BPAI Factual Findings Affirmed Based on Substantial Evidence

In re Stauffer (Fed. Cir. 2008) (nonprecedential)

PatentLawPic381This is a nice idea: A device for automatically printing out caller ID records. What I prefer (and have used in the past) is to receive an e-mail receipt for all incoming calls and with messages attached in an mp3.

SEI (the party in interest) has a simple enough claim:

1. A caller ID printing device, comprising:

a controller configured to detect caller ID information from an incoming call; and
a printer configured to automatically print the caller ID information; and
a message template onto a call record immediately after the first receipt of a first ring signal and without user intervention.

The BPAI rejected the claim as obvious. On appeal, the CAFC reminded the applicant that the BPAI’s underlying factual determinations need only be supported by “substantial evidence.”

‘Substantial evidence is evidence that “a reasonable mind might accept as adequate to support a conclusion.” In re Gartside, 203 F.3d 1305 (Fed. Cir. 2000). “[W]here two different inconsistent conclusions may reasonably be drawn from evidence in the record, an agency’s decision to favor one conclusion over the other is the epitome of a decision that must be sustained upon review for substantial evidence.” In re Jolley, 308 F.3d 1317 (Fed. Cir. 2002). This court will not determine that a decision made by the Board is unsupported “simply because the Board chose one conclusion over another plausible alternative.” Id.’

In this case, the panel easily found that two references combined teach each element of the invention and render it obvious.

15 thoughts on “BPAI Factual Findings Affirmed Based on Substantial Evidence

  1. 15


    If your interested in § 145, I discussed some case law related to the introduction of new evidence at the district court level in Patently-O Bits and Bytes No. 53.

  2. 14

    Most of the comments here are correct, but we’re overlooking the elephant in the room.

    Step Back, 7:46 AM notes that the burden of proof *at the Board* is “preponderance,” and that burden by law is on the *Office.* However, in most recent Board decisions, and in the recent Notice of Final Rulemaking on the Appeal Rule, the Board states that the standard of review applied by the Board shifts the burden of proof to the *appellant* to demonstrate error.

    That’s totally illegal, and brings into question whether the Board is composed of “persons of competent legal knowledge” 35 U.S.C. § 6. In the last few years, the Office’s entire legal structure – both the part led by GC Toupin and the part led by Dep Comm’r Love – have totally dissolved, into farce unrecognizable to American notions of “the rule of law.”

    Most recent decisions of the Board can be voided based on this defect – when a tribunal applies the wrong standard of review, any further appeal results in the decision below being vacated and remanded on a per se basis, once that error in standard of review is shown. Cooper Industries Inc v. Leatherman Tool Group, Inc., 532 U.S. 424, 443, 58 USPQ2d 1641, 1649 (2001) (vacating a decision of the Ninth Circuit based solely on the Ninth Circuit’s application of an incorrect standard of review of a decision by a district court); Dickinson v. Zurko, 527 U.S. 150, 165, 50 USPQ2d 1930, 1936-37 (1999).

    New evidence can – and as a practical matter must – be introduced in any § 145 D.C.D.C. action.

  3. 13

    step back,

    In Patently-O Bits and Bytes No. 53, I discuss the Takeda case referred to by somebody above.

    If you’re interested, I made two separate comments related to Takeda and the ability for the aggrieved applicant to introduce “new evidence.” As it turns out, the Court will consider new evidence if the applicant is not negligent in failing to raise the new evidence before the BPAI. It worked for Takeda because it was faced with a double patent rejection and learned of one prior art patent after the BPAI briefing was complete.

    From Takeda, I have learned that a § 145 proceeding is not a de novo review. De novo applies where there is new evidence, and new evidence will be admissible if the plaintiff/aggrieved applicant was not negligent in submitting the new facts before the briefing to the BPAI was complete.

    You are very much correct about gambling by not submitting your expert witness up front.

  4. 12

    Jim H,

    The more you talk, the more we converge into 100% agreement.

    The burden of proof before the BPAI is preponderance of evidence.
    Once an Applicant submits rebuttal evidence, the prima facie case dissolves and patentability is determined by preponderance of evidence in the record as a whole and persuasiveness of arguments.

    I recall having seen one decision pursuant to 35 USC § 145 where the DC wanted good and sufficient cause for admitting evidence that had not been previously submitted to the USPTO. So you’re taking a gamble by not submitting your expert evidence up front.

  5. 11

    Jim H.

    I agree with you. Getting out of the PTO (where facts are regarded as something to be made up and not found objectively) and into USDC would appear to favor the applicant.

