The US Court of Appeals for the Federal Circuit vacated a Patent Trial and Appeal Board (PTAB) rejection of claims as obvious and remanded the case, finding that the PTAB failed to review arguments in a reply brief. In re: Durance, Case No. 17-1486 (Fed. Cir., June 1, 2018) (Reyna, J).

Durance filed a patent application directed to microwave vacuum-drying of organic materials, such as fruits. During examination of the application, the examiner rejected all of Durance’s claims, including the independent apparatus and method claims, based on a combination of cited references. In the final office action, the examiner relied on Figures 6 and 7 of a cited reference and inherency as teaching the claimed invention. In a subsequent interview, the examiner changed course and relied on Figure 8 of the cited reference as teaching the claimed invention. Later, in an answer to Durance’s appeal, the examiner again changed course and relied on all of the identified figures in the cited reference, as well as a new argument that the combined references taught an identical structure to the claimed invention. The identical-structure argument was not identified as a new ground of rejection in the answer. 

In the reply brief, Durance challenged the identical-structure argument and explained that the examiner’s understanding of the claimed invention’s structure was inaccurate because the claimed invention relied on gears, not gravity as in the combined references, and that the identical-structure argument therefore did not apply. However, the PTAB affirmed the examiner, finding the claims obvious in view of the cited references and inherency, and disregarded Durance’s arguments in the reply brief as not responsive to argument raised in the answer.

Durance requested rehearing, alleging that the reply brief arguments were ignored, that inherency was improperly applied, and that the identical-structure argument cannot be used to show that a method claim is inherently performed by a combination of references. The PTAB denied the request, asserting that it did not rely on inherency and that the reply brief arguments were properly ignored as not being directed to a new ground of rejection in the answer. Durance appealed.

On appeal the Federal Circuit explained that the US Patent and Trademark Office continually shifted its position on which structures and characteristics of the cited references established the basis for rejection. The Court found that the examiner and PTAB also continually changed which embodiment of the cited reference was relied upon throughout prosecution, and changed position on whether inherency was being applied. The Federal Circuit found that the examiner and the PTAB clouded the issues, and that the examiner’s identical-structure argument was raised for the first time in the answer. Because the PTAB did not review the reply-brief arguments, the Court vacated the PTAB’s decision and remanded for consideration of Durance’s arguments.