Durance - Important Rules Related to Ex Parte Appeal Practice at the PTAB

In re Durance is an important new precedential opinion from the Federal Circuit that touches on several aspects related to patent prosecution at the USPTO, including ex parte appeals before the PTAB.

The case relates to a patent application directed to improved methods and apparatuses for microwave vacuum-drying of organic materials, such as food products and medicinal plants.  The application describes dehydrating organic material, such as fruits and berries, by placing the material in a container,transferring the container to a vacuum chamber, and rotating the container as it moves through the vacuum chamber while applying microwave radiation to the organic material.

While future posts may discuss other aspects of this case, one important topic here was that of waiver in an appeal brief. The PTAB currently has a love affair with waiver and tries to find it wherever possible, sometimes in the most dubious of circumstances. Obviously when waiver applies, the Board does not have to deal with the substance of an argument and can simply ignore it, which makes for more efficient affirmances of rejections.

The issue here was whether new arguments raised in the Examiner's answer can open the door for the appellant to respond to new arguments in a reply brief. Remember, at the USPTO, some examiners do not really even read the arguments and simply maintain final rejections as a matter of course. These examiners only really ever consider the arguments once an appeal brief is filed. Thus, it is common for these examiners to set forth new reasons (although not designated as a new ground of rejection) in the Answer, leaving the appellant only the reply brief to counter them. 

However, the PTAB often finds waiver in new arguments in a reply brief, even when these new arguments were prompted because of new reasoning in the examiner's Answer. Unfortunately, it is common practice for the PTAB to ignore arguments in a reply brief by simply citing to 37 C.F.R. § 41.41(b)(2) and stating that these arguments were not shown to be responsive to
an argument raised in the Answer. 

In this case, the Federal Circuit took on the issue and was not impressed with the PTAB's approach or the USPTO lawyers trying to defend it. As the Federal Circuit explains in its opinion

Section 41.41(b)(2) permits a reply brief to respond to “an argument raised in the examiner’s answer.” In particular, nothing in this provision bars a reply brief from addressing new arguments raised in the examiner’s answer that are not articulated in the Final Office Action, regardless of whether the examiner designated that new argument as a “new ground of rejection.”7 To be clear, 37 C.F.R. § 41.39(a)(1) provides that “[a]n examiner’s answer is deemed to incorporate all of the grounds of rejection set forth in the Office action from which the appeal is taken.” Since the examiner’s answer is deemed to incorporate all grounds in the Final Office Action, an applicant’s reply may not respond to grounds or arguments raised in the examiner’s answer if they were part of the Final Office Action and the applicant did not address them in the initial appeal brief. If an examiner’s answer includes arguments raised for the first time, i.e., not in the Final Office Action, an applicant may address those arguments in the reply. 37 C.F.R. §§ 41.39, 41.41.

What is amazing here is that the lawyers defending the PTAB decision actually argued before the court that the applicant MUST petition the fact that there are new arguments in order to address said new arguments in the reply brief. The court correctly noted that there is no such requirement. 

So, when an Examiner raises new arguments or reasons in the Answer, you can and should address those new arguments in the reply brief. Further, it is good practice to explain why these new arguments are presented, and point out exactly how the Examiner has shifted the rejection or introduced new reasoning and/or citations. And you may want to cite Durance for good measure.