                                          CORRECTED: December 24, 2008

 United States Court of Appeals for the Federal Circuit

                            2007-1050, -1051, -1052, -1053


                                 GILBERT P. HYATT,

                                                      Plaintiff-Appellee,

                                           v.

          Jon W. Dudas, DIRECTOR, PATENT AND TRADEMARK OFFICE,

                                                      Defendant-Appellant.


      Kenneth C. Bass, III Sterne, Kessler, Goldstein & Fox P.L.L.C., of Washington,
DC, argued for plaintiff-appellee. On the brief were Michael L. Martinez and Michael I.
Coe, Crowell & Moring, LLP, of Washington, DC. Of counsel on the brief was Gregory
L. Roth, Law Offices of Gregory L. Roth, of La Palma, California. Of counsel was J.
Robert Chambers, Wood, Herron & Evans, L.L.P., of Cincinnati, Ohio.

      Robert J. McManus, Associate Solicitor Solicitor’s Office, United States Patent
and Trademark Office, of Arlington, Virginia, argued for defendant-appellant. With him
on the brief were Stephen Walsh, Acting Solicitor, Thomas W. Krause and William G.
Jenks, Associate Solicitors.


Appealed from: United States District Court for the District of Columbia

Judge Henry H. Kennedy, Jr.
 United States Court of Appeals for the Federal Circuit
                            2007-1050, -1051, -1052, -1053

                                  GILBERT P. HYATT,

                                                       Plaintiff-Appellee,

                                            v.

          Jon W. Dudas, DIRECTOR, PATENT AND TRADEMARK OFFICE,

                                                       Defendant-Appellant.


Appeal from the United States District Court for the District of Columbia in case no.
04-CV-1138, 04-CV-1139, 04-CV-1802, 05-CV-0310, Judge Henry H. Kennedy, Jr.

                           ___________________________

                            DECIDED: December 23, 2008
                           ___________________________


Before NEWMAN and GAJARSA, Circuit Judges, and WARD, District Judge. *

GAJARSA, Circuit Judge.

      The    Patent and Trademark Office (“PTO”) appeals a decision of the United

States District Court for the District of Columbia in a consolidated case involving four

civil actions brought by Gilbert P. Hyatt under 35 U.S.C. § 145 (2000). In his section

145 actions, Hyatt challenged decisions of the Board of Patent Appeals and

Interferences (“Board”) that affirmed the rejections of all claims in twelve of his patent

applications. The district court’s decision vacated the Board’s decisions and remanded

Hyatt’s case to the Board for further consideration. The PTO raises two issues on



      *
             Honorable T. John Ward, District Judge, United States District Court for
the Eastern District of Texas, sitting by designation.
appeal. The first issue is the extent to which 37 C.F.R. § 1.192(c)(7) (2000) 1 allows the

Board to affirm the rejections of groups of patent claims based upon its consideration of

certain representative claims.   In particular, the PTO challenges the district court’s

holding that the Board misinterpreted the meaning of “ground of rejection” in section

1.192(c)(7) and, as a result, improperly selected certain claims to be representative of

groups of claims that were rejected on different grounds. The second issue is whether

the district court’s remand order requires the Board to consider arguments that Hyatt

allegedly waived by failing to raise them before the Board in his initial appeals.

Because we conclude, first, that the district court correctly interpreted section

1.192(c)(7) and, second, that the district court’s remand order does not require the

Board to consider arguments waived by Hyatt, we affirm.

                                    BACKGROUND

      This case concerns the patentability of approximately 2,400 claims in twelve

related patent applications in areas including microcomputers, computer memories and

displays, and global positioning systems. Hyatt filed all twelve applications between

April and June of 1995.     However, all twelve applications were part of a series of

continuation applications that claim priority to ancestor patent applications dating back

to the early 1980s or before. In addition, all twelve applications were amended to add

hundreds of claims that were not included in the original applications.




      1
              37 C.F.R. § 1.192(c)(7) (2000) was replaced by 37 C.F.R.
§ 41.37(c)(1)(vii), effective September 2004. See Rules of Practice Before the Board of
Patent Appeals and Interferences, 69 Fed. Reg. 49,960, 49,962-63 (Aug. 12, 2004).
However, the former rule was applicable during Hyatt’s appeals to the Board and thus it
is the applicable rule here.


