# Petition for Writ of Certiorari — Brennan v. Abbott Laboratories > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_0531%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1992 - **Citation:** 505 U.S. 1205 ## Text In The Supreme Court of the United States October Term, 1991 ¢ JOHN F. BRENNAN, Petitioner, VS. ABBOTT LABORATORIES, ANDREW J. MUETTERTIES and JOSEPH N. GENESE, Respondents. S Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Federal Circuit, Or, Order Of Summary Reversal ¢ PETITION FOR WRIT OF CERTIORARI * MicHette A. THomas (P35135) Attorney for Petitioner SULLIVAN, Warp, Bone, TYLER & AsHER, P.C. 1000 Maccabees Center 25800 Northwestern Highway Post Office Box 222 Southfield, MI 48037-0222 (313) 746-0700 COCKLE LAW BRIEF PRINTING CO, (800) 2256964 OR CALL COLLECT (402) 342-2831 I. QUESTIONS PRESENTED Whether the Doctrine of Collateral Attack forecloses a party receiving priority of invention following interference proceedings before the United States Patent and Trademark Office from bringing a subse- quent state tort action for abuse of process as a remedy for pecuniary and non-pecuniary damages caused by the other party’s intentional and tortious abuse, corruption and perversion of the procedures and processes of the PTO during the course of the interference proceedings for ulterior and collateral motives unrelated to the valid and proper award of priority of invention. Whether the Doctrine of Federal Preemption fore- closes, as encroaching upon a field of exclusively federal interest, additional remedies provided under traditional state common law for personal injuries caused by the tortious perversion of legitimate fed- eral patent proceedings for improper, ulterior and collateral purposes. il TABLE OF CONTENTS Page QUESTIONS PRESS mir a. ss a0saeseeeeee trees i TABLE OF AU TIGRE lee i o545 cesses iV OPINIONS SELAAW «3.0%. 205 seeanee eee Peak a JURISDIC THOM ; .. «scene eee nee eee een eee aees 2 CONSTITUTIONAL, STATUTORY AND REGULA- TORY PROVISIONS IN VOIVEGR SE oss kasecascaacas 3 STATEMENT OF THE (AS iio us cee ess 3 REASONS FOR SUMMARY REVERSAL OR GRANT- ING OF THE WRITE... c5550ces eee ee ) CONCLUSION |... \ss.s:05 ise eae 30 APPENDIX A, OPINION OF THE COURT OF APPEAL FOR THE FEUGBRAL, GORGails ss sass ass A-] APPENDIX B, ORDER OF THE COURT OF APPEALS DENYING REHEARING.............. A-26 APPENDIX C, ORDER OF THE COURT OF APPEALS DENYING A SUGGESTION FOR REHEARING IN SAN ...2..4.555305 eae A-28 APPENDIX D, OPINION AND ORDER OF THE COURT OF APPEALS FOR THE SIXTH CIR- APPENDIX E, ORDER OF THE DISTRICT COURT GRANTING PARTIAL REMITTITUR AND RESTRICTING THE AWARD OF PRE-JUDG- MENT INTERES! ...sie50503000ee eee gees A-33 APPENDIX F, JUDGMENT OF THE DISTRICT COURT ON THE JURY Wemeermiedis cesses eeee A-35 ill TABLE OF CONTENTS - Continued Page APPENDIX G, ORDER OF THE DISTRICT COURT REMANDING THE MATTER TO THE rat ae Ce SY cde ue kes pleat A -37 APPENDIX H, DECISION BY THE BOARD ON a Tg ag elo A-39 APPENDIX I, DECISION OF THE COMMIS- SIONER ON REMAND...... ee nhs CADE ORF Lr ae A-50 APPENDIX J, DECISION BY THE BOARD SEEM GT ULOCOUEOE Vc ccvvvcccncvaccceveseesess A-90 APPENDIX K, CONSTITUTIONAL PROVISIONS re ee nod re ee ee A-131 APPENDIX L, STATUTORY PROVISIONS Te eee rn oe hel i ee od A-132 APPENDIX M, RULES OF PRACTICE IN PATENT ee ON a ee ake es A-138 APPENDIX N, FORMER RULES OF PRACTICE a iS A-144 APPENDIX O, LEGISLATIVE HISTORY .......... A-146 APPENDIX P, ADMINISTRATIVE NOTICES......A-151 iV TABLE OF AUTHORITIES CASES Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 ee Se ROE oe Ga enh Capen ay coer yen eeee American Guaranty Corp. v. United States, 401 F.2d 1004 (U.S. Ct. Cl. 1968)....0 0.0... e cece cece eee. Aronson v. Quick Point Pencil Co., 440 U.S. 257 SRE Ais ne wateveeeauan ue feet oceee 17, 18, 25, Astoria Fed. Sav. & Loan Ass'n v. Solimino, 111 S. Ct. Ss era ce ats Ae eat Baker Driveaway Co. v. Bankhead Enter., 478 F. Supp. Mh Re sy) Sr re eee Bill Johnson's Restaurants, Inc. v. N.L.R.B., 461 U.S. Fe! Seg ane cad eae eee anaes i Bonito Boats v. Thunder Craft Boats, 489 U.S. 141 UN Ss onan cereus eee Eee ee Rene eks Bowen v. American Hosp. Ass'n, 476 U.S. 610 (1986) LK ELARRE HES Ce EOL ea R OO ee aa eet ee 19, California Motor Transp. Co. v. Trucking Unlimited, PO Wh De HENGE osc cone t ene cceeeecanss 13, California v. ARC America Corp., 490 U.S. 93 (1989) See e GaN Snare eerie ee baler e earn a ie 19, Callanan Road Improvement Co. v. United States, 345 SRS NE MEER Man SP LES Lae Cee te ee es ee Diamond v. Chakrabarty, 447 U.S. 303 (1980).......... Eastern R.R. President's Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961) ........... 13, English v. General Electric Co., 496 U.S. 72 (1990) Pe re re ene ee we re ON PE ae ae ee 18, Florida Lime and Avocado Growers, Inc. v. Paul, 373 Fak ee NS. 6c inca so ne Oo aa Seen 18, Page 26, 24, TABLE OF AUTHORITIES — Continued Page Friedman v. Dozorc, 412 Mich. 1, 312 N.W.2d 585 Tera mr nh 58 SO cent: 15 Gilbert v. Ben-Asher, 900 F.2d 1407 (9th Cir. 1990) cork. demied, 42 US. 077 IG. he's 2 oa awe eases 8, 11 Goldstein v. California, 412 U.S. 546 (1973) ........ 17, 18 Goodyear Atomic Corp. v. Miller, 486 U.S. 174 (1988) .19, 25 Grant, et al. v. Raymond, 31 U.S. 218 (1832).......... 18 Interstate Natural Gas Co. v. Southern Cal. Gas Co., 209 F.20 see COU CA, THs ss vas oes eka ines 12 Jones v. Rath Packing Co., 430 U.S. 519 (1977)..... 19, 24 Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974) neu the oe wee es RG ea ON ee 17, 18, 25, 26, 29 Lewis v. Lho, 696 F. Supp. 723 (D. D.C. 1988)........ 11 Meehan v. Michigan Bell Tel. Co., 174 Mich. App. $36, 436 N.W20 F711 (19) coi sc ea es 16 MGA, Inc. v. General Motors, Corp., 827 F.2d 729, 3 U.S.P.Q.2d 1762 (Fed. Cir. 1987), cert. denied, 484 US. TD i oni kcdas cnc sindusanoses sevens 12 Mitchell v. Cole, 176 Mich. App. 200, 439 N.W.2d SAD CODD) ook ose ies eeties se eee 16 Neumann v. Vidall, 710 F.2d 856 (D.C. Cir. 1983) od é al uuke ss ae\xa00d00 cube eek eee 8, 10, 11, 16 Otter Tail Power Co. v. United States, 410 U.S. 366 (TOTS 5 5 os kc cavnPeeees creer eee eee ee eee 13 Power Lift, Inc. v. Weatherford Nipple-Up Sys., 871 F.2d 1002 (Fed. (is. TRS)... ckas Ge eee ees 25 Precision Instruments Mfg. Co. v. Automotive Main- tenance Mach. Co., 324 U.S. 806 (1945)............. a2 Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947) .... 19 vi TABLE OF AUTHORITIES - Continued Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 {1968) |. co vicacantcdceiessaeee eee 18 Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984) Js ene bees eae es eet weale ean epee ee een 18, 19, 24 Sony Corp. v. Universal City Studios, Inc., 464 U.S. ML? (POGS) as cvsnssacaehedceeenee eee 17, 18 Spear v. Pendill, 164 Mich. 620, 130 N.W. 343 (1911) .... 15 Three Lakes Ass’n v. Whiting, 75 Mich. App. 564, on, Be Wee GOO CRE ii ics tack onkktase eee 15, 16 Trepel v. Pontiac Osteopathic Hosp., 135 Mich. App. 261, SOO NLW.2G SO COPE i ioc cdavaciecaeeuaes 16 United Mine Workers v. Pennington, 381 U.S. 657 (PPR) . ces cs chu be eee eo hu he's 0a ker ee ee oan 13 United States v. Bass, 404 U.S. 336 (1971)..... 19, 23, 24 Universal Gym Equip. v. ERWA Exercise Equip., 827 rag i362 (req. (le. S000). . iiaciscsin sane aoe 25 Vallance v. Brewbaker, 161 Mich App. 642, 411 N.W.2d 808 (1987), appeal denied, 430 Mich. 883 ‘ty | rennet ln ESN Oe 15 Will v. Michigan Dept. of State Police, 491 U.S. 58 (1900)... os ae 19, 23, 24 CONSTITUTION, STATUTES, REGULATIONS AND RULES 2 USC. § 19504 cc eee 2 2 USC. § WN... 6 3 USC. 4.12... ee 6 28 U.S.C. § 1295(a(4)(C).. 0. cece cece cece cccceecee. 6 2 USC. 6 191.......4. 4 USC. § WE. 4 Vil TABLE OF AUTHORITIES — Continued Page Bk a ot Seer rey rear se 4, 6 , Eis. ae eo err rrr rae eer ee rer rr re rere res re 6 RT ae RS i | SS en Irae wr Par X Btn! i prem ree rr errr ree hres 4, 6 gat: 2k >) Sore ee rT errr rrr errr 3 SF OF Cer 5 bins coe ee whee a cee 22 SF UF ee Pe ces bv oe cee es esky Cae ee bee ee BF Ci Oe Ba ds kee eS es ween kp ee ee ee ok eS RR |, Sn oe ens aa a, 2h) oe oo ee ee errr rr Terr. 21 > Fed. Rae. 3,760 (19048) «.. «occ cic ec cecie ree ay ae SP FOG. Bere. GO BIG CIFOG) oe 5 wa ns ve vd -sceeseses 3, 23 Se ee eS OeGy Pee erm ren es rer cere or Tre 5 A a eS Co ere e erate pri weer yl 1 Ly Re BE. eo Ss ass 3, 5, 7, 13, 14, 16, tA wo” ee oe. Ee eer err rr a YY LT Re ay Ok Octet eae es Neha ees 3, 18 LEGISLATIVE MATERIALS 130 Cong. Rec. H10,525 (daily ed. Oct. 1, 1984), reprinted in 1984 U.S. Code Cong. & Admin. i PEP r re ee Tepe TIT rere a S. Rep. No. 1979, 82d Cong., 2d Sess., reprinted in 1952 U.S. Code Cong. & Admin. News 2394... .3, 20 S. Rep. No. 2169, 87th Cong., 2d Sess., reprinted in 1962 U.S. Code Cong. & Admin. News 3286... .3, 20 Books Prosser & Keeton, Torts (5th ed. 1984)............ a>, 27 In The Supreme Court of the United States October Term, 1991 4 JOHN F. BRENNAN, Petitioner, VS. ABBOTT LABORATORIES, ANDREW J. MUETTERTIES and JOSEPH N. GENESE, Respondents. ¢ Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Federal Circuit, Or, Order Of Summary Reversal ¢ PETITION FOR WRIT OF CERTIORARI e The Petitioner, John F. Brennan, respectfully requests that a Writ of Certiorari issue to review the Judgment and Opinion of the United States Court of Appeals for the Federal Circuit entered on December 27, 1991, rehearing denied on January 27, 1991, and Suggestion for Rehearing In Banc denied on February 7, 1992. The questions pre- sented raise purely legal and constitutional issues. Because the Court of Appeal’s decision is so clearly erro- neous, this case is also appropriate for summary reversal pursuant to Rule 16.1 of the Rules of this Court. OPINIONS BELOW The Opinion of the Court of Appeals for the Federal Circuit (Appendix A, pp. A-1-25) is reported at 952 F.2d 2 1346 (Fed. Cir. 1991). An Order Denying Rehearing (Appendix B, pp. A-26-27) was not reported. An Order Denying a Suggestion for Rehearing In Banc (Appendix C, pp. A-28-29) is reported at 952 F.2d 1346 (Fed. Cir. 1991). The Opinion and Order of the Court of Appeals for the Sixth Circuit transferring this matter to the Court of Appeals for the Federal Circuit (Appendix D, pp. A-30-32) was not reported. The Judgment on the jury verdict entered by the District Court for the Eastern District of Michigan (Appendix F, pp. A-35-36) was not reported. The Order granting partial remittitur as to the jury awards for costs and attorney fees and restricting an award of pre-judg- ment interest entered by the District Court (Appendix E, pp. A-33-34) was not reported. The Order of the District Court remanding the matter to the Patent and Trademark Office (Appendix G, pp. A-37-38) was not reported. The decision by the Board of Patent Appeals and Interferences (“Board”) upon remand by the District Court (Appendix H, pp. A-39-49) was not reported. The decision by the Commissioner of Patents (“Commis- sioner”) (Appendix I, pp. A-50-89) was not reported. The decision by the Board awarding priority to Bren- nan (Appendix J, pp. A-90-130) is reported at 230 U.S.P.Q. 145 (Bd. Pat. App. & Int. 1986), as corrected at 230 U.S.P.Q. 560 (Bd. Pat. App. & Int. 1986). JURISDICTION The Judgment of the Court of Appeals (App. A p. A-1) was entered on December 27, 1991. An Order Deny- ing Rehearing (App. B p. A-26) was entered on January 27, 1992. An Order Denying a Suggestion for In Banc Review (App. C p. A-28) was entered on February 7, 1992. The jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1). 3 CONSTITUTIONAL, STATUTORY AND REGULATORY PROVISIONS INVOLVED This case involves the following Constitutional provi- sions, statutes, regulations, legislative history and admin- istrative notices: U.S. Const. art. I, § 8, cl. 8, art. VI, cl. 2, amend. I; 35 U.S.C. §§ 1, 31, 101, 131-135, 146; 37 C.F.R. §§ 1.56 & 1.616 and former 37 C.F.R. §§ 1.257(a), 1.259, 1.287(d)(2); S. Rep. No. 1979, 82d Cong., 2d Sess., reprinted in 1952 U.S. Code Cong. & Admin. News 2394, ~ Rep. No. 2169, 87th Cong., 2d Sess., reprinted in 1962 U.S. Code Cong. & Admin. News 3286, 130 Cong. Rec. H10,525 (daily ed. Oct. 1, 1984), reprinted in 1984 U.S. Code Cong. & Admin. News 5827; 49 Fed. Reg. 3,768 (1984) (to be codified at 37 C.F.R. §§ 1.601-1.688) (pro- posed Jan. 30, 1984), 49 Fed. Reg. 48,416 (1984) (to be codified at 37 C.F.R. §§ 1.601-1.688). The pertinent texts of the foregoing are set forth in the Appendixes. STATEMENT OF THE CASE Petitioner Brennan seeks either an Order of Summary Reversal or a Writ of Certiorari to the Court of Appeals for the Federal Circuit regarding the Judgment of the Court of Appeals which stripped the Petitioner of $1,171,391.13 in personal injury damages awarded by the U.S. District Court for the Eastern District of Michigan following a jury trial on the common law theory of abuse of process recognized under Michigan law. The verdict in favor of Brennan is based upon the jury’s findings that, for ulterior and collateral motives unrelated to the valid and proper award of priority, the Respondents tortiously perverted and abused the legiti- mate processes of the U.S. Patent and Trademark Office (“PTO”) during the prosecution of interference proceed- ings. The evidence at trial established that, in 1982, after the Respondents were caught committing fraud, perjury and other inequitable conduct upon the PTO by filing false statements and affidavits, they knowingly and willfully fabricated and pursued false charges of ——————————— 4 fraud against Brennan in an effort to coerce, harass and frighten Brennan, his attorneys and investors and to gain competitive advantage by preventing or delaying Brennan’s successful use of any patented technology for sequential administration of two or more intravenous fluids. Notwithstanding great emotional distress and financial hardship, Brennan did not succumb to the Respondents’ coercive and harassing tactics and was awarded priority of invention due to the initial fraud, perjury and other inequitable conduct committed by the Respondents upon the PTO. Jurisdiction of the District Court was initially secured by the filing of a complaint by the Respondents pursuant to 35 U.S.C. § 146, seeking de novo review of the decision of the Board of Patent Appeals and Interferences (“Board”). (App. J p. A-90). The District Court also had jurisdiction over the original action pursuant to 28 U.S.C. § 1338 and § 1331, as well as independent diversity jurisdiction over compulsory counterclaims and _ third- party claims filed by Brennan pursuant to 28 U.S.C. § 1332. Brennan's claims set forth state common law tort theories of fraudulent misrepresentation, abuse of pro- cess, and tortious interference with economic expectancy, and, claims of violation of the federal RICO and anti-trust Statutes. The District Court entered a pre-trial order granting partial summary judgment in favor of Respondents Abbott Laboratories, Andrew J. Muetterties and Joseph N. Genese [hereinafter collectively referred to as “Abbott”], dismissing with prejudice the RICO and anti- trust claims, as well as the state law claims for fraudulent misrepresentation, and, granting summary judgment in favor of the individual Third-Party Defendants for lack of jurisdiction over those Defendants due to the dismissal of the RICO count. On August 9, 1989, the District Court granted Bren- nan’s Motion for Summary Judgment on the § 146 Com- plaint and denied Abbott’s renewed Motion for Summary 5 Judgment.' Abbott did not appeal from the entry of the August 9, 1989 Order. Trial proceeded solely on Brennan’s state tort law claims of abuse of process and interference with economic relations. The jury ultimately returned a verdict wnich determined that Brennan take nothing on the claim of abuse of process as against Muetterties and Genese; that Brennan recover the following amounts on the claim of abuse of process against Counter-Defendant Abbott Laboratories: $250,000.00 for attorney fees, $1,070,000.00 for emotional injuries and $30,000.00 for out-of-pocket costs, for a total award of $1,350,000.00. A Judgment for $1,350,000.00 with interest thereon accruing until the date of satisfaction as permitted by law, was entered on December 21, 1989 (App. F p. A-35). An order was entered on February 26, 1990, which denied both parties’ Motions for Sanctions pursuant to Fed. R. Civ. P. 11; denied Brennan’s Motion for New Trial, denied Abbott’s Motion for J.N.O.V. or for New Trial; granted in part Abbott’s Motion for Remittitur as to the awards for costs and attorney fees, only, and reduced the total judgment to $1,171,391.13; and, finally, held that 1 The Order of August 9, 1989 also vacated the District Court’s prior order of July 6, 1987 (App. G p. A-37) which granted summary judgment for Abbott on the § 146 Complaint and remanded the matter to the PTO with directions to refer the matter to the Commissioner to consider the allegations of inequitable conduct. On remand the Board reaffirmed the pro- priety of its award of priority to Brennan, emphasizing that this award was on the ancillary matter of inequitable conduct by Abbott upon the PTO and, was not a sanction in favor of Brennan following a finding of priority in favor of Abbott (App. H p. A-44-49). Pursuant to former 37 C.F.R. § 1.259, the Board referred its decision on remand to the Commissioner (App. H p. A-48-49), who determined that, pursuant to 37 C.F.R. § 1.56 and case law precedent, the Board properly exer- cised its authority to conclude that Abbott's conduct constitu- ted inequitable conduct ancillary to priority. (App. [| p A-81-88). 6 pre-judgment interest would not be allowed on the jury award for attorney fees or costs, nor on the damages awarded during periods when the case was stayed (App. E p. A-33-34). From the Order of Feb. 26, 1990, regarding curtail- ment of pre-judgment interest, the Judgment of Dec. 21, 1989 with respect to the verdict of no cause for action on the claims of tortious interference and certain pre-trial orders, Brennan filed a Notice of Appeal with the U.S. Court of Appeals for the Federal Circuit. Abbott filed a Notice of Appeal with the Sixth Circuit Court of Appeals claiming an appeal from the final order of February 26, 1990, and the Judgment on the jury ver- dict with respect to the claims of abuse of process. In an Order dated June 20, 1990, the Sixth Circuit Court of Appeals concluded that it lacked jurisdiction over the Notice of Appeal filed by Abbott because, pur- suant to 28 U.S.C. § 1295(a), the Federal Circuit had exclusive jurisdiction of an appeal from a District Court decision in a case brought pursuant to 28 U.S.C. § 146 (App. D p. A-31). However, pursuant to 28 U.S.C. § 1631, the Sixth Circuit ordered Abbott’s Appeal transferred to the Federal Circuit (App. D p. A-31). Thereafter, the two appeals before the Federal Circuit were consolidated, with Abbott designated as the Cross- Appellant. The Court of Appeals for the Federal Circuit has exclusive subject matter jurisdiction over the appeals pur- suant to 28 U.S.C. § 1295(a)(1) and § (a)(4)(C) because the jurisdiction