United States Court of Appeals for
       the Federal Circuit
                __________________________

              (Reexamination No. 90/008,477)
  IN RE CONSTRUCTION EQUIPMENT COMPANY
            __________________________

                        2010-1507
                __________________________

    Appeal from the United States Patent and Trademark
Office, Board of Patent Appeals and Interferences.
                 __________________________

                Decided: December 8, 2010
                __________________________

    PETER E. HEUSER, Schwabe Williamson & Wyatt PC, of
Portland, Oregon, argued for appellant. With him on the
brief was DEVON ZASTROW NEWMAN.

   FRANCES M. LYNCH, Associate Solicitor, United States
Patent and Trademark Office, of Alexandria, Virginia,
argued for appellee. With her on the brief was RAYMOND T.
CHEN, Solicitor, and JANET A. GONGOLA, Associate Solicitor.

                __________________________

  Before NEWMAN, PROST, and O’MALLEY, Circuit Judges.
Opinion for the court filed by Circuit Judge PROST. Dissent-
        ing opinion filed by Circuit Judge NEWMAN.
IN RE CONSTRUCTION EQUIPMENT                           2


PROST, Circuit Judge.

    Construction Equipment Company (“CEC”) appeals
from reexamination proceedings in which the United States
Patent and Trademark Office (“PTO”) rejected numerous
claims sought by CEC. Ex parte Constr. Equip. Co., No.
2009-5265, 2009 WL 2807871 (B.P.A.I. 2009) (“BPAI Op.”),
reh’g denied, 2010 WL 2157846 (B.P.A.I. May 28, 2010)
(“Reh’g Denial”).     Because we agree with the PTO’s
conclusion that the claims at issue were obvious over the
prior art, we affirm.

                             I

    CEC is the owner of U.S. Patent No. 5,234,564 (“’564
patent”).    The ’564 patent is entitled “Mobile Screen
Assembly for Rubble and Debris,” and is directed to a
vehicle for screening rocks and plant matter (among other
things) based on size from, for example, soil or dirt at a
construction site.




’564 patent fig.1. Material to be sorted is placed in the
hopper 30. It is carried up by transport conveyor 26 and
dropped onto screen assembly 90, which sifts it. Sorted
material either descends down chute 120, or is carried away
3                             IN RE CONSTRUCTION EQUIPMENT



away by conveyors 130 or 168, according to where in the
sifting process the sorted material left the main stream.

    The proceedings at issue began in January 2007 when
the PTO received a request for ex parte reexamination of
the ’564 patent. 1 The requestor sought reexamination of
claims 1, 2, and 5–8, alleging that they were unpatentable.
Upon finding that the request raised a substantial new
question of patentability concerning those claims, the PTO
began reexamination proceedings.

     CEC made various amendments and added claims.
This appeal concerns claims 1, 2, 5–10, 13, 14, 19, and 20,
as amended. By the end of reexamination in October 2007,
all these claims stood rejected by the Examiner as obvious
under 35 U.S.C. § 103 in view of the various references cited
in the reexamination request. CEC appealed to the Board
of Patent Appeals and Interferences, which generally
affirmed the Examiner’s rejections. BPAI Op. CEC sought
rehearing, which the Board denied. Reh’g Denial. CEC
timely appealed to this court. We have jurisdiction over the
Board’s decisions under 28 U.S.C. § 1295(a)(4)(A).


                             II




       1    CEC claims that the request was initiated by a
company called Powerscreen International Distribution Ltd.
(“Powerscreen”). CEC had asserted the ’564 patent against
Powerscreen in the late 1990s and obtained an injunction
against further infringement.       Constr. Equip. Co. v.
Powerscreen Int’l Distrib. Ltd., 45 U.S.P.Q.2d 1206 (D. Or.
1997), aff’d without op., 243 F.3d 559 (Fed. Cir. 2000).
According to CEC, that injunction remains in effect.
IN RE CONSTRUCTION EQUIPMENT                               4


    This court reviews the Board’s factual findings for sub-
stantial evidence and its legal determinations de novo. 5
U.S.C. § 706(2)(E); In re Gartside, 203 F.3d 1305, 1316 (Fed.
Cir. 2000). The determination of what a reference teaches
is one of fact, as is the existence of a reason for a person of
ordinary skill to combine references. Rapoport v. Dement,
254 F.3d 1053, 1060 (Fed. Cir. 2001); see also Gartside, 203
F.3d at 1316.

