No. 98-377
In the Supreme Court of the United States
OCTOBER TERM, 1997
BRUCE A. LEHMAN,
COMMISSIONER OF PATENTS
AND TRADEMARKS, PETITIONER
v.
MARY E. ZURKO, THOMAS A. CASEY, JR.,
MORRIE GASSER, JUDITH S. HALL, CLIFFORD E. KAHN, ANDREW H. MASON, PAUL D.
SAWYER,
LESLIE R. KENDALL, AND STEVEN P. LIPNER
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
NANCY J. LINCK
Solicitor
ALBIN F. DROST
Deputy Solicitor
KAREN A. BUCHANAN
KENNETH R. CORSELLO
Assistant Solicitors
United States Patent and
Trademark Office
Arlington, Virginia 22215
SETH P. WAXMAN
Solicitor General
Counsel of Record
FRANK W. HUNGER
Assistant Attorney General
LAWRENCE G. WALLACE
Deputy Solicitor General
EDWARD C. DUMONT
Assistant to the Solicitor
General
WILLIAM KANTER
ALFRED MOLLIN
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
QUESTION PRESENTED
Section 12 of the Administrative Procedure Act (APA), now revised and reenacted
as 5 U.S.C. 559, provided that the Act did not "limit or repeal additional
requirements imposed by statute or otherwise recognized by law." The
question presented in this case is:
Whether a standard of judicial review more stringent than that specified
by the APA, purportedly used by courts before the adoption of the Act in
reviewing factual findings made by a particular agency, is an "additional
requirement * * * otherwise recognized by law" within the meaning of
Section 559.
No. 98-377
BRUCE A. LEHMAN,
COMMISSIONER OF PATENTS
AND TRADEMARKS, PETITIONER
v.
MARY E. ZURKO, THOMAS A. CASEY, JR.,
MORRIE GASSER, JUDITH S. HALL, CLIFFORD E. KAHN, ANDREW H. MASON, PAUL D.
SAWYER,
LESLIE R. KENDALL, AND STEVEN P. LIPNER
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
The Solicitor General, on behalf of the Commissioner of Patents and Trademarks,
respectfully petitions for a writ of certiorari to review the judgment of
the United States Court of Appeals for the Federal Circuit in this case.
OPINIONS BELOW
The opinion of the court of appeals sitting en banc (App., infra, 1a-27a)
is reported at 142 F.3d 1447. The earlier opinion of a panel of that court
(App., infra, 28a-34a) is reported at 111 F.3d 887. The opinions of the
Board of Patent Appeals and Interferences (App., infra, 35a-47a) are unreported.
JURISDICTION
The judgment of the court of appeals was entered on May 4, 1998. On July
24, 1998, the Chief Justice extended the time within which to file a petition
for a writ of certiorari to and including September 1, 1998. The jurisdiction
of this Court is invoked under 28 U.S.C. 1254(1).
STATUTORY PROVISIONS INVOLVED
1. Section 559 of Title 5 of the United States Code (drawn from Section
12 of the Administrative Procedure Act, Pub. L. No. 404, ch. 324, 60 Stat.
244) provides in pertinent part as follows:
§ 559. Effect on other laws; effect of subsequent statute
This subchapter, [and] chapter 7 * * * of this title, * * * do not limit
or repeal additional requirements imposed by statute or otherwise recognized
by law. Except as otherwise required by law, requirements or privileges
relating to evidence or procedure apply equally to agencies and persons.
Each agency is granted the authority necessary to comply with the requirements
of this subchapter through the issuance of rules or otherwise. Subsequent
statute may not be held to supersede or modify this subchapter, [or] chapter
7 * * * of this title, * * * except to the extent that it does so expressly.
2.
Section 701 of Title 5 of the United States Code (drawn from Sections 2
and 10 of the Administrative Procedure Act, Pub. L. No. 404, ch. 324, 60
Stat. 237) provides in pertinent part as follows:
§ 701. Application; definitions
(a) This chapter applies, according to the provisions thereof, except to
the extent that-
(1) statutes preclude judicial review; or
(2) agency action is committed to agency discretion by law.
