In Re Leithem

United States Court of Appeals
for the Federal Circuit
__________________________

(Serial No. 09/863,585)
IN RE PHYLLIS LEITHEM, CHARLES A.
KREMERS,
W. PAUL HARRELL, STEPHEN LEWIS, KARL D.
SEARS,
QUAN HE, AND PETER R. ABITZ
__________________________

2011-1030
__________________________

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

Decided: September 19, 2011
__________________________

WILLIAM J. SPATZ, Kramer Levin Naftalis & Frankel
LLP, of New York, New York, argued for appellants.
With him on the brief was JEAN-PAUL CIARDULLO.

MARY L. KELLY, Associate Solicitor, United States
Patent and Trademark Office, of Alexandria, Virginia,
argued for appellee. With her on the brief were RAYMOND
T. CHEN, Solicitor and FRANCES M. LYNCH, Associate
Solicitor.
__________________________
2 IN RE LEITHEM

Before NEWMAN, BRYSON, and LINN, Circuit Judges.
LINN, Circuit Judge.

Phyllis Leithem et al. (collectively, “Leithem”) appeal
the decision of the Board of Patent Appeals and Interfer-
ences (“Board”) sustaining the unpatentability of the sole
pending claim of U.S. Patent Application No. 09/863,585
(filed May 16, 2001) (“the ’585 Application”) for obvious-
ness. Ex parte Leithem, No. 2008-0222 (B.P.A.I. Sept. 4,
2008) (“Decision”), reconsideration denied, (B.P.A.I. July
15, 2010) (“Reconsideration”). Because the Board, in
affirming the examiner’s rejection, relied on a new ground
of rejection, this court vacates and remands.

I. BACKGROUND

Leithem’s patent application discloses an improved
personal hygiene device (“diaper”). Traditional diapers
are constructed using an absorbent core of dry shredded
wood fiber pulp, known as fluff pulp, interposed between
a water barrier sheet and a permeable layer that allows
liquid to pass through to the absorbent fluff pulp core.
For absorption intensive devices, such as baby diapers,
the fluff pulp is often pretreated with a chemical cross-
linking agent. Chemical cross-linking increases the wet
stiffness of the fluff pulp so that it retains its bulk and
pore volume when wet, thereby enhancing its absorbency
and preventing “wet collapse.” Appellant Br. 4, 18.
Leithem contends that prior to the discovery disclosed in
the ’585 Application, it was not believed to be possible to
achieve the absorption, liquid retention, softness, and pad
integrity of modern diapers without using chemically
cross-linked fluff pulp.

Leithem sought to invent a diaper that would avoid
the expense of using chemically cross-linked fluff pulp
while still retaining the superior absorbency properties
characteristic of a cross-linked fluff pulp. Leithem discov-
IN RE LEITHEM 3
ered that when wood pulp is extracted with a caustic
substance at low temperature and is then dried and
fluffed, the resulting fluff pulp is imbued with superior
absorbency properties without the need for the extra step
and expense of chemically cross-linking the fluff pulp.

Independent claim 104 is pending and on appeal.
Claim 104 recites:

104. An absorbent personal hygiene device com-
prising:

a layer that allows liquid to pass,

a water barrier sheet,

an absorbent core interposed between said layer
and said sheet, the absorbent core containing

at least about 25% of fluffed wood fiber pulp,
wherein said fluffed wood fiber pulp comprises

wood fiber pulp that has been cold caustic
extracted and fluffed by mechanical action
and is without chemical crosslinking.

The examiner rejected the claim as obvious under 35
U.S.C. § 103 over U.S. Patent No. 3,658,064 (“Pociluyko”)
in view of U.S. Patent No. 2,083,575 (“Novak”). Office
Action of June 25, 2004 (“Office Action”), at 2-4. The
examiner explained that Pociluyko discloses a diaper
satisfying every element of claim 104 except that Po-
ciluyko was “silent as to the method of manufacturing the
fluff pulp.” Id. at 3. In other words, Pociluyko did not
disclose using a fluff pulp that satisfied the cold caustic
extraction limitation. The examiner then explained that
Novak discloses cold caustic extraction of wood pulp and
“a method of making fluff pulp.” Id. at 3-4. According to
the examiner, “[i]t would have been obvious to one having
4 IN RE LEITHEM

ordinary skill in the art . . . to modify the invention of
Pociluyko with a fluff pulp made by the method taught in
Novak.” Id. at 3.

