Ex parte Shaw

Informative decision only: persuasive authority, not binding precedent. When an ex parte applicant lost an issue (here, enablement of claimed apparatus) in a final inter partes interference decision and the four issue-preclusion elements are met, the Board may apply issue preclusion to bar relitigating that issue in ex parte prosecution, and may reject method-of-use claims that read on the non-enabled apparatus as non-enabled under § 112, first paragraph. The applicant must also overcome the prior adverse holding under the same standard of proof (clear and convincing evidence) that applied in the interference, and is not permitted to present additional evidence on the precluded issue. No prior precedent directly addressed this issue: the Board said it could locate no precedential Federal Circuit decision applying issue preclusion based solely on an unreviewed prior administrative agency decision, though it cited approvals of interference estoppel. The decision distinguishes the CCPA ex parte res judicata cases (In re Herr, In re Russell) as involving prior ex parte decisions. For an examiner, a prior interference holding of non-enablement can serve as the prima facie case, and later declarations on the precluded issue need not be considered. For the applicant, new declarations and arguments that the Board erred are foreclosed, because errors had to be corrected by rehearing or judicial review under 35 U.S.C. 146, and the applicant carries the interference burden of clear and convincing evidence. The Board relied on In re Freeman, 30 F.3d 1459 (Fed. Cir. 1994) for the four-element test, and on United States v. Utah Construction & Mining Co. and Astoria Federal Savings v. Solimino for preclusion based on administrative adjudication. LEGAL TEST OR STANDARD: Per In re Freeman, a party, including an ex parte applicant, may be precluded when (1) the issue is identical to one decided in the first action, (2) the issue was actually litigated in the first action, (3) resolution of the issue was essential to a final judgment in the first action; and (4) plaintiff had a full and fair opportunity to litigate the issue in the first action. The Board then considers whether to exercise discretion not to apply preclusion, including differences in procedural opportunities and burden of proof. Preclusion is inappropriate where Congress has indicated otherwise. TRIGGERING FACTS: Applicant's claims were copied to provoke Interference 100,775, where the Board held at final hearing that the grandparent specification did not enable the claimed apparatus (a right-to-make issue), applicant had testimony, briefing and cross-examination, and judicial review under 35 U.S.C. 146 was dismissed. In the continuation, method-of-use claims covered use of that apparatus and the examiner rejected under 112, first paragraph. Applicant's burden in the interference was clear and convincing evidence, the same standard imposed on overcoming the holding ex parte. KEY QUOTE: "In view of principles announced by the Supreme Court and the Federal Circuit, we have no difficulty - - in an appropriate case - - applying "issue preclusion" against an applicant in an ex parte proceeding to bar that applicant from re-litigating ex parte an issue which was resolved against it inter partes in an interference proceeding before t.his board." (p. 27) PRIOR PRECEDENT AFFECTED: No prior Board precedential or informative decision is directly affected. The Board distinguished In re Herr, 377 F.2d 610 (CCPA 1967) and In re Russell, 439 F.2d 1228 (CCPA 1971) as involving prior ex parte decisions, and followed In re Freeman, 30 F.3d 1459 (Fed. Cir. 1994) and the interference estoppel cases In re Kroekel, Woods v. Tsuchiya and Meitzner v. Mindick. It cited Ex parte Tytgat, 225 USPQ 907 (Bd. App. 1985), only for use of a five-judge panel. PRACTICE TIP: If you lost an issue in an interference, do not expect to relitigate it ex parte with new declarations or by arguing the Board erred; seek rehearing or judicial review in the interference. Before filing a continuation, assume that the burden of proof from the interference will follow you and that claims reading on non-enabled subject matter will fail, so draft narrower claims outside the held-non-enabled subject matter.