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2014-1653

United States Court of Appeals


for the Federal Circuit
LUV N CARE, LTD.,
Appellant,
v.
MUNCHKIN, INC.,
Appellee.

Appeal from the United States Patent Trial and Appeal Board,
Patent Trial and Appeal Board in No. IPR2013-0007,
Administrative Patent Judges Fitzpatrick, Bisk and Wood.
APPELLANTS PETITION FOR REHEARING EN BANC
Edward D. Manzo
Lead Counsel for Appellant
George S. Pavlik
Daniel Kim
HUSCH BLACKWELL LLP
120 S. Riverside Plaza, Suite 2200
Chicago, Illinois 60606
Telephone: 312-655-1500

Hartwell P. Morse, III


LUV N CARE, LTD.
3030 Aurora Avenue
Monroe, Louisiana 71201
Telephone: 318-338-3108

May 12, 2015

Counsel for Appellant


Luv N Care, Ltd.

CERTIFICATE OF INTEREST
The undersigned counsel for Appellant certifies the following:
1.

The full name of every party represented by me is:

Luv n Care, Ltd.


3030 Aurora Avenue
Monroe, Louisiana 71201
2.

The name of the real party in interest represented by me is:

Luv n Care, Ltd.


3.

All parent corporations and any publicly held companies that own 10

percent or more of the stock of the party represented by me are:


None.
4.

The names of all law firms and the partners or associates that

appeared for the party now represented by me in the trial court or are expected to
appear in this court are:
HUSCH BLACKWELL LLP
Edward D. Manzo, Lead Counsel for Appellant
George S. Pavlik
Daniel Kim
120 S. Riverside Plaza, Suite 2200
Chicago, Illinois 60606
Goldberg Cohen LLP
Morris E. Cohen
Lee A. Goldberg
1350 Avenue of the Americas, 4th Floor
New York, New York, 10019

TABLE OF CONTENTS
Page
CERTIFICATE OF INTEREST ................................................................................ i
TABLE OF CONTENTS .......................................................................................... ii
TABLE OF AUTHORITIES ................................................................................... iv
RULE 35 STATEMENT OF COUNSEL ..................................................................1
ARGUMENT .............................................................................................................1
I.

PTAB Procedures Generally .................................................................2

II.

The Proceedings Below .........................................................................3

III.

A.

Neither the Third Oval Ring Nor the Spout Size


Were Identified as Issues in the Decision to
Institute........................................................................................3

B.

The PTAB Spontaneously Made the Third Oval


Ring an Issue at the Final Hearing ..............................................4

C.

The PTAB Relied on the Third Oval in the Final


Written Decision and Added the Second New
Issue the Spout Size .................................................................4

The Lack of Timely Notice of Issues in an IPR Is


Unconstitutional and Violates the Administrative
Procedures Act ......................................................................................5
A.

U.S. Law Demands Fundamental Fairness and an


Opportunity to Present Evidence ................................................6

B.

Other Circuits Prohibit Agencies from Changing


Theories at Trial Without Giving Proper Notice
and an Opportunity to Respond ..................................................9

C.

This Court and One of its Predecessors Apply the


Same Due Process Requirements to Appeals at the
PTO Board ................................................................................11

ii

D.

Notice and Opportunity Are Especially Important


in this Case. ...............................................................................12
1.

The Difference Between PTAB Litigation


and District Court Litigation Make a
Complete Articulation of the Issues
Paramount. ......................................................................12

2.

The Statement of Issues by the PTAB is


Even More Critical with Respect to Design
Patents. ............................................................................14

CONCLUSION ........................................................................................................14
ADDENDUM ............................................................................................................1
CERTIFICATE OF SERVICE ..................................................................................2

