Procedural bait and switch: withdrawn rejections as undesignated new grounds in Examiner's Answers

As discussed in MPEP § 1207.03(b), 37 C.F.R. § 41.40 sets forth the exclusive procedure for an appellant to request review of an examiner’s failure to designate a rejection made in an examiner's answer brief on appeal as a "new ground of rejection": the appellant must file a petition under 37 C.F.R. § 1.181, which petition tolls the time period for filing a reply brief under the current rules.  If the appellant does not petition, the Board will not dismiss the new ground of rejection on appeal, but will affirm it if the appellant's arguments do not otherwise overcome the rejection.  This is because, absent such a petition, the Board's review is limited to whether the appellant identifies reversible error in the examiner's position.  In re Jung, 637 F.3d 1356, 1365 (Fed. Cir. 2011).  37 C.F.R. § 41.40 thus permits a procedural trap for the unwary that can be set by an examiner to ensnare unwitting appellants.  And sometimes, the trap can be set without even the examiner realizing it.

More nefarious versions of the trap go something like this: an examiner may withdraw a ground of rejection during prosecution, luring the applicant into a false sense of security, only to reintroduce the rejection during appeal, after the appellant has not the opportunity to introduce evidence in rebuttal of the reintroduced rejection, and without designating the reintroduced rejection as a "new ground" of rejection or withdrawing the application from appeal back into prosecution to give the applicant an opportunity to address the renewed rejection.  Once the applicant complains to the Board about the procedural unfairness of the reintroduced rejection, perhaps futilely raising the specter of deprivation of due process or violation of the Administrative Procedure Act, rather than filing the required petition, the trap is sprung.  The appellant's election to proceed to the Board leaves the Board powerless to address whatever unfairness may inhere in the situation, since 37 C.F.R. § 41.40 deprives the Board of any such power by making the matter a petitionable one.

The trap may even be set by the examiner unwittingly, as where the examiner copies and pastes from the text of the final Office action without reference to any effect of a subsequent advisory action.  This would seem to be a plausible explanation for what happened in Ex parte Schultz, No. 2015-005690 (P.T.A.B. Sep. 26, 2017).  In that case, in an advisory action, the examiner withdrew a written description rejection made under pre-AIA 35 U.S.C. § 112, first paragraph, following the applicant's arguments after final rejection, and the applicant appealed the remaining obviousness rejection.  The examiner then re-introduced the written description rejection in the examiner's answer brief—despite the answer brief including an opening statement identifying the obviousness ground as the only remaining ground for rejection.  The appellant complained to the Board about the impropriety of the re-introduced rejection in a reply brief, but the Board considered the rejection as maintained on appeal, despite the advisory action and the inconsistent opening statement of the answer brief.  Fortunately for the appellant, even without substantive argument addressing the written description rejection in the reply brief, the Board exercised its discretion to take up the issue and reversed, finding no prima facie case of lack of written description had been made.  The appellant in Schultz lucked out.  Other appellants may find the Board not to be so accommodating in their own appeals.

To complicate matters, it may not always be easy for appellants to spot a "new" ground of rejection in an examiner's answer brief.  Taken together, 37 C.F.R. §§ 41.30 and 41.39(a)(2) provide that, for the purposes of the examiner's answer brief, any rejection that relies upon any evidence (not including dictionaries) not relied upon in the Office action from which the appeal is taken, as modified by an advisory action, is a new ground of rejection and must be so-designated, except that, as discussed above, any failure in designation is of no consequence to the examiner, despite being consequential to the appellant.  But what about where no new evidence is entered?  A position or rationale that does not change the "basic thrust" of a rejection and does not deprive the appellant a fair opportunity to respond generally does not give rise to a "new ground."  In re Kronig, 539 F.2d 1300, 1303 (C.C.P.A. 1976).  New motivations to combine references can constitute a "new ground".  Rambus Inc. v. Rea, 731 F.3d 1248 (Fed. Cir. 2013).  Reliance on a portion of a reference not earlier cited by examiner, even where the reference had been cited, can constitute a new ground of rejection.  Ex parte Rogers, No. 2014-000330 (P.T.A.B. June 9, 2016).  Even so, this blog previously discussed a PTAB decision in which a new reference citation was held not to amount to a new ground of rejection when the reference was in the priority chain of previously used references.

In the recent case of Ex parte Roussos, No. 2016-005524 (P.T.A.B. Nov. 3, 2017), the examiner relied upon five references, newly introduced in the examiner's answer, to prove the meaning of a claim term ("ethylene-alpha olefin copolymer").  While acknowledging that "[a]n examiner cannot . . . newly cite to patent documents not relied upon previously without designating the Answer as including a new ground of rejection" and that the examiner "failed to comply with the Office’s rules by failing to" make the requisite designation, the Board took the appellant's failure to petition to be an acquiescence to their procedural propriety and considered the substance of the appellant's arguments, on which the Board reversed the examiner ("it is clear from Appellant’s Specification that a broader unconventional definition [of the disputed claim term as urged by the Examiner on the basis of the five newly cited patents] was not intended").  Again, the appellant was lucky, but also smart, to have included at least something of a substantive rebuttal of the new grounds.