(b) For the purpose of this chapter-
(1) "agency" means each authority of the Government of the United
States, whether or not it is within or subject to review by another agency,
but does not include-
(A) the Congress;
(B) the courts of the United States;
(C) the governments of the territories or possessions of the United States;
(D) the government of the District of Columbia;
(E) agencies composed of representatives of the parties or of representatives
of organizations of the parties to the disputes determined by them;
(F) courts martial and military commissions;
(G) military authority exercised in the field in time of war or in occupied
territory; or
(H) functions conferred by sections 1738, 1739, 1743, and 1744 of title
12; chapter 2 of title 41; subchapter II of chapter 471 of title 49; or
sections 1884, 1891-1902, and former section 1641(b)(2), of title 50, appendix[.]
3. Section 706 of Title 5 of the United States Code (drawn from Section
10(e) of the Administrative Procedure Act, Pub. L. No. 404, ch. 324, 60
Stat. 243) provides as follows:
§ 706. Scope of review
To the extent necessary for decision and when presented, the reviewing court
shall decide all relevant questions of law, interpret constitutional and
statutory provisions, and determine the meaning or applicability of the
terms of an agency action. The reviewing court shall-
(1) compel agency action unlawfully withheld or unreasonably delayed; and
(2) hold unlawful and set aside agency action, findings, and conclusions
found to be-
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law;
(B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or short
of statutory right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence in a case subject to sections 556
and 557 of this title or otherwise reviewed on the record of an agency hearing
provided by statute; or
(F) unwarranted by the facts to the extent that the facts are subject to
trial de novo by the reviewing court.
In making the foregoing determinations, the court shall review the whole
record or those parts of it cited by a party, and due account shall be taken
of the rule of prejudicial error.
STATEMENT
1. Respondents applied for a patent, claiming that they had invented a method
of improving security in computer systems that include both "trusted"
and "untrusted" computing environments. See App., infra, 28a-29a
& n.1. The application acknowledged that the UNIX operating system had
previously taught the feasibility of having an "untrusted" program
"pars[e] a command [such as a user keyboard entry] and then execut[e]
the command by calling a trusted service that executes in a trusted computing
environment." Id. at 30a. It also acknowledged that another existing
program, FILER2, had taught the mechanism of "repeat[ing] back potentially
dangerous user commands and request[ing] confirmation from the user prior
to execution." Ibid. Respondents claimed a patentable invention in
the idea of processing a "trusted" command in an "untrusted"
environment, relaying the parsed command to a trusted environment, and then
having the trusted portion of the system seek user verification, over a
trusted pathway, before executing the command. See id. at 29a.
After a preliminary narrowing of the claims at issue (see App., infra, 40a
& n.2), an examiner employed by petitioner, the Commissioner of Patents
and Trademarks (Commissioner), rejected respondents' patent application.
See 35 U.S.C. 131-132. The examiner first determined that respondents' remaining
claims were not stated with the specificity necessary to satisfy 35 U.S.C.
112. See App., infra, 41a. In any event, the examiner concluded (ibid.)
that respondents were not entitled to a patent because, in the language
of 35 U.S.C. 103, "the differences between the subject matter sought
to be patented and the prior art [were] such that the subject matter as
a whole would have been obvious at the time the invention was made to a
person having ordinary skill in the art."
Respondents appealed the examiner's decision to the Board of Patent Appeals
and Interferences (the Board). See 35 U.S.C. 134.1 The Board rejected the
examiner's conclusion that respondents' claims were not properly specified
(App., infra, 42a-43a), but it sustained the examiner's refusal to issue
a patent on the ground that the claimed invention was "obvious"
within the meaning of 35 U.S.C. 103. The Board agreed with the examiner
that it was proper to read the two cited instances of prior art in conjunction,
and that one ordinarily skilled in the relevant art "would have been
led from these teachings to take the trusted command parsed in the untrusted
environment and submitted to the trusted computing environment, as taught
by UNIX, and to display the parsed command to the user for confirmation
prior to execution, as suggested by [FILER2]." App., infra, 44a.
The Board rejected respondents' argument that the use of a trusted (rather
than untrusted) path to seek and receive verification from the user before
executing the command involved a non-obvious advance over the prior art.
App., infra, 45a. Rather, the Board concluded, "[c]ommunication in
a trusted environment would normally be assumed, by artisans, to be over
trusted paths," so that the use of such a path for verification, in
a system designed to ensure security, was, "if not explicit,"
then "either inherent or implicit" in the prior art. Ibid.2
2. Respondents sought review of the Board's decision in the United States
Court of Appeals for the Federal Circuit, as permitted by 35 U.S.C. 141.