iii

TABLE OF AUTHORITIES
Page(s)
Cases
Armstrong v. Manzo,
380 U.S. 545, 85 S.Ct. 1187, 14 L.Ed.2d 62 (1965) ....................................... 8, 15
Boumediene v. Bush,
553 U.S. 723 (2008) ...........................................................................................1, 7
Chicago, Milwaukee, St. Paul and Pacific Railroad Co. v. United States,
585 F.2d 254 (7th Cir. 1978) ...............................................................................10
Christopher v. SmithKline Beecham Corp.,
132 S.Ct. 2156 (2012) ........................................................................................1, 6
Clear Pine Mouldings, Inc. v. NLRB,
632 F.2d 721 (9th Cir. 1980),
cert. denied, 451 U.S. 984 (1981) ........................................................................11
Dickinson v. Zurko,
527 U.S. 150, 119 S.Ct. 1816, 144 L.Ed.2d 143 (1999) ........................................5
General Electric Co. v. U.S. EPA,
53 F.3d 1324 (D.C. Cir. 1995) ...........................................................................7, 8
Hall v. Florida,
134 S.Ct. 1986 (2014) ............................................................................................7
In re Biedermann,
733 F.3d 329 (Fed. Cir. 2013)......................................................................... 1, 12
In re Leithem,
661 F.3d 1316 (Fed. Cir. 2011)..................................................................... 11, 12
In re Stepan Co.,
660 F.3d 1341 (Fed.Cir.2011)................................................................... 1, 11, 12
J.C. Penney Co. v. NRLB,
384 F.2d 479 (10th Cir. 1967) .............................................................................10

iv

Lane Hollow Coal Co. v. Director, OWCP,


137 F.3d 799 (4th Cir. 1998) .................................................................................8
Macklin v. Butler,
553 F.2d 525 (7th Cir. 1977) .................................................................................7
NLRB v. H. E. Fletcher Co.,
298 F.2d 594 (11th Cir. 1962) .............................................................................11
NLRB v. I.W.G., Inc.,
144 F.3d 685 (10th Cir. 1998) .............................................................................11
NLRB v. Johnson,
322 F.3d 216 (6th Cir. 1963) .................................................................................9
NLRB v. Pepsi-Cola Bottling Co. of Topeka, Inc.,
613 F.2d 267 (10th Cir. 1980)...............................................................................11
NLRB v. Quality C.A.T.V., Inc.,
824 F.2d 542 (7th Cir. 1987) ...............................................................................10
NRLB v. Complas Industries, Inc.,
714 F.2d 729 (7th Cir. 1983) ...............................................................................10
Old Chief v. U.S.,
519 U.S. 172 (1997) ...........................................................................................1, 6
Propert v. District of Columbia,
948 F.2d 1327 (D.C. Cir. 1991) .............................................................................7
Rambus Inc. v. Rea,
731 F.3d 1248 (Fed. Cir. 2013)................................................................... 1, 2, 12
Rodale Press, Inc. v. FTC,
407 F.2d 1252 (D.C. Cir. 1968) ................................................................... passim
Satellite Broadcasting Co. v. FCC,
824 F.2d 1 (D.C. Cir. 1987) ...................................................................................7
Simons v. City of Grand Forks,
935 F.2d 981 (8th Cir. 1993)...................................................................................8

Stanley Works v. FTC,


469 F.2d 498 (2d Cir. 1972), cert. denied, 412 U.S. 928 (1973).........................11
Stokely-Van Camp, Inc., v. NLRB,
722 F.2d 1324 (7th Cir. 1983) .............................................................................10
White v. New Hampshire Dept. of Employment Sec.,
455 U.S. 445, 102 S.Ct. 1162 (1982) .....................................................................6
Yellow Freight System, Inc. v. Martin,
954 F.2d 353 (6th Cir. 1992) .............................................................................8, 9
Statutes
U.S. Constitution, Amend. 5 ......................................................................................5
5 U.S.C. 554(b) ................................................................................................ 7, 12
5 U.S.C. 706(2) .......................................................................................................5
35 U.S.C. 261 ..........................................................................................................5
35 U.S.C. 318 ..........................................................................................................2
America Invents Act, Publ. L. 112-29, 125 Stat.284 (2011) .....................................2
Detainee Treatment Act .............................................................................................7
Other Authorities
Trial Practice Guide ........................................................................................ 2, 3, 13
Wright, Federal Practice and Procedure,
Judicial Review of Administrative Action 8112, Vol. 32 ....................................7
Wright, Federal Practice and Procedure,
Judicial Review of Administrative Action 8222, Vol. 32 ................................7, 8