of the District Court was initially invoked under 28 U.S.C. § 1338 and 35 U.S.C. § 146. With respect to its Appeal, Abbott argued that Bren- nan’s counterclaim for abuse of process should have been dismissed as a matter of law because: 1) no judicial process was involved in the interference proceedings before the PTO; and 2) to permit separate state law tort claims arising out of a party’s misconduct before the PTO would deny or impair the party’s right to petition the 7 government or to continue adversarial proceedings. No argument was made on the part of Abbott that remedies afforded under the state common !aw theory of abuse of process were preempted by former or existing federal patent laws and regulations. Brennan responded by contending that: 1) under Michigan law, an abuse of process action will be sus- tained upon a showing that a judicial, quasi-judicial or administrative process is utilized in a properly filed action in an effort to threaten, coerce, or harass the opposing party; 2) the right to petition the government does not preclude liability for threats, coercive tactics, and the knowing and willful submission of false facts and allegations against the opposing party during the course of federal agency proceedings for improper pur- poses; and 3) the jury verdict was supported by ample evidence that the interference process was abused by Abbott’s intentionally fabricated charges of fraud, improper acts of coercion and harassment against Bren- nan, and, evidence that Abbott’s baseless charges of fraud were merely a pretext or means to extort Brennan to withdraw his legitimate charges of fraud, or, to other- wise gain competitive advantage by enjoying full use of the technology at issue while causing extraordinary delay in the issuance of Brennan’s patent, or, causing the technology at issue to return to the public domain. On Brennan’s Appeal, the Court of Appeals affirmed the denial of sanctions, the dismissal of anti-trust coun- terclaims, and the denial of a new trial on the tortious interference counterclaim (App. A pp. A-9-17, 20-21). On Abbott's Appeal, the Court of Appeals reversed the judg- ment of abuse of process, and the jury’s award of dam- ages (App. A pp. A-24-25). The issue raised in Brennan’s Appeal regarding entitlement to additional pre-judgment interest was deemed moot (App. A p. A-25). When deciding to reverse the money judgment on the jury verdict in favor of Brennan, the Court below declined to resolve “the broad question of whether 8 actions in connection with federal administrative pro- ceedings can ever provide the ‘process’ for a common law claim of abuse of process.” (App. A p. A-21). The Court opted instead, to resolve “the narrow issue of whether the state tort action for abuse of process can be invoked as a remedy for inequitable or other unsavory conduct of parties to proceedings in the Patent and Trademark Office” concluding that “the federal administrative pro- cess of examining and issuing patents, including proceed- ings before the PTO’s boards, is not subject to collateral review in terms of the common law tort of abuse of process.” (App. A pp. A-21-22). In this regard, the Court of Appeals reasoned that “[t]he PTO procedures themselves provided a remedy for Abbott’s malfeasance” since “Brennan was awarded a patent although the PTO found that Brennan was not the first inventor of the subject matter.” (App. A p. A-24). Relying on the cases of Baker Driveaway Co. v. Bankhead Enter., 478 F. Supp. 857, 207 U.S.P.Q. 365 (E.D. Mich. 1979), and Gilbert v. Ben-Asher, 900 F.2d 1407 (9th Cir. 1990), cert. denied, 111 U.S. 177 (1990), the Court of Appeals opined that “[a]n additional state action would be an inappropriate collateral intrusion on the regulatory procedures of the PTO, ‘under the guise of a complaint sounding in tort.’” (App. A pp. A-22-25). The Court reached this conclusion even while noting the contrary holding in Neumann v. Vidall, 710 F.2d 856 (D.C. Cir. 1983), where the D.C. Circuit refused to dismiss a state common law claim for abuse of process arising out of proceedings conducted before the PTO for an anti-com- petitive motive. (App. A p. A-24). According to the Court of Appeals, “the better general rule is that based on judicial disfavor of collateral attack, under the common law, on proceedings before the PTO.” (App. A p. A-24). Moreover, without any articulated deference to the historic powers of the states to provide tort remedies to compensate for personal injury, and without any analysis of the purposes and objectives of Congress in enacting 9 the federal patent law and enabling federal patent regula- tions, the Court of Appeals below concluded that a state action for abuse of process “is contrary to Congress’ preemptive regulation in the area of patent law.” (App. A p- A-25). Brennan filed a timely combined Petition for Rehear- ing and Suggestion for Rehearing In Banc. Rehearing was denied in an order dated January 27, 1992 (App. B p. A-26). The Suggestion for Rehearing In Banc was denied on February 7, 1992 (App. C p. A-28). REASONS FOR SUMMARY REVERSAL OR GRANTING OF THE WRIT The Petitioner Brennan brings before the Court issues of state power and federalism of great significance to American jurisprudence which have not been, but must be, settled by this Court. Without any authority and without proper analysis of attendant constitutional, legal and policy considerations, the Court of Appeals has declared that the doctrines of collateral attack and federal preemption foreclose state common law tort actions for abuse of process as a remedy for personal injuries sustained by a private party as a result of the tortious misconduct of another party to proceedings before the PTO. At best, this unprecedented decision constitutes a monstrous transformation of a party’s constitutional right to petition the PTO for a determination of priority of invention into absolute immunity from tort liability for pecuniary and non-pecuniary damages caused by the abuse and perversion of the patent office processes - personal injury damages which the PTO is not, and has never been, authorized to award because Congress and the Courts have conferred upon the PTO only the power to fashion equitable remedies when granting or determining patent rights. At worst, the unprecedented decision constitutes an unconstitutional infringement upon the historic police 10 powers of states to invoke traditional common law so as to compensate victims of personal injuries caused by intentional and tortious acts and omissions. State com- mon law of abuse of process has coexisted harmo- niously with federal patent protecticn for over 200 years, and, the U.S. Constitution, the federal statutes, legislative history, regulations and regulatory history do not support the notion that Congress intended to preempt the historic power of states to ensure compen- sation of tort victims. Unless this Court acts by either summarily revers- ing the judgment of the Court of Appeals or granting the Writ of Certiorari to the Court of Appeals, the deci- sion of the lower court will drastically alter sensitive federal-state relationships, upsetting the delicate bal- ance heretofore carefully protected and preserved by the Constitution and by this Court. Moreover, unless this Court acts, the decision of the Court of Appeals will serve to promote the misuse and perversion of the legitimate processes of the PTO and the subversion of the integrity of that agency - and potentially all other federal agencies —- while depriving victims of such abuse relief only available under tradi- tional state tort law - all to the detriment of the parties to proceedings before federal agencies, to the federal agencies themselves, as well as to the usual constitu- tional balance between the states and federal govern- ment. I. Consideration by this Court is necessary because the Court of Appeal’s unprecedented determination that a state common law action for abuse of process constitutes an improper collateral intrusion on the PTO is in direct conflict with decisions by this Court and decisions by the Courts of Appeals for the District of Columbia Circuit, the Ninth Circuit, and the Federal Circuit. A. There is clear conflict between the Court of Appeals for the Federal Circuit and the decision of the Court of Appeals for the District of Columbia Circuit in Neumann v. Vidall, supra. ln Neumann, an abuse of process 11 action was filed by a patent applicant after a competitor charged that the applicant had committed fraud before the PTO and filed other proceedings with the PTO allegedly designed to delay the issuance of the patent and discourage potential investors. 