    It’s just that USDC will be an expensive route.

    For a good example where an aggrieved applicant did proceed to the USDC, see Takeda Pharmaceutical Co., Ltd. v. Dudas (Case 1:06-cv-01640-TFH). J. Hogan (chief of USDC for DC) smacks BPAI upside the head.

  6. 10


    Thanks for your insightful feedback. Please note that I have not disagreed with step back, and I agree with both of you that the applicant should and must present facts during the examination to preserve the issues for the record for further challenges. I have not said the step back has been incorrect.

    It is just that, other than the costs and expenses associated with a district court trial, neither you nor step back have denied the opportunity afforded to the aggrieved applicant to have an independent trier of fact (e.g., district court) make independent factual findings that may differ from the examiner’s and/or BPAI’s.

    I agree with your statement that substantial evidence is not higher than a preponderance of the evidence. That is why it seems to me that a district court challenge would provide a second bite at the factual findings apple for the aggrieved applicant in which the PTO will have to meet the higher preponderance of the evidence standard again at which time they could lose.

  7. 9

    “There are not many things more challenging than trying to argue an erroneous factual determination where there is substantial evidence to support the finding of fact, and to me, a trial in a district court avoids this standard of review by lowering the bar to preponderance of the evidence and making the PTO argue its position and identification of the PHOSITA.”

    The substantial evidence requirement is not higher than a preponderance of evidence. Substantial evidence is a burden of production. Not the entire burden of proof.

    The burden of proof is the burden of production plus the burden of persuasion.

    The determination of obviousness is a legal conclusion. During examination, the burden on the examiner is to establish obviousness by a preponderance of the evidence. In other words, the examiner must present evidence that makes it more likely than not that the claim(s) is(are) obvious.

    First, the examiner has to answer the factual inquiries. The examiner’s burden of production when answering these factual inquiries is substantial evidence, i.e. the examimer must produce enough evidence that a reasonable person could accept as establishing the fact.

    Once the examiner has met this burden of production for each factual inquiry, the examiner must meet the burden of persuasion (preponderance). To do that, the examiner has to produce reasoning that establishes it is more likely than not that the claim(s) is(are) obvious.

    If the examiner does not meet his/her burden of pfoduction, i.e. does not produce substantial evidence to establish the facts as alleged, the case is over. If the applicant’s evidence is more probative than the examiner’s evidence, the applicant will win. Well, should win. This is the government we’re dealing with.

    step back has been correct on this for a while now. during prosecution, applicants should get in the habit of submitting evidence. Most examiner “findings” are not supported by substantial evidence, they are simply made up by the examiner (or the SPE/QAS/OPQA/whateverotheruselessdeadweightdonothingGS-15).

  8. 8

    step back,

    I agree that a Rule 132 could be submitted during the examination, but what if the BPAI comes to a different conclusion based upon other facts than those presented in a Rule 132 affidavit and affirms the examiner’s determination of obviousness? I suggest that the applicant is stuck and cannot prevail if appealed to the CAFC because of the substantial evidence standard of review.

    However, if the applicant still thinks an affirmation of an examiner’s obviousness rejection by the BPAI is wrong given the facts of the application record including those presented by him in the Rule 132 affidavit (i.e., the factual determination made by the BPAI was errorneous), then it seems that he would have a better chance with a trial against the PTO because the burden is a preponderance of evidence instead of substantial evidence (assuming expenses are not a factor). Isn’t that correct? A trial de novo?

    I agree that it is a more costly option and there is no guarentee of success, but in the post-KSR world where the PTO’s breadth of determining obviousness has been expanded, it seems to be a way to attack the PTO’s determination of “obviousness” by making the PTO prove — and not conclude — obviousness by a higher burden of proof. It allows a neutral trier of fact to determine obviousness and not the examiner of three person comprising the BPAI.

    There are not many things more challenging than trying to argue an erroneous factual determination where there is substantial evidence to support the finding of fact, and to me, a trial in a district court avoids this standard of review by lowering the bar to preponderance of the evidence and making the PTO argue its position and identification of the PHOSITA.

  9. 7

    Jim H.

    It’s expensive to pursue a full trial in District Court. And there is no guarantee of success.

    If you have an expert witness, why not present his Rule 132 to the examiner in the first instance, why not have the Rule 131 on record when the BPAI reviews the case?

  10. 6

    step back,

    I agree with you that the appeal to the CAFC from the district court will be reviewed with the “substantial evidence” and that the review will be conducted using the record below. I see that. Also, I read the Stauffer opinion and recognize the weaknesses of the record as stated by the CAFC.