vi

RULE 35 STATEMENT OF COUNSEL


Based on my professional judgment, I believe the panel decision is contrary
to the following decisions of the U. S. Supreme Court that concern unfair surprise:
Christopher v. SmithKline Beecham Corp., 132 S.Ct. 2156 (2012); Boumediene v.
Bush, 553 U.S. 723 (2008); and Old Chief v. U.S., 519 U.S. 172 (1997) and further
is contrary to In re Biedermann, 733 F.3d 329, 336-37 (Fed. Cir. 2013); Rambus
Inc. v. Rea, 731 F.3d 1248, 1255-56 (Fed. Cir. 2013); and In re Stepan Co., 660
F.3d 1341, 1344 (Fed.Cir.2011). Second, based on my professional judgment, I
believe this appeal requires an answer to a precedent-setting question of
exceptional importance: whether this Court should follow other circuits that have
ruled that agencies cannot change the issues of a trial without giving reasonable
and timely notice to the parties and the opportunity to present evidence.
/s/ Edward David Manzo
Attorney of Record for Appellant, Luv n Care Ltd.
ARGUMENT
The material facts are simple: the PTAB raised two new issues and relied on
them to invalidate LNCs design patent. These two issues were not stated in the
Decision to Institute. The APJ who raised one of them conceded this absence at the
Final Hearing. With respect to trials, other circuits have ruled that agencies cannot
change theories in midstream without giving respondents reasonable notice of the
change. E.g., Rodale Press, Inc. v. FTC, 407 F.2d 1252, 1256 (D.C. Cir. 1968).
1

This Court has applied similar due process principles with respect to appeals to the
PTO Board. E.g., Rambus Inc. v. Rea, 731 F.3d 1248, 1255-56 (Fed. Cir. 2013).
The same rule should apply to PTAB trials especially where, as here, the patent
owner has no opportunity to muster new evidence to answer the new issues.
The PTAB rules forbade LNC from introducing further evidence at (or after)
the hearing. If LNC had received timely notice about the new issues, it could have
retained a technical expert to provide testimony to support the patent. It never had
that chance. An agencys substitution of an issue at the hearing and addition of
another issue after the hearing are prohibited in other circuits and warrant en banc
correction and guidance for future PTAB trials.
I.

PTAB Procedures Generally


The America Invents Act, Pub. L. 112-29, 125 Stat. 284 (2011), gave the

PTAB authority to conduct administrative inter partes trials in which patent claims
could be declared invalid. E.g., 35 U.S.C. 318. The PTO adopted a set of trial
rules, 37 C.F.R. Part 42, to govern such trials and added an Office Patent Trial
Practice Guide. 77 Fed. Reg. 48756-73 (Aug. 14, 2012) (Trial Practice Guide).
The Trial Practice Guide opens, This practice guide applies to inter partes review
Id. at 48756. The statute, rules, and Trial Practice Guide govern an expeditious
PTAB mechanism for testing the validity of a patent claim. To do this, the PTAB
reviews petitions to institute trials and selects the issues that it will try. Thus,
2

In instituting a trial, the Board will narrow the issues for


final decision by authorizing the trial to proceed only on the
challenged claims for which the threshold standards for the
proceeding have been met. Further, the Board will identify, on a
claim-by-claim basis, the grounds on which the trial will
proceed. Any claim or issue not included in the authorization
for review will not be part of the trial.
Trial Practice Guide at 48757 (emphasis added).
In a PTAB trial, evidence is submitted with the petition seeking IPR and the
Patent Owner Response. The Final Hearing occurs long after the evidence is filed
and is an oral argument. The trial is circumscribed so that: (1) the issues for trial
are announced at the outset, then (2) the patent owner responds with evidence and
argument speaking to those issues, and (3) the parties present oral argument later,
but they cannot add new evidence at that time. It is prohibited :
No new evidence and arguments. A party may rely upon
evidence that has been previously submitted in the proceeding
and may only present arguments relied upon in the papers
previously submitted. No new evidence or arguments may be
presented at the oral argument.
Trial Practice Guide, at 48768 (underlining added).
II.

The Proceedings Below


A.

Neither the Third Oval Ring Nor the Spout Size Were Identified
as Issues in the Decision to Institute

In instituting the IPR, the PTAB discarded most of Munchkins arguments.


See A91-113. The PTAB stated only two reasons for denying the patent owner the
benefit of the parents filing date, namely: (1) whether the spout tip is racetrack3

shaped or oval-shaped and (2) slits in the spout tip and vent openings. A97. The
PTAB gave no notice about the third oval ring or the spout size being issues.
B.