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      The PTO examiner rejected all the claims in Hyatt’s applications.        The most

common basis for rejection was that the claims lacked written description support as

required by 35 U.S.C. § 112 ¶ 1. However, the PTO also rejected some claims for lack

of enablement and for obviousness.

      Hyatt appealed the examiner’s rejections to the Board. Hyatt argued that each of

his claims should be reviewed independently by the Board “because the claims are

separately patentable and because each of the claims is separately argued.”           The

Board concluded, however, that Hyatt had separately argued only twenty-one of his

claims because these were the only claims that Hyatt had discussed in the “Summary of

the Invention” sections 2 of his briefs to the Board. On this basis, the Board selected

these twenty-one claims as representative of the approximately 2,400 claims on appeal.

Upon consideration of these representative claims, the Board affirmed the examiner’s

rejections and thereupon affirmed the rejections of the non-representative claims.

      Hyatt challenged the Board’s decision in the district court pursuant to 35 U.S.C.

§ 145. Before the district court, Hyatt argued that the Board should have considered all

of his 2,400-plus claims individually. In the alternative, Hyatt argued that the Board had

improperly selected the twenty-one claims discussed in the “Summary of the Invention”

sections of his briefs as representative of his remaining claims. Conversely, the PTO

argued, first, that the Board properly chose the twenty-one representative claims

because Hyatt had failed to separately argue any other claims and, second, that all the




      2
              In these “Summary of the Invention” sections, Hyatt provided a
“representative reading” of a select group of claims on the disclosure in the written
description.


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claims were properly grouped because each group was rejected under the same

statutory provision, e.g., 35 U.S.C. § 112 ¶ 1 (the written description requirement).

       The district court found that Hyatt had failed to separately argue all of his claims.

However, the court also concluded that the Board had failed to comply with 37 C.F.R.

§ 1.192(c)(7) (2000) when selecting the representative claims upon which it based its

review of the examiner’s rejection of groups of claims in Hyatt’s applications.           In

particular, the district court held that “the Board should not have grouped claims that

have been rejected for lack of a written description unless those claims share a

limitation that has been found to have not been disclosed by the specification.” Hyatt v.

Dudas, Nos. 04-1138, 04-1139, 04-1802, 05-0310, 2006 WL 2521242, at *9 n.8 (D.D.C.

Aug. 30, 2006). Accordingly, the district court remanded the case to the Board with

instructions to regroup and reconsider Hyatt’s claims according to appropriate

representative claims. The PTO appeals the district court’s remand order.

                                      DISCUSSION

I. Jurisdiction

       Before addressing the merits of this appeal, we must first address the threshold

issue of our appellate jurisdiction. Int’l Rectifier Corp. v. IXYS Corp., 515 F.3d 1353,

1357 (Fed. Cir. 2008); Hyatt v. Dudas, 492 F.3d 1365, 1368 (Fed. Cir. 2007) (“Hyatt I”);

Thompson v. Microsoft Corp., 471 F.3d 1288, 1291 (Fed. Cir. 2006). This court has

exclusive jurisdiction over appeals of final decisions in section 145 actions (i.e., actions

brought in the D.C. District Court pursuant to 35 U.S.C. § 145).           See 28 U.S.C.

§ 1295(a)(4)(C). The case before us, however, is an appeal of a remand order issued

by the district court. Appellate courts generally do not have jurisdiction over a case




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“when no final judgment has been rendered, and a remand for further agency

proceedings is generally not a final judgment.” Hyatt I, 492 F.3d at 1368 (citing Cabot

Corp. v. United States, 788 F.2d 1539, 1542 (Fed. Cir. 1986)). Nonetheless, there is an

exception to the final judgment rule in the rare situation when denying appellate review

of a remand order would likely result in the permanent loss of an agency’s ability to

appeal the lower court’s determination of a legal issue. See Id. at 1368 (citing Sullivan

v. Finkelstein, 496 U.S. 617, 625 (1990)); see also Williams v. Principi, 275 F.3d 1361,

1364 (Fed. Cir. 2002) (“[W]e will depart from the strict rule of finality when . . . [the lower

court made] a clear and final decision of a legal issue . . . and there [is] a substantial risk

that . . . the remand proceeding may moot the issue.”); Travelstead v. Derwinski, 978

F.2d 1244, 1248 (Fed. Cir. 1992) (holding that this court had appellate jurisdiction over

a remand to the Department of Veterans Affairs where the lower court’s remand order

required the agency to act contrary to its interpretation of 38 U.S.C. § 3713).

