FITZPATRICK, CELLA, HARPER & SCINTO © 2008 | 1 Brand v. Miller: Standard of Review of Factual Findings Made by the PTO Board of Appeals Joseph P. Pieroni Associate

FITZPATRICK, CELLA, HARPER & SCINTO © 2008 | 2 BACKGROUND  The Board of Patent Appeals and Interferences (“Board”) of USPTO declared Interference No. 105,215 between Thomas Miller et al. as Junior Party [U.S. Patent No. 5,865,232] and Robert Brand as Senior Party [U.S. Patent Application No. 09/377,120].  Invention – a new method of cutting veneers of wood from logs, including attaching the wood in place as the veneer is cut. –Brand - Chief Engineer for Capital – a company that makes machines for cutting veneer –Miller - Production Manager of Miller Veneers - a customer of Capital –Miller occasionally communicated new design concepts to Capital.

FITZPATRICK, CELLA, HARPER & SCINTO © 2008 | 3 BACKGROUND  Preparing logs for veneering –“Flitches” –“Staylog” of a veneer-cutting machine –“Dogging” systems - flitch held on the staylog by clamping “dogs” –Staylog rotates on the machine; veneer-cutting knife slices veneer from the flitch as it rotates.  Logs typically thicker at base than top; the ends of tapered flitches usually discarded - more uniform cross-section.  Invention allows tapered flitch to be mounted on a staylog so surface is parallel to veneer-cutting knife - more efficient use of flitches.

FITZPATRICK, CELLA, HARPER & SCINTO © 2008 | 4 BACKGROUND  Single count in declared interference (claim 1 of Miller’s ’232 patent, and claim 38 copied in Brand’s ’120 application): –A method for cutting veneer sheets from a tapered flitch, comprising the steps of providing a staylog for a veneer slicing machine having a veneer slicing knife; attaching a flitch having a tapered veneer producing face to the staylog with the tapered veneer producing face affixed in a stable, parallel relationship with the veneer slicing knife; and cutting veneer sheets with the veneer slicing knife from the tapered veneer producing face of the flitch (emphasis added).  Tapered flitch could not be mounted onto a staylog by traditional clamping dogs (did not allow for the length of the dogs extending from the staylog to vary based on the taper of the flitch). Miller and Brand used different methods to attach tapered flitch to staylog.

FITZPATRICK, CELLA, HARPER & SCINTO © 2008 | 5 THE BOARD DECISION  Miller argued priority - alleged Brand derived the invention from Miller (regarding the use of dogs to attach the flitch to the staylog). –The Board relied on its own expertise to evaluate the knowledge of a skilled artisan (main focus of the Federal Circuit decision).  Case for derivation primarily based on two drawings that Miller allegedly communicated to Brand prior to Brand’s conception date. –End-view of a tapered flitch (“end ‑ view exhibit”) did not depict any dogs, or any holes in the flitch for receiving dogs. –Type of screw called a “bugle-headed screw dog” (“bugle-headed dog exhibit”).

FITZPATRICK, CELLA, HARPER & SCINTO © 2008 | 6 THE BOARD DECISION  The Board addressed whether Miller had proven derivation by Brand from Miller based on the two exhibits, either separately or together.  The Board rejected Miller’s testimony (uncorroborated) that he explicitly told Brand how to practice the invention of the count by supporting a tapered flitch with bugle-headed dogs.  Nevertheless, the Board held that Miller had established derivation based on the two exhibits together, without relying on any testimony. The Board was persuaded upon its own review of the exhibits that “one skilled in the art, having been informed of Miller’s proposed bugle-headed screw dogs, would have recognized their suitability for securely supporting a tapered flitch in the position depicted in [the end- view exhibit].” Board Decision (“B.D.”) Priority, at 59 (emphasis added).

FITZPATRICK, CELLA, HARPER & SCINTO © 2008 | 7 THE BOARD DECISION  The Board did not cite any testimony or record evidence to support its conclusion. “The ability of the bugle-headed screw dogs to tightly clamp the flitch would have been readily apparent.” B.D. Priority, at 59 (emphasis added).  The Board also held that the information contained in the end-view exhibit was sufficient by itself to teach one of ordinary skill, without any evidence of record. –“Although not discussed in the [end-view] exhibit, it is apparent that the flitch is supported by the dogs (not shown) with its uppermost surface region parallel to the staylog mounting surface (not shown) and thus parallel to the edge of the veneer-cutting knife (not shown).” B.D. Priority, at 57 (emphasis added). –The end-view exhibit does not depict the relationship between a flitch and a veneer-cutting knife, and does not show the size and shape of any supporting dogs. In spite of these deficits, the Board inferred and concluded: “it is nevertheless clear that the position of the flitch is due to the fact that the dogging holes have different depths.” Id. at 57 ‑ 58.