710 F.2d at 858. The Dis- trict of Columbia Circuit held that these allegations stated a valid state common law cause of action for abuse of process. Id. at 860. See also: Lewis v. Lho, 696 F. Supp. 723, 728 (D. D.C. 1988) (encouraging the submission of forged and fraudulent documents to the FCC to gain competitive advantages is abuse of process). The Court of Appeals below noted, but rejected, the holding in Neumann, and, without any supporting legal authority, determined the “better general rule is that based on judicial disfavor of collateral attack, under the common law, on proceedings before the PTO” (App. A p. A-24). Since the Court of Appeals made no attempt to conceal its disagreement with Neumann, supra, its opin- ion here can be characterized as an invitation to this Court to resolve the conflict created. B. There is also clear conflict between the Court of Appeals for the Federal Circuit and prior decisions by this Court and the Ninth Circuit Court of Appeals’ deci- sions defining and applying the doctrine of collateral attack. Specifically, the decision below absolutely mis- construes the cited case of Gilbert v. Ben-Asher, supra (plaintiff’s abuse of process claims dismissed as a collat- eral attack upon the final decision of the Arizona Board of Medical Examiners to revoke plaintiff's license to prac- tice medicine because the tort claims for damages were filed against the individual members of the Board and indirectly challenged the Board’s final decision). Additionally, the decision below ignores a host of other appellate decisions narrowly defining “collateral! attack” as questioning the validity of a judgment in a proceeding not brought for the purpose of modifying, setting aside, vacating or enjoining the judgment, an 12 attempt to avoid and defeat or evade judicial decree or to deny its force and effect. See, e.g., Callanan Road Improve- ment Co. v. United States, 345 U.S. 507, 512 (1952) (separate administrative proceeding precluded where attempt made to defeat an order of the Interstate Commerce Com- mission), MGA, Inc. v. General Motors, Corp., 827 F.2d 729, 732, 3 U.S.P.Q.2d 1762 (Fed. Cir. 1987), cert. denied, 484 U.S. 1009 (even though an action has an independent purpose and contemplates some other relief, it is a collat- eral attack if it must in some fashion overrule a previous judgment), American Guaranty Corp. v. United States, 401 F.2d 1004, 1010-11 (U.S. Ct. Cl. 1968) (bankruptcy ref- eree’s orders not subject to modification or defeat in a separate action filed with the District Court), Interstate Natural Gas Co. v. Southern Cal. Gas Co., 209 F.2d 380, 385 (9th Cir. 1953) (party may not by means of a separate suit for damages indirectly annul decisions by the Federal Power Commission). In this case, and unlike the cases where claims were properly dismissed pursuant to the doctrine of collat- eral attack, Brennan’s state law tort claims were filed against the real parties in interest to the interference proceedings, and not against any members, employees, or staff of the PTO. Additionally, Brennan’s state law tort claims did not directly or indirectly challenge the final decision of the PTO Board awarding priority of intervention in favor of Brennan on all counts due to Abbott's fraud, perjury, and inequitable conduct upon the PTO. Rather, and as the Court of Appeals itself conceded, Brennan’s counterclaims for abuse of process followed Abbott’s attack of the Board’s decision to award priority of invention to Brennan via a § 146 appeal. (App. A p. A-24). Indeed, Brennan relied upon the Board’s decision. Most importantly, Brennan’s abuse of process claims focused on the torts committed by Abbott upon Brennan, separate and distinct from the inequitable conduct committed by Abbott upon the PTO. 13 The Court of Appeals’ misapplication of the collat- eral attack doctrine is in clear conflict with the prior decisions of this Court and the Federal Circuit, as well as the Ninth Circuit, and therefore constitutes an invita- tion for action by this Court. C. Finally, the Federal Circuit Court of Appeals’ analysis and application of the doctrine of collateral attack is ripe for summary reversal or review on the merits because the decision conflicts with prior decisions of this Court limiting the scope of the First Amendment right to petition. Among the guarantees enumerated in the First Amendment to the Constitution is the right to petition the government for a redress of grievances. U.S. Const. amend. I. In the context of federal antitrust and labor laws, this Court has developed a doctrine which exempts parties from liability for the valid petitioning of the legislature, courts, and administrative agencies, despite improper motive or dilatorious incidental effect. Eastern R.R. Prest- dent’s Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 139 (1961), United Mine Workers v. Pennington, 381 U.S. 657, 660 (1965), Bill Johnson’s Restaurants, Inc. v. N.L.R.B., 461 U.S. 731 (1983), Otter Tail Power Co. v. United States, 410 U.S. 366, 380 (1973). However, this Court has also developed clear lim- itations to the exemption from liability grounded in First Amendment protection. Specifically within the context of administrative or judicial processes, this Court has held that the exemption from liability will not apply if the petitioning activities are a “sham”, to wit, used as an integral part of illegal, deceptive or unethical conduct which violates valid stat- utes or common law. Noerr, supra, at 144, California Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 512-15 (1972) (“there are many .. . forms of illegal and reprehen- sible practice which may corrupt the administrative or judicial processes and which may result in [liability])” 1d. at 512-13; Bill Johnson’s Restaurants, Inc., supra, at 743-44 14 (state action for retaliatory purpose will form a basis of liability under federal labor laws where suit is based on false or unsubstantial claims). See also: Allied Tube & Con- duit Corp. v. Indian Head, Inc., 486 U.S. 492, 500, n. 4 (1988). The rationale here is that First Amendment rights may not be used as a means or pretext for abusing or corrupting administrative or judicial processes, or sub- verting the integrity of such processes. California Motor, supra, at 513-15, Bill Johnson's Restaurants, Inc., supra. In its Opinion, the Court of Appeals below relied upon Baker Driveaway Co., supra for the proposition that an alleged abuse of the processes of the PTO is not remediable by a state common law tort action absent a showing that the entire agency proceeding was a “sham” (App. A, pp. A-22-23). The Court then determined that Brennan neither asserted nor proved a “sham” petition, reasoning that “[a]lthough Brennan complains of the delay he experienced in receiving a patent after Abbott’s false affidavit of mailing, we take notice that delay is ubiquitous in PTO proceedings, and does not of itself support an action for abuse of process” (App. A p. A-23). Despite the Court of Appeals’ misreading of the record, misapplication of Baker Driveaway, supra, and its misplaced reference to the Noerr-Pennington doctrine, this case did not involve allegations or proofs that the pro- cedures established by Congress and by the Patent Office are insufficient ways to deal with “inequitable or other unsavory conduct” during patent contests. Nor did recovery rest solely upon the delay in the issuance of the patent rights to Brennan caused by Abbott’s execution of its right to petition the PTO: Brennan never contested the right of Abbott to file patent applications or to resist in a proper fashion Brennan’s charges of inequitable conduct which, following extensive proofs, were found by the Board to be totally justified (App. J pp. A-97-123). 15 Instead, at the heart of this case were proofs that, after Abbott was caught filing false affidavits of mail- ing and committing fraud, perjury and other inequita- ble conduct upon the patent office, Abbott then 1) intentionally fabricated, and pursued with a vengeance, false counter-charges of fraud against Brennan; and, 2) issued vile threats regarding disbarment of Brennan’s attorney. It was proven that these reprehensible actions were taken with the motive and intent to coerce, harass, and frighten Brennan, his attorney and investors, and to gain unfair competitive advantage by preventing or delaying Brennan’s successful use of the technology. For, as a senior party and patent holder, Abbott enjoyed exclusive use of the technology pending a final deci- sion. Finally, it was proven that Abbott's tortious and reprehensible actions - and not Abbott's valid exercise of its right to petition the patent office - were the proximate cause of Brennan’s substantial emotional and financial damages. These were the jury’s findings! In short, the proofs at trial established that Abbott knowingly filed and pursued false counter-charges of fraud as a pretext for and means of abusing and corrupt- ing administrative processes, thereby subverting the integrity of the PTO and, more to the point, creating liability under state tort law. Indeed, these proofs — and the ultimate jury award - transcend the patent system itself, focusing instead upon the price a party must pay under the Michigan common law of abuse of process for perverting a legitimate governmental process for ulte- rior, improper and collateral motives.? 