The PTAB Spontaneously Made the Third Oval Ring an Issue at


the Final Hearing

At the Final Hearing, Judge Fitzpatrick asked about the third concentric
oval, conceding that this was not identified as an issue in the Decision to Institute:
JUDGE FITZPATRICK: *** I know we're moving on to the
motion to amend, but in the challenged claim, the spout tip has
three concentric ovals, which I am not sure that exists anywhere
in the 106 application and that was not pointed out in the
decision to institute, but that doesn't mean that it's not relevant.
***
JUDGE FITZPATRICK: What is relevant to me is that in
the issued claim the spout has three concentric ovals. And you
don't have to be you don't have to talk about Figure 3. You
can talk about any of the 106 application, and I'm asking what
is the 112 support in the 106 application for those three
concentric ovals? Setting aside the fact of whether they're
racetrack ovals or not racetrack ovals, just focusing on the three
concentric rings.
A274, lines 18-24; A275, lines 12-18 (emphasis added). The attorney for LNC, Mr.
Cohen, protested, this is a new issue that wasnt raised by the Petitioner. A275,
lines 21-22. In rebuttal, Mr. Cohen commented on the third oval, but he never had
the chance to consult with a technical expert on this issue or offer evidence.
C.

The PTAB Relied on the Third Oval in the Final Written Decision
and Added the Second New Issue the Spout Size

In the Final Written Decision, the PTAB wholly abandoned the slits issue,
used the racetrack versus oval issue, and added two new issues, stating:
4

Figure 3 of the 465 patent and Figure 12a of the 106


application each illustrate a top view of a drinking cup having a
spout, collar, and vessel, the vessels being barely visible. As
can be seen, the claimed design of the 465 patent includes a
spout tip that is different than that disclosed in the 106
application. Specifically, and as viewed from the top, (1) the
outer boundary of the spout tip of the claimed design is larger
than that of the 106 application; (2) the spout tip of the claimed
design has a different, more rounded, oval shape than that of the
racetrack shape of the spout tip in the 106 application; and (3)
the spout tip of the claimed design has three concentric rings
that the 106 application does not disclose.
A7 (emphasis added). The two new issues were (1) the size of the spout tip and (3)
the third concentric (oval) ring. As LNC did not argue nonobviousness over the
publication of its parent application, relying only on antedating the citation, the
PTAB ruled the design patent unpatentable over it and a related citation. A8.
III.

The Lack of Timely Notice of Issues in an IPR Is Unconstitutional and


Violates the Administrative Procedures Act
Patents have the attributes of personal property. 35 U.S.C. 261. As such, a

patent owner cannot be deprived of one without due process of law. U.S.
Constitution, Amend. 5; 5 U.S.C. 706(2) (Administrative Procedure Act (APA)
requirement for timely notice). The PTO is subject to the APA and its notice
requirements. Dickinson v. Zurko, 527 U.S. 150, 154, 119 S.Ct. 1816, 144 L.Ed.2d
143 (1999). LNC was required to rely on the PTABs statement of issues for trial
announced in the decision to institute trial. When the PTAB decided the case on
two other issues, with LNC never having had notice and the opportunity to provide
5

evidence on the issue, this violated due process and the APA. 1
A.

U.S. Law Demands Fundamental Fairness and an Opportunity to


Present Evidence

American jurisprudence requires fair play and no unfair surprise. Cases


about unfair surprise span the entire jurisprudence. For example, in the context of
agency rulemaking, the Supreme Court admonishes against unfair surprise:
To defer to the agency's interpretation in this circumstance
would seriously undermine the principle that agencies should
provide regulated parties fair warning of the conduct [a
regulation] prohibits or requires. [citation omitted] Indeed, it
would result in precisely the kind of unfair surprise against
which our cases have long warned. [citations omitted]
Christopher v. SmithKline Beecham Corp., 132 S.Ct. 2156, 2167 (2012). Probative
evidence is excluded to avoid unfair surprise. Old Chief v. United States, 519 U.S.
172, 181, 117 S.Ct. 644, 651 (1997). Cf. White v. New Hampshire Dept. of
Employment Sec., 455 U.S. 445, 454, 102 S.Ct. 1162, 1167-68 (1982) (avoid unfair
surprise).
1