     Applying that standard here, we see error of neither fact
nor law in the Board’s analysis of these claims’ validity.
Reviewing the record prior art, we agree with the Board
that every limitation of each claim on appeal is found in one
or another of the available references. We further agree one
of ordinary skill in the art would have been able to combine
the available references in such a way as to practice the
alleged invention of each claim. And we agree that such a
person would have had a reason to make such combinations,
for the reasons set forth by the Board and by the Examiner.


    As CEC itself admits, the basic concepts of sifting and
sorting material are not new. Neither are the concepts of
carrying material via conveyors, or of positioning the sort-
ing machine on a trailer, as the ’564 patent does. CEC’s
alleged invention consists entirely of combining known
elements into a machine that, while possibly new, was
nevertheless obvious and therefore unpatentable. 2 We find

        2    In its briefing and at oral argument, CEC stated
its intention, should this court affirm the Board opinion, to
oppose any attempt Powerscreen might make to have its
injunction against practicing the ’564 patent lifted by the
district court. CEC suggested that because Powerscreen
had a full and fair opportunity to litigate the ’564 patent’s
validity, it should be estopped from seeking to avoid the
injunction irrespective of that patent’s fate in reexamina-
5                                IN RE CONSTRUCTION EQUIPMENT



We find the Board’s opinion supported by substantial evi-
dence and without legal error. 3 The opinion of the Board
therefore stands affirmed.

reexamination. We express no opinion on whether Pow-
erscreen might or might not be entitled to seek abrogation
of the injunction.
     3   We are unpersuaded by the dissent’s contention that
this court should hold the reexamination proceedings in this
case unconstitutional, or barred by considerations of res
judicata or issue preclusion. This is so for three reasons.
First, the notion that the reexamination was ipso facto
unlawful was neither briefed nor argued by any party, at
any stage of this case. The appellate courts of the federal
judiciary have a well-established practice of declining to
take up arguments not timely made by the parties.
Singleton v. Wulff, 428 U.S. 106, 121 (1976); Boggs v. West,
188 F.3d 1335, 1337–38 (Fed. Cir. 1999). “This [rule] is
essential in order that parties may have the opportunity to
offer all the evidence they believe relevant to the issues . . . ;
it is equally essential in order that litigants may not be
surprised on appeal by final decision there of issues upon
which they have had no opportunity to introduce evidence.”
Hormel v. Helvering, 312 U.S. 552, 556 (1941). In this case
neither CEC nor, crucially, the PTO has had an opportunity
to submit evidence or argument addressing the concerns
laid out in the dissent. To upset, as the dissent proposes,
the entire reexamination proceeding on the strength of
arguments not previously contemplated by the parties
seems to us an indiscreet application of judicial power.

    Second, we disagree that either constitutional principles
or the common-law doctrines of claim or issue preclusion
would bar reexamination of the ’564 patent. In re Swanson,
540 F.3d 1368 (Fed. Cir. 2008), is highly instructive.

    In that case, we found no error in the PTO’s holding
that reexamination could be instituted on the strength of a
reference that the requesting party had unsuccessfully
asserted as prior art in litigation involving the same patent,
even where this court had affirmed the district court’s
judgment of validity. Id. at 1379. Swanson included de-
IN RE CONSTRUCTION EQUIPMENT                              6


                        AFFIRMED




cluded detailed discussion of the reexamination statutes
and legislative history thereof. Id. at 1376–77. It specifi-
cally noted that the district court’s judgment, which this
court affirmed, was not incompatible with the Examiner’s
rejection of claims on reexamination. The reason was that
the district court’s judgment was not that the patent was
valid per se, but that the accused infringer had failed to
carry his burden to prove it invalid. Id. at 1379; see also
Stevenson v. Sears Roebuck & Co., 713 F.2d 705, 710 (Fed.
Cir. 1983) (holding that, for this reason, issue preclusion is
generally not applicable in patent validity judgments).
There was therefore no contradiction between the affirmed
litigation judgment and the Examiner’s rejection during
reexamination.
     On the thin record before us, we see no reason why
Swanson would not control this case. In both cases, the
reexamination was initiated by a party that had previously
failed to prove the patent invalid in litigation. We also note
that, in this case, the reexamination involved numerous
references, combinations, and even claims not treated by
the district court.       Compare Constr. Equip. Co. v.
Powerscreen Int’l Distrib. Ltd., No. 96-1574, slip op. (D. Or.
June 11, 1998) (reviewing novelty and nonobviousness of
seven claims over three references) J.A. 97 with BPAI Op.
(affirming rejection for obviousness of twelve claims over
various combinations of seven references, two of which were
considered in the Powerscreen litigation). Thus, even if we
were to depart from this court’s prior holdings concerning
waiver, we do not think we would take up the dissent’s
invitation to find the reexamination proceeding improper.