A panel of that court concluded that the Board's decision should be reversed.
App., infra, 28a-34a. The court noted that "[o]bviousness is a legal
question based on underlying factual determinations" (id. at 31a),
and that "[w]hat a [prior-art] reference teaches and whether it teaches
toward or away from the claimed invention are questions of fact" (id.
at 32a). Reviewing the references cited by the Board, the court determined
that "neither UNIX nor FILER2 teaches communicating with the user over
a trusted pathway." Id. at 33a. Concluding that the Board had "impermissibly
used hindsight" in evaluating respondents' claimed invention, the court
held that "the Board's finding that the prior art teaches, either explicitly
or inherently, the step of obtaining confirmation over a trusted pathway"
was "clearly erroneous." Id. at 32a; see also id. at 33a.
The court noted petitioner's argument that it "should review findings
by the Board using a more deferential standard as required by the Administrative
Procedure Act [(APA)], 5 U.S.C. § 706(2) (1994)." App., infra,
32a n.7. Although the panel opinion indicated that, in light of Federal
Circuit precedent, "[o]nly the court sitting in banc [could] answer
the question of whether a different standard of review of the Board's findings
should apply," it observed that a suggestion of en-banc rehearing could
"appropriately" be made where, as in this case, the court had
already determined that the Board's decision would be reversed under a non-APA
standard of review. Ibid.
3. The full court of appeals, "[c]oncluding that the outcome of this
appeal turns on the standard of review used by th[e] court to review board
fact finding," accepted petitioner's suggestion that it rehear this
case en banc to consider whether the Board's factual findings should be
reviewed "under the Administrative Procedure Act standard of review
instead of the presently applied 'clearly erroneous' standard." App.,
infra, 2a. After considering the matter, the court determined that it would
adhere to what it viewed as traditional practice, rather than apply the
standards prescribed by the APA. Id. at 1a-27a.
The court first noted that the APA's "substantial evidence" standard
for reviewing agency factual findings, 5 U.S.C. 706(2)(E), would "require
that we review board decisions on their own reasoning." App., infra,
3a. The court's "clear error" standard, by contrast, dictates
affirmance "as long as we lack a definite and firm conviction that
a mistake has been made"-a determination that "requires us to
review board decisions on our reasoning." Ibid. Thus, in the court
of appeals' view, its standard of review differed from those prescribed
by the APA "both in character and [in] the amount of deference they
contemplate." Ibid.
After discussing the history and general purposes of the APA (App., infra,
4a-7a), the court noted that the Patent and Trademark Office (PTO) had been
the subject of specific attention during the APA's drafting and enactment
(id. at 7a-8a). Although it acknowledged that Congress had specifically
contemplated exempting the work of the Patent Office from the purview of
the Act, but ultimately did not do so, the court interpreted the history
of the Act as "suggest[ing] that Congress drafted the APA to apply
to agencies generally, but that * * * [it] did not intend the APA to alter
the review of substantive Patent Office decisions" by the courts. Id.
at 8a-9a. The court construed 5 U.S.C. 559, which was drawn from the final
Section of the APA as originally enacted and provides that the Act "do[es]
not limit or repeal additional requirements imposed by statute or otherwise
recognized by law," as "preserving those standards of judicial
review that had evolved as a matter of common law [before the APA's enactment],
rather than compelling that all such standards of review be displaced by
the [APA]." Id. at 9a-10a.
The court then reviewed at some length the history of the patent laws, including
the various mechanisms historically provided for administrative and judicial
review of decisions to grant or deny patents. App., infra, 9a-22a. On the
basis of its review, the court observed that no patent statute has ever
spoken explicitly to the standard of review to be used by courts in reviewing
administrative decisions in patent cases, but that "the common law
recognized several standards prior to 1947, including clear error and its
close cousins." Id. at 22a. On that basis, the court held that the
"more searching clear error standard of review" that it has applied
in lieu of the APA's "substantial evidence" standard "is
an 'additional requirement' that was 'recognized' in our jurisprudence before
1947, which we therefore continue to apply under the exception in section
559." Id. at 22a-23a.