Although the panel decision was under Rule 36, the due process violation was
not harmless error. Addressing the racetrack/oval issue on appeal, LNC showed
enlargements of several figures of the parent application and demonstrated that the
oval shape is indeed supported by the parent application. See enlargements at Blue
Brief (BB) pp. 59-62. The PTABs racetrack finding is not supported by
substantial evidence.
Addressing the new spout size issue, LNC showed why that ruling also lacks
support by substantial evidence. Briefly, LNC showed that the relative size of the
spout compared to the size of the top in the several figures of the parent application
is the same. BB at 24-25, 58 (34% relative length in both design patent and parent
application; relative width in design patent of 22% is within range of parents
illustrations of 15%-25%). Munchkin did not argue otherwise in its Red Brief.
6

Fairness demands that parties be given a reasonable opportunity to present


evidence. E.g., Hall v. Florida, 134 S.Ct. 1986 (2014) (reversing Florida Supreme
Court to give Hall opportunity to present evidence of mental disability);
Boumediene v. Bush, 553 U.S. 723, 789, 128 S.Ct. 2229, 2272 (2008) (proceeding
under Detainee Treatment Act constitutionally inadequate, as detainee would have
no opportunity to present evidence discovered after proceedings concluded);
Macklin v. Butler, 553 F.2d 525, 528-29 (7th Cir. 1977).
Fairness or fair procedure permeates the language of administrative law . .
. [and] expresses a special concern for those individuals especially affected by the
government action. Wright, Federal Practice and Procedure, Judicial Review of
Administrative Action 8112, Vol. 32, p. 5. Notice is a basic requirement. Id. at
8222, pp. 349-50 (citing e.g., APA, 5 U.S.C. 554(b) ([W]hen private persons
are the moving parties, other parties to the proceeding shall give prompt notice of
issues controverted in fact or law; and in other instances agencies may by rule
require responsive pleading.), General Electric Co. v. U.S. EPA, 53 F.3d 1324,
1328-30 (D.C. Cir. 1995) (The requirement of adequate notice has now been
thoroughly incorporated into administrative law), Satellite Broadcasting Co. v.
FCC, 824 F.2d 1, 4 (D.C. Cir. 1987), Propert v. District of Columbia, 948 F.2d
1327, 1332 (D.C. Cir. 1991) (adequacy of the notice necessarily determined by
facts of the particular adjudicative process.)).
7

It has long been established that due process requires notice reasonably
calculated, under all circumstances, to inform the private party of the nature of the
government action so as to allow an opportunity to challenge the action. Wright,
8222, Vol. 32, pp. 350-51 (citing e.g., General Electric Co., supra, 53 F.3d at 1329
(Fair notice requires clear expression of the regulations in dispute.), Simons v.
City of Grand Forks, 935 F.2d 981, 983 (8th Cir. 1993) (due process requires
reasonable notice of the adverse contentions and access to the evidence for an
adequate opportunity to participate.); Yellow Freight System, Inc. v. Martin, 954
F.2d 353, 357 (6th Cir. 1992) (To satisfy the requirements of due process, an
administrative agency must give the party charged a clear statement of the theory
on which the agency will proceed with the case.)). See also, Rodale Press, supra.
Fairness also requires that the notice be given sufficiently prior to the
adjudication so as to allow the party to adequately participate. Wright, 8222,
Vol. 32, pp. 351-52 (citing e.g., Lane Hollow Coal Co. v. Director, OWCP, 137
F.3d 799, 807 (4th Cir. 1998) (notice must afford reasonable time to respond)).
Thus, a fundamental requirement of due process is the opportunity to be
heard at a meaningful time and in a meaningful manner. Armstrong v. Manzo,
380 U.S. 545, 552, 85 S.Ct. 1187, 1191, 14 L.Ed.2d 62 (1965).

B.