       In this case, should we deny appellate review, there is a substantial risk that the

PTO will permanently lose its ability to challenge the district court’s interpretation of

section 1.192(c)(7). Cf. Williams, 275 F.3d at 1364. Indeed, under the district court’s

interpretation of section 1.192(c)(7), the PTO may be required to issue claims that it

would otherwise deny, and “by law the PTO cannot appeal its own decision to not reject

claims,” Hyatt I, 492 F.3d at 1369.       Accordingly, we have jurisdiction to determine

whether the district court’s interpretation of section 1.192(c)(7) is correct.

II. Standard of Review

       An agency’s interpretation of its own regulation is entitled to substantial

deference, and “the reviewing court should give effect to the agency’s interpretation so




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long as it is reasonable.” Martin v. Occupational Safety & Health Review Comm’n, 499

U.S. 144, 150-51 (1991) (quotation omitted); see also Bowles v. Seminole Rock & Sand

Co., 325 U.S. 410, 414 (1945) (An agency’s interpretation of its own rule or regulation is

entitled to “controlling weight unless it is plainly erroneous or inconsistent with the

regulation.”).

III. The Meaning of “Ground of Rejection” in Section 1.192(c)(7)

       Section 1.192(c)(7) provides:

       Grouping of claims. For each ground of rejection which appellant contests
       and which applies to a group of two or more claims, the Board shall select
       a single claim from the group and shall decide the appeal as to the ground
       of rejection on the basis of that claim alone unless a statement is included
       that the claims of the group do not stand or fall together and, in the
       argument under paragraph (c)(8) of this section, appellant explains why
       the claims of the group are believed to be separately patentable. Merely
       pointing out differences in what the claims cover is not an argument as to
       why the claims are separately patentable.

(emphasis added). The PTO argues that a “ground of rejection” is simply the statutory

section under which a claim was rejected. As applied here, the PTO argues that the

ground of rejection is a failure to satisfy the written description requirement of 35 U.S.C.

§ 112 ¶ 1. Accordingly, the PTO argues that it can select a claim rejected for failure to

satisfy the written description requirement as representative of all claims rejected for

failure to satisfy the written description requirement—regardless of whether the

limitation in the representative claim that lacks written description support is present in

the non-representative claims. Conversely, Hyatt argues that a “ground of rejection”

includes both (1) the statutory section under which a claim was rejected and (2) the

reason why the claim failed to meet that statutory requirement. Thus, Hyatt contends

that the PTO can only select a claim as representative of a group of claims rejected for




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failure to satisfy the written description requirement if the representative claim and all

claims in the group share a common limitation that lacks written description support.

      In In re McDaniel this court interpreted section 1.192(c)(7) as follows:

      The rule operates to relieve the Board from having to review—and an
      applicant from having to argue—the myriad of distinctions that might exist
      among claims, where those distinctions are, in and of themselves, of no
      patentable consequence to a contested rejection. . . . The rule acts as the
      default that permits the Board to designate one claim to serve as
      representative of others in a commonly rejected group and to focus its
      attention on only those matters that are dispositive of the appeal, unless
      applicant overcomes the default to assure separate review of individual
      claims by meeting the two conditions specified in the rule.

293 F.3d 1379, 1383 (Fed. Cir. 2002) (emphases added).              Thus, under section

1.192(c)(7), a commonly rejected group of claims—i.e., a group of claims rejected on

the same ground—is one in which the differences between the claims is “of no

patentable consequence to a contested rejection.” McDaniel, 293 F.3d at 1383.