The court found additional support for its holding in the principle of stare
decisis. App., infra, 23a-26a. Having concluded that there had been a "settled
practice of reviewing factual findings of the board's patentability determinations
for clear error," the court held that its "interpretation of section
559 * * * permit[ted]" it to continue that practice, "because
no statute speaks directly to a required standard, and review for clear
error was certainly recognized in the cases - though perhaps not exclusively
or intentionally - before 1947." Id. at 25a.
The court added that use of a non-APA standard is "justif[ied]"
by "the premises underlying review for clear error": "By
making it clear that we review factual findings for clear error, and thereby
review board decisions on our own reasoning, we hope the board understands
that we are more likely to appreciate and adopt reasoning similar to its
reasoning when it is both well articulated and sufficiently founded on findings
of fact." Id. at 25a. The court thus hoped, through its choice of standard,
to "encourage administrative records that more fully describe the metes
and bounds of the patent grant than would a more deferential standard of
review." Ibid. Finally, the court noted its belief that use of the
"clearly erroneous" standard would "preserve the confidence
of inventors who have relied on this standard in prosecuting their patents,"
"promote consistency between [the court's] review of the patentability
decisions of the board and the district courts in infringement litigation,"
and "help avoid situations where board fact finding on matters such
as anticipation or the factual inquiries underlying obviousness become virtually
unreviewable." Id. at 26a.
Having concluded that "section 559 and stare decisis together justify
our continued application of [a] heightened level of scrutiny to decisions
by the board," the full court ratified the holding of the original
panel that had applied such a standard and had reversed the Board's decision
in this case. App., infra, 26a-27a.
REASONS FOR GRANTING THE PETITION
1. The provisions of the Administrative Procedure Act now embodied in Title
5 of the United States Code provide a generally applicable framework for
proceedings seeking judicial review of "agency action." See 5
U.S.C. 702. The term "'agency action' includes the whole or a part
of an agency * * * order, * * * relief, or the equivalent or denial thereof,"
and "relief" includes any agency "recognition of a claim,
right, * * * [or] privilege * * * [or the] taking of other action on the
application or petition of, and beneficial to, a person." 5 U.S.C.
551(11)(B), (11)(C), and (13), 701(b)(2). With exceptions not relevant here,
the term "agency" includes "each authority of the Government
of the United States, whether or not it is within or subject to review by
another agency." 5 U.S.C. 701(b)(1). By their terms, these provisions
apply to the Federal Circuit's review of a decision by the Board of Patent
Appeals and Interferences to reject a patent application. See 35 U.S.C.
1 (establishing PTO within the Department of Commerce); 35 U.S.C. 7 (constituting
Board); 35 U.S.C. 131-134 (administrative examination of applications and
issuance or denial of patents); 35 U.S.C. 141-144 (review of Board decisions
in the Federal Circuit); see also Singer Co. v. P.R. Mallory & Co.,
671 F.2d 232, 236 n.7 (7th Cir. 1982) (PTO falls within APA definition of
"agency"); 5 U.S.C. 704 ("[a]gency action made reviewable
by statute" is subject to judicial review); App., infra, 2a, 8a-9a,
21a-22a, 26a (acknowledging in en banc opinion that APA generally applies
to the PTO).
The APA provides that "[t]he form of proceeding for judicial review
is the special statutory review proceeding relevant to the subject matter
in a court specified by statute." 5 U.S.C. 703. Under the patent laws,
if a "dissatisfied" patent applicant seeks review of a Board decision
in the Federal Circuit, the Commissioner must certify the administrative
record to that court. 35 U.S.C. 141, 143. If, as is usually the case, there
is no adverse private party, the Commissioner must also "submit to
the court in writing the grounds for the decision of the Patent and Trademark
Office, addressing all the issues involved in the appeal." 35 U.S.C.
143. The court then "review[s] the decision from which an appeal is
taken on the record before the Patent and Trademark Office." 35 U.S.C.
144. Review concludes when the court "issue[s] to [petitioner] its
mandate and opinion, which shall be entered of record in the Patent and
Trademark Office and shall govern the further proceedings in the case."