    Finally, the dissent’s suggestion that a finding that a
patent is not invalid in one proceeding against one party
would bar any other validity challenge would be a dramatic
expansion of the concept of non-mutual offensive collateral
estoppel. We decline to adopt a rule for patent cases that is
inconsistent with all other governing law regarding
collateral estoppel.
United States Court of Appeals for
       the Federal Circuit
                __________________________

  IN RE CONSTRUCTION EQUIPMENT COMPANY
            __________________________

                        2010-1507
              (Reexamination No. 90/008,447)
                __________________________

    Appeal from the United States Patent and Trademark
Office, Board of Patent Appeals and Interferences.
                 __________________________

NEWMAN, Circuit Judge, dissenting.

    This reexamination appeal raises a fundamental ques-
tion—is a final adjudication, after trial and decision in the
district court, and appeal and final judgment in the Federal
Circuit, truly final? Or is it an inconsequential detour along
the administrative path to a contrary result? Although final
decisions of courts of last resort are preclusive within the
courts, is the administrative agency excused? Here the Patent
and Trademark Office did not mention the prior adjudication
of the same issue, although that issue was finally decided in
the courts in 2001. 1 The PTO’s reexamination decision is now
before us on appeal, the same issue that we finally adjudicated
eleven years ago.



    1   Constr. Equip. Co. v. Powerscreen Int’l Distrib. Ltd.,
243 F.3d 559 (Fed. Cir. 2000), cert. denied, 531 U.S. 1148
(2001).
IN RE CONSTRUCTION EQUIPMENT                               2


    Thus the curious, as well as unconstitutional, situation
whereby this court’s final decision has devolved into an uncer-
tain gesture, stripped of value in commerce as well as in law.
The panel majority, unperturbed, simply defers to the agency’s
new result as if this history does not exist. I respectfully
dissent.

    The constitutional plan and the administrative state


    The judicial power established in Article III, §1, is “an
inseparable element of the constitutional system of checks and
balances.” N. Pipeline Constr. Co. v. Marathon Pipe Line Co.,
458 U.S. 50, 58 (1982). My colleagues on this panel object to
the intrusion of the Constitution into this appeal, Maj. Op. at
5–6 n.3, arguing that the role of judicial rulings in
administrative proceedings cannot be considered because the
parties did not raise it in the Patent and Trademark Office.
However, the nation’s fundamental law is not waivable. The
Court has reiterated that “[w]hen these Article III limitations
are at issue, notions of consent and waiver cannot be disposi-
tive because the limitations serve institutional interests that
the parties cannot be expected to protect.” Commodity
Futures Trading Comm'n v. Schor, 478 U.S. 833, 851 (1986).


    Waiver is inapplicable to “significant questions of general
impact or of great public concern.” Interactive Gift Express,
Inc. v. Compuserve Inc., 256 F.3d 1323, 1345 (Fed. Cir. 2001).
The constitutional impact of the procedure that gives rise to
this appeal cannot be deemed waived, for it affects no less
than the integrity of judgments and the separation of powers.
Constitutional principles are not required to be set aside
merely because they were not raised in the administrative
forum. See Hormel v. Helvering, 312 U.S. 552, 555–59 (1941)
(courts of appeal have the discretion to consider issues not
3                               IN RE CONSTRUCTION EQUIPMENT



to consider issues not raised below “as justice may require”).