2 Under established and controlling Michigan law, such proofs of personal injuries support an award of compensatory damages under a theory of abuse of process. Spear v. Pendill, 164 Mich. 620, 130 N.W. 343 (1911), Friedman v. Dozorc, 412 Mich. 1, 312 N.W.2d 585 (1981), Vallance v. Brewbaker, 161 Mich. App. 642, 411 N.W.2d 808 (1987), appeal denied, 430 Mich. 883 (1988), Three Lakes Ass'n v. Whiting, 75 Mich. App. 564, 255 (Continued on following page) 16 Given such proofs of personal injury damage caused by Abbott’s egregious efforts to subvert the integrity of the patent process, this Court would not find Abbott's liability under a theory of abuse of process precluded by the right to petition the government protected by the First Amendment. Allied Tube Corporation, supra; Noerr, supra; California Motor Transp., supra; Bill Johnson's Restau- rants, Inc., supra. Clearly, a conflict exists between prior decisions of this Court limiting the exemption from liability created by the valid exercise of the First Amendment right to petition and the unprecedented decision by the Court of Appeals below that, notwithstanding allegations, proofs and a jury determination that Abbott knowingly and willfully subverted the valid processes of the PTO by submitting and pursuing false counter-charges of fraud for improper and collateral purposes, the First Amendment precludes any liability under a state com- mon law tort theory of abuse of process. This Court has never denied a remedy to victims of tortious perversion of administrative proceedings and therefore, the con- trary decision of the Court of Appeals requires action by this Court. D. In sum, the decision of the Federal Circuit Court of Appeals in this case squarely conflicts with the better reasoned decision of the District of Columbia Circuit Court of Appeals in Neumann, supra, on the question of whether the doctrine of collateral attack forecloses an abuse of process action under state common law as a remedy for the tortious misconduct of a party to proceed- ings before the PTO. Before the Court of Appeals’ deci- sion in this case, no court had ever answered that (Continued from previous page) N.W.2d 686 (1977), Meehan v. Michigan Bell Tel. Co., 174 Mich. App. 538, 436 N.W.2d 711 (1989), Mitchell v. Cole, 176 Mich. App. 200, 439 N.W.2d 319 (1989); Trepel v. Pontiac Osteopathic Hosp., 135 Mich. App. 361, 354 N.W.2d 341 (1984). 17 question in the affirmative. Moreover, the unprecedented decision below conflicts in substance with prior decisions by this Court, and the Circuit Court of Appeals for the Federal and Ninth Circuits defining the proper and lim- ited scope and application of the doctrine of collateral attack. Finally, the unprecedented decision below directly conflicts with prior decisions of this Court which fore- close use of First Amendment rights as a means of avoid- ing liability for the abuse and corruption of adminis- trative processes and the subversion of the integrity of such processes. For these reasons, the case at bar is ripe for either summary reversal or review on the merits by this Court. II. Consideration of the case by this Court is necessary because the Court of Appeals’ conclusion that Congress alone may provide remedies for misconduct during pat- ent proceedings ignores and conflicts with this Court’s pronouncements regarding the basic principles of federal- ism, federal preemption in general, and federal preemp- tion in the patent area in particular. Art. I, § 8, cl. 8 of the Constitution gives to Congress the power “[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”. The objective of Art. I, § 8, cl. 8 is to facilitate the granting of patent rights national in scope, by eliminating the need for multiple patent applications in every state and by providing a reward greater in scope than any particular state may grant to promote progress in the fields of arts and sciences. Goldstein v. California, 412 U.S. 546, 555-56 (1973); Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 429 (1983); Aronson v. Quick Point Pencil Co., 440 U.S. 257, 262 (1979); Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 478-79 (1974); Bonito Boats v. Thunder Craft Boats, 489 U.S. 141, 146 (1989). This objec- tive is bolstered by acts of Congress which codify the laws relating to the creation and enforcement of patent rights; confer upon a federal agency the exclusive author- ity to administer the federal patent system; and, vest 18 exclusive jurisdiction to hear patent and copyright cases in the federal courts. Goldstein, supra; Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964). The patent laws promote Art. I, § 8, cl. 8 by: 1) offering inventors exclusive rights for limited periods as a reward for their creativity and research, and, as an incentive for further efforts; 2) allowing the public access to the products of new technology after the limited periods of exclusive control have expired; and, 3) assur- ing that ideas in the public domain remain there for free public use. Kewanee, supra; Aronson, supra; Sony Corp., supra; Diamond v. Chakrabarty, 447 U.S. 303, 307 (1980); Grant, et al. v. Raymond, 31 U.S. 218 (1832). In cases too numerous to cite, this Court has held that state law may be preempted under the Supremacy Clause, U.S. Const. art. VI, cl. 2 where through federal laws and/or regulations, Congress either explicitly defines the extent to which its enactments preempt state law, or, where Congress has implicitly supplanted state law. Congress is deemed to implicitly preempt state law where federal statutes and/or regulations touch a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state law touching on the subject. The test here: whether com- pliance with both federal and state law is impossible, or, whether the state law stands as an obstacle to accom- plishment of the full purposes and objectives of Congress. See, e.g., Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 248 (1984); English v. General Electric Co., 496 U.S. 72 (1990); Goldstein, supra, at 561. However, there is always a presumption against implicit preemption. The presumption against preemption is particularly strong,where an attempt is made to prevent the states from exercising their historic police powers on behalf of their citizens, such as providing tort remedies to compen- sate for personal injuries. See, e.g: Florida Lime and Avocado § 1.616 Sanctions for failure to comply with rules or order. An examiner-in-chief or the Board may impose an appro- priate sanction against a party who fails to comply with the regulations of this part or any order entered by an examiner- in-chief or the Board. An appropriate sanction may include among others entry of an order: (a) Holding certain facts to have been established in the interference; (b) Precluding a party from filing a motion or a prelimi- nary statement; (c) Precluding a party from presenting or contesting a particular issue; (Continued on following page) eee 23 (App. N p. A-145)] has specifically permitted an Interference Examiner or the Board to impose appropriate equitable sanc- tions against a party to an interference proceeding who fails to comply with its rules or orders. 49 Fed. Reg. 3,768 (1984) (to be codified at 37 C.FR. §§ 1.601-88) (proposed Jan. 30, 1984); 49 Fed. Reg. 48,416 (1984) (to be codified at 37 C.ER. §§ 1.601-88), (App. P pp. A-152-56). The PTO conducts inter- ference proceedings solely to determine who, as between two or more parties, shall receive priority of invention and therefore, may receive the right to exclude under the federal patent laws. 49 Fed. Reg. 3,768; 49 Fed. Reg. 48,416; 35 U.S.C. §§ 131-135. In short, when enacting 35 U.S.C. §§ 131-135 and enabling regulations such as 37 C.F.R. § 1.56 and § 1.616, Congress only intended to insure that patent monopo- lies, obtained via interference proceedings, remain free from the taint of fraud or other inequitable conduct. These powers allow the PTO to vindicate itself of ineq- uitable conduct practiced against it. Nothing in the text or history of these federal statutes and regulations even remotely suggests that Congress intended to alter the usual constitutional balance between the states and fed- eral government by preventing the states from exercis- ing their historic police power on behalf of their citizens to provide tort remedies in order to compensate for the personal injuries of victims of abuse of the patent process. The requisite presumption therefore: preemption of traditional state common law theories of abuse of process under the patent field preemption rationale will not be implied. Will, supra; Bowen, supra; Bass, supra. The Court of Appeals below, without the requisite analysis, apparently concluded that, because Congress (Continued from previous page) (d) Precluding a party from requesting; obtaining, or opposing discovery; or (e) Granting judgment in the interference. eee ees 24 did not specifically include monetary damages for per- sonal injuries among the sanctions for misconduct out- lined in the current and former federal regulations, then Congress obviously intended not to permit such a rem- edy under either federal or state law. However, such analysis is in direct conflict with the prior decisions of this Court which compel the exact opposite result: because Congress has left unattended the area of remedies for personal injury damage caused by the abuse of the patent process, the states remain free under their traditional police powers to compensate such tort victims because Congress would not, without comment, remove all historically existing means of legal recourse, reposited in state common law, for those suffering personal injuries during the course of federal agency proceedings designed solely to determine prior- ity of invention. See, e.g., Silkwood, supra; English, supra; Florida Lime and Avocado Growers, supra; Jones, supra; Will, supra; Bowen, supra; Bass, supra. The Court of Appeals’ determination that the “added” liability under the state common law tort theory of abuse of process is contrary to Congress’ preemptive regulation in the field of patent law, also directly conflicts with this Court’s teachings that state causes of action are not preempted solely because they impose liability over and above that authorized by federal statutes and regu- lations, and, that traditional state common law remedies apply with full force unless expressly supplanted by Congress. English, supra; ARC America Corporation, supra; Silkwood, supra. Hence, this Court should now resolve the conflict between the Court of Appeals’ decision and the decisions of this Court by summarily reversing or reviewing on the merits the issue of whether Congress has so occupied the field of patent protection as to preempt all additional state common law remedies arising from the misconduct of parties to a patent proceeding or litigation. B. Secondly, action by this Court is warranted because the Court of Appeals’ decision below directly a 25 conflicts with prior decisions of this Court and the Fed- eral Circuit Court of Appeals outlining the extent to which Congress has implicitly preempted state common law in the patent field. 