Holding:

In SynQor, Inc. v. Vicor Corp., No. 20-1259 (Fed. Cir. June 17, 2022) (non-precedential), the Court of Appeals for the Federal Circuit vacated the decision of the Patent Trial and Appeal Board upholding a rejection of claims 49 and 50 of U.S. Pat. No. 7,272,021 (“the ’021 patent”).

Background:

SynQor sued Vicor for infringement, and then Vicor filed a request for inter partes reexamination of several patents, including the ’021 patent and a related patent, U.S. Patent No. 7,072,190 (“the ’190 patent”).[1] Inter partes reexamination was granted on both patents, with the reexamination of the ’190 patent proceeding to final resolution first. The examiner rejected all challenged claims of the ’190 patent, including claims 34-38 that SynQor sought to add during reexamination. Id. at *2. The Board reversed, and then the Federal Circuit reversed-in-part, vacated-in-part, and remanded “for the Board to consider the examiner’s obviousness rejections in light of our conclusion that a prior art patent, incorporating another prior art patent by reference, anticipated claims 20–23, 27, 29, 30, 32, and 33.” Id. at *3.

On remand, the Board affirmed the examiner’s rejection except with respect to claim 34, for which the Board entered a new ground of rejection. Id. SynQor then reopened prosecution before the examiner, after which the case again made its way to the Board. Before the Board issued a decision on claim 34, the ’190 patent expired, but the Board still went on to issue a final decision affirming the new rejection. Id.

SynQor appealed that decision, which the Federal Circuit vacated “because ‘the ’190 patent expired before the appeals of the patentability of claims 34–38 terminated,’ meaning that ‘the claims will never issue,’ and the Board’s patentability determinations were unreviewable for mootness.” Id. (quoting SynQor, Inc. v. Vicor Corp., 988 F.3d 1341 (Fed. Cir. 2021) (“SynQor IV”)).

The challenged claims of the ’021 patent at issue in this case were also rejected in inter partes reexamination, including claims 49 and 50 that SynQor sought to add during reexamination. Id. at *4. The Board affirmed the examiner’s rejection, and the Federal Circuit affirmed-in-part, vacated-in-part, and remanded “for the Board to reconsider two obviousness grounds for which the Board had, without explanation, reached inconsistent conclusions in a separate reexamination proceeding for another related patent.” Id. Before the Board issued its remand decision, the ’021 patent expired, but the Board still went on to issue a final decision affirming the new rejection. Id. SynQor petitioned for rehearing, asking the Board to vacate its remand decision since the ’021 had already expired, but the Board declined. Id.

Federal Circuit:

The Federal Circuit agreed with SynQor that the reasoning of SynQor IV applied mutatis mutandis, and vacated the Board’s decision rejecting claims 49 and 50 of the ’021 patent.

The Federal Circuit began its analysis by rejecting Vicor’s argument that the Court had no Article III jurisdiction over the appeal:

The Supreme Court explained in U.S. Bancorp that lack of jurisdiction over the merits does not prevent a federal appellate court from taking any action regarding the litigation. U.S. Bancorp [Mortg. Co. v. Bonner Mall P’ship,] 513 U.S. [18,] 21 [(1994)]. Rather, when a case becomes moot, the appellate court “may make such disposition of the whole case as justice may require,” including vacating an unreviewable decision. Id. ... As we implicitly concluded in SynQor IV, we have jurisdiction to consider and grant SynQor’s request for vacatur.

Id. at *5. The opinion in U.S. Bancorp applied the holding of United States v. Munsingwear, 340 U.S. 36 (1950), “whereby an appellate court can vacate a lower court’s or administrative agency’s decision when review of that decision on the merits becomes moot ‘by the vagaries of circumstance.’” U.S. Bancorp, 513 U.S. at 25 (“the Munsingwear doctrine”).

The Federal Circuit agreed with SynQor that the circumstances of this case were “materially indistinguishable” from SynQor IV:

    • the patent expired before the Board’s final determination finding unpatentable new claims added during reexamination;
    • claims added during reexamination are not incorporated into the patent until a reexamination certificate issues, so the added claims will never issue; and
    • the patentability determinations for those claims are therefore moot.

Id. at *6. The Federal Circuit granted SynQor’s request for vacatur of the Board’s decision regarding claims 49 and 50 of the ’021 patent.

Judge Lourie dissented, finding a difference between the timeline of rejections and patent expiration in this case and SynQor IV. Specifically, in SynQor IV, the Board first rejected claim 34 two years before the patent expired, but in the case at hand, the patent had expired before the Board rejected new claims 49 and 50. In addition, Judge Lourie noted that vacatur is an equitable remedy which requires clean hands, and Judge Lourie was not convinced SynQor’s hands were clean:

13 months … passed during which the ’021 patent appeal was pending before the Board and SynQor did not notify the Board that the patent had expired. It only did so a month after the Board’s decision. That looks suspiciously like a strategic decision to lay low until the decision and, only if one lost, seek vacatur. That is not happenstance; it looks like either gamesmanship or negligence, and rewarding that conduct with vacatur is not equity.

Dissent, at *2. For these reasons, Judge Lourie would have affirmed the Board’s decision.

Take-Aways:

Practitioners need to guard against any appearance of “gamesmanship.” In this case, the timing of the patent expirations and the Board decisions was found due to “vagaries” rather than “gamesmanship,” but only by 2 of the 3 judges on the panel. Indeed, the dissent shows that courts may look to delays in notifying the USPTO of relevant information when deciding between whether certain actions are “gamesmanship” or “vagaries.”

This opinion was made more topical by the release of a notice from the USPTO on July 28, 2022, titled “Duties of Disclosure and Reasonable Inquiry During Examination, Reexamination, and Reissue, and for Proceedings Before the Patent Trial and Appeal Board.”

The duty of disclosure in 37 C.F.R. 1.56 is familiar to many as the basis for inequitable conduct allegations. But there is an additional separate rule specifically aimed at reexamination codified under 37 CFR 1.555(a). That rule states:

Each individual associated with the patent owner in a reexamination proceeding has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability in a reexamination proceeding.

Practitioners should guard against any appearance of “gamesmanship” and consider what is needed to satisfy Rule 56 and Rule 555.