    The plan of the Constitution places the judicial power in
the courts, whose judgments are not thereafter subject to
revision or rejection. Neither the legislative nor the executive
branch has the authority to revise judicial determinations.
See Chi. & S. Airlines, Inc. v. Waterman S.S. Corp., 333 U.S.
103, 114 (1948) (“Judgments, 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.”); Gordon v. U.S., 69 U.S.
561, 561 (1864) (judgments of Article III courts are “final and
conclusive upon the rights of the parties”). In Plaut v.
Spendthrift Farm, Inc., 514 U.S. 211 (1995), the Court
explained that:

    The record of history shows that the Framers crafted
    this charter of the judicial department with an
    expressed understanding that it gives the Federal
    Judiciary the power, not merely to rule on cases, but
    to decide them, subject to review only by superior
    courts in the Article III hierarchy—with an
    understanding, in short, that “a judgment conclusively
    resolves the case” because “a ‘Judicial Power’ is one to
    render dispositive judgments.”

Id. at 218–19 (quoting Frank H. Easterbrook, Presidential
Review, 40 Case W. Res. L. Rev. 905, 926 (1990)). The Court
traced the history of judicial finality to Hayburn’s Case, 2 U.S.
(2 Dall.) 409 (1792), which “stands for the principle that
Congress cannot vest review of the decisions of Article III
courts in officials of the Executive Branch.” Plaut, 514 U.S. at
218.
IN RE CONSTRUCTION EQUIPMENT                                  4


     With the emergence of the administrative state, “Article
III, §1 safeguards the role of the Judicial Branch in our tripar-
tite system by barring congressional attempts ‘to transfer
jurisdiction [to non-Article III tribunals] for the purpose of
emasculating’ constitutional courts, and thereby preventing
‘the encroachment or aggrandizement of one branch at the
expense of the other.’” Schor, 478 U.S. at 850 (brackets in
original, internal citations omitted). The application of this
rule is not in dispute, nor is it disputed that administrative
agencies may be authorized to perform quasi-adjudicatory
functions. Id. The issue here arises because the judicial
function has already been performed, and warrants the
finality of the Judicial Power. As the court explained in Town
of Deerfield v. Federal Communications Commission, 992 F.2d
420, 428 (2d Cir. 1993), revision by the agency of the district
court’s order would render the previous judgment by the
district court “merely advisory” and thus in violation of the
Constitution.

     Nor is the previous judgment of this court, on the issue
that was taken to the PTO for reexamination, “merely
advisory.” In enacting the reexamination statute, Congress
did not purport to violate constitutional strictures governing
issues that had previously been finally adjudicated. Contrary
to the majority’s postulate, this constitutional concern does
not “upset . . . the entire reexamination proceeding,” Maj. Op.
at 5 n.3. The concern arises because in this case there has
already been final disposition of the issue of validity in Article
III courts. Respect for judicial finality, when there has been a
final decision, does not “upset . . . the entire reexamination
proceeding.” Id.

    Res judicata and issue preclusion
5                                IN RE CONSTRUCTION EQUIPMENT



     In addition to the principles of finality based on separation
of powers, the principles of litigation repose are violated by
the reopening in an administrative agency of issues that were
litigated to finality in judicial proceedings. Throughout the
evolving reexamination statutes, no legislation suggested that
reexamination might overtake a final judicial decision, or that
the preclusive effect of such decision may be ignored. The
reexamination statutes do not purport to grant to the PTO the
authority to ignore final judgments. Such an adjudicatory
structure would not have been contemplated by the Congress,
and is improperly accepted by this court.


    Waiver is inapplicable against issues of res judicata and
issue preclusion, for preclusion principles serve the powerful
public and private interests of finality in judicial proceedings
and the avoidance of inconsistent results. See Clements v.
Airport Auth. of Washoe Cnty., 69 F.3d 321, 330 (9th Cir.
1995) (“Vindication of this public interest is at its zenith in the
realm of issue preclusion. It is the failure to adhere closely to
basic issue preclusion principles that is most likely to lead
directly to the inconsistent results that tend to undermine
confidence in the judicial process.”); Caldera v. Northrop
Worldwide Aircraft Servs., Inc., 192 F.3d 962, 970–72 (Fed.
Cir. 1999) (applying principles of collateral estoppel on appeal,
where an administrative board had determined anew an issue
already decided in state court).

