In Koninklijke Philips Electronics N.V. v. Cardiac Science Operating Company, the United States Court of Appeals for the Federal Circuit (“CAFC”) reversed and remanded the United States District Court for the Western District of Washington’s (“District Court”) order dismissing Koninklijke Philips Electronic’s (“Philips”) complaint with prejudice.

The District Court affirmed the Board of Patent Appeals and Interferences’ (the “Board”) decisions, finding its “reasons for denying or dismissing each motion were grounded in the application of the Board’s own procedures and regulations.” On appeal, the CAFC reversed and remanded the District Court’s decision. The CAFC held that the District Court improperly dismissed Philips’ complaint sua sponte, thereby entering a de facto summary judgment; wrongly dismissed Philips’ claim that the Board erroneously applied 37 C.F.R. §41.200(b); and improperly dismissed Philips’ claim that the Board erred in denying its contingent motion to find several of the competing applicant’s claims anticipated or obvious.

Philips is the assignee of U.S. Patent No. 6,241,751 (the “’751 patent”) that discloses a cardiac defibrillator delivering electric shocks to a patient’s heart during ventricular fibrillation. The ’751 patent was applied for on April 22, 1999, and issued on June 5, 2000. The ’751 patent is an improvement patent on U.S. Patent No. 5,749,904 (the “Gliner patent”). Cardiac Science (“Cardiac”) filed a patent for a multiple-capacitor defibrillator on March 6, 1998, and on May 31, 2002, filed a continuation application (the “Owen application”). To provoke interference proceedings, Cardiac copied claims 1-37 of the ’751 patent into the Owen application and claimed an earlier priority date.

The CAFC first addressed the District Court’s sua sponte summary judgment. Philips’ challenged the Board’s decision under 35 U.S.C. §146, which allows the losing party in an interference proceeding to present new testimony and requires a district court to review the Board’s factual findings. Despite Philips’ request for a claim construction trial and their intent to introduce new evidence at trial, the District Court sua sponte dismissed the complaint with prejudice.

The CAFC reversed, holding that the District Court failed to meet the standards necessary for summary judgment. Within the Ninth Circuit a District Court can only enter summary judgment without an opportunity to present new evidence when (1) the losing party has had a full and fair opportunity to present arguments and (2) the parties have no genuine dispute as to any material facts. The CAFC reasoned that neither of these requirements were met. First, the District Court failed to grant Philips an opportunity to present its evidence or argument regarding the priority of the ’751 patent. Thus, summary judgment was inappropriate because the District Court deprived Philips of a full and fair opportunity to present its arguments. Further, there existed genuine issues of material fact including the adequacy of the Owen application’s written description and whether the Gliner patent anticipates a claim in the Owen application. These issues of material fact precluded the entering of summary judgment.

The second issue addressed by the CAFC was whether the District Court properly affirmed the Board’s application of 37 C.F.R. §41.200(b) to Philips’ challenge of the Owen application’s written description. 37 C.F.R. §41.200(b) is a PTO procedural regulation that relates to claim construction in an interference proceeding. This regulation states that “[a] claim shall be given its broadest reasonable construction in light of the specification of the application or patent in which it appears.” The District Court opinioned that the ’751 patent written description was irrelevant and that the applicable written description in an interference proceeding was that of the challenged patent.

The CAFC reversed and remanded the District Court’s ruling. The CAFC noted that a district court reviews issues of law from Board interference proceedings de novo and that the CAFC reviews issues of law from the district court de novo as well. Further, deference should be given to an agency’s own interpretation of its rules unless the interpretation “plainly erroneous or inconsistent with regulation.” The CAFC held that the District Court made an erroneous conclusion of law in ruling that the Board can apply 37 C.F.R. §41.200(b) and disregard the original disclosure when a patentee challenges an applicant’s written description in an interference proceeding. The CAFC reasoned that the District Court failed to apply judicial precedent which requires that “[w]hen interpretation is required of a claim that is copied for interference purposes, the copied claim is viewed in the context of the patent from which it was copied.” Failing to apply the correct precedent, the Board and District Court fundamentally erred in summarily rejecting Philip’s written description challenge. The CAFC made a special reminder to the District Court and the Board that the PTO lacks substantive rulemaking authority and that they must follow judicial precedent rather than applying PTO procedural regulation.

The final issue was whether the District Court properly dismissed Philips’ claim that the Board erred in denying Philips’ contingent motion. Philips’ argued before the Board that numerous claims in the Owen application were unpatentable because the Gliner patent anticipated those claims under 35 U.S.C. §102 or at least rendered them obvious under §103. The District Court opined that the Board had properly dismissed Philips’ contingent motion “because the contingency on which it was premised never arose.”

The CAFC reversed and remanded the District Court’s ruling. The CAFC reasoned that the contingency never materialized because the Board failed to apply judicial precedent when resolving Philips’ written description challenge. Moreover, the CAFC held that when a party challenges a claim’s patentability under §102 or §103, in contrast to a written description challenge, a court “must interpret the claim in light of the specification in which it appears.” As such, if the District Court were to conclude on remand that the Owen application provides an adequate written description, it would also have to address Philip’s contingent argument regarding whether the claims are unpatentable over the Gliner patent.