FITZPATRICK, CELLA, HARPER & SCINTO © 2008 | 8 THE BOARD DECISION  In denying a request for rehearing (Brand argued that the Board did not consider certain declarations), the Board called “unconvincing” the declaration of a witness who stated that “there is no way one could deduce from [the end-view exhibit] how to build [such] a machine or attach a tapered flitch to the machine.” B.D. Rehearing, at 11. –The Board rejected the logic of the declaration: “[the] reasoning is unconvincing because [the declaration] fails to explain why an artisan seeking to support a tapered flitch [as shown in the end ‑ view exhibit] would not have known to use screw dogs which are longer than the screw dog depicted in [the bugle-headed dog exhibit].” Id. at 12 (emphasis added).

FITZPATRICK, CELLA, HARPER & SCINTO © 2008 | 9 THE FEDERAL CIRCUIT DECISION  Under the substantial evidence standard of review: –Federal Circuit must search for evidence, clearly set forth in the record below, to justify conclusions (such as those drawn by the Board). –The Federal Circuit had concluded in In re Gartside that findings of fact by the Board must be supported by substantial evidence in the record. “In appeals from the Board, we have before us a comprehensive record that contains the arguments and evidence presented by the parties, including all of the relevant information upon which the Board relied in rendering its decision.... That record, when before us, is closed, in that the Board’s decision must be justified within the four corners of that record.” Gartside, 203 F.3d 1305, 1314 (Fed. Cir. 2000).  The Federal Circuit also addressed the Administrative Procedure Act; and the detailed PTO regulations governing interferences and other contested proceedings.

FITZPATRICK, CELLA, HARPER & SCINTO © 2008 | 10 THE FEDERAL CIRCUIT DECISION  The Federal Circuit held that the Board must base factual findings in a contested case on evidence in the record, not on its own expertise. It is appropriate for the Board to use its expertise to interpret evidence in the record, but not to make findings in the absence of evidence.  For proving derivation by senior party, the burden of proof is on junior party: (1) establish that junior party had a prior conception of the claimed subject matter; and (2) prove that the junior party ’ s conception was effectively communicated to the senior party, as an enabling disclosure. The Federal Circuit reviews a finding of derivation by the Board as a question of fact.  Communication was the source of the problem in the Board ’ s decision, according to the Federal Circuit ’ s analysis. The Federal Circuit agreed with Brand: the Board improperly substituted its own opinion for evidence of the knowledge of a skilled artisan. The Board did not use record evidence to ascertain whether Miller met burden; relevant testimony was discounted as unconvincing; no testimony from one of ordinary skill to explain how the two exhibits could be viewed as an enabling disclosure. The Federal Circuit found that the Board introduced its own expertise into this lack of testimony.

FITZPATRICK, CELLA, HARPER & SCINTO © 2008 | 11 THE FEDERAL CIRCUIT DECISION  The Board asserted that a skilled artisan would have been able to recognize the suitability of particular dogs for the task of attaching the flitch to a staylog, which the Board believed could be inferred by a skilled artisan from viewing the two exhibits together, or from viewing the end-view exhibit only (in spite of the fact that the end-view exhibit indicated neither dogs, nor holes in the flitch for attaching dogs).  The standard of review allows the Board to use its expertise to interpret evidence in the record, but something outside the Board’s purview was attempted here. The relationship between a flitch (without dogs) and a bugle-headed dog (without a flitch) was neither depicted, nor explained by way of testimony. The Board believed that one of ordinary skill would be able to glean an enabled invention from these drawings (with benefit of the same insight possessed by the Board).  “[T]he artisan further would have recognized that Miller's dogs would permit the dogging holes to take the form of round holes or longitudinal pockets, with round holes offering the advantage of requiring less time and effort to form. The ability of the bugle-headed screw dogs to tightly clamp the flitch would have been readily apparent.” B.D. Priority, at 59 (emphasis added).

FITZPATRICK, CELLA, HARPER & SCINTO © 2008 | 12 THE FEDERAL CIRCUIT DECISION  The Federal Circuit made several findings highlighting the incorrect nature of the Board’s decision. “The Board’s finding that an artisan would have known how to securely fasten a tapered flitch to a staylog using bugle-headed dogs does not represent a simple substitution of bugle-headed dogs for existing dogs, but detailed inferences as to the mounting process. The detailed nature of the findings that the Board found necessary to make demonstrates the inappropriateness of its approach.... [T]he path that the Board determined that a skilled artisan would follow has, so far as the record reflects, never been followed.” Brand, 487 F.3d at (emphasis added).  The Federal Circuit held that the Board’s decision was based on its own expertise, and not adequately supported by substantial evidence of record; thus, Junior Party Miller did not meet the burden of proof.  The case was remanded to the Board for entry of judgment in favor of Senior Party Brand.

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