    In this case the rules of res judicata and issue preclusion
are involved, for this reexamination was requested by Power-
screen, the defendant in the prior district court ruling, the
appellant in the prior Federal Circuit appeal, and the peti-
tioner for certiorari. Powerscreen could not have relitigated
the question of obviousness in any court. 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
IN RE CONSTRUCTION EQUIPMENT                                    6


the merits of an action precludes the parties or their privies
from relitigating issues that were or could have been raised in
that action. Under collateral estoppel, once a court has
decided an issue of fact or law necessary to its judgment, that
decision may preclude relitigation of the issue in a suit on a
different cause of action involving a party to the first case.”).
There is no assertion here of the “extraordinary
circumstances” contemplated by Fed. R. Civ. P. 60(b), a rule
that reflects the courts’ inherent power to reopen their own
judgments in the interest of justice. See Liljeberg v. Health
Servs. Acquisition Corp., 486 U.S. 847 (1988):

    Rule 60(b)(6) . . . grants federal courts broad authority
    to relieve a party from a final judgment “upon such
    terms as are just,” provided that the motion is made
    within a reasonable time and is not premised on one of
    the grounds for relief enumerated in clauses (b)(1)
    through (b)(5). The Rule does not particularize the
    factors that justify relief, but . . . it provides courts
    with authority “adequate to enable them to vacate
    judgments whenever such action is appropriate to
    accomplish justice,” while also cautioning that it
    should only be applied in “extraordinary
    circumstances.”

Id. at 863–64 (citations omitted).

     The doctrines of preclusion relate to the re-litigation of is-
sues that have been actually litigated and decided. A party
who took part in the earlier litigation cannot ordinarily be
prejudiced by subsequently being bound by that decision. See
Clements, 69 F.3d at 330 (“Where the plaintiffs have had a full
and fair opportunity to actually litigate the issue and did in
fact litigate it, they can not ordinarily be prejudiced by subse-
quently being held to the prior determination.”). The interest
in finality is highlighted in this case, where this court previ-
7                               IN RE CONSTRUCTION EQUIPMENT



case, where this court previously upheld the validity of
Construction Equipment’s patent, the same patent that the
panel majority today holds to be invalid on the same issue.
When Powerscreen was sued by Construction Equipment for
infringement, the defense included a challenge to the ’564
patent’s validity on the ground of obviousness. The case was
tried in the United States District Court for the District of
Oregon. In the district court, Powerscreen cited references
that showed various components of the patented machine, and
argued that it would have been obvious to select these
components and put them together in one machine. In its
ruling of non-obviousness, the district court discussed the
cited references and explained its conclusions. For example:


    [T]he combination of the prior art as suggested by
    Defendants, which merely combines the loader of the
    Royer Trommel with the screening device of the
    Eriksson Patent situated in the opposite direction,
    would not produce a viable machine. . . . The sche-
    matic drawing of the combination offered by Defen-
    dants includes necessary deviations from the prior art
    but does not indicate how these alterations are
    obvious from the prior art or teachings. . . . Accord-
    ingly, the court finds Defendant’s portrayal of the
    obvious combination of the Erikkson [sic] Patent and
    Royer Trommel does not encompass the element of
    depositing the coarsest material from the top screen
    beyond the opposite end of the machine.

Constr. Equip. Co. v. Powerscreen Int’l Distrib. Ltd., Civ. No.
96-1574-AS (D. Or. June 11, 1998), slip op. at 17–19. The
district court ruled that the ’564 patent was valid, enforceable,
and willfully infringed by Powerscreen, and entered final
judgment.
IN RE CONSTRUCTION EQUIPMENT                                  8


     Powerscreen appealed to the Federal Circuit, again with
full briefing of the issue of obviousness. Powerscreen argued
that the claims of the ’564 patent are invalid under §103 based
on several combinations of references. With respect to the
proposed combination of the Eriksson Patent with either the
Trommel 620 or the Royer Trommel prior art, Construction
Equipment responded that

    Powerscreen does not attempt to show such teachings,
    but instead merely contends . . . that it would have
    been obvious “to modify existing machine designs by
    simply exchanging one type of screen assembly with
    another.” . . . Without any suggestion in the prior art
    that the best features of Eriksson, Royer and the
    Trommel 620 would have been combined in the
    manner recited in claim 5, Powerscreen’s obviousness
    argument must fail, as the district court so held at
    JA2009-2011.

Appellee Br. 44–45. The Federal Circuit affirmed the district
court’s judgment. Constr. Equip. Co. v. Powerscreen Int’l
Distrib. Ltd., 243 F.3d 559 (Fed. Cir. 2000), cert. denied, 531
U.S. 1148 (2001).

