Zenon Environmental v. United States Filter (CAFC 06-1266)

The district court decision:

On April 27 and 28, 2005, the court held a bench trial on the validity of the ’319 patent. At trial, US Filter argued that the ’319 patent was not entitled to claim priority from the ’373 patent. In particular, US Filter asserted that the intervening patents failed to incorporate by reference the gas distribution system disclosed in the ’373 patent, and thus broke the chain of priority because the asserted claims in the ’319 patent were not supported by each patent in the family chain—a requirement for entitlement to the benefit of the filing date of an earlier patent under 35 U.S.C. § 120. In light of the undisputed fact that the ’373 patent contains each and every element of the claimed invention of the ’319 patent, US Filter argued that the ’373 patent invalidated the ’319 patent by reason of anticipation.

Incorporation is a matter of law, whereas anticipation is a finding of fact.

We have previously described incorporation by reference and anticipation as separate inquiries. We have stated that “no necessary contradiction exists given that incorporation by reference is a question of law while anticipation is a question of fact.” Id. We also clarified the court’s role in situations in which both inquiries are at issue. We held that “if incorporation by reference comes into play in an anticipation determination, the court's role is to determine what material in addition to the host document constitutes the single reference. The factfinder’s role, in turn, is to determine whether that single reference describes the claimed invention.” Id.

The case law standard for incorporation -

Incorporation by reference “provides a method for integrating material from various documents into a host document . . . by citing such material in a manner that makes clear that the material is effectively part of the host document as if it were explicitly contained therein.” Cook Biotech Inc. v. Acell, Inc., 460 F.3d 1365, 1376 (Fed. Cir. 2006) (quoting Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed. Cir. 2000)). “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. (emphases added). Whether material has been incorporated by reference into a host document, and the extent to which it has been incorporated, is a question of law. Cook, 460 F.3d at 1376. In making that determination, “the standard of one reasonably skilled in the art should be used to determine whether the host document describes the material to be incorporated by reference with sufficient particularity.” Advanced Display, 212 F.3d at 1282.

The relevant family tree: '319 is a continuation of a divisional of a divisional of two sequential CIPs -

['319 is a] continuation of Ser. No. 09/507,438, filed Feb. 19, 2000 issued as U.S. Pat. No. 6,294,039 [“the ’039 patent”]; which is a division of Ser. No. 09/258,999, filed Feb. 26, 1999, issued as U.S. Pat. No. 6,042,677 [“the ’677 patent”]; which is a division of Ser. No. 08/896,517, filed Jun. 16, 1997, issued as U.S. Pat. No. 5,910,250 [“the ’250 patent”]; which is a continuation-in-part application of Ser. No. 08/690,045, filed Jul. 31, 1996, issued as U.S. Pat. No. 5,783,083 [“the ’083 patent”] which is a non-provisional of provisional application Ser. No. 60/012,921 filed Mar. 5, 1996 and a continuation-in-part of Ser. No. 08/514,119, filed Aug. 11, 1995, issued as U.S. Pat. No. 5,639,373 [“the ’373 patent”].

The incorporation language in '319 was found derelict.

The incorporation by reference language states that:

The vertical skein is not the subject matter of this invention and any prior art vertical skein may be used. Further details relating to the construction and deployment of a most preferred skein are found in the parent U.S. Pat. No. 5,639,373, and in Ser. No. 08/690,045, the relevant disclosures of each of which are included by reference thereto as if fully set forth herein.

’250 patent col.2 ll.30-36 (emphases added).

The CAFC majority ruled that the priority chain had been broken.

We agree with US Filter that the district court erred by concluding that the ’319 patent is entitled to the priority date of the ’373 patent, and thus clearly erred in concluding that the ’319 patent was not anticipated by the ’373 patent. We begin our analysis by focusing on 35 U.S.C. § 120, which governs entitlement to an earlier filing date in the United States. That section provides that:

An application for patent for an invention disclosed in the manner provided by the first paragraph of section 112 of this title in an application previously filed in the United States . . . which is filed by an inventor or inventors named in the previously filed application shall have the same effect, as to such invention, as though filed on the date of the prior application[.]