Ibid.3
As the court of appeals noted in this case (App., infra, 22a), "no
patent statute speaks explicitly to the standard to be used when reviewing
decisions of the board." The absence of such a specific standard does
not, however, authorize a reviewing court to adopt whatever standard it
deems appropriate under the circumstances. This Court has made clear that,
"[i]n the absence of a specific command in [a relevant statute] to
employ a particular standard of review" of administrative action, that
action "must be reviewed solely under the * * * standard prescribed
by the Administrative Procedure Act." American Paper Inst. v. American
Elec. Power Serv. Corp., 461 U.S. 402, 412-413 n.7 (1983); see also Steadman
v. SEC, 450 U.S. 91, 95-97 & n.9 (1981); Citizens to Preserve Overton
Park, Inc. v. Volpe, 401 U.S. 402, 413-414 (1971); cf. Vermont Yankee Nuclear
Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 543-549
(1978) (court may not impose, on policy grounds, rulemaking procedures beyond
those required by the APA or another applicable statute); compare App.,
infra, 25a-26a.
Under the APA, the Federal Circuit may "set aside" the Board's
"action, findings, and conclusions" if they were "'arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with
law' or if [they] failed to meet statutory, procedural, or constitutional
requirements." Citizens to Preserve Overton Park, 401 U.S. at 414 (quoting
5 U.S.C. 706(2)(A)-(D)). Because the Board's decisions are "reviewed
on the record of an agency hearing provided by statute," they are also
subject to the somewhat more searching "substantial evidence"
standard of 5 U.S.C. 706(2)(E). See 35 U.S.C. 7(b), 134, 144; see also American
Paper Inst., 461 U.S. at 412 n.7 (distinguishing substantial-evidence review
from "the more lenient arbitrary-and-capricious standard"). Nothing
in the APA, however, authorizes the Federal Circuit to subject the Board's
decisions to the "heightened level of scrutiny" (App., infra,
27a) that the court elected to apply in this case.
2. The court of appeals sought to justify its frank adoption of a "more
searching" standard of review in patent cases, "free[d]"
from the otherwise applicable limits of the APA, on the ground that such
a "heightened" standard is an "additional requirement[] *
* * otherwise recognized by law" within the meaning of 5 U.S.C. 559.
See App., infra, 5a, 9a-10a, 22a-23a, 26a-27a. The court reasoned that,
by providing that the APA would not "limit or repeal" such "additional
requirements," Congress intended to "preserv[e] those standards
of judicial review that had evolved as a matter of common law," to
the extent they were more stringent than those provided in the new Act.
App., infra, 9a-10a. Because "the common law recognized several standards
[of review in patent cases] prior to 1947, including clear error and its
close cousins," the court concluded that what is now Section 559 authorized
it to continue to apply some such standard if it chose to do so. Id. at
22a, 26a.
Section 559 cannot bear the weight that the court of appeals would place
upon it. It is based on Section 12-the final section-of the original Act,
then entitled "Construction and Effect." Administrative Procedure
Act, Pub. L. No. 404, ch. 324, § 12, 60 Stat. 244. The language of
that concluding provision4 is perhaps most naturally read to refer only
to matters not addressed by the APA itself ("additional requirements").
See H.R. Rep. No. 1980, 79th Cong., 2d Sess. 47 (1946) (Section 12 "merely
provides formal matters of construction and effect. * * * Any inconsistent
agency action or statute is in effect repealed." (emphasis added)).
Alternatively, it might refer to "requirements"-such as pre-existing
informational, rule-making, or hearing requirements-greater than those specified
in the APA's own core provisions, which were intended to specify a new "outline
of minimum essential rights and procedures" governing agencies' own
administrative operations. H.R. Rep. No. 1980, supra, at 16; see also ibid.
("Agencies may fill in details [of the 'outline'], so long as they
publish them."); APA §§ 3-9, 60 Stat. 238-243; 5 U.S.C. 552-558
(current embodiment of same APA provisions). In either case, a standard
of judicial review different from that specified in the APA itself is not
an "additional requirement[]" within the meaning of what is now
Section 559.5
Nor, despite the court of appeals' novel analysis (see App., infra, 6a-9a),
is there anything in the history or general purposes of the APA to suggest
that what is now Section 559 was intended to preserve whatever standards
of review courts, including the Federal Circuit's predecessors, were applying
in reviewing administrative decisions before the adoption of the Act. To
the contrary, an important general purpose of the APA was to "supplant
a variety of pre-existing methods for obtaining [judicial] review that differed
from one agency to another." Cousins v. Dep't of Transportation, 880
F.2d 603, 606 (1st Cir. 1989) (en banc) (Breyer, J.).6 Thus, although Congress
certainly looked to existing law when it framed the new, generally applicable
review provisions of the APA (see, e.g., App., infra, 6a-7a, 10a), there
is no reason to think that it intended to preserve, rather than to eliminate,
deviations from the norm it was prescribing. Moreover, so far as the PTO
is concerned, what the legislative history demonstrates is that Congress
specifically considered the nature of patent proceedings and the role of
the PTO, but enacted the APA without excepting the PTO from the judicial
review provisions of Section 10 of the Act (now 5 U.S.C. 701-706). See App.,
infra, 7a-8a. The court of appeals erred in interpreting Section 559 to
create an exception that Congress itself did not see fit to make.7
Finally, the Federal Circuit's strained interpretation of Section 559 contravenes
the principle that a court exceeds the proper bounds of statutory review
when it interferes, to any greater extent than specifically authorized by
the APA (or by some other applicable statute), with an administrative agency's
discharge of the responsibilities that have been delegated to it by Congress.