On appeal to the Board, Leithem argued that “Novak
does not teach that his pulp is fluffed.” Supp. Appellant
Br. of Aug. 18, 2004 (“Supp. Br.”), at 6. Instead, Leithem
observed that the pulp product of Novak is a wet-laid
paper and not a fluff material as the examiner alleged.
Id. Because Novak describes the manufacture of wet-laid
paper, not dry shredded fluff, Leithem argued that those
skilled in the art could not simply substitute the wet-laid
paper product of Novak for the dried fluff pulp of Po-
ciluyko to produce the claimed invention. Id. Accord-
ingly, Leithem contended that the examiner’s § 103
rejection was improper.

The Board, in its initial decision, agreed with Leithem
that Novak only discloses the cold caustic treatment of
pulp to produce a wet-laid paper. Decision at 8. The
Board found that, while Novak itself does not disclose a
fluffed pulp, “the Novak pulp is a pulp which may be
fluffed for use in an absorbent core.” Id. The Board
reached this conclusion because Novak’s goal was to
create a more absorptive paper and one of skill in the art
“would have had reason to use this pulp as a fluffed pulp
in an absorbent product such as Pociluyko.” Id. at 9. The
Board therefore sustained the examiner’s rejection of
claim 104 as obvious.

Leithem then petitioned the Board for rehearing. Lei-
them contended that the Board, in affirming the exam-
iner, relied on a new ground of rejection. Specifically,
Leithem explained that the examiner did not find that the
caustic extracted pulp of Novak could be mechanically
fluffed and used in the product of Pociluyko. Instead, the
examiner simply found that Novak’s wet-laid pulp was
itself already a fluff pulp. Thus, according to Leithem,
IN RE LEITHEM 5
the Board relied on a new ground of rejection when it
affirmed the examiner on the basis that Novak’s pulp was
not fluffed, but could be dried, fluffed, and then used as
disclosed in Pociluyko. Req. for Reh’g of Nov. 3, 2008, at
3.

The Board disagreed. The Board initially observed
that both the examiner and the Board had rejected the
claim under 35 U.S.C. § 103 over Novak and Pociluyko.
Reconsideration at 3. Although the Board acknowledged
Leithem’s argument that Novak does not teach fluffing,
the Board reiterated that the examiner found that No-
vak’s pulp was fluffed. Id. (noting that “Novak further
discloses fluffing,” “the Examiner again regarded the
Novak pulp as fluffed,” and “the pulp of Novak was a
‘fluff’ pulp, not the felt.”) Because the examiner’s rejec-
tion referred to “pulp,” Leithem’s appeal brief to the
Board referred to “pulp,” and the Board referred to “pulp”
in its initial decision, the Board determined that the
thrust of the rejection had not changed and denied Lei-
them’s request for rehearing. Id. at 4. Leithem filed a
timely appeal and this court has jurisdiction under 28
U.S.C. § 1295(a)(4)(A).

II. DISCUSSION

This court applies the standards set forth in the Ad-
ministrative Procedure Act (“the Act”) at 5 U.S.C. § 706 in
reviewing decisions from the Board. See In re Gartside,
203 F.3d 1305, 1311 (Fed. Cir. 2000). Under 5 U.S.C.
§ 706, this court “shall . . . set aside agency action . . .
found to be . . . not in accordance with law.” 5 U.S.C.
§ 706; In re McDaniel, 293 F.3d 1379, 1385 (Fed. Cir.
2002).

Leithem argues that the Board relied on a new
ground of rejection in affirming the examiner’s rejection.
Leithem contends that the examiner rejected claim 104 on
6 IN RE LEITHEM

the basis that Novak teaches a cold caustic extracted fluff
pulp, even though Novak only teaches making wet-laid
paper from cold caustic extracted pulp. Appellant Br. 17.
Fluff pulp is a dried product resembling a ball of cotton,
whereas wet-laid paper is a liquid slurry of water and
wood pulp. Leithem asserts that fluff pulp is quite differ-
ent than wet-laid paper, both structurally and in its
absorptive properties. Id. Leithem agrees that the wet-
laid paper of Novak could be dried and then shredded in a
hammermill to make fluff pulp, but points out that this
was not the basis of the examiner’s rejection. Leithem
argues that the Board relied on a new rationale for its
rejection by finding that it would have been obvious to
take Novak’s cold caustic extracted pulp, dry it, shred it
into a fluff, and then combine it with the diaper of Po-
ciluyko. Id. at 19, 21-23.

The United States Patent and Trademark Office (“Of-
fice”) responds that “Novak plainly teaches fluffed cold
caustic-extracted wood pulp.” Appellee Br. 12. The Office
also contends that “Novak teaches that his cold caustic-
extracted wood pulp may be used as a fluff.” Id. at 8, 13.
The Office asserts that Novak teaches “fluffing” because it
discloses the use of a Holland beater. Id. at 13. According
to the Office, the process of beating in a Holland mill
equates to the process of fluffing in a hammermill. Id.
Thus, because the Board and the examiner based their
rejections on these shared findings, the Office argues that
the Board did not impose a new ground of rejection. Id. at
14.