Other Circuits Prohibit Agencies from Changing Theories at


Trial Without Giving Proper Notice and an Opportunity to
Respond

Courts of appeal reverse agencies or refuse to enforce their determinations


when the agencies changed theories at (or after) trial without giving appropriate
and timely notice.
D.C. Cir.: As noted above, this rule is followed in the D.C. Circuit. In
Rodale Press, supra, the court declared, By substituting an issue for the one
framed by the pleadings, the Commission has deprived petitioners of both notice
and hearing on the substituted issue. 407 F.2d at 1256 (see also concurring
opinion of McGowan, J., at 1258). The court vacated the order of the Federal
Trade Commission and remanded for a further hearing on a new theory that the
FTC found to exist after oral argument. 407 F.2d at 1257. In doing so, the FTC had
deprived the petitioner of notice and hearing as to the substituted issue.
6th Cir.: In Yellow Freight, supra, due process required an agency to give
the charged party a clear statement of the theory on which the agency will proceed
with the case. 954 F.2d at 357. Here, the Secretary of Labor failed to give Yellow
Freight adequate notice of a dispositive issue and violated its due process rights.
The court remanded for proper notice and a full and fair opportunity to respond.
Id. at 359. See also, NLRB v. Johnson, 322 F.3d 216, 220 (6th Cir. 1963).

7th Cir.: In NRLB v. Complas Industries, Inc., 714 F.2d 729, 734, 736 (7th
Cir. 1983), an employer was denied due process when the NRLB was allowed to
amend its original complaint during a one-day administrative proceeding, where
the employer repeatedly objected to the amendment of complaint, and the
proceeding was not adjourned to give the employer a meaningful opportunity to
meet the amended claim. Citing Rodale, the court stated:
[I]t is well settled that an agency may not change theories in
midstream without giving respondents reasonable notice of the
change.
The evil ... is not remedied by observing that the outcome
would perhaps or even likely have been the same. It is the
opportunity to present argument under the new theory of
violation, which must be supplied. [citation omitted]
Id. at 734. See also, NLRB v. Quality C.A.T.V., Inc., 824 F.2d 542, 548-49 (7th Cir.
1987) (vacating and remanding); Stokely-Van Camp, Inc., v. NLRB, 722 F.2d 1324
(7th Cir. 1983); and Chicago, Milwaukee, St. Paul & Pacific Railroad Co. v.
United States, 585 F.2d 254, 260 (7th Cir. 1978) (agency action was arbitrary and
capricious without adequate notice).
10th Cir.: In J.C. Penney Co. v. NLRB, 384 F.2d 479 (10th Cir. 1967), the
court declined to enforce the portion of an order based on a charge not in the
complaint, where the issue had not been fairly litigated. The court explained,
Failure to clearly define the issues and advise an employer
charged with a violation of the law of the specific complaint he
must meet and provide a full hearing upon the issue presented
is, of course, to deny procedural due process of law. We
10

cannot enforce a finding based on a charge not in the complaint


where the record, as does this one, clearly discloses that the
issue has not been litigated.
Id. at 483 (citations omitted). See also, NLRB v. Pepsi-Cola Bottling Co. of
Topeka, Inc., 613 F.2d 267, 273-75 (10th Cir. 1980). Cf. NLRB v. I.W.G., Inc., 144
F.3d 685, 689 (10th Cir. 1998).
Other circuits are in accord. 2
C.

This Court and One of its Predecessors Apply the Same Due
Process Requirements to Appeals at the PTO Board

This Court and the Court of Customs and Patent Appeals have long applied a
similar rule with respect to the PTO Board raising new grounds for decision on
appeal from a patent examiner. The Court should extend that rule to IPRs at the
PTAB. The error is the same relying on new issues to reach a decision, with the
inventor never having had timely notice or the opportunity to respond. This Court
has admonished:
The Board also exceeded its limited role to review of the
examiner's decisions during prosecution. In re Stepan Co., 660
F.3d 1341, 1344 (Fed. Cir. 2011). Under the Administrative
Procedure Act, the PTO must ensure that the parties before it
are fully and fairly treated at the administrative level. In re
Leithem, 661 F.3d 1316, 1319 (Fed. Cir. 2011). Namely, the
2

NLRB v. H. E. Fletcher Co., 298 F.2d 594, 600 (1st Cir. 1962) (In sum, the
Board made a finding of a violation which was neither charged in the complaint
nor litigated at the hearing.); Stanley Works v. FTC, 469 F.2d 498, 508 n.24 (2d
Cir. 1972), cert. denied, 412 U.S. 928 (1973); Clear Pine Mouldings, Inc. v. NLRB,
632 F.2d 721, 728 (9th Cir. 1980) (six week adjournment to allow preparation of
defense to new charge allowed a meaningful opportunity to defend and full and fair
litigation of the new claim), cert. denied, 451 U.S. 984 (1981).
11