As noted above, this Court has made clear that a reviewing court is not
authorized to direct an agency to adopt supplemental procedures beyond those
required by the APA. Vermont Yankee, 435 U.S. at 543-549; see id. at 544
(citing FCC v. Schreiber, 381 U.S. 279 (1965), "where the District
Court * * * devised procedures to be followed by the agency on the basis
of its conception of how the public and private interest involved could
best be served"). Nor, where the APA prescribes the applicable standard,
is a court free to decide that some other standard of proof should apply
in an administrative proceeding, despite the traditional judicial role in
resolving such questions in the absence of a statutory directive. Steadman,
450 U.S. at 95-97 & n.9. Similarly, it is "a simple but fundamental
rule of administrative law" that, although a reviewing court may police
the statutory boundaries within which Congress has authorized an agency
to act, it may not substitute its discretion for that of the agency with
respect to matters that fall within the legislative delegation. SEC v. Chenery
Corp., 332 U.S. 194, 196 (1947).
In the case of the PTO, Congress has created a comprehensive statutory scheme
for the submission of patent applications to a specialized agency, the examination
of those applications by qualified personnel, and the administrative grant
or denial of patents. See 35 U.S.C. 111-122 (applications), 131-135 (examination).
The statute itself makes clear that Congress intended to place the administration
of the patent system, which by definition involves the evaluation of claimed
advances at the border of scientific and technical knowledge, largely in
the hands of persons who possess both "competent legal knowledge and
scientific ability." 35 U.S.C. 7 (prescribing requirements for the
appointment of examiners-in-chief), 282 (presumption of validity attaches
to patent once it has been issued). It is, moreover, difficult to imagine
any area in which the exercise of such administrative expertise would be
more critical than the determination of close factual questions relating
directly to patentability, such as what the "prior art" relating
to a particular claimed subject matter would have revealed or suggested
to "a person having ordinary skill in the art to which said subject
matter pertains." 35 U.S.C. 103.8
The resolution of this case turns on just such a question. See App., infra,
1a-2a. Yet it is in this case, with respect to that question, that the Federal
Circuit has reaffirmed its determination to subject the PTO's highly informed
fact-finding to "heightened * * * scrutiny," beyond that authorized
by the APA, for the stated purpose of preserving the court's ability "to
review board [patenting] decisions on [the court's] own reasoning,"
rather than the Board's. Id. at 3a, 25a-27a. By thus aggrandizing the court
of appeals' own role, the decision exceeds the proper bounds of judicial
review. The decision's definitive adoption of an extra-statutory standard
of review warrants review by this Court, which necessarily has greater detachment
from the particular controversy about the respective roles of the agency
and its reviewing court, as well as less reason for inhibition to depart
from Federal Circuit precedent.
3. Proper administration of the patent system plays an important role in
the continuing technological, and hence economic, development of the Nation.
When properly issued in accordance with the stringent statutory requirements
established by Congress, see 35 U.S.C. 100 et seq., including the requirement
of non-obviousness at issue in this case (id. § 103), patents "promote
the Progress of Science and useful Arts" (U.S. Const., Art. I, §
8, Cl. 8). Just as surely, however, when improperly issued they retard that
progress, stifle technological and economic competition, and may be invalidated,
if at all, only through protracted and expensive litigation. See generally
35 U.S.C. 271 et seq. (infringement and remedies). The decision not to issue
a patent-the only sort that will ordinarily be reviewable at the instance
of a "dissatisfied" applicant, see 35 U.S.C. 141, 145-will frequently
depend, as it did in this case, on the determination of close and highly
technical factual questions. It is therefore critical that the expert judgment
of the PTO's Board of Patent Appeals and Interferences, charged by Congress
with the final administrative responsibility for determining whether a patent
should issue (see 35 U.S.C. 7(b), 134), should be subject to judicial review
and "correction" only within the limited bounds prescribed by
Congress for the review of any administrative action.