In accordance with the Act, the Office must assure
that an applicant’s petition is fully and fairly treated at
the administrative level. See In re Kumar, 418 F.3d 1361,
1367 (Fed. Cir. 2005) (citing Dickinson v. Zurko, 527 U.S.
150, 154 (1999)). The Board’s statutory authority re-
quires the Board to review, on appeal, adverse decisions of
the examiner. 35 U.S.C. § 6(b). Under the Act, an appli-
IN RE LEITHEM 7
cant for a patent who appeals a rejection to the Board is
entitled to notice of the factual and legal bases upon
which the rejection was based. 5 U.S.C. § 554(b)(3). The
Board’s rules are in accord and provide that when the
Board relies upon a new ground of rejection not relied
upon by the examiner, the applicant is entitled to reopen
prosecution or to request a rehearing. See 37 C.F.R.
§ 41.50(b). The Board need not recite and agree with the
examiner’s rejection in haec verba to avoid issuing a new
ground of rejection. “[T]he ultimate criterion of whether a
rejection is considered ‘new’ in a decision by the [B]oard is
whether [applicants] have had fair opportunity to react to
the thrust of the rejection.” In re Kronig, 539 F.2d 1300,
1302-03 (CCPA 1976) (holding no new ground of rejection
when the Board relied on the same statutory basis and
the same reasoning advanced by the examiner).

Mere reliance on the same statutory basis and the
same prior art references, alone, is insufficient to avoid
making a new ground of rejection when the Board relies
on new facts and rationales not previously raised to the
applicant by the examiner. See Kumar, 418 F.3d at 1367-
68. This court’s predecessor long acknowledged the right
of the Board to make additional findings of fact based
upon the Board’s own knowledge and experience to “fill in
the gaps” that might exist in the examiner’s evidentiary
showing. See, e.g., In re Ahlert, 424 F.2d 1088, 1091-92
(CCPA 1970); see also In re Moore, 444 F.2d 572, 574-75
(CCPA 1971). But the Board’s power to do so is construed
narrowly and when reliance upon such facts changes the
thrust of the rejection, the Board’s action “does everything
but cry out for an opportunity to respond.” Moore, 444
F.2d at 575; see Ahlert, 424 F.2d at 1091. For example, in
Kumar, although the rejection and asserted prior art
relied upon by the Board were the same as those relied
upon by the examiner, “the Board found facts not found
by the examiner regarding the differences between the
prior art and the claimed invention, which in fairness
8 IN RE LEITHEM

required an opportunity for response.” 418 F.3d at 1368;
Ahlert, 424 F.2d at 1092 (“These aspects of judicial notice
are . . . designed with the purpose in mind of fully utiliz-
ing the independent and specialized technical experience
of the Patent Office examiners while balancing the appli-
cant’s rights to fair notice and an opportunity to be
heard.”). This also serves the interests of judicial effi-
ciency. Rather than reviewing arguments directed to-
wards ever-shifting rejections, this court is instead only
presented with arguments concerning those rejections
properly made by the examiner and, in due time, re-
viewed by the Board. See 37 C.F.R. § 41.50(b) (“A new
ground of rejection pursuant to this paragraph shall not
be considered final for judicial review.”).

Here, the examiner cited Novak as teaching a fluff
pulp. Office Action at 3. Leithem appealed this rejection
to the Board on the basis that Novak does not contain
such a teaching. Supp. Br. 6. Leithem argued that No-
vak’s pulp is not fluffed, that Novak does not teach fluff-
ing, and that Novak only teaches wet-laid paper. Id. This
view of Novak is contrary to the examiner’s assertion that
Novak discloses or teaches fluff pulp. The Board agreed
with Leithem but instead affirmed the examiner’s rejec-
tion by finding that Novak teaches a pulp “which may be
fluffed.” Decision at 8. The Board thus found new facts
concerning the scope and content of the prior art. These
new facts relate to whether the prior art discloses or
teaches fluffing cold caustic extracted wood pulp to make
fluff pulp for use in the diaper of Pociluyko. These facts
were the principal evidence upon which the Board’s
rejection was based. Leithem would certainly have re-
sponded differently had the examiner’s original rejection
been premised upon Novak teaching pulp “which may be
fluffed” as opposed to teaching fluff pulp which could be
directly substituted into the diaper of Pociluyko. The
examiner never articulated, nor relied upon, the former
rationale for combining Novak with Pociluyko, and Lei-
IN RE LEITHEM 9
them was never given an opportunity to respond to this
rejection. Leithem, in filing a petition for rehearing,
directly challenged the findings of fact made for the first
time by the Board. The thrust of the Board’s rejection
changes when, as here, it finds facts not found by the
examiner regarding the differences between the prior art
and the claimed invention, and these facts are the princi-
pal evidence upon which the Board’s rejection was based.
Kumar, 418 F.3d at 1368. Accordingly, fairness dictates
that the applicant, in this case Leithem, should be af-
forded an opportunity to respond to the Board’s new
rejection.