     Seven years later Powerscreen requested reexamination
on the ground of obviousness, citing the same references and
additional references, placing strongest reliance on the same
references that had been cited in the litigation. However,
when an issue has been litigated and judgment entered in a
court of last resort, “[t]he underlying rationale of the doctrine
of issue preclusion is that a party who has litigated an issue
and lost should be bound by that decision and cannot demand
that the issue be decided over again.” In re Freeman, 30 F.3d
1459, 1465 (Fed. Cir. 1994) (in a reexamination completed
after litigation, the PTO gave preclusive effect to the district
court’s ruling on claim scope, although the Board stated that it
9                                IN RE CONSTRUCTION EQUIPMENT



the Board stated that it did not agree with the district court).
These fundamentals of judicial authority and administrative
obligation are not subject to the vagaries of shifts in the
burden or standard of proof in non-judicial forums, as the
panel majority proposes. Although this aspect was weighed in
In re Swanson, 540 F.3d 1368 (Fed. Cir. 2008), a lower stan-
dard of proof in an administrative agency cannot override the
finality of judicial adjudication. The burden of proof assigned
to administrative bodies is a matter of policy and procedure,
not a change in substantive law. Administrative burdens do
not override the Judicial Power of dispositive judgment.


    Conservation of judicial and administrative resources also
counsels against relitigation of issues that have been fully
adjudicated and finally decided. Although the administrative
agency boards have a “quasi-judicial” flavor, “the same
principles of efficiency which justify application of the doctrine
of collateral estoppel in judicial proceedings also justify its
application in quasi-judicial proceedings.” Graybill v. U.S.
Postal Serv., 782 F.2d 1567, 1571 (Fed. Cir. 1986) (holding
that Maryland court decision had preclusive effect on Merit
Systems Protection Board proceedings).

    The public interest in finality is particularly compelling in
the context of commercial investment and property rights.
The adverse effect on the patent incentive, due to uncertainty
as to the validity of a duly granted patent, is notorious, and
permeates the hearing record of the recently enacted America
Invents Act. The reexamination that is here sustained, after
final judgment in the courts, contravenes the policy of the
reexamination procedures that applied in this case. The panel
majority apparently misperceives this concern, for the ques-
tion is not whether all “non-mutual offensive collateral estop-
pel” must be barred, Maj. Op. at 5–6 n.3. The question here is
not of non-mutuality, for this reexamination was initiated by
IN RE CONSTRUCTION EQUIPMENT                               10


for this reexamination was initiated by the same party that
was defendant in the district court and Federal Circuit. The
question is whether the administrative agency is bound by
prior final adjudication of the same issue—a question that has
been definitively answered by the Supreme Court. See Burson
v. Carmichael, 731 F.2d 849, 854 (Fed. Cir. 1984) (“There is no
support in law for repeated bites at the apple. On the
contrary, the law whenever possible reaches for repose.”).


    Here, the question of obviousness had been finally decided,
and Powerscreen is precluded from reopening the same issue
in another forum. Whether viewed as res judicata or issue
preclusion, reexamination on this issue is not available.


    The Reexamination Statute

     The reexamination statute, in its various evolving forms,
did not and does not purport to authorize departure from the
principles of judicial review and judicial finality. The statute
authorizes the return of an issued patent to the administra-
tive agency so that the patent examiners can conduct a more
thorough examination than may have occurred the first time
around. The purposes remain as initially conceived, to provide
a less costly way of removing or restricting patents that
should not have been granted or that were granted too
broadly, to permit such challenge even before litigation-
inducing controversy has arisen, and also to enable patentees
to bring overlooked references into the examination process.
See Patent Reexamination: Hearing on S. 1679 Before the
Senate Comm. on the Judiciary, 96th Cong. 15–16 (1979)
(statement of Comm’r Sidney Diamond) (“Reexamination
would eliminate or simplify a significant amount of patent
litigation. In some cases, the PTO would conclude as a result
of reexamination that a patent should not have issued. A
11                               IN RE CONSTRUCTION EQUIPMENT



patent should not have issued. A certain amount of litigation
over validity and infringement thus would be completely
avoided.”); 126 Cong. Rec. 30,364 (1980) (statement of Sen.
Bayh) (“Reexamination would allow patent holders and
challengers to avoid the present costs and delays of patent
litigation. . . . Patent reexamination will also reduce the
burden on our overworked courts by drawing on the expertise
of the Patent and Trademark Office.”); 126 Cong. Rec. 29,901
(1980) (statement of Rep. Hollenbeck) (“As a result of the
provision for reexamination, the potential conflict can be
settled by the Patent Office itself in far shorter time and at far
smaller expense to the challenger or to the patent holder than
would be the case if the only recourse was through the court
system.”).