1. One line of cases stands for the proposition that there is no clear and manifest intent on the part of Congress in enacting the patent laws and enabling the patent regulations to preempt all state common law remedies resting upon the historic police powers of states and traditionally made available to residents who allege actionable misconduct. See: Aronson, supra (state contract law not preempted by federal patent law so as to pre- clude enforcement of a royalty contract) Kewanee, supra, (state trade secret law not preempted by operation of federal patent laws), Power Lift, Inc. v. Weatherford Nipple- Up Sys., 871 F.2d 1082 (Fed. Cir. 1989) (state law dealing with forfeiture of contract rights not preempted by fed- eral patent law), Universal Gym Equip. v. ERWA Exercise Equip., 827 F.2d 1542 (Fed. Cir. 1987) (federal patent law did not preempt state law for damages arising out of breach of licensing agreement). The historic police powers of the states include the power to compensate victims of the tort known as abuse of process. This tort dates back as far as 1838, when the English and American courts developed a theory to per- mit a remedy for situations where, although legal pro- cedures had been set in motion in proper form, with probable cause and possibly ultimate success, these pro- cedures had been perverted to accomplish an ulterior purpose for which the process was not designed. Prosser & Keeton, Torts (5th ed. 1984) § 121, at 897-900. Congress is understood to have enacted the patent laws and enabled the patent regulations against the back- drop of the historic state common law tort theory of abuse of process. ARC America Corp., supra; Astoria Fed. Sav. & Loan Ass’n, supra; Goodyear Atomic Corp., supra. 26 It is absurd and irrational to conclude, as did the Court of Appeals below, that Congress intended to pre- empt state common law tort actions for damages stem- ming from the abuse of the patent processes, but intended not to preempt other state common law tort actions and state common law contract actions touching upon the subject of patent rights. Without question, the decision by the Federal Cir- cuit Court of Appeals in this case conflicts directly with the prior decisions by this Court and by that Circuit on the subject of federal patent field preemption, and therefore, constitutes an invitation to this Court to review the issue. 2. The decision by the lower appellate court also conflicts in substance with prior decisions of this Court defining the extent to which state common law remedies stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress in enact- ing patent laws and enabling patent regulations. In Kewanee, supra this Court held that state protection of trade secrets, as applied to both patentable and unpa- tentable subject matter, did not conflict with the federal patent laws. Id. at 482-91. In reaching its holding, the Kewanee Court emphasized that state trade secret law and federal patent law each has its particular and indepen- dent role to play, that Congress has given no indication that the operation of the state law was inconsistent with the operation of federal patent laws, and that, until Con- gress takes affirmative action to the contrary, states should be free to grant protection to trade secrets. Id. In Aronson, supra, this Court held that state contract law was not preempted by federa! patent law so as to preclude enforcement of a royalty agreement between a patent applicant and a manufacturing company, because it was not inconsistent with the aim of the federal patent system but merely required the company to pay the consider- ation which it promised in return for the use of a novel device which had enabled the company to be first on the market with the device. Id. at 262-66. 27 Such decisions by this Court compel the conclusion that state common law providing compensation for per- sonal injuries caused by the abuse of the patent process does not clash or interfere with the objectives and implementation of federal patent law. First, there is no actual conflict between the tradi- tional state common law tort theory of abuse of process and the federal patent laws and regulations because the state law and federal system have absolutely distinct and independent objectives and remedies. The equitable remedies that have been allowed the PTO under the federal regulations or case law in situa- tions involving fraud or other misconduct committed upon the PTO, have always been limited to either sanc- tions affecting the grant of patent rights or the power to withhold such rights. In contrast, the legal remedy afforded under state common law to the private victims of abuse of the PTO process is redress for personal injuries separate and distinct from the ultimate determinations by the PTO regard- ing priority and/or patentability. For, in an abuse of process action, focus is only upon the purpose for which the process is used, regardless of the outcome; it is unnecess- ary for a plaintiff to prove that the underlying proceeding was terminated in the plaintiff’s favor. Prosser & Keeton, Torts, supra. In other words, a party could lose on a determination of priority of invention, and still maintain a civil action under state common law for abuse of the patent processes. The object of the federal law and regulations permit- ting the PTO to exercise its equitable powers in cases of fraud and other inequitable conduct is to protect the public from tainted patent monopolies. In contrast, the object of the tort theory of abuse of process is to provide monetary compensation for a private party injured by the abuse of any valid judicial, administrative or other legal procedure. Prosser & Keeton, Torts, supra. 28 The bottom line is that compliance with both the federal patent system and state tort law is entirely pos- sible and desirable. A party is certainly capable of par- ticipating in an interference proceeding without resorting to either fraud, perjury, inequitable conduct or other rules violations which could affect patent rights, or, misuse of the patent process for an improper and collateral purpose which could affect tort liability. Using the facts of this case as an example, Brennan’s tort recovery was not premised upon Abbott’s decision to pursue any and all remedies under federal patent law in order to gain priority of invention, and thereby maintain the exclusive right to exclude. Rather, Brennan’s state law theory was that Abbott tortiously perverted the legiti- mate federal patent interference proceedings to accom- plish an end not intended by federal patent law and regulation, to wit, to frighten off Brennan, his attorneys and investors, as well as to delay Brennan from ever successfully enjoying patent rights, and, as a result, Bren- nan suffered monetary losses in the form of costs, attor- ney fees and emotional distress. The jury at trial found Brennan’s proofs of abuse of process so compelling it awarded reasonable compensa- tory damages. Such an award for personal injuries sim- ply does not intrude upon the exclusive province of the patent office with respect to the determinations of pri- ority and patentability. The PTO is and always has been without authority to issue relief capable of compen- sating pecuniary and non-pecuniary losses — such relief being outside the purpose, scope and language of fed- eral patent laws and regulations, and residing instead, within the historic purview of common law tort theories espoused by the various states, including Michigan. The obvious conclusion: the PTO’s exclusive authority to administer equitable sanctions relative to patent rights under federal law and regulation does not foreclose addi- tional legal remedies for separate and distinct personal injuries under state common law tort theories. This conclu- sion is strongly suggested by this Court’s decisions in 29 Kewanee, supra; and Aronson, supra, and therefore, the contrary determination by the Court of Appeals below warrants either preemptory reversal or further review by the issuance of a Writ of Certiorari. Secondly, the state common law theory of abuse of process does not stand as an obstacle to the accomplish- ment of the full purposes and objectives of the federal patent system. The goal of this traditional state law tort theory is to discourage the perversion of any proper legal proceeding for an improper and collateral purpose such as coercion to obtain a collateral advantage, not properly involved in the proceeding itself. Discouragement of the tortious perversion of the federal patent system does not impair the creative activity of inventors, does not dis- courage any one from seeking a patent, does not deprive the public of the use of valuable or patentable inventions, and, does not impair public access to new technologies after the limited period