    I do not see that district court as an appellate-type court where the district court judge reviews the PTO record for substantial evidence. Instead, with a district court case, I interpret “adjudge” as meaning a DE NOVO trial where the aggrieved applicant has the ability to build a new and fresh record with expert witness testimony, declarations, and other admissible evidence (which could contain the same information as that in a Rule 132 affidavit). Am I wrong that the district court proceeding is de novo and providing a second bite of the application apple? If I am correct, doesn’t 35 USC § 145 provide a de novo bite of the apple where the PTO must prove the issue of obviousness or the applicant prove the issue of non-obviousness by a preponderance of evidence (i.e., not substantial evidence)? In other words, isn’t the PTO removed from deciding the issue of obviousness and is tasked with proving the issue? In other words, wouldn’t the decision of obviousness/ non-obviousness ultimately rest with the trier of fact and not one examiner and three members of the BPAI?

    The strategic advantage I am seeing (but I could be wrong) is this: a trier of fact de novo (bench trial or jury) could come to a different conclusion than the examiner when considering the expert testimony (which may or may not be the same evidence contained in a Rule 132 affidavit). In other words, the trier of fact would be permitted to choose applicant’s conclusion over another plausible alternative provided by the PTO by a preponderance of evidence and not substantial evidence.

  11. 5

    Jim H.

    You kind of get the point and also miss it at the same time.
    CAFC will review district court fact findings under a substantial evidence basis also.
    You have a right to present expert witness testimony to the examiner. It’s called a Rule 132 affidavit. Problem is, that if you don’t present “evidence” while prosecuting the case, then there is no substantial evidence on your side of the “administrative record” when you get up to appeal at the CAFC level, and the CAFC by law must rule against you in regards to your challenges to the fact findings made by the administrative agency (i.e. USPTO). See 5 USC 706.

    Stauffer had no evidence entered in the record below. Therefore his appeal to the CAFC was a waste of time and money. The CAFC had no choice but to affirm. This is not new law. It’s been the law at least as far back as In re Gartside (year 2000). Hence, Stauffer is a nonprecedential decision. The CAFC is merely reminding practitioners that they waste their time trying to go this route.

  12. 4

    Interesting…but this device (or one quite similar to it) was actually sold by Radio Shack in the mid-1990s. I owned one.

    Phone rings…if not answered, it printed the number with “missed call”. If you answered, it waited until you hung up, then printed the number and call duration. Pretty good for billing and record-keeping in a small law office.

    Perhaps the USPTO should get some old catalogs from Radio Shack and other companies for its library, and have the examiners search them. Perhaps applicants should do this, as well? (Nah….)

  13. 3

    If an applicant disagrees with an adverse BPAI holding with respect to obviousness, why wouldn’t one seek a determination of obviousness in the district court pursuant to 35 USC § 145?

    “35 USC § 145: An applicant dissatisfied with the decision of the Board of Patent Appeals and Interferences in an appeal under section 134(a) of this title may, unless appeal has been taken to the United States Court of Appeals for the Federal Circuit, have remedy by civil action against the Director in the United States District Court for the District of Columbia if commenced within such time after such decision, not less than sixty days, as the Director appoints. The court may adjudge that such applicant is entitled to receive a patent for his invention, as specified in any of his claims involved in the decision of the Board of Patent Appeals and Interferences, as the facts in the case may appear, and such adjudication shall authorize the Director to issue such patent on compliance with the requirements of law. All the expenses of the proceedings shall be paid by the applicant.”

    Assuming for the sake of discussion the applicant has the financial resources, would not such adjudication take the form of a [de novo] trial in determining obviousness, thereby avoiding the higher burden of “sustantial evidence” of an appeal? Would not the applicant get to pit expert witnessess (i.e., those having ordinary skill in the art) in support of non-obviousness against the “expert” examiners in support of obviousness? In the post-KSR world where examiners have been given more breadth to issue obviousness rejections, would it not be more advantageous to go for a trial and have the PTO prove its position in a neutral playing field (assuming the court adjudicates by trial)?

  14. 2

    Where the f%ck is pds on this one . . . always b1tching and moaning about the Exr’s “lack of evidence” . . . ?????

  15. 1

    “1. A caller ID printing device, comprising:
    a controller configured to detect caller ID information from an incoming call; and
    a printer configured to automatically print the caller ID information; and
    a message template onto a call record immediately after the first receipt of a first ring signal and without user intervention. ”

    I don’t even want to know what argument the applicants tried to float in support of the non-obviousness of this claim. I am sufficiently ashamed of the human race already.

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