PTO must provide prior notice to the applicant of all matters


of fact and law asserted prior to an appeal hearing before the
Board. Stepan, 660 F.3d at 1345 (quoting 5 U.S.C.
554(b)(3)).
This framework limits the Board's ability to rely on different
grounds than the examiner. The Board may not rel[y] on new
facts and rationales not previously raised to the applicant by the
examiner. Leithem, 661 F.3d at 1319....The ultimate criterion
is whether the appellant has had before the PTO a fair
opportunity to react to the thrust of the rejection. [citations and
internal quotation marks omitted]. If that condition is not met,
the Board must designate its decision a new ground of rejection
and provide the appellant with an opportunity to respond. See
Stepan, 660 F.3d at 1346; 37 C.F.R. 41.77(b). Failure to do so
violates the appellant's notice rights and warrants vacatur of the
Board's decision. Stepan, 660 F.3d at 1346.
Rambus v. Rea, supra, 731 F.3d at 1255-56. Accord, In re Biedermann, 733 F.3d
329, 336-37 (Fed. Cir. 2013). Violating the rule calls for vacatur of the decision.
D.

Notice and Opportunity Are Especially Important in this Case.

The requirements for notice and an opportunity to present evidence are


heightened in this case for two additional reasons. First, a PTAB Final Hearing in
an IPR (where one new issue arose) is nothing like a normal evidentiary hearing.
Second, because a design patent has only one claim, proper notice of an issue can
require a more detailed articulation to meet due process standards.
1.

The Difference Between PTAB Litigation and District


Court Litigation Make a Complete Articulation of the
Issues Paramount.

In federal district court, pleadings frame the issues for trial. The trial is an
evidentiary proceeding where parties introduce evidence through witnesses at the
12

hearing. That is nothing like an IPR hearing before the PTAB. A PTAB trial,
like a district court case, refers to the contested case as a whole and begins with a
written decision to institute. 37 C.F.R. 42.2. The PTAB hearing is the
consideration of the trial. Id. It is simply the oral argument. See id. 42.70. It is
not an evidentiary hearing.
In a Decision to Institute, the PTAB selects issues to be tried in a
streamlined proceeding. Issues not specified there are not part of the trial. Thus,
the parties thereafter litigate those issues only. The patent owner provides evidence
with its response pursuant to 37 C.F.R. 42.120. This occurs months before the
hearing. (The petitioners evidence is already part of the record because it
accompanied the petition. Id. 42.104.) 3
Receiving notice at the final hearing of a new issue is insufficient for at least
the reason that the rules deny the Patent Owner the right to present new evidence at
the hearing. Indeed, the Trial Practice Guide prohibits new evidence at the oral
argument, as quoted supra at 3. This regulation made it impossible for LNC to
present evidence on the substitute issue(s), even if it had received timely notice.
Notice of a new issue in a Final Written Decision is even more defective.

A patent owner addresses the issues declared in the Decision to Institute by


taking a deposition of the petitioners witnesses, if any, and providing documentary
evidence or testimony evidence when filing its Patent Owner Response under
42.120; see 42.53, 42.63.
13

2.

The Statement of Issues by the PTAB is Even More Critical


with Respect to Design Patents.

When the issue is entitlement to an earlier filing date and the PTAB has
declared specific priority issues, a patent owner is not on notice that all other
potential priority issues could be addressed also. When the issue is, for example,
the support for the existence (or absence) of slits in a design patent figure, a patent
owner would not be alerted to questioning the location of a different feature of the
drawings. And when the stated issue is the roundness (oval shape) of one feature in
a drawing, the patent owner is not on notice that the existence of another feature
that drawing, or another one, is also an issue.
Thus, when the PTAB identifies specific issues in the Decision to Institute,
and the challenged patent is a design patent, many other potential issues that might
have been litigated are put aside and not chosen for trial. The patent owner does
not have notice of the potential issues. It cannot lawfully be forced to guess what
new issues the PTAB might interject at a future time, after the evidence period.
CONCLUSION
The PTAB must adhere to the APA and due process standards. When it
conceded at the Final Hearing that the third ring issue was not in the Decision to
Institute, that should have ended that issue. It was off limits not fair game in this
IPR unless the PTAB made a new evidence period available to LNC. The PTAB

14

compounded this error by adding another new issue (the spout size) in its Final
Written Decision (as in Rodale Press).
The addition of two new issues denied LNC the opportunity to be heard at a
meaningful time and in a meaningful manner. Armstrong v. Manzo, supra. LNC is
entitled to address the new issues, as many courts of appeal hold. This Court calls
for notice and an opportunity to present evidence when the PTO Board raises new
issues in ex parte appeals. Whether the outcome here might have been the same
(which LNC denies) is not a concern. See NLRB v. Complas, supra.
Rehearing en banc is needed to align this Courts law with other circuits
which hold that agencies cannot switch theories midstream (or thereafter) without
giving proper notice and an opportunity to defend. The PTAB must not be allowed
to decide an IPR on new issues. Either the new issues must be eliminated from the
case, or the patent owner must be given a timely notice and opportunity to present
evidence. The PTAB ruling must be vacated.
Respectfully submitted,

/s/ Edward D. Manzo


Edward D. Manzo, Principal Counsel
for Appellant, Luv n Care, Ltd.
George S. Pavlik
Daniel Kim
HUSCH BLACKWELL LLP
120 S. Riverside Plaza, Suite 2200
Chicago, Illinois 60606
Telephone: 312-655-1500

Hartwell P. Morse, III


Luv n Care, Ltd.
3030 Aurora Avenue
Monroe, Louisiana 71201
Telephone: 318-338-3108
Counsel for Appellant
Luv n Care, Ltd.
15

ADDENDUM

NOTE: This disposition is nonprecedential.

United States Court of Appeals


for the Federal Circuit
______________________
LUV N CARE LTD.,
Appellant
v.
MUNCHKIN, INC.,
Appellee
______________________
2014-1653
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR201300072.
______________________
JUDGMENT
______________________
EDWARD DAVID MANZO, Husch Blackwell LLP, Chicago, IL, argued for appellant. Also represented by DANIEL
KIM, HARTWELL POWELL MORSE, III, GEORGE S. PAVLIK,
III.
ALLEN JUSTIN POPLIN, Lathrop & Gage, LLP, Overland Park, KS, argued for appellee. Also represented by
TRAVIS W. MCCALLON, ROBERT CAMERON GARRISON,
Kansas City, MO.
______________________

THIS CAUSE having been heard and considered, it is


ORDERED and ADJUDGED:

PER CURIAM (WALLACH, MAYER, and CHEN, Circuit


Judges).
AFFIRMED. See Fed. Cir. R. 36.
ENTERED BY ORDER OF THE COURT
April 14, 2015
Date

/s/ Daniel E. OToole


Daniel E. OToole
Clerk of Court

United States Court of Appeals


for the Federal Circuit
Luv N' Care Ltd v. Munchkin, Inc., No. 2014-1653
CERTIFICATE OF SERVICE
I, Robyn Cocho, being duly sworn according to law and being over the age
of 18, upon my oath depose and say that:
Counsel Press was retained by HUSCH BLACKWELL LLP, Attorneys for
Appellant to print this document. I am an employee of Counsel Press.
On May 12, 2015, counsel has authorized me to electronically file the
foregoing Appellants Petition for Rehearing En Banc with the Clerk of Court
using the CM/ECF System, which will serve via e-mail notice of such filing to any
of the following counsel registered as CM/ECF users:
R. Cameron Garrison (Principal Counsel)
Travis W. McCallon
Lathrop & Gage, LC
2345 Grand Boulevard, Suite 2800
Kansas City, MO 64108
816-292-2000
cgarrison@lathropgage.com
tmccallon@lathropgage.com

Allen J. Poplin
Lathrop & Gage, LLP
10851 Mastin Boulevard
Suite 1000
Overland Park, KS 66210
913-451-5100
Jpoplin@lathropgage.com

Paper copies will also be mailed to the above principal counsel on this date.
Additionally, sixteen paper copies will be filed with the Court within the
time provided in the Courts rules.
May 12, 2015

/s/ Robyn Cocho


Robyn Cocho
Counsel Press