In re Zurko

142 F.3d 1447, 1998 WL 216703
CourtCourt of Appeals for the Federal Circuit
DecidedMay 4, 1998
DocketNo. 96-1258
StatusPublished
Cited by18 cases

This text of 142 F.3d 1447 (In re Zurko) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Zurko, 142 F.3d 1447, 1998 WL 216703 (Fed. Cir. 1998).

Opinion

MAYER, Chief Judge.

Mary E. Zurko et al. appealed from a decision of the Board of Patent Appeals and Interferences sustaining the rejection of United States Patent Application No. 07/479,666 under 35 U.S.C. § 103 (1994). Ex parte Zurko, No. 94-3967 (Bd. Pat. Apps. & Int. Aug. 4, 1995). On appeal, this court reversed, holding that the board’s decision— that the method claimed for improving security in computer systems was obvious — was based on clearly erroneous findings of fact. In re Zurko, 111 F.3d 887, 42 USPQ2d 1476 (Fed.Cir.1997). Concluding that the outcome of this appeal turns on the standard of review used by this court to review board fact finding, we accepted the Commissioner’s suggestion that we rehear the appeal in banc so that we could consider the following question: “Should this court review Patent and Trademark Office fact-findings under the Administrative Procedure Act standard of review instead of the presently applied ‘clearly erroneous’ standard?” 116 F.3d 874, 874 (Fed.Cir.1997). We believe section 559 of the Administrative Procedure Act permits, and stare decisis warrants, our continued application of the clearly erroneous standard in our review of these fact-findings.

I.

The Commissioner has campaigned aggressively for this court to review factual findings underlying the board’s patentability determinations using the more deferential substantial evidence standard found in section 10(e) of the Administrative Procedure Act (APA) and codified in relevant part at 5 U.S.C. § 706 (1994), but we have not done so. See, e.g., In re Lueders, 111 F.3d 1569, 1574-78, 42 USPQ2d 1481, 1484-87 (Fed.Cir.1997); In re Mac Dermid, Inc., 111 F.3d 890, 890-91, 42 USPQ2d 1479, 1480 (Fed.Cir.1997); In re Kemps, 97 F.3d 1427, 1430-31 & nn. 5-6, 40 USPQ2d 1309, 1312-13 & nn. 5-6 (Fed.Cir.1996) (a precondition to addressing the standard of review issue is that its resolution be relevant to the determination of the case); In re Napier, 55 F.3d 610, 614, 34 USPQ2d 1782, 1785 (Fed.Cir.1995) (determining proper standard of review is unnecessary because board’s fact finding could be affirmed under more stringent standard); In re Brana, 51 F.3d 1560, 1568-69, 34 USPQ2d 1436, 1443-44 (Fed.Cir.1995) (declining invitation to reconsider the standard of review because the decision does not turn on it). Specifically, the Commissioner argues that in appeals under 35 U.S.C. § 141, we should accept the factual findings underlying the board’s pat-entability determinations as long as they are supported by probative evidence of a substantial nature (the substantial evidence standard found at 5 U.S.C. § 706(2)(E)),1 or in the alternative2 as long as they were made upon consideration of the proper factors (the arbitrary and capricious standard found at 5 U.S.C. § 706(2)(A)). Both standards require that we review board decisions on their own reasoning. Currently, we affirm decisions as long as we lack a definite and firm conviction that a mistake has been made. See, e.g., Kemps, 97 F.3d at 1430, 40 USPQ2d at 1312. [1450]*1450This standard defines review for clear error and requires us to review board decisions on our reasoning. The substantial evidence, arbitrary and capricious, and clear error standards differ both in character and the amount of deference they contemplate. Thus, to choose among them, we must not only construe relevant sections of the APA and patent statutes, we must understand the historical context in which the standards developed and the current context in which they operate.

II.

Congress enacted the APA in part to stem the abuses of power by agencies seemingly unchecked by requirements for procedural rigor. For example, the original presidential committee investigating the need for congressional control over these agencies reported: “[Agencies] are in reality miniature independent governments____ They constitute a headless ‘fourth branch’ of the Government, a haphazard deposit of irresponsible agencies and uncoordinated powers____ Furthermore, the same men are obliged to serve both as prosecutors and as judges. This not only undermines judicial fairness; it weakens public confidence in that fairness.” The Report of the President’s Committee on Administrative Management 89-40 (1937). This same language was quoted by Senator McCarran, and by Representative Walters, during consideration of the final bills. See 92 Cong. Rec. 2149-50 & 2163-64 (1946), reprinted in Staff of Sen. Comm, on the Judiciary, 79th Congress, Administrative Procedure Act, Legislative History 1944-46 (1946) CAPA Legislative History). Congress was also concerned about the lack of uniformity and consistency in and among the administrative and adjudicative processes of these agencies. See generally APA Legislative History at 189 (report of Senate Judiciary Committee), 242-44 (report of House Judiciary Committee). Acting upon information gathered for almost ten years, Congress set out to “enunciate and emphasize[ ] the tripartite form of our democracy and bring[ ] into relief the ever essential declaration that this is a government of law rather than of men.” Id. at iii (Sen. McCarran).

As incorporated into Title 5 of the United States Code, the APA requires agencies to provide information to the public (§ 552), to follow specified rulemaking procedures (§ 553), and to follow procedures for formal administrative adjudications (§ 554) and hearings (§ 556). The APA goes on to state: “This subchapter [and] chapter 7 ..., do not limit or repeal additional requirements imposed by statute or otherwise recognized by law. ... Subsequent statute may not be held to supersede or modify this subchapter [and] chapter 7 ..., except to the extent that it does so expressly.” 5 U.S.C. § 559 (emphasis added). In chapter 7, the APA provides for judicial review of agency “action, findings, and conclusions”:

To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall—
(1) compel agency action unlawfully withheld or unreasonably delayed; and
(2) hold unlawful and set aside agency action, findings, and conclusions found to be—
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
(B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence

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142 F.3d 1447, 1998 WL 216703, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-zurko-cafc-1998.