Board records are replete with instances where the appellants were not so lucky.  In Ex parte Snyder, No. 2017-004918 (P.T.A.B. Sep. 19, 2017), where the appellants argued that shifting examiner interpretations of how the cited art read on the claims constituted a new ground of rejection, the Board affirmed.  "We will not consider Appellants’ argument that the Answer includes an undesignated new ground of rejection.  This issue is addressable by petition to the Director, not appeal to the Board."  See also Ex parte Peltz, No. 2017000970 (P.T.A.B. Sep. 5, 2017) ("Appellant[s] did not avail [themselves] of the [petition] provision . . . .  Instead, Appellant[s] filed a Reply Brief in timely fashion without presenting substantive arguments addressing the disputed new issue (rejection).").

Usually, the Board dispenses with appellant arguments that examiner's answer arguments constitute new grounds with no more than a terse footnote.  See, e.g., Ex parte Baltes, No. 2016005613 (P.T.A.B. Sep. 19, 2017) ("We deem Appellants, by their presentation of arguments in the Reply Brief in rebuttal to the Answer, to have waived any argument that the rejection must be designated a new ground."); Ex parte Holtzman, No. 2016-001992 (P.T.A.B. Sep. 15, 2017) ("By filing a Reply Brief rather than filing a petition under 37 C.F.R. § 1.181, Appellants waived any argument that the Answer included a new ground of rejection."); Ex parte Chidambaran, No. 2017005099 (P.T.A.B. Aug. 23, 2017).  (The Board ultimately did reverse in Baltes.)

Once, the Board "declined" an "invitation to announce and apply a new legal rule" in denying a request for rehearing in Ex parte Kreiling, No. 2014-005850 (P.T.A.B. May 21, 2017), the requested "new rule" being: "when an examiner’s answer contains a new ground of rejection, the Board should ignore the examiner's new arguments and/or new findings of fact as untimely for purposes of determining patentability and consider the inclusion of the new grounds of rejection as a tacit admission that the rejections in the final office action are fatally flawed."  To back up the request, the appellants cited to Ex parte Yudoovsky, No. 2011-006238 at 5 n.3 (B.P.A.I. Feb. 16, 2012), in which the Board "decline[d] to consider [a] new [rejection] rationale because it implicitly constitutes an unauthorized new ground of rejection" and "[t]he 'Response to Arguments' section of the Answer is not an appropriate place to raise a new rationale for unpatentability", and Ex parte Haalck, No. 2010-002620 at 3-4 (B.P.A.I. July 14, 2010), where the Board decided that "[t]he Examiner’s Answer does not contain a statement that a new ground of rejection was entered into the record", so "the rejections relying on the full disclosures of [three cited references] are not properly before this panel."  Aside from finding the requested "new rule" in contravention of  37 C.F.R. § 41.40(a), and the two cited decisions non-binding, the Board also found that the

proposed rule represents poor policymaking. Were we to adopt the proposed rule, an applicant would be able to avoid addressing the merits of an undesignated new ground of rejection—whether by presenting evidence, amending claims, or presenting argument—merely by asking the Board to recognize the examiner's undesignated new ground of rejection as such. The public interest is not served by allowing an applicant to avoid addressing the merits of a new ground of rejection—whether or not it is so designated—presented for the first time in the examiner’s answer. Nor is treating the inclusion of a new ground of rejection in an examiner’s answer as a tacit admission by the examiner that the rejections in the final office action are fatally flawed consistent with the law.  As our reviewing court stated, "[p]atent examiners are quasi-judicial officials" and therefore do not make admissions, but rather make findings of fact and conclusions based on their factual findings. Western Elec. Co. v. Piezo Tech., Inc., 860 F.2d 428, 431 (Fed. Cir. 1988).

Although no serious fault can be found in this reasoning, it can scarcely be disputed that the procedural setup for responding to new grounds of rejection on appeal places multiple burdens on the appellant: the burden of catching the newly introduced or re-introduced ground; the burden of recognizing the rejection as an undesignated "new ground"; and the burden of making the strategic decision of whether to proceed to the Board in spite of the new ground, or if not, the burden of filing the petition to have the rejection denominated as a new ground and to return the application to prosecution to address it.  By contrast to the waiver imposed on the appellant who does not petition, there is no consequence for the examiner who violates the rules by not properly designating a new ground of rejection.  On top of these applicant burdens, costly appeal forwarding fees can be wasted if new grounds on appeal are not timely caught.  Appellants should never assume that a withdrawn ground reintroduced in an examiner's answer brief will be taken by the Board for the copy-and-paste error that it appears to be.

Doubtless many applicants—even those represented by experienced practitioners, in some cases—have fallen prey to various forms of the "undesignated new grounds" trap and will continue to do so as long as the rules favor examiner trickiness or carelessness over balance in procedural burdens.