      The court’s application of section 1.192(c)(7) in McDaniel is illustrative.       In

particular, the court held that the Board erred in treating four claims as a commonly

rejected group even though all four claims were rejected for failure to meet the

nonobviousness requirement of 35 U.S.C. § 103. Id. at 1384-85. The court noted that

the examiner’s rejection of the three non-representative claims in the group cited an

additional reference beyond the combination of references cited against the Board’s

chosen representative claim. Id. at 1384. Accordingly, the court held that the three

non-representative claims “did not share a common ground of rejection” with the

Board’s chosen representative claim and that the Board’s selection of the representative

claim was thus plainly erroneous and inconsistent with the text of section 1.192(c)(7).

Id. In so holding, the court explained that—




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       [Section] 1.192(c)(7) does not give the Board carte blanche to ignore the
       distinctions between separate grounds of rejection and to select the
       broadest claim rejected on one ground as a representative of a separate
       group of claims subject to a different ground of rejection. . . . [Section]
       1.192(c)(7) does not override an applicant’s right under the statute to have
       each contested ground of rejection by an examiner reviewed and
       measured against the scope of at least one claim within the group of
       claims subject to that ground of rejection.

Id. at 1384-85 (citations omitted).     Thus, McDaniel establishes that a “ground of

rejection” for purposes of Rule 1.192(c)(7) is not merely the statutory requirement for

patentability that a claim fails to meet but also the precise reason why the claim fails

that requirement.

       The PTO’s interpretation of section 1.192(c)(7) in this case is strikingly similar to

the interpretation that this court rejected in McDaniel. There, the Board considered a

group of claims rejected for obviousness under 35 U.S.C. § 103 as a commonly rejected

group, despite the fact that the non-representative claims in the group were obvious in

view of different prior art references than the Board’s chosen representative claim.

Here, the PTO seeks to treat a group of claims rejected for lack of written description

under 35 U.S.C. § 112 ¶ 1 as a commonly rejected group, regardless of whether the

limitations lacking written description support in its chosen representative claim are

present in the other claims in the group. Thus, as in McDaniel, the PTO argues that a

“ground of rejection” in section 1.192(c)(7) is merely the statutory section under which a

group of claims was rejected, rather than the precise reason why the examiner

determined that the group of claims failed that statutory requirement. We therefore

conclude, as we did in McDaniel, that the PTO’s interpretation of section 1.192(c)(7) is

plainly erroneous and inconsistent with the text of the regulation.




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       In addition to being faithful to the text of section 1.192(c)(7), this court’s

interpretation of “ground of rejection” is consistent with the fact that the PTO “bears the

initial burden . . . of presenting a prima facie case of unpatentability.” In re Alton, 76

F.3d 1168, 1175 (Fed. Cir. 1996) (alteration in original) (citation omitted). In Alton, we

explained that, “[i]nsofar as the written description requirement is concerned, that

burden is discharged by presenting evidence or reasons why persons skilled in the art

would not recognize in the disclosure a description of the invention defined by the

claims.” Id. (quotation omitted). Likewise, in Hyatt I we explained that the PTO cannot

“reject a complex claim with numerous limitations by summarily declaring that no written

description support exists. Rather, [the PTO’s Manual of Patent Examining Procedure

(“MPEP”)] section 2163.04(I) expressly instructs the examiner to specify which claim

limitation is lacking adequate support in the written description.” 492 F.3d at 1370.

Thus, to be consistent with the PTO’s prima facie burden in rejecting claims, section

1.192(c)(7) must be interpreted such that, when a claim is rejected under 35 U.S.C.

§ 112 ¶ 1, the relevant “ground of rejection” is the PTO’s identification of a specific

limitation that lacks written description support.      To interpret section 1.192(c)(7)

otherwise would allow the Board to subject claims to a new ground of rejection without

following the procedures specified in 37 C.F.R. § 41.50(b). 3 See McDaniel, 293 F.3d at




       3
               Under 37 C.F.R. § 41.50(b), when the Board issues a new ground of
rejection, an applicant may “[s]ubmit an appropriate amendment of the claims so
rejected or new evidence relating to the claims so rejected, or both, and have the matter
reconsidered by the examiner, in which event the proceeding will be remanded to the
examiner. . . . Should the examiner reject the claims, appellant may again appeal to the
Board pursuant to this subpart.” See In re Sullivan, 498 F.3d 1345, 1349 n.5 (Fed. Cir.
2007).


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1384 (referring to a prior version of 37 C.F.R. § 41.50(b) codified at 37 C.F.R.

§ 1.196(b) (2003)).

        In sum, we hold that a group of claims rejected for lack of written description do

not share a common “ground of rejection” under section 1.192(c)(7)—thus, allowing the

Board to consider the group on the basis of a single representative claim—unless the

claims share a common limitation that lacks written description support. Because the

PTO plainly erred in its interpretation of section 1.192(c)(7), the district court was correct

to remand Hyatt’s appeals to the Board with instructions to regroup and reconsider

Hyatt’s claims according to appropriate representative claims.

IV. Applying the Doctrine of Waiver in the context of Section 1.192(c)(7)

        The PTO argues that if we reject its interpretation of “ground of rejection” in

section 1.192(c)(7), then it will be required on remand to consider grounds of rejection

that Hyatt failed to contest in his initial appeals to the Board. We disagree. Under well-

established rules of waiver, the Board is not required on remand to consider grounds of

rejection that were not contested by Hyatt in his initial appeals to the Board. See 37

C.F.R. § 1.192(a) (2000) (“Any arguments or authorities not included in the brief will be

refused consideration by the Board of Patent Appeals and Interferences, unless good

cause is shown.”). Of course, arguments that become relevant on remand, whether due

to implementation of the district court’s decision or other actions by the Board or the

examiner, cannot be deemed waived if they were not previously required to have been

made.

        As noted above, section 1.192(c)(7) provides that “[f]or each ground of rejection

which appellant contests and which applies to a group of two or more claims, the Board




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shall select a single claim from the group and shall decide the appeal as to the ground

of rejection on the basis of that claim alone . . . .” 37 C.F.R. § 1.192(c)(7) (emphasis

added). When the appellant fails to contest a ground of rejection to the Board, section

1.192(c)(7) imposes no burden on the Board to consider the merits of that ground of

rejection on the basis of a representative claim.      Rather, the Board may treat any

argument with respect to that ground of rejection as waived. In the event of such a

waiver, the PTO may affirm the rejection of the group of claims that the examiner

rejected on that ground without considering the merits of those rejections.

       If the applicant has properly appealed a particular ground of rejection, the

applicant may choose to request a more specific subgrouping of the claims rejected on

that ground. See 37 C.F.R. § 1.192(c)(7) (requiring “a statement . . . that the claims of

the group do not stand or fall together,” and an explanation “why the claims of the group

are believed to be separately patentable”). An applicant who fails to include such a

statement in the opening brief “has waived the right to insist that the Board separately

review the patentability of individual claims within each group of rejected claims.”

McDaniel, 293 F.3d at 1384. In the event that appellant has appealed a particular,

properly defined ground of rejection, but has not argued for separate consideration of

the grouped claims, the Board on remand may select a single representative claim for

the group in accordance with the requirements set forth by the district court.

       Thus, the applicant can waive appeal of a ground of rejection, and can waive the

right to demand additional subgrouping of claims within a given appealed ground. But

the applicant cannot waive the Board’s obligation to select and consider at least one

representative claim for each properly defined ground of rejection appealed. McDaniel,




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293 F.3d at 1385. We express no opinion as to which grounds of rejection Hyatt has in

fact appealed, nor as to whether he has argued for more specific review of claims within

any of the grounds he has appealed. We simply note that this general rule of waiver is

as applicable on remand as it was in the Board’s initial review.

                                     CONCLUSION

      For the foregoing reasons, we affirm the district court’s interpretation of the term

“ground of rejection” in 37 C.F.R. § 1.192(c)(7) (2000). On remand, the Board must

consider all grounds of rejection challenged by Hyatt and cannot select one claim to be

representative of a group of claims that were rejected on different grounds. However,

the Board is free on remand to apply the rule of waiver to any grounds of rejection not

contested by Hyatt in his initial appeals to the Board, provided that such grounds do not

become relevant on remand due to realignment of the representative claims or other

aspects not previously at issue.

                                       AFFIRMED

      No costs.




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