Zenon Envtl, Inc. v. U.S. Filter Corp., 506 F.3d 1370 (Fed. Cir. 2007)

A divided panel of the Federal Circuit recently ruled that a grandparent patent anticipated, and therefore invalidated, a grandchild patent in the same family due to a lack of continuity of disclosure in the patent family chain. Zenon Envtl, Inc. v. U.S. Filter Corp., 506 F.3d 1370 (Fed. Cir. 2007). The patentee in Zenon was granted a family of patents related to water treatment and filtration systems. The grandchild patent-in-suit claimed priority to a grandparent patent which disclosed each element of the claims of the grandchild. The majority held that the grandchild claims were invalidated by the grandparent patent because there was a lack of continuity of disclosure in the intervening patents, and thus an improper claim to priority. The patentee attempted to maintain continuity of disclosure in the intervening patents through an incorporation by reference to the grandparent patent. The majority concluded, however, that the incorporation by reference was drafted too narrowly to encompass a gas distribution system that was an element of the grandchild patent’s claims; thus the continuity chain was broken.

Although Zenon turns on the language of the particular incorporation by reference, the Federal Circuit’s analysis could easily be applied in other situations. Zenon, therefore, is of concern to all businesses that prosecute families of patents on the same or similar subject matter. A potential patentee must take care to ensure continuity of disclosure, or risk having its own earlier patents anticipate later patents

Lack of Continuity of Disclosure Leads to Invalidation

In Zenon, the grandchild patent-in-suit was the sixth patent to issue from a family of applications filed by the same assignee. See 506 F.3d at 1374. The grandchild claimed priority to a grandfather patent that disclosed each element of the claims of the grandchild. Id. at 1379. The parties disagreed whether the four intervening patents between the grandfather and the grandchild contained a continuity of disclosure for one element of the asserted grandchild patent claims, namely a type of gas distribution system.

A continuity of disclosure must be maintained throughout a chain of patents in order for a grandchild patent to be entitled to the benefit of the earlier filing date (i.e., priority) of the grandparent patent under 35 U.S.C. § 120. One method of maintaining continuity of disclosure is for a patentee to incorporate an earlier disclosure by reference. Id. at 1378. “To incorporate material by reference, the host document must identify with detailed particularity what specific material it incorporates and clearly indicate where that material is found in the various documents.” Id. (citation omitted).

The intervening patents in Zenon incorporated by reference certain parts of the grandparent patent. Id. at 1379. The Zenon majority, overruling the district court’s findings, held that the express wording of the incorporation by reference limited the incorporated material to specific disclosures concerning “construction and deployment of a vertical skein,” and thus did not include the gas distribution system disclosed in the grandparent patent. Id. at 1379-80. As a result, the continuity of disclosure in the intervening patents with respect to the gas distribution system was broken, and the grandchild patent could not claim the earlier priority date. Id. at 1381. The grandparent patent thus was prior art, anticipating all asserted claims of the grandchild patent.

Dissent Urges Broader View of Incorporation by Reference

In dissent, Judge Pauline Newman disagreed both with the majority’s decision not to give deference to the findings of the district court and the majority’s narrow reading of the incorporation by reference. First, the dissent criticized the majority’s decision to review the continuity issue as a “matter of law” subject to a de novo standard rather than the clearly erroneous standard accorded to a district court’s factual findings. Id. at 1383-85. Second, the dissent read the incorporation by reference in the intervening patents broadly enough to maintain the continuity of disclosure necessary to establish the grandchild’s claim of priority to the grandparent. Id. at 1385.

The dissent expressed the practical concern that the majority’s ruling raises risks in drafting patent applications in the same family:

The apparent requirement that all subject matter must be reproduced in all continuing applications adds nothing to the knowledge disclosed to the public, adds nothing to the information provided to the patent examiner, and adds nothing to compliance with 35 U.S.C. § 120; it simply adds costs and pitfalls to inventors, as they attempt to walk new judicial tightropes.

Id. at 1385-86.

This opinion emphasizes the need for patent applicants and drafters to exercise diligence in prosecuting additional applications within the same family to ensure continuity of disclosure and avoid potential invalidity problems.