Wertz v. Rose

Informative decision only: persuasive authority, not binding precedent. Where the parties agree to arbitrate an interference under 37 CFR § 1.690 and agree that the arbitrator's decisions are binding and that the Board may enter judgment on them, the arbitrator's decisions are dispositive as to the parties, and the Board considers them and enters judgment on them. Here the Board substituted the arbitrator's modified count and entered priority judgment based on the reasons in the arbitrator's decisions (Papers 31 and 38). No prior precedent directly addressed this issue in the text; the decision cites no earlier Board decision. For the opposing party in an interference, an agreed arbitration under 37 CFR § 1.690 produces a result that the Board will convert into a final judgment, including a redeclared count and designation of corresponding claims, so the arbitrator's rulings on preliminary motions and priority are effectively final as between the parties. For the party that loses before the arbitrator, here junior party Wertz, the arbitrator's decisions are dispositive, and the Board entered judgment that Wertz was not entitled to a patent containing claims 1, 5, 6, and 10 of the patent. The Board also required the prevailing party to file a terminal disclaimer and cancel a claim to offset delay. The decision cites no Federal Circuit, CCPA or Supreme Court authority; it relies on 37 CFR § 1.690(a) and (c). LEGAL TEST OR STANDARD: The Board stated no multi-factor test. Under 37 CFR § 1.690(a), where the parties have agreed that the arbitrator's decisions are binding and that judgment can be entered by the Board, and under 37 CFR § 1.690(c), the arbitrator's decisions are dispositive as to the parties and are considered by the Board. The Board then finds it appropriate to act based on the record and the arbitrator's reasons. TRIGGERING FACTS: The parties agreed to arbitrate under 37 CFR § 1.690 (Paper 28). The arbitrator issued a decision on preliminary motions (Paper 31), which modified Count 1 into Count 2 and found only certain claims corresponding. The arbitrator also issued a final decision on priority (Paper 38), finding that Wertz proved neither an actual reduction to practice before Rose's constructive reduction to practice nor an earlier conception. The arbitrator's decisions were filed with the Board. KEY QUOTE: "The arbitrator’s decisions are dispositive as to the parties and have been considered by the Board." (Paper 39, p. 5) PRIOR PRECEDENT AFFECTED: No prior precedential or informative decision is directly affected. PRACTICE TIP: Before agreeing to arbitrate an interference under 37 CFR § 1.690, treat the arbitrator's rulings, including on preliminary motions to modify the count and on priority, as final. The Board will enter judgment on them, so put every argument before the arbitrator and expect to comply with Board-imposed conditions such as a terminal disclaimer.