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AFFIRMED O'MALLEY, Circuit Judge, concurring in the result. I concur in the judgment only. I agree with the majority's conclusion that Keurig's asserted patent rights were exhausted by the sale of its patented brewers. Reaching this result requires application of a single principle: “[t]he longstanding [rule] ... that the initial authorized sale of a patented item terminates all patent rights to that item.” Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617, 625 (2008). This would include all rights to claims which recite methods which involve the normal and intended use of the patented item. The conclusion that the rights to the asserted methods were exhausted by the brewer sales in this case does not, however, depend upon whether exhaustion should be assessed on a claim-by-claim or patent-by-patent basis. Keurig's patent rights covering normal methods of using its brewers to brew coffee would be exhausted by the sale of the Keurig brewers, regardless of which patent or patents contain the relevant apparatus and method claims. Thus, the majority's conclusion that exhaustion should not be assessed on a claim-by-claim basis is dicta. To the extent it could be characterized as anything other than dicta, I must dissent from that conclusion. There could be instances where assessing exhaustion on a claim-by-claim basis—the same way we conduct almost every analysis related to patent law—would be necessary and appropriate. “[E]ach claim must be considered as defining a separate invention.” Jones v. Hardy, 727 F.2d 1524, 1528 (Fed.Cir.1984). “Because patent claims are independent of each other, it stands to reason that the legal doctrine of patent exhaustion should apply on a claim-by-claim basis.” Amicus Br. of Boston Patent Law Ass'n at 7. Thus, to the extent the majority purports to lay down a blanket rule affecting cases with facts that diverge widely from those we consider today, I must dissent.
UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT 678 F.3d 1357 (2012) Before NEWMAN, LOURIE, and MOORE, Circuit Judges. Opinion for the court filed by Circuit Judge LOURIE. Dissenting opinion filed by Circuit Judge NEWMAN. LOURIE, Circuit Judge.
I.
Baxter owns the '434 patent, entitled "Method and Apparatus for Kidney Dialysis," which discloses and claims a hemodialysis machine integrated with a touch screen user interface that allows an operator to monitor and control a number of parameters. Figure 8 of the patent, reproduced below, depicts an exemplary touch screen interface: 
As depicted above, the interface allows an operator to monitor and control a number of treatment parameters, such as the dialysate temperature, and the patent details the computer system that interfaces with the touch screen to control the delivery of the dialysate and other liquids. Claim 26 of the patent, reproduced below, recites the elements of the integrated hemodialysis machine: 26. A hemodialysis machine comprising: (a) means for controlling a dialysate parameter selected from a group consisting of dialysate temperature and dialysate concentration, and means for delivering the dialysate to a dialysate compartment of a hemodialyzer; and (b) a user/machine interface operably coupled to said dialysate-delivery means, the user/machine interface comprising a touch screen adapted to display an indicium corresponding to a parameter pertinent to operation of the hemodialysis machine for performing hemodialysis and to permit the user, by touching the indicium, to cause a change in the parameter. '434 patent, col.40 ll.29-43 (emphases added). . . . II.
III.
In 2006, in parallel with the Fresenius litigation, the United States Patent & Trademark Office ("PTO") began to reexamine the '434 patent, stimulated by Fresenius. In the course of those proceedings, the examiner found that a number of references rendered obvious claims 26-31 of the patent, including, among other references, the CMS 08 Manual, the Sarns 9000 Manual, U.S. Patent 4,370,983 ("Lichtenstein"), and U.S. Patent 4,710,166 ("Thompson"). Specifically, with regard to claims 26-29 and 31, the examiner concluded that those claims would have been obvious in light of the combined teachings of the CMS 08 Manual, Lichtenstein, the Sarns 9000 Manual, and two other references not at issue on appeal. Regarding claim 30, the examiner concluded that it would not have been patentable over a combination of the same references in view of Thompson. Baxter appealed the examiner's final rejections to the Board. After briefing and oral argument before the Board but prior to issuance of the Board's decision, we decided the Fresenius case. Shortly thereafter, Baxter petitioned the Director of the PTO to remand the reexamination to the examiner to consider the rejections in light of our Fresenius decision. The Director denied the petition but ordered the Board to consider our decision in Fresenius. The Board affirmed the examiner's rejections of claims 26-31. Regarding our Fresenius decision, the Board discussed the holding of the case and concluded that "[a]lthough claims 26-31 were not proven invalid in court, a lower standard of proof and the broadest reasonable interpretation standard of claim construction apply at the PTO and therefore the agency is not bound by the court's determination." *** Baxter timely appealed, and we have jurisdiction under 28 U.S.C. § 1295(a)(4)(A). DISCUSSION ***
B. [Baxter’s arguments on the merits are rejected.] We also reject Baxter's argument that the Board erred because it "ignored" our decision in Fresenius and failed to "give serious consideration" to the district court's Fresenius decision. First, as recounted above, the Board expressly considered our decision in Fresenius. More fundamentally, the PTO in reexamination proceedings and the court system in patent infringement actions "take different approaches in determining validity and on the same evidence could quite correctly come to different conclusions." Swanson, 540 F.3d at 1377 (quoting Ethicon, 849 F.2d at 1428). In particular, a challenger that attacks the validity of patent claims in civil litigation has a statutory burden to prove invalidity by clear and convincing evidence. Should the challenger fail to meet that burden, the court will not find the patent "valid," only that "the patent challenger did not carry the 'burden of establishing invalidity in the particular case before the court.'" Swanson, 540 F.3d at 1377. In contrast, in PTO reexaminations "the standard of proof--a preponderance of the evidence--is substantially lower than in a civil case" and there is no presumption of validity in reexamination proceedings. This case thus illustrates the distinction between a reexamination and a district court proceeding. In Fresenius, we upheld the district court's grant of judgment as a matter of law because the patent challenger failed to meet its burden to prove invalidity by clear and convincing evidence--it "failed to present any evidence . . . that the structure corresponding to the means for delivering dialysate limitation [in claim 26], or an equivalent thereof, existed in the prior art" and did not identify "the structure in the specification that corresponds to the means for delivering dialysate" or compare the identified structure to those structures present in the prior art. Ultimately, we concluded that the clear and convincing burden of proof in the "means plus function" context "cannot be carried without clearly identifying the corresponding structure in the prior art." Fresenius, at 1300. In contrast, during the reexamination, the examiner sufficiently identified the corresponding structure recited in the '434 patent and identified the structures in the prior art such that a reasonable person might accept that evidence to support a finding that claim 26 is not patentable under a preponderance of the evidence standard of proof. Moreover, in addition to relying on the CMS 08 Manual, the examiner based those rejections on prior art references that were not squarely at issue during the trial on the invalidity issues, such as Lichtenstein and Thompson. Thus, because the two proceedings necessarily applied different burdens of proof and relied on different records, the PTO did not err in failing to provide the detailed explanation now sought by Baxter as to why the PTO came to a different determination than the court system in the Fresenius litigation. Lest it be feared that we are erroneously elevating a decision by the PTO over a decision by a federal district court, which decision has been affirmed by this court, the following additional comments must be made. When a party who has lost in a court proceeding challenging a patent, from which no additional appeal is possible, provokes a reexamination in the PTO, using the same presentations and arguments, even with a more lenient standard of proof, the PTO ideally should not arrive at a different conclusion. However, the fact is that Congress has provided for a reexamination system that permits challenges to patents by third parties, even those who have lost in prior judicial proceedings. Usually one would expect that any such reexamination, such as the one before us, would raise new issues. In this case, the patent examiner relied on new prior art that had not been raised in the prior district court proceeding. Why Fresenius did not present that prior art before the district court we do not know. But the Director apparently found that a substantial new question of patentability had been raised and the examiner was then entitled to conduct a reexamination on the basis of the new art presented and her search of the prior art. Thus, this case is not about the relative primacy of the courts and the PTO, about which there can be no dispute. Finally, we could not conclude that the PTO was barred from conducting the reexamination of the '434 patent because of the final judgment in Fresenius without overruling Ethicon and Swanson, which we cannot do. ***
We have considered Baxter's remaining arguments and conclude that they are without merit. For the foregoing reasons, the Board's determination that claims 26-31 were not patentable is
[Judge Newman, dissenting, took the view that the appellate court's final judgment cannot be overridden by administrative proceeding at the PTO.] ON PETITION FOR REHEARING EN BANC: 698 F.3d 1349 (October 26, 012) Before RADER, Chief Judge, NEWMAN, LOURIE, BRYSON, LINN, DYK, PROST, MOORE, O'MALLEY, REYNA, and WALLACH, Circuit Judges. O'MALLEY, Circuit Judge, with whom RADER, Chief Judge, and LINN, Circuit Judge, joins, concurs in the denial of the petition for rehearing en banc. NEWMAN, Circuit Judge, dissents from the denial of the petition for rehearing en banc. PER CURIAM. ORDER A combined petition for panel rehearing and rehearing en banc was filed by Appellant, and a response thereto was invited by the court and filed by Appellee. The petition for rehearing was considered by the panel that heard the appeal, and thereafter the petition for rehearing en banc and the response were referred to the circuit judges who are authorized to request a poll of whether to rehear the appeal en banc. A poll was requested, taken, and failed. Upon consideration thereof, IT IS ORDERED THAT: (1) The petition of Appellant for panel rehearing is denied. (2) The petition of Appellant for rehearing en banc is denied. (3) The mandate of the court will issue on November 2, 2012. O'MALLEY, Circuit Judge, concurring, with whom RADER, Chief Judge, and LINN, Circuit Judge join. I concur in the denial of the request for rehearing en banc. I do so, however, premised on my understanding that the panel opinion does not, as the dissent claims and the petition for rehearing en banc assumes, endorse "administrative nullification of a final judicial decision." In re Baxter, Int'l Inc., 678 F.3d 1357, 1366 (Fed. Cir. 2012) (Newman, J., dissenting). Nothing in this opinion, or in those on which it relies, alters the governing legal principles of res judicata or abandons the concept of finality those principles further. The majority here concludes--rightly in my view--that a prior court decision in which a party has failed to prove a patent invalid does not bar the Patent and Trademark Office (PTO) from subsequently reexamining that same patent. And, it concludes that, despite a final court judgment reaching a contrary conclusion as between the patent holder and one alleged infringer, the PTO is free to conclude that the patent is, indeed, invalid. That proposition is an unremarkable one. In a court proceeding, a patent is not found "valid." A judgment in favor of a patent holder in the face of an invalidity defense or counterclaim merely means that the patent challenger has failed to carry its burden of establishing invalidity by clear and convincing evidence in that particular case--premised on the evidence presented there. See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1429 n.3 (Fed. Cir. 1988). If the PTO later considers the validity of that same patent, it does so based on the evidence before it and under the lesser burden of proof that applies in reexamination proceedings. As the majority notes, Congress granted the PTO the right to act within the realm of its authority. In re Baxter, Int'l Inc. 678 F.3d at 1365. These conclusions do not mean, however, that, when the PTO does act in the context of a reexamination proceeding, its conclusions can alter the binding effect of a prior judgment in a judicial proceeding. They cannot, and the PTO concedes as much in its response to the petition for rehearing en banc when it states that "[i]f a federal court awards relief to a patent holder against an infringer, a subsequent reexamination decision that the patent is invalid does not disturb the judgment of the court or alter its binding effect on the parties." PTO Response at 14. This concession is consistent with, and dictated by, well-established principles of res judicata. See San Remo Hotel, L.P. v. City & Cnty. of S.F., 545 U.S. 323, 336 n.16, (2005) ("Under res judicata, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action."); see also Reed v. Allen, 286 U.S. 191, 198-99 (1932) ("[the] well-established doctrine of res judicata [was] conceived in the light of the maxim that the interest of the state requires that there be an end to litigation--a maxim which comports with common sense as well as public policy."); Foster v. Hallco Mfg Co., Inc., 947 F.2d 469, 475-76 (Fed. Cir. 1991) ("The principles of law denominated 'res judicata' embody the public policy of putting an end to litigation."). The dissent's fears, and the premise of the petition for rehearing en banc are unfounded. Well established principles of res judicata will govern the continuing relationship between the parties to any court proceeding and will dictate whether the PTO's reexamination ruling will have any impact on them going forward. Reassured by this fact, I concur in the denial of the request for rehearing en banc in this matter. NEWMAN, Circuit Judge, dissenting from denial of the petition for rehearing en banc. Baxter requests rehearing en banc, for the court holds that a final judgment of this court, after trial and appeal, has no preclusive effect on administrative agency review of the same issue on the same evidence--and also has no preclusive effect on our judicial redetermination of the same issue on the same evidence. Thus the loser in the initial adjudication need only seek reexamination of the patent that was finally adjudged to be infringed, and the agency is authorized to start again, again encumbering the patent. This principle is critically at odds with the tenets of repose and conclusiveness of judicial determination: This general rule is demanded by the very object for which civil courts have been established, which is to secure the peace and repose of society by the settlement of matters capable of judicial determination. Its enforcement is essential to the maintenance of social order; for the aid of judicial tribunals would not be invoked for the vindication of rights of person and property if, as between parties and their privies, conclusiveness did not attend the judgments of such tribunals in respect of all matters properly put in issue, and actually determined by them. Southern Pac. R.R. v. United States, 168 U.S. 1, 49 (1897). Nonetheless, the Federal Circuit today again endorses this departure from established judicial and administrative process. This departure directly confronts the Constitution, for "[j]udgments, within the powers vested in courts by the Judiciary Article of the Constitution, may not lawfully be revised, overturned or refused faith and credit by another Department of Government." Chi. & S. Airlines, Inc. v. Waterman S.S. Corp., 333 U.S. 103, 114 (1948). I respectfully dissent. Directory: faculty faculty -> Dsci 3870: Management Science faculty -> Handling Indivisibilities faculty -> Course overview faculty -> Curriculum vitae wei chen professor faculty -> Digital image warping faculty -> Samples of Elements Exam Question III contains All Prior Exam Qs III except faculty -> 【Education&Working Experience】 faculty -> References Abe, M., A. Kitoh and T. Yasunari, 2003: An evolution of the Asian summer monsoon associated with mountain uplift —Simulation with the mri atmosphere-ocean coupled gcm. J. Meteor. Soc. Japan, 81 faculty -> Ralph R. Ferraro Chief, Satellite Climate Studies Branch, noaa/nesdis faculty -> Unit IV text: Types of Oil, Types of Prices Grammar: that/those of, with revision Download 2.39 Mb. Share with your friends:
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