There should be no doubt about the importance of the Federal Circuit's decision
in this case. As the court of appeals acknowledged, the outcome of the case
before that court-which has exclusive jurisdiction in cases of this type,
see 28 U.S.C. 1295(a)(4)-"turn[ed] on" the court's selection of
a standard of review. App., infra, 2a. The types of factual and legal questions
involved in this case are not unusual, and one may expect that the standard
of review will likewise be important or determinative in many other cases
in which the Board has resolved close factual questions against the applicant.
(Where the Board resolves a close case in favor of issuing the patent, there
is no appellate review.) Indeed, as Judge Michel of the Federal Circuit
has stated in a speech to members of the bar, "standards of review
influence dispositions in the Federal Circuit far more than many advocates
realize." See Nard, Deference, Defiance, and the Useful Arts, 56 Ohio
St. L.J. 1415, 1415 & n.3 (1995). Thus, like the burden of proof, which
is similarly determinative at, but only at, the margin of close cases, the
standard of judicial review will "rarely [be] without consequence and
frequently may be dispositive." Lavine v. Milne, 424 U.S. 577, 585
(1976). And, like the burden of proof, the standard of review is an inherent
aspect of every litigated case.
Moreover, the court's decision ultimately rested, not simply on its choice
of standards, but on an interpretation of 5 U.S.C. 559 that, in the court's
view, made that choice permissible. See App., infra, 9a-10a, 26a. That flawed
construction of a widely applicable statute has the potential to unsettle
the law with respect to judicial review of additional federal agencies subject
to the APA, inviting other courts to inquire whether before 1947 they, too,
may have used, albeit "perhaps not exclusively or intentionally"
(id. at 25a), "heightened" standards of review that could now
be revived should a court deem it desirable to do so.
Finally, it is significant that, in rendering its decision in this case,
the court of appeals candidly acknowleged that it prefers to review the
Board's decisions under a standard that allows it "to review board
decisions on [the court's] own reasoning," rather than on the Board's.
App., infra, 3a, 25a. The court recognizes that under the APA's normal standards
of review it would, to the contrary, be required to "review board decisions
on their own reasoning," an approach that "differ[s] both in character
and [in] the amount of deference [it] contemplate[s]." Id. at 3a. The
court's refusal to countenance that result reveals the most fundamental
error in this case.
Indeed, it is the broad choice between essentially deferential and essentially
non-deferential review that the court of appeals faced, and made, in this
case that most likely accounts for the extraordinary degree of interest
that the court's choice of a standard of review has generated from the bench
and bar. See 142 F.3d at 1448-1449 (listing amici before the en banc court).9
In avowing its reasoning, the court of appeals has demonstrated an underlying
approach to, and philosophy of, judicial review that is inconsistent with
the letter and spirit of the APA. The court's en banc decision in this case
accordingly warrants review by this Court.
CONCLUSION
The petition for a writ of certiorari should be granted.
Respectfully submitted.
NANCY J. LINCK
Solicitor
ALBIN F. DROST
Deputy Solicitor
KAREN A. BUCHANAN
KENNETH R. CORSELLO
Assistant Solicitors
United States Patent and
Trademark Office
SETH P. WAXMAN
Solicitor General
Counsel of Record
FRANK W. HUNGER
Assistant Attorney General
LAWRENCE G. WALLACE
Deputy Solicitor General
EDWARD C. DUMONT
Assistant to the Solicitor
General
WILLIAM KANTER
ALFRED MOLLIN
Attorneys
AUGUST 1998
1 The Board consists of petitioner, the Deputy Commissioner and Assistant
Commissioners of Patents and Trademarks, and a number of patent "examiners-in-chief,"
who are "persons of competent legal knowledge and scientific ability
* * * appointed to the competitive service." 35 U.S.C. 7(a). The Board
ordinarily acts through panels of three members, as it did in this case.
