Another BPAI ruling on January 7, 2010, ex parte Nakashima, went directly "to consider whether arguments that could have been presented in the Principal Brief on Appeal, but were not, may be presented in the Reply Brief in the absence of a showing of good cause."

The examiner's final rejection and answer to the principal brief were "substantially the same as, if not identical." "Nakashima raised new arguments against the rejection in the Reply11 and at oral argument. Nakashima does not explain what "good cause" there might be to consider the new arguments. On this record, Nakashima's new arguments are belated."

The same language, about the reply brief not being "an opportunity to make arguments that could have been made during prosecution, but were not," is identical in Nakashima and Borden.

Continuing, both rulings of the same script:

Giving cognizance to belated arguments in a reply would vitiate the force of the requirement in Board Rule 37(c)(1)(vii) that "[a]ny arguments or authorities not included in the brief . . . will be refused consideration by the Board, unless good cause is shown." The reference in that section to the "reply brief filed pursuant to § 41.41" does not create a right for the Appellant to raise an argument in the reply brief that could have been raised in the principal brief but was not.

Nakashima had raised a new justification to overcome examiner's obviousness rejection via combining two prior art references: that there was "no reason to combine" the two references used, because the "combination would not have been obvious nor desirable to one skilled in the art."

The Board's rationale, and an appellant's escape value for missing a beat: file a new application or RCE -

In any event, the Appellant can have a full and fair opportunity to raise additional issues and to provide additional evidence by way of refiling the application under an appropriate provision of 37 C.F.R. § 1.53, or by seeking continued prosecution under § 1.114. It is in no way unfair to require applicants for patents, including Appellants to the Board, to present their best arguments in a timely fashion. Belated arguments, if addressed, impose costs on the Agency (specifically on the Examiner, the Technical Center Directors, and the Board), which in turn impose costs on the public (most directly, on other applicants and appellants, who must wait longer for consideration of their applications and appeals; and indirectly, on the general public, which must wait longer for the benefits provided by a healthy and vigorous patent system). Properly interpreted, the Rules do not require the Board to take up a belated argument that has not been addressed by the Examiner, absent a showing of good cause.

In dissent, Administrative Patent Judge Owens.

Because the Appellant's arguments are in the Reply Brief, as specifically permitted by 37 C.F.R. § 41.37(c)(1)(vii), the Appellant did not need to present a showing of good cause as to why the arguments were not presented earlier.

Since July 1, 1998 an argument in a reply brief is not rendered belated by not being limited to a new point of argument in the examiner's answer.

Because the clear meaning of 37 C.F.R. § 41.37(c)(1)(vii) does not forbid new arguments in a reply brief that are not directed toward new points of argument in the examiner's answer, an appellant should not have to refile the application to have those arguments considered by the Board.

Even if a government agency is given the "arbitrary and capricious" standard of review, in my view an agency's interpretation of its own rule as implicitly including a requirement the agency has intentionally explicitly deleted from the rule is arbitrary and capricious.

Well put, Judge Owens.

Hat tip of recognition to Professor Crouch at Patently-O.