CAFC Adds More Twists to Incorporation by Reference - Improper Language Invalidates Patent

Zenon Environmental, Inc. v. United States Filter Corporation (06-1266) , November 7, 2007

During litigation, USFC challenged the validity of a Zenon patent (the '319 patent) that was the sixth patent to issue from a series of continuation and CIP applications related to skein and gas distribution systems for water treatment filtration. Specifically, USFC argued that an intervening patent (the '250 patent) in the chain did not incorporate all the elements of an earlier patent (the '373 patent). The parties agreed that the earlier patent disclosed each and every element of the asserted patent. Accordingly, Zenon argued that the earlier patent was invalidating art under 35 USC 102(b).

The CAFC agreed with USFC (in a 2-1 decision), after looking at the incorporating language in the intervening patent:

The vertical skein is not the subject matter of this invention and any prior art vertical skein may be used. Further details relating to the construction and deployment of a most preferred skein are found in the parent U.S. Pat. No. 5,639,373, and in Ser. No. 08/690,045, the relevant disclosures of each of which are included by reference thereto as if fully set forth herein.

The district court found this language to be sufficient to incorporate the entire disclosure. However, after noting that incorporation by reference is a matter of law (which is reviewed de novo), the CAFC reversed:

Such an interpretation is inconsistent with the plain language of the statement. The plain language expressly limits the incorporation to only relevant disclosures of the patents, indicating that the disclosures are not being incorporated in their entirety. Moreover, the plain language indicates that the subject matter that is being incorporated by reference pertains to the details relating to the construction and deployment of a vertical skein. Thus, we must look, as one reasonably skilled in the art would, to the grandparent patents to determine what the patentees meant by details relating to the construction and deployment of a vertical skein. (Emphasis added).

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Turning to the written description, the ’373 patent expressly states that the vertical skein consists of three distinct elements, viz., fibers, a pair of headers, and a permeate collection means. Id. at col.1 ll.31-38. Thus, by definition, a skein does not include a gas distribution system . . . As such, a reasonable person of ordinary skill in the art would understand that the gas distribution system covered by the ’373 patent is not a detail relating to the construction and deployment of a vertical skein, but rather is a separate and distinct element of the invention, and thus was not incorporated by reference in the ’250 patent.

Thus, the majority held the patent anticipated by the earlier patent.

Judge Newman's dissent:

The issue in this case is simple. The issue is not whether the invention claimed in the '319 patent could have been claimed in the '373 grandparent; nor is the issue one of priority as against a competing claimant; nor is the applicant reaching out for a broad incorporation of background technology from unspecified parts of unrelated publications. Here, the applicant simply invoked the expedient of incorporating a prior disclosure in a chain of applications on the same subject matter. The gas distribution system described in the '319 patent is the same as that of the '373 patent, with continuity of disclosure that includes an incorporation by reference.

The panel majority's holding casts doubt on the reliable use of this expedient, lest an earlier patent become an invalidating reference against its successors in the chain of filings. The majority's rejection of the factual foundations of incorporation by reference and creation of a new area of de novo appellate authority, raise new risks of patent drafting. The apparent requirement that all subject matter must be reproduced in all continuing applications adds nothing to the knowledge disclosed to the public, adds nothing to the information provided to the patent examiner, and adds nothing to compliance with 35 U.S.C. '120; it simply adds costs and pitfalls to inventors, as they attempt to walk new judicial tightropes.