See 35 U.S.C. 7(b); App., infra, 35a. When deciding cases, the members of
the Board are generally known as "Administrative Patent Judges."
See 1156 Off. Gaz. Pat. Office 32 (1993); App., infra, 35a.
2 At respondents' request, the Board reconsidered this portion of its decision.
After doing so, however, it adhered to its original reasoning and conclusions.
App., infra, 35a-38a.
3 An applicant who is "dissatisfied" with the Board's decision
but does not wish to seek review in the court of appeals on the basis of
the administrative record may instead file suit against the Commissioner
in the United States District Court for the District of Columbia. 35 U.S.C.
145. By seeking review in the court of appeals, respondents "waive[d]
[their] right to proceed under section 145" (35 U.S.C. 141), which
is therefore not directly at issue in this case.
4 The first sentence of Section 12 provided: "Nothing in this Act shall
be held to diminish the constitutional rights of any person or to limit
or repeal additional requirements imposed by statute or otherwise recognized
by law." 60 Stat. 244.
5 A non-APA standard of review specified by a particular statute would presumably
govern in proceedings under that statute, whether it was more stringent
or more lax than those set out in 5 U.S.C. 706. See, e.g., American Paper
Inst., 461 U.S. at 412 n.7 (APA standard to be applied "[i]n the absence
of a specific command in [the relevant statute] to employ a particular standard
of review"). That result does not depend, however, on Section 559's
"additional requirements" language. Such a provision would embody,
not an "additional requirement[]" of review, but an inconsistent
direction concerning the manner in which review should be conducted. The
inconsistency would be resolved in accordance with ordinary principles of
statutory construction, including the principle that a more specific enactment
normally controls rather than a more general one-according due weight to
Section 559's separate instruction that a later enactment should not be
held to "supersede or modify" the APA "except to the extent
that it does so expressly." 5 U.S.C. 559.
6 See also Cousins, 880 F.2d at 606, quoting S. Rep. No. 442, 76th Cong.,
1st. Sess. 9-10 (1939) (relating to an earlier version of the legislation
that became the APA) ("'unfortunately,' existing statutes d[id] not
provide for 'a uniform method and scope of judicial review'"); cf.
H.R. Rep. No. 1980, 79th Cong., 2d Sess. 16 (1946) ("The bill is meant
to be operative 'across the board' in accordance with its terms, or not
at all. Where one agency has been able to demonstrate that it should be
exempted, all like agencies have been exempted in general terms. (See [the
definitional provision now at 5 U.S.C. 551(1)]). Where one agency has shown
that some particular operation should be exempted from any particular requirement,
the same function in all agencies has been exempted. No agency has been
favored by special treatment.").
7 In addition, as the court of appeals itself recognized, "[i]t would
be disingenuous to suggest that the courts employed a uniform standard of
review [of Patent Office factual determinations] prior to 1947." App.,
infra, 11a; see also Dunner et al., Court of Appeals for the Federal Circuit:
Practice & Procedure § 6.04, at 6-49 to 6-52 (1995) (discussing
various standards employed by the former Court of Customs and Patent Appeals).
Thus, even if Section 559 could properly be construed to preserve different
and more stringent standards of judicial review that were clearly established
at the time the APA was passed, such an exception would not apply to the
Federal Circuit's review of decisions by the PTO.
8 The PTO informs us that, of the three members of the Board who rendered
the administrative decisions in this case, one holds a degree in electrical
engineering, one holds a degree in electronics and has had extensive career
experience in computer technology, and one holds an advanced degree in computer
science and two in electrical engineering.
9 See also, e.g., Hon. Alan D. Lourie, Speech to [American Intellectual
Property Law Association], Jan. 22, 1998, 55 Pat., Trademark & Copyright
243, 243 (BNA 1998) (discussing issue of judicial deference to the PTO,
and noting that the court "had a standing room only courtroom"
for the en banc argument in this case); Stoll, A Clearly Erroneous Standard
of Review, 79 J. Pat. & Trademark Off. Soc'y 100 (Feb. 1997); Rennecker,
Ex parte Appellate Procedure in the Patent Office and the Federal Circuit's
Respective Standards of Review, 4 Tex. Intell. Prop. L.J. 335 (Spring 1996);
Nard, Deference, Defiance, and the Useful Arts, 56 Ohio St. L.J. at 1467-1472.