The subsequent proceedings further solidifies this
court’s conclusion that the thrust of the Board’s rejection
differed from that of the examiner’s rejection. When
Leithem sought rehearing as to whether the Board relied
upon a new ground of rejection, the Board shifted its
characterization of its earlier rejection. On reconsidera-
tion, the Board explained that the examiner viewed
Novak as disclosing fluff pulp and, because the Board’s
decision “referred to the pulp in the decision, not the wet-
laid [paper],” the Board’s initial decision did so as well.
Reconsideration at 4. This conclusory analysis is hardly
persuasive when nothing in the Board’s initial decision
describes the wet-laid paper of Novak as “fluffed”—the
precise issue, in fact the only issue, appealed by Leithem.

On appeal to this court, the Office continued to argue
that Novak discloses fluff pulp. In doing so, the Office
relied upon additional facts not articulated in the exam-
iner’s rejection. For example, the Office argued that
Novak teaches pulp which may be fluffed using a “beater
engine of Holland type” and that “[t]he process of beating
the pulp equates to fluffing.” Appellee Br. 13. Leithem
disagrees with the Office’s assertion that the beating of
pulp in a Holland beater is equivalent to the shredding of
dry paper in a hammermill, as required by claim 104 and
10 IN RE LEITHEM

disclosed in the ’585 Application. Reply Br. 3-5 (under the
section labeled “Disputed Facts in the Solicitor’s Brief”).
Moreover, according to the Office, the “swollen” pulp of
Novak is already fluffed, and need not be “re-beaten” in a
hammermill. Oral Argument at 17:40-17:50, available at
http://www.cafc.uscourts.gov/oral-argument-recordings/2011-
1030/all. The Office’s position that Novak’s pulp is “me-
chanically fluffed” because it is puffed or “swollen” is
unsustainable and inconsistent with the Board’s rejection.
Compare Oral Argument at 17:40-17:50;18:25-18:30
(“Novak uses the word swollen rather than the word
fluffed . . .”) and Novak at col.1 ll.32-50 (describing proc-
ess where wood pulp is soaked in caustic and the pulp
“immediately swell[s],” which “may be called puffing,” and
is “due to the action of the caustic soda”) with Decision at
8 (agreeing with Leithem that Novak’s pulp is not fluff
material but is instead “a pulp which may be fluffed”).
Moreover, the examiner never suggested that the swollen
fibers of Novak were, by nature of absorbing water, me-
chanically fluffed. See, e.g., Office Action.

Additionally, at oral argument, the Office relied on
the teachings contained within U.S. Patent No. 6,063,982
(“Martin”) as further evidence that “reconfirms” how one
of skill in the art would have understood Novak to have
disclosed fluff pulp. Oral Argument at 13:50-15:08;17:50-
18:15. While the Office assured this court that Martin
was in the record and is “a piece of prior art,” id. at 16:29,
Martin was not relied upon in the instant rejection. The
Office’s reliance upon additional facts and grounds, some
of which were raised for the first time to this court at oral
argument, rings hollow when the entire basis for this
appeal is whether Leithem was afforded the opportunity
to respond to the Board’s new ground of rejection.

Finally, at oral argument the Office said that Leithem
was making “a shift in argument” and not presenting the
same argument as the one presented to the Board. Id. at
IN RE LEITHEM 11
17:10-17:35; 18:20-18:35. This begs the question and
highlights the problem when the Board relies on a new
ground of rejection. Leithem’s argument to the Board was
in response to the grounds relied upon by the examiner,
namely, that Novak disclosed a fluff pulp. When the
Board affirmed the rejection on the basis that Novak
taught a pulp that was not fluffed, but that could be
fluffed, of course Leithem’s argument had to shift—the
thrust of the Board’s rejection had shifted. The Board
cannot play it so fast and loose in affirming an examiner’s
rejection that it disregards procedural safeguards afforded
to the applicant.

Accordingly, while we express no opinion on the pro-
priety of the Board’s rejection of claim 104, the case must
be remanded to the Board to allow appellants a full
opportunity to respond to the new rejection in the first
instance. The Board’s decision to the contrary was “not in
accordance with law,” 5 U.S.C. § 706, and is hereby va-
cated.

III. CONCLUSION

For the foregoing reasons, this court vacates the
Board’s rejections of claim 104 and remands for appropri-
ate further proceedings.

VACATED AND REMANDED