35 U.S.C. § 120. “In order to gain the benefit of the filing date of an earlier application under 35 U.S.C. § 120, each application in the chain leading back to the earlier application must comply with the written description requirement of 35 U.S.C. § 112.” Lockwood v. Am. Airlines, Inc., 107 F.3d 1565, 1571 (Fed. Cir. 1997); see also Reiffin v. Microsoft Corp., 214 F.3d 1342, 1346 (Fed. Cir. 2000) (noting that “claims to subject matter in a later-filed application not supported by an ancestor application in terms of § 112 ¶ 1 . . . do not receive the benefit of the earlier application’s filing date”). Thus, in order for the ’319 patent to be entitled to priority from the ’373 patent, continuity of disclosure must have been maintained throughout a chain of patents from the ’373 patent leading up to the ’319 patent.

We are not persuaded by Zenon’s assertion, which the trial court accepted, that that language incorporates by reference the entire disclosures of the ’373 and ’083 patents. Such an interpretation is inconsistent with the plain language of the statement. The plain language expressly limits the incorporation to only relevant disclosures of the patents, indicating that the disclosures are not being incorporated in their entirety. Moreover, the plain language indicates that the subject matter that is being incorporated by reference pertains to the details relating to the construction and deployment of a vertical skein. Thus, we must look, as one reasonably skilled in the art would, to the grandparent patents to determine what the patentees meant by details relating to the construction and deployment of a vertical skein.

Accordingly, because the ’250 patent fails to incorporate by reference, with sufficient particularity to one reasonably skilled in the art, the gas distribution system disclosed in the ’373 patent, and thus a lack of continuity of disclosure exists in the family chain, the ’319 patent is not entitled to the filing date of the ’373 patent. Because it is undisputed that the ’373 patent discloses each and every limitation of the claims of the ’319 patent, and the ’373 patent was filed more than one year prior to the filing of the ’319 patent, we thus conclude that the ’319 patent is anticipated by the ’373 patent and hence invalid.

Judge Newman, ever acute, dissented.

I respectfully dissent, for my colleagues have converted fact into law and ignored the findings of the district court as well as the agreed and undisputed facts, and misapplied the rules of incorporation by reference. The consequence is that the disclosure in the "grandparent" ('373) patent is held by this court to "anticipate" and thereby invalidate the "grandchild" ('319) patent that contains the text of the '373 patent.

The question of what material would be understood as incorporated is a question of fact, on which the district court made extensive findings...

The court also observed that the incorporation was reviewed by the patent examiner. This administrative finding carries the deference required by the Administrative Procedure Act. See Dickinson v. Zurko, 527 U.S. 150, 152 (1999). My colleagues ignore the administrative findings, as they ignore the district court.

The panel majority does not review the district court's findings, and instead announces that this is a matter of "law." However, the question of what would be "reasonably conveyed to a person skilled in the relevant art," is a classical question of fact. Bilstad v. Wakalopulos, 386 F.3d 1116, 1126 (Fed. Cir. 2004).

The question of what technology is included in the incorporation clause, as it would be understood by a person of ordinary skill in the field of the invention, was resolved by the district court, in findings that have not been shown to be clearly erroneous. These highly factual questions are not rules of law; they are the facts to which 35 U.S.C. '120 is applied. Cf. Arrowhead Indus. Water, Inc. v. Ecolochem, Inc., 846 F.2d 731, 735 (Fed. Cir. 1988) ("the district court's view of the legal effect of the fact pattern before it is not to be lightly disregarded").

The panel majority's holding casts doubt on the reliable use of this expedient, lest an earlier patent become an invalidating reference against its successors in the chain of filings. The majority's rejection of the factual foundations of incorporation by reference and creation of a new area of de novo appellate authority, raise new risks of patent drafting. 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.

The majority ruling was harsh, while the dissent overstates but a bit. How much easier just to incorporate by reference in entirety, as proficient prosecutors do all the time; this sidesteps the problem entirely. If the appeals and Supreme courts were not in such a sustained anti-patent mood, the benefit would have been granted the patent holder, as the district court so patiently decided.