fact that the
“third-party requester” is the person “requesting” reexam-
ination as of any given point in time and not the person
“who requested” reexamination upon initiation. While the
language of the statute does not explicitly forbid a change
in the identity of the third-party requester over the course
of the proceeding or on appeal, however, it similarly does
10 AGILENT TECHNOLOGIES v. WATERS TECHNOLOGIES
not appear to address whether and under what circum-
stances a change in the identity of the third-party re-
quester can occur. See Vaillancourt v. Becton Dickinson &
Co., 749 F.3d 1368, 1370 (Fed. Cir. 2014) (rejecting former
patent owner’s argument that § 141 “does not explicitly
bar” delegation of appeal rights and holding that “[t]his
court sees no reason . . . to extend that procedural right
beyond what is clearly set forth in § 141”). At best, it does
not inform us either way about how to resolve the parties’
debate. 3
Waters argues that one could just as easily read 35
U.S.C. § 311, which governs a “Request for inter partes
reexamination,” to suggest that a third-party requester
cannot change over the course of a proceeding. Section
311 states that “[a]ny third-party requester at any time
may file a request for inter partes reexamination by the
Office of a patent,” and the request shall “be in writing,
include the identity of the real party in interest, and be
accompanied by payment of an inter partes reexamination
fee.” It is undisputed that Agilent did not perform any of
these actions.
We decline to decide whether a successor-in-interest
becomes the third party requester for purposes of either
3 Vaillancourt, 749 F.3d at 1368-69, does little to
advance Agilent’s claim. That case is largely inapposite,
as it does not address § 141 as it applies to third-party
requesters. Rather, it holds that the identity of the patent
owner can change for purposes of § 141 with the complete
transfer of a patent’s ownership after the reexamination
proceeding but before an appeal to this court. Id. Where-
as ownership of a patent is the sine qua non of a patent
owner, a party’s status as a third-party requester does not
derive, at least in the first instance, from the ownership of
a set of particular assets.
AGILENT TECHNOLOGIES v. WATERS TECHNOLOGIES 11
§ 100(e) or § 141 because Agilent has not established that
it is, in fact, Aurora’s successor-in-interest.
According to Agilent, it “acquired substantially all the
assets of Aurora (including all rights relating to the
reexaminations)” in August 2012, five months after the
filing of the reexamination request. Appellant Br. 8-9.
We do not know precisely what was transferred, but
“substantially all” does not mean “all.” After the transac-
tion, Aurora remained a distinct, ongoing entity. And
after the examiner issued an ACP in September 2012,
Waters filed a response, and in November, it was Auro-
ra—not Agilent—who submitted third-party comments.
That November 2012 submission—which significantly
post-dates the asset purchase agreement—belies Agilent’s
claim that it effectively stepped into Aurora’s shoes as the
third-party requester upon taking over Aurora’s assets.
Agilent never addresses this point, except to state at oral
argument that, “I believe that that was simply so that
legal knowledge and strategies could be transitioned
among counsel.” Oral Argument at 2:45-3:02, available at
http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20
15-1280.mp3.
It was not until April 26, 2013—approximately eight
months after the asset transfer and one month after the
cross-appeal to the Board was noticed—that Aurora filed
a request to change the “real party in interest” from
Aurora to Agilent. Neither Aurora nor Agilent requested
that Agilent be substituted as the “third-party requester,”
however. At the hearing before the Board on April 23,
2014, Aurora’s counsel appeared on behalf of Aurora as
the respondent. She never withdrew as counsel from the
reexamination proceeding. Aurora was subsequently
listed in the caption of the Board’s decision as the third-
party requester.
In addition, Aurora remains a party to the underlying
district court litigation. Agilent makes much of the fact
12 AGILENT TECHNOLOGIES v. WATERS TECHNOLOGIES
that, “[a]s part of th[e] acquisition, Agilent also agreed to
be bound by the outcome of the two reexamination pro-
ceedings, and the patent infringement litigation.” Appel-
lant Br. 9. But in doing so, it ignores the fact that Aurora
would also be bound by the outcome of the patent litiga-
tion, and, therefore, retains an apparent stake in the
outcome of the case. Indeed, in November 2012, Waters
moved for leave to amend its complaint and add Agilent
as a defendant in the district court litigation. See Motion
for Leave to Add Agilent and File Amended and Supple-
mental Complaint, Dkt. 110, Waters, No. 1:11-cv-00708-
JEI-KW. Aurora filed an answering brief opposing the
motion, arguing, inter alia, that “Waters fails to explain
why the transfer of Aurora’s assets changes the underly-
ing infringement analysis.” See Answering Brief in Oppo-
sition re Motion for Leave to Add Agilent, Dkt. 122 at 16,
Waters, No. 1:11-cv-00708-JEI-KW. On January 25, 2013,
the district court issued an order granting leave to amend.
Order Granting Motion for Leave to Add Agilent, Dkt.
149, Waters, No. 1:11-cv-00708-JEI-KW. Because Aurora
is still a party to and will be bound by the judgment in the
underlying infringement litigation, we do not find that
Agilent has established that it is Aurora’s successor-in-
interest or has otherwise “stepped into the shoes of Auro-
ra” for all intents and purposes. See Appellant Br. 17.
Finally, though not dispositive, we note that Agilent
has not furnished this court with a copy of the asset
transfer agreement, while simultaneously relying on a
portion of its contents as the basis for its right to appeal.
Agilent provided only the four-page Declaration of Mi-
chael Tang, Agilent’s Assistant General Counsel, to
establish that Agilent has “succeeded to all of Aurora’s
legal claims and liabilities relating to the purchased
Business.” Appellant Reply Br. 3. Although we do not
doubt the veracity of the statements made in the declara-
tion, it is an incomplete account of the agreement and
does not allow us to verify all of Agilent’s claims and
AGILENT TECHNOLOGIES v. WATERS TECHNOLOGIES 13
develop our own understandings. For example, the decla-
ration refers several times to the Seller’s “Business,” “the
terms and conditions set forth in this Agreement,” and
“the Excluded Assets,” yet fails to provide definitions for
any of these terms. See Tang. Decl. ¶¶ 2, 5.
The burden of demonstrating a cause of action rests
on Agilent, the party seeking relief. See Jazz Photo Corp.
v. ITC, 264 F.3d 1094, 1102 (Fed. Cir. 2001) (“The initial
burden is upon the complainant to establish its cause of
action”). Agilent has had ample opportunity to establish
itself as Aurora’s successor-in-interest, but has failed to
do so. Therefore, we need not reach whether a successor-
in-interest would qualify as a third-party requester. For
the foregoing reasons, we hold that Agilent lacks a statu-
tory cause of action to appeal the reexamination decision
to this court. Accordingly, we dismiss.
DISMISSED