    The reexamination statute seeks to replace or reduce the
expense and encumbrance of litigation; but when the same
issue has already been litigated and finally adjudicated,
interested persons should be able to rely on the judicial
decision. Throughout the legislative adjustments to reexami-
nation, no one suggested that reexamination in the PTO could
override a final judicial decision. Such an unconstitutional act
would not have been contemplated by the Congress, and is
improperly endorsed by this court. For the patent here at
issue, the question of obviousness was litigated and decided in
the district court, followed by decision on appeal to the
Federal Circuit, and denial of certiorari. The PTO on
reexamination can no more invalidate an adjudicated valid
patent, than can the PTO validate a patent that has been
adjudicated invalid. Nor does the reexamination statute
purport to grant such authority.
     The merits
    The panel majority decides the merits of this appeal as if
there had been no litigation history, as if the issue of obvious-
ness had not previously been fully adjudicated. As in the prior
IN RE CONSTRUCTION EQUIPMENT                               12


in the prior appeal to the Federal Circuit, the various ele-
ments of the patented device were selected from various
references, and the question is whether it would have been
obvious to combine these elements, and in this way. This
time, however, my colleagues find that “one of ordinary skill in
the art would have been able to combine the available
references in such a way as to practice the alleged invention.”
Maj. Op. at 3. This is not the correct analytic criterion.


    Precedent warns against hindsight combination whereby
disparate elements are fitted into the template of the new
device with the guidance of the patentee. My colleagues
present a classical illustration of judicial hindsight to con-
struct a machine that was not previously known, a machine
that achieved commercial success because it provided previ-
ously unavailable advantages. 2 See In re Fritch, 972 F.2d
1260, 1266 (Fed. Cir. 1992) (“[I]t is impermissible to use the
claimed invention as an instruction manual or ‘template’ to
piece together the teachings of the prior art so that the
claimed invention is rendered obvious. . . . This court has
previously stated that ‘[o]ne cannot use hindsight reconstruc-
tion to pick and choose among isolated disclosures in the prior
art to deprecate the claimed invention.’”). This prohibited
analysis is nonetheless adopted by the panel majority, al-
though unaccompanied by any “articulation of a rational
underpinning” for combining the references in such a way as

    2   The invention in the ’564 patent channels oversized
material in a novel way whereby a relatively small machine
can process larger debris than its predecessors, while concur-
rently sifting and sorting debris. This machine is described as
reducing jamming and improving performance compared with
prior art machines, and because of its capacity to handle large
debris, it can be made small enough to be transported to an
operating site on roads using a hitch. Its commercial value
attracted imitators, and litigation.
13                             IN RE CONSTRUCTION EQUIPMENT



ences in such a way as to achieve the machine made by the
patentee.

See KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007)
(“[R]ejections on obviousness grounds cannot be sustained by
mere conclusory statements; instead, there must be some
articulated rational underpinning to support the legal
conclusions of obviousness.”).

    The Court recognized in KSR that “inventions in most, if
not all instances rely upon building blocks long since uncov-
ered, and claimed discoveries almost of necessity will be
combinations of what, in some sense, is already known.” 550
U.S. at 419. See Ruiz v. A.B. Chance Co., 357 F.3d 1270, 1275
(Fed. Cir. 2004) (“Inventions typically are new combinations of
existing principles or features.”). We are offered no rationale
for the combination now deemed obvious, other than the
patentee’s achievement. On any view of the posture in which
this case reaches us, the panel majority errs in its decision.


                        CONCLUSION

    As a matter of constitutional plan, judicial power, legis-
lative structure, and national innovation policy, a patent that
has been held valid or invalid in court is not subject to
administrative redetermination of the same issue. On these
premises, reexamination in the PTO is not generally available
after the issue of patentability has been litigated to a final
judgment from which no appeal can be or has been taken. The
procedure here accepted is in violation of fundamental
principles. I respectfully dissent.
