August 01, 1998
In a major decision on May 4, 1998, In re Zurko, No. 96-1258 (Fed. Cir. 1998), a unanimous twelve-judge Court of Appeals for the Federal Circuit soundly rejected the Patent and Trademark Office's concerted efforts to lower the court's standard of review for findings of fact by the Patent and Trademark Office ("PTO") Board of Patent Appeals and Interferences ("BPAI").
As the court pointed out: "The Commissioner has campaigned aggressively for this court to review factual findings underlying the board's patentability determinations using the more deferential substantial evidence standard found in . . . the Administrative Procedure Act ('APA')." This would have meant that findings of fact by the BPAI would be reversed on appeal to the Federal Circuit only if they were "arbitrary (or) capricious" or "unsupported by substantial evidence." The PTO argued that the APA required this standard since the PTO was not specifically excepted by statute from the provisions of that Act.
The court rejected that argument, noting that long before enactment of the APA, reviewing Federal courts would reverse decisions of the PTO if they were determined to be "clearly erroneous" and that the APA "did not limit or repeal additional requirements imposed by statute or otherwise recognized by law." A rather detailed history of judicial review of PTO decisions, as well as of the APA itself, supported the court's view. The court concluded:
"From this brief historical survey, we see that no patent statute speaks explicitly to the standard to be used when reviewing decisions of the board. But the common law recognized several standards prior to 1947, including clear error and its close cousins. Thus, we conclude that our more searching clear error standard of review is an 'additional requirement' that was 'recognized' in our jurisprudence before 1947, which we therefore continue to apply under the exception in section 559 (of the APA)."
The court went on discuss in detail the common law doctrine of stare decisis and held that the PTO did not argue any of the traditional reasons for departing from stare decisis. It stated: "While it is unclear what prejudice might befall patentees and patent applicants were the standard to be changed, the Commissioner has made no suggestion that our current standard of review is unworkable, intolerable, prejudicial, burdensome, or even that it adversely affects the administration of the patent system."
This is a very important decision for inventors who seek U.S. patents. It means that the PTO will continue to be closely supervised by the Federal Circuit Court of Appeals. Quite simply, inventors cannot be denied patents based on Patent Office findings that the court determines are clearly erroneous - a result that would have been possible if the court had not ruled as it did. Given the compelling reasoning underlying the court's ruling and the fact that it was unanimous, this decision should put an end to the PTO's campaign for a less exacting standard of judicial review.
Reprinted with permission of the Washington Legal Foundation. Copyright 1998.
*Hon. Gerald J. Mossinghoff is Senior Counsel to the Arlington, Virginia law firm Obion, Spivak, McClelland, Maier & Neustadt. A former Assistant Secretary of Commerce and Commissioner of Patents and Trademarks, Mr. Mossinghoff is a Visiting Professor of Intellectual Property Law at the George Washington University School of Law, and is a Vice Chairman of the Federalist Society's Intellectual Property Practice Group.