of control has expired. Certainly, the patent policy of encouraging invention and free competition is not disturbed by state common law that requires interference proceedings before the PTO be conducted fairly, without resort by any party to the tortious misuse, abuse and perversion of the processes for improper and collateral objectives unrelated to priority of invention and/or patentability. Indeed, the abolition of state law remedies for abuse of the patent process will only discourage small, private and independent inventors for pursuing their rights through an interference proceed- ing because that individual would be exposed to fraud, coercion and harassment on the part of parties such as the respondents, without any legal recourse. C. In sum, the state common law tort theory for abuse of process poses no threat whatsoever to the scheme of federal laws and regulation aimed at the pro- motion of invention, while at the same time preserving free competition. Congress has never acted to displace the historic police powers of the states so as to preclude additional legal remedies available under the traditional tort theory of abuse of process from arising out of patent 30 proceedings. Nor is there any compelling federal policy or interest which demands that this tort theory be singled out from other common law theories such as breach of contract, unfair trade competition, tortious interference with economic expectancies, etc., all of which have coex- isted harmoniously with federal patent protection for over 200 years. Finally, compliance with federal patent law and regulations and the state tort law of abuse of process is not only possible, it is desirable. This conclusion is mandated by prior decisions of this Court, and, the Court of Appeals’ unprecedented decision to the contrary merits, at least, further review upon the grant of the Petitioner’s Writ of Certiorari, or, because it is so clearly erroneous, summary reversal. CONCLUSION For the foregoing reasons, Petitioner John F. Brennan respectfully requests that a Writ of Certiorari issue to review the Judgment and Opinion of the U.S. Court of Appeals for the Federal Circuit, or, that the Judgment and Opinion be summarily reversed in part with the remitted judgment on the jury verdict entered by the District Court below reinstated and the matter then remanded to the Court of Appeals for consideration, only, of whether the District Court erred by precluding pre-judgment interest on the Judgment during periods when discovery was stayed and when the action was remanded to the PTO and on that part of the Judgment reflecting costs and attorney fees awarded by the jury as an element of dam- ages for abuse of process. Respectfully Submitted, MicHEe.tLe A. THomas (P35135) Attorney for Petitioner 1000 Maccabees Center 25800 Northwestern Highway Post Office Box 222 Southfield, MI 48037-0222 (313) 746-0700 April 22, 1992 A-1 APPENDIX A United States Court of Appeals for the Federal Circuit 90-1268, -1424 ABBOTT LABORATORIES, ANDREW J. MUETTERTIES and JOSEPH N. GENESE, Plaintiffs /Cross-Appellants, V. JOHN F. BRENNAN, Defendant-Appellant. Michael Dockterman, of Wildman, Harrold, Allen & Dixon, Chicago, Illinois, argued for plaintiffs/cross- appellants. With him on the brief was Joan M. Fencik. Michelle A. Thomas, of Sullivan, Ward, Bone, Tyler, Fiott & Asher, Southfield, Michigan, argued for defen- dant-appellant. With her on the brief was Ronald S. Leder- man, of counsel. Appealed from: United States District Court for The Eastern District of Michigan ]. Friedman A-2 United States Court of Appeals for the Federal Circuit 90-1268, -1424 ABBOTT LABORATORIES, ANDREW J. MUETTERTIES and JOSEPH N. GENESE, Plaintiffs /Cross-Appellants, V. JOHN F. BRENNAN, Defendant-Appellant. DECIDED: December 27, 1991 Before NEWMAN, MAYER, and LOURIE, Circuit Judges. NEWMAN, Circuit Judge. Appellant John F. Brennan, and cross-appellants Abbott Laboratories, Andrew J. Muetterties and Joseph N. Genese (collectively “Abbott”), ask our review of var- ious aspects of the judgment of the United States District Court for the Eastern District of Michigan, including rul- ings on certain pre- and post-trial motions.' 1 Abbott Laboratories v. Brennan, No. 86-70935 (E.D. Mich. November 20, 1986) (Order); Abbott Laboratories v. Brennan, No. 86-70935 (E.D. Mich. November 20, 1989) (Order); Abbott Labo- ratories v. Brennan, No. 86-70935 (E.D. Mich. December 21, 1989) (Judgment); Abbott Laboratories v. Brennan, No. 86-70935 (E.D. Mich. February 22, 1990)(Order). A-3 Background This case arose upon interference proceedings in the United States Patent and Trademark Office (the “PTO”), involving a patent application of which Mr. Brennan is the inventor, a patent owned by Abbott Laboratories of which Andrew J. Muetterties and Joseph N. Genese are joint investors, and a reissue application owned by Abbott and naming only Muetterties as inventor. The invention of the counts of the interference is an intra- venous delivery device for sequentially administering two medical liquids to a patient, each at a different flow rate. The Board of Patent Appeals and Interferences awarded priority of invention to Brennan. The Board held that the Muetterties/Genese dates of conception and reduction to practice were prior to those of Brennan, but that because an attorney for Abbott had backdated a request for extension of time and falsely averred that the request had been timely made, this activity constituted inequitable conduct, with the result that Abbot was not awarded priority. Brennan v. Muetterties, 230 USPQ 145 (Bd. Pat. App. & Int. 1986). Abbott brought a civil action in the district court pursuant to 35 U.S.C. § 146,? seeking to set aside the 2 35 U.S.C. § 146. Civil action in case of interference Any party to an interference dissatisfied with the decision of the Board of Patent Appeals and Interferences, may have remedy by civil action... . In such suits the record in the Patent and Trademark Office shall be admitted on motion of either par- ty ... without prejudice to the right of the parties to take further testimony... . A-4 award of priority to Brennan. Brennan counterclaimed for fraudulent misrepresentation, abuse of process, tortious interference with economic relations, antitrust violations under the Sherman and Clayton Acts, violation of the Racketeer Influenced and Corrupt Organizations Act, and intentional infliction of emotional distress. The district court dismissed Brennan’s claims for antitrust and RICO violations, intentional infliction of emotional distress, and fraudulent misrepresentation. The court declined to dis- miss the claims for tortious interference and abuse of process. Abbott then moved for summary judgment on the issue of priority of inventorship, arguing that the Board erred as a matter of law in awarding priority to Brennan based on Abbott’s inequitable conduct. Abbott’s position was that priority must be awarded to the first inventor and that enforceability due to inequitable conduct is a separate issue, not determinative of priority. The district court granted summary judgment of priority of invention to Abbott, and remanded to the Board with instructions to refer the matter to the Commissioner of Patents and trademarks “for the purpose of considering the allega- tions of inequitable conduct”. On Brennan’s motion the district court stayed trial of Brennan’s remaining counter- claims pending the Commissioner’s decision. Upon remand the Board issued another decision awarding priority to Brennan due to Abbott's inequitable conduct, apparently ignoring the district court’s contrary judgment. Brennan v. Muetterties, Interf. Nos. 100,817 and 101,078 (Bd. Pat. App. & Int. May 27, 1988). The Board explained that under “controlling law” the Board was “precluded from awarding priority against both parties.” ) i A-5 Id. at 4. The Board then referred the case to the Commis- sioner as the district court had ordered; the Commis- sioner deferred review on his part until after judicial review of the Board’s award of priority to Brennan. Upon return of the case to the district court, the parties filed cross motions for summary judgment on the issue of priority of invention. After a hearing, now before a differ- ent judge, the district court granted Brennan’s motion and denied Abbott’s; that is, the court awarded priority to Brennan because of Abbott’s inequitable conduct. The prior judgment in favor of Abbott was vacated and judg- ment was entered in favor of Brennan. Abbott has not appealed this decision, and we do not consider its merits, or the correctness of the Board’s view of the law. Brennan then moved for sanctions against Abbott under Fed. R. Civ. P. 11, requesting award of costs and attorneys fees incurred in defending the § 146 action in the district court. Abbott cross-moved for sanctions, stat- ing that Brennan’s counterclaims were not well-grounded in fact or law, and that Brennan’s Rule 11 motion was frivolous. Both sides’ motions were denied. Trial was held to a jury on Brennan’s counterclaims for tortious interference with economic relations and tor- tious abuse of process during the prosecution of the interference proceeding before the PTO. The jury returned a verdict in favor of Abbott on the tortious interference claim, and for Brennan on the abuse of pro- cess claim. The jury awarded Brennan Damages of $1,350,000 for abuse of process, designated as $1,070,000 for emotional injuries, $250,000 for attorney fees, and $30,000 for out-of-pocket costs; all for the interference proceeding. The district court denied both sides’ requests A-6 for judgment n.o.v. and a new trial, and denied renewed requests for Rule 11 sanctions. The court granted Abbott's motion to clarify the judgment, to the extent that prejudg- ment interest was disallowed for the period during which the § 146 action was stayed because of the referral to the PTO, and for two shorter periods of stay. The court denied Abbott’s motion for remittitur of the award of emotional damages, but remitted the award of attorney fees to $89,439.75 and costs to $11,951.38, the actual sums incurred. Brennan appeals the denial of his motions for sanc- tions under Ruie 11 and for a new trial on his counter- claim of tortious interference with economic relations. Brennan also appeals the dismissal of his antitrust coun- terclaim and the grant of Abbott’s motion that affected the amount of prejudgment interest. Abbott cross-appeals the denial of its motion for judgment n.o.v. or a new trial on the issue of abuse of process, and the partial denial of its alternative motion for remiittitur. Jurisdiction Upon Abbott’s omission of appeal of the issue of priority of invention, the remaining issues are either mat- ters of state law based on pendent jurisdiction, or issues of federal law that are not within the exclusive assign- ment of the Federal Circuit, but that were properly included at trial of the case. See Fed.R.Civ. P. 13,(a); see generally 3 Moore's Federal Practice, J 13.13 (2d ed. 1983). No issues arising under the patent law remain, and none is referred to in the notice of appeal. We thus have reviewed sua sponte our jurisdiction over this appeal. SS A-7 Abbott’s civil action was brought under 35 U.S.C. § 146. The district court’s jurisdiction arose in part under Title 35, the codification of the patent law, and thus satisfies the requirement of: 28 U.S.C. § 1338(a). The district courts shall have original jurisdiction of any civil action aris- ing under any Act of Congress relating to pat- ents. ... All appeals in such circumstances are assigned exclu- sively to the Federal Circuit: 28 U.S.C. § 1295(a)(1). The United States Court of Appeals for the Federal Circuit shall have exclusive jurisdiction - (1) Of an appeal from a final decision of a district court of the United States .. . if the jurisdiction of that court was based, in whole or in part, on section 1338 of this title... . The path of appeals is determined by the basis of jurisdic- tion in the district court, and is not controlled by the district court’s decision or the substance of the issues that are appealed. The reasons are pragmatic: to avoid creat- ing fresh opportunities for forum shopping; to avoid bifurcation of issues and cases at trial and on appeal; to remove uncertainty and the abuses of procedural maneu- vering; and, ultimately, to facilitate resolution of disputes. Thus, the direction of appeal to the Federal Circuit does not change during or after trial, even when the only issues remaining are not within our exclusive assignment. See, e.g., Technicon Instruments Corp. v. Alpkem Corp., 866 F.2d 417, 419-20, 9 USPQ2d 1540, 1541-42 (Fed. Cir. 1989) (antitrust counterclaim sole issue on appeal); Atari, Inc. v. A-8 JS & A Group, Inc., 747 F.2d 1422, 1427, 223 USPQ 1074, 1077 (Fed. Cir. 1984) (en banc) (copyright issue appealed separately). See generally Aerojet-General Corp. v. Machine Tool Works, Oerlikon-Buehrle, Ltd., 895 F.2d 736, 741-45, 13 USPQ2d 1670, 1675-77 (Fed. Cir. 1990) (en banc) (discuss- ing the well-pleaded complaint rule in the context of Federal Circuit jurisdiction). Appellate jurisdiction is not with the Federal Circuit when no well-pleaded claim arising under the patent law is stated in the pleadings before the district court, Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 807-10, 7 USPQ2D 1109, 1113-14 (1988), or which the patent claim is merely “tran- sient,” Schwarzkopf Development Corp. v. Ti-Coating, Inc., 800 F.2d 240, 245, 231 USPQ 47, 51 (Fed. Cir. 1986) (patent counterclaim dismissed without opposition during plead- ing stage). Accord, Unique Concepts, Inc. v. Manuel, 930 F.2d 573, 575, 18 USPQ2d 1654, 1656 (7th Cir. 1991) (juris- diction of district court to enter judgment dismissing patent claim “came, in part, from (a well-pleaded com- plaint under) § 1338”). The path of this appeal was established with the filing of the civil action to obtain a patent in accordance with 35 U.S.C. § 146 and, although the § 146 issue was not appealed, this appeal of the other issues was correctly taken to the Federal Circuit. I BRENNAN’S APPEAL A Rule 11 Sanctions Mr. Brennan argues that the district court erro- neously denied his request for sanctions under Fed. R. ae A-9 Civ. P. 11 based on Abbott's filing of the civil action under 35 U.S.C. § 146, which Brennan states was for the purpose of harassment, to delay Brennan’s receiving his patent after the award of priority by the PTO, and to increase his costs. A district court’s Rule 11 determination is reviewed on the standard of abuse of the trial court’s discretionary authority. Cooter & Gell v. Hartmarx Corp., 110 S. Ct. 2447, 2460 (1990). In matters of sanctions particular deference is owed the trial court’s discretion; for the trial judge has viewed the matter at first hand, has considered all the circumstances, and made assessments of credibility and other intangibles that escape the written record. See Id., 110 S. Ct. at 2460-61. In this case the district court’s denial of sanctions is well supported. The patent law authorizes any party to a patent interference to take civil action in the district court. 35 U.S.C. § 146. Such action is taken as of right. The vagaries of litigation inevitably delay final resolution of disputes. However, Congress has preserved this right of recourse to the courts from a decision of the PTO: a statutory right available at least since 1836. Act of July 4, 1836, § 16, 5 Stat. 117, 123-24. Absent improper purpose, a litigant’s exercise of a statutory right of action can not be, of itself, a sanctionable offense. See Cooter & Gell, 110 S. Ct. at 2462 (discussing policy of not discouraging mer- itorious appeals). Brennan argues that Abbott’s position on the issue of priority under 35 U.S.C. § 146 was so obviously devoid of “merit as to warrant sanctions. However, the district judge to whom the case was first assigned granted Abbott’s A-10 motion for summary judgment based on Abbott’s posi- tion that inequitable conduct by counsel can not direct the decision of priority of invention. Although this ques- tion is not before us for review, this is not an area in which the law is so clear that Abbott’s challenge in dis- trict court was “unreasonable under the circumstances.” Century Products, Inc. v. Sutter, 837 F.2d 247, 253 (6th Cir. 1988); see also Davis v. Crush, 862 F.2d 84, 88 (6th Cir. 1988) (the challenged pleading must be tested as of the time the pleading was filed, not with “the wisdom of hindsight”).° The district court’s denial of Brennan’s request for Rule 11 sanctiens is affirmed. B Tortious Interference with Economic Relations The jury decided the issue of tortious interference with economic relations in favor of Abbott. Brennan argues that the district court abused its discretion in denying his motion for a new trial on this issue. Brennan states that the district court committed several errors at trial: in allowing Abbott to present the rebuttal testimony of three experts on medical devices, when Abbott did not disclose their identity until the day before trial; in pre- cluding Brennan’s expert, Dr. Coffey, from giving testi- mony on lost royalties; in excluding evidence of Abbott’s 3 We apply Sixth Circuit law on review of the district court’s rulings on Rule 11 and other matters not within the Federal Circuit’s exclusive purview. See Atari, Inc. v. JS & A Group, Inc., 747 F.2d at 1438-40, 223 USPQ at 1086-87. A-11 marketing projections for its allegedly competing prod- uct; and in instructing the jury that it was required to determine whether “but for” Abbott’s conduct Brennan would not have suffered harm, instead of instructing the jury that it need only determine whether Abbott’s con- duct was a “substantial factor” in causing harm to Bren- nan. We consider these issues seriatim. 1. The Rebuttal Witnesses The Sixth Circuit practice is that “no error in the admission or exclusion of evidence is ground for reversal or granting a new trial unless refusal to take such action appears to the court to be inconsistent with substantial justice.” TCP Industries, Inc. v. Uniroyal, Inc., 661 F.2d 542, 549 (6th Cir. 1981). The Federal Circuit has expressed a similar view. Devices for Medicine, Inc. v. Boehl, 822 F.2d 1062, 1066, 3 USPQ2d 1288, 1292 (Fed. Cir. 1987) (a trial need be fair, but it need not be perfect). It is improper on appeal to disturb a district court’s trial management, absent a clear abuse of judicial discretion. Benedict v. United States, 822 F.2d 1426, 1428 (6th Cir. 1987). The three medical witnesses, Melissa Kraus, Edward Hayman, and Larry Shoup, were called by Abbott in rebuttal to testimony by Brennan’s witnesses Anna Dugan and Leon Pedell relating to the medical efficacy of the invention that was the subject of the patent interfer- ence. Abbott first revealed its intention to call these wit- nesses the day before trial. Brennan objected to the admission of their testimony, claiming unfair surprise. Abbott stated that the late identification of these wit- nