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Natural Alternatives International, Inc. v. Iancu

Priority Waiver via Amendment in Intermediate Application Undermines Chain of Priority

Natural Alternatives International, Inc. v. Iancu904 F.3d 1375 (Fed. Cir. Oct. 1, 2018) (PROST, Moore, Reyna) (PTAB) (3 of 5 stars)

Fed Cir affirms IPRx rejection of claims in NAI’s patent. This patent arose from an application that was the eighth in a chain. Initially, each application claimed priority to the one before it, and through that, all the way to the original application. But shortly after filing its sixth application, NAI amended its fifth application in a chain-breaking way. It deleted the fifth application’s priority claim to the fourth through first applications, leaving only a priority claim to a 2003 provisional that was outside the “chain.” The sixth through eighth applications continued to recite claims to the fifth through first applications, as well as the provisional, and did not discuss how the fifth application had waived priority.

The PTAB did not err in holding that the patent in IPRx (from the eighth application) was not entitled to the benefit of the first through fourth applications because its priority claim did not satisfy all of § 120’s requirements. “In other words, because the fifth application lacked priority to the first application, the eighth application’s priority claim to the first application (via the fifth application) did not satisfy all of § 120’s requirements.” 904 F.3d at 1381. The opinion rejects NAI’s theory that priority for the sixth application “vested” during the period before NAI waived priority for the fifth application. Citing NTP, 654 F.3d 1268 (Fed. Cir. 2011), and PowerOasis, 522 F.3d 1299 (Fed. Cir. 2008), the opinion reasons that priority is established only upon proof of entitlement to the PTO, Board, or a federal court. At the time it was filed, the eighth application had a defective priority claim, because it claimed back to the first application via the fifth application—but the fifth application had waived the priority claim.

The opinion also rejects NAI’s argument that per MPEP § 201.11, the priority waiver in the fifth application could not affect other applications. Per Textron, 48 F.3d 1172 (Fed. Cir. 1995), and Litton Systems, 728 F.2d 1423 (Fed. Cir. 1984), the MPEP does not have force of law and does not bind the Fed Cir. Regardless, nothing in MPEP § 201.11 “limits the scope of waiver to only the instant application.” 904 F.3d at 1382. The opinion also declines to adopt NAI’s theory of priority as requiring a “new priority chain . . . created at each new filing,” and not a single growing chain. The opinion reasons that NAI failed to explain why § 120 would compel its new theory, or why the “long-standing interpretation of priority as a single chain, growing with each additional continuation” should be abrogated. Finally, the opinion describes how, by waiving its priority claim in the fifth application, NAI was apparently seeking additional patent term. It rejects NAI’s argument that prosecution rules should be crafted so as to allow an applicant to gain term for one of its applications without losing priority.

KEYWORDS: PATENT PROSECUTION; PRIORITY; SECTION 102; INTER PARTES REEXAMINATION