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In re Comiskey

January 13, 2009

IN RE STEPHEN W. COMISKEY


Appeal from the United States Patent and Trademark Office, Board of Patent Appeals and Interferences.

Per curiam.

Published opinion

(Serial No. 09/461,742)

ON PETITION FOR REHEARING EN BANC

Before MICHEL, Chief Judge, NEWMAN, MAYER, LOURIE, RADER, SCHALL, BRYSON, GAJARSA, LINN, DYK, PROST, and MOORE, Circuit Judges.

Concurring opinion filed by DYK, Circuit Judge, in which MICHEL, Chief Judge, and PROST, Circuit Judge, join. Concurring opinion filed by LOURIE, Circuit Judge. Dissenting opinion filed by MOORE, Circuit Judge, in which NEWMAN and RADER, Circuit Judges, join. Dissenting opinion filed by NEWMAN, Circuit Judge. NEWMAN, MAYER, RADER, BRYSON, and MOORE, Circuit Judges, would grant rehearing en banc with full briefing and argument rather than for the limited purpose of authorizing the panel to revise its opinion.

ORDER

This case was decided by a panel of three judges. A petition for rehearing en banc was filed by the Appellant, and a response was invited by the court and filed by the Appellee. The petition for rehearing en banc and response having been referred to the circuit judges who are in regular active service, and a poll having been requested and taken,

IT IS ORDERED THAT:

Rehearing en banc is granted for the limited purpose of authorizing the panel to revise its opinion.

The judgment of the court entered on September 20, 2007, and reported at 499 F.3d 1365 (Fed. Cir. 2007), is hereby vacated, and the opinion of the court accompanying the judgment is withdrawn.

The en banc court returns this appeal to the merits panel, which issues the revised opinion that accompanies this order.

DYK, Circuit Judge, with whom MICHEL, Chief Judge, and PROST, Circuit Judge, join, concurring.

Contrary to Judge Moore's dissent, the panel decision is entirely consistent with precedent allowing an appellate tribunal to affirm an agency on alternative legal grounds or to remand to the agency to consider an alternative ground. This authority is, in fact, so well-established that the petition for rehearing did not even raise the issue.

1. The dissent recognizes that under SEC v. Chenery Corp., 318 U.S. 80, 88 (1943), we may affirm an agency on a legal ground not decided by the agency. Dissenting op. at 4-5. Chenery itself is explicit on the point, 318 U.S. at 88, and we have repeatedly recognized that we possess such authority. See, e.g., Newhouse v. Nicholson, 497 F.3d 1298, 1301 (Fed. Cir. 2007) ("Thus, the Chenery doctrine is not implicated when the new ground for affirmance is not one that calls for a determination or judgment which an administrative agency alone is authorized to make." (internal quotation marks omitted)). However, the dissent appears to contend that under Chenery our court lacks power to uphold the Board's rejection on alternative legal grounds without first deciding that the original ground was erroneous. There is no authority cited in support of this view, and it is well established that an appellate court has the power to decide a case on alternative legal grounds without addressing the original ground for decision. For example, the Supreme Court did precisely this in Schenck v. Pro-Choice Network of Western New York, 519 U.S. 357, 384 n.12 (1997), in the face of a dissent. In that case, the district court issued a "cease and desist" provision as part of an injunction. Although the Court expressed "doubt" as to whether "the District Court's reason" was correct, it nevertheless upheld the "cease and desist" provision on alternative legal grounds without deciding whether the district court's rationale was correct or incorrect. Id. at 383-84. Notably, and relying in part on Chenery, the Supreme Court majority flatly rejected the dissent's objection that this was impermissible as "inconsistent with our precedents." Id. at 384 n.12. Schenck is governing authority that an appellate court may substitute a new ground for decision without rejecting the original ground. Our sister circuits have repeatedly recognized and exercised such authority,*fn1 as have we.*fn2 Indeed, we have done so explicitly in administrative proceedings.

In Koyo Seiko Co. v. United States, we held that we need not reach the ground relied upon below because "[w]e find it unnecessary to decide that question. We conclude that the judgment of the Court of International Trade . . . appropriately should be affirmed on a clearer and simpler alternative ground." 95 F.3d 1094, 1098 (Fed. Cir. 1996) (emphases added). The court discussed Chenery at length:

The . . . question is whether our affirmance of the judgment of the Court of International Trade on a ground other than that the court or the agency gave is consistent with the Supreme Court's decision in SEC v. Chenery Corp., 318 U.S. 80 (1943) ("Chenery"). We conclude that it is.

In Chenery, the Commission's determination whether the reorganization plan met the standards of the Holding Company Act involved and required the exercise of the broad discretion Congress had given the agency in applying those indeterminate standards. It was "a determination or judgment which an administrative agency alone is authorized to make," id. at 88, one reflecting "'its special administrative competence.'" Chenery, 318 U.S. at 92.

In the present case, in contrast, the sole issue is one of statutory construction . . . . That is not "a determination or judgment which an administrative agency alone is authorized to make." Chenery, 332 U.S. at 196. As we have concluded, the plain language of the statute compels the conclusion that the cap does not cover that situation. Unlike the situation in Chenery, the answer to that question does not require or implicate the exercise of agency discretion in applying subtle and complex statutory standards to particular facts.

Id. at 1099-1101 (internal citations omitted); see also GTE South, Inc. v. Morrison, 199 F.3d 733, 741-42 (4th Cir. 1999) (citing Koyo Seiko). Indisputably statutory subject matter is not a determination which the Patent & Trademark Office alone is authorized to make. See Merck & Co., Inc. v. Kessler, 80 F.3d 1543, 1549-50 (Fed. Cir. 1996) (no deference to Patent & Trademark Office on substantive patent law issues).

2. It is also well within the power of an appellate court to remand a case for consideration of an alternative issue that might obviate the need to decide the ground of the trial tribunal's decision, as the panel decision does in part. One such example is the Supreme Court's decision in Dretke v. Haley, 541 U.S. 386, 388-89 (2004). There, the Supreme Court declined to rule on the district court's application of the "actual innocence" doctrine in a habeas petition, noting that there were alternative legal grounds that the district court could consider. Remanding for a ruling on the alternative grounds "might obviate any need to reach" the "difficult questions regarding the scope of the actual innocence exception" implicated by the district court's ground for decision. Id. at 389, 396. Our sister circuits have done the same.*fn3

This is once again no less true in the administrative context. For example, the Second Circuit in Butt v. Gonzales, 500 F.3d 130, 132-33 (2d Cir. 2007), "decline[d] to consider" the ground that was the basis for the agency's decision and was the principal issue argued on appeal, and instead remanded to the agency for consideration of antecedent issues.

3. Nor is the dissent correct that § 706 of the Administrative Procedure Act imposes some special requirement in agency proceedings that the agency's ground first be rejected. Section 706 states in relevant part: "To the extent necessary to 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." 5 U.S.C. § 706. The dissent suggests that this language requires that we decide every issue presented on review. Dissenting op. at 8. Rather, the purpose of the mandatory language is to ensure that the reviewing court does not affirm the agency decision without first considering all bases for challenging an agency decision. See, e.g., Charlton v. United States, 412 F.2d 390, 391-393 (3d Cir. 1969) (reversing district court's decision because it violated § 706 by dismissing challenge to agency action without considering the basis for challenge). It does not require the decision of issues that are not "relevant." The statute and cases make clear that the reviewing court need not decide the validity of every ground for affirming the agency decision. See 5 U.S.C. § 706 (review need not extend beyond "the extent necessary to decision").

4. The panel here did not suggest that the court should reach new issues not decided below as a normal practice, but the facts of this case present unusual circumstances. The panel concluded that the § 103 rejection raised serious questions. Also, in an ex parte Patent & Trademark Office proceeding, there is no adverse party who could have raised the issue of statutory subject matter. The § 101 issue was fully briefed on appeal in this case at the court's invitation, and in its response the Patent & Trademark Office noted that "[a] well-considered, precedential decision of this Court would give the Office needed guidance in this area." Patent & Trademark Office Supp. Letter Br. 15. We concluded that addressing the issue was both desirable and appropriate.

LOURIE, Circuit Judge, concurring in the denial of the petition for further rehearing en banc.

I concur in the court's decision to take this case en banc, vacate the prior panel decision, and return it to the panel for disposition in the manner reflected in the opinion issued today. I do so even though I am sympathetic to Judge Moore's dissent. I believe the panel should have originally decided the appeal on the grounds appealed to us from the Patent Office's decision. However, having rendered the decision that it did, and which it now reaffirms as to the method claims, I do not believe we need to unwind the panel decision as to those claims in order to review the § 103 rejections. The panel was and is correct that the method claims do not pass muster under 35 U.S.C. § 101, and more uncertainty in the perceived state of the law that would be engendered by vacating that conclusion is not necessary or desirable.

I also concur in the court's decision to take this case en banc only for the limited purpose of remanding to the panel to vacate the issued opinion, rather than totally declining to take it en banc, another option. I do so because, under that option, the original opinion would stand, and, in my view, the original opinion states propositions contrary to law. Those propositions particularly include the conclusion that the system claims recite patent-eligible subject matter under § 101. In re Comiskey, 499 F.3d 1365, 1380 (Fed. Cir. 2007) ("[I]ndependent claims 17 and 46 . . . claim patentable subject matter under § 101 . . . ."). The panel also stated that "claims 17 and 46 at most merely add a modern general purpose computer to an otherwise unpatentable mental process . . . ." Id. Thus, it remanded those claims for further treatment "to determine in the first instance whether the addition of general purpose computers or modern communication devices to Comiskey's otherwise unpatentable mental process would have been non-obvious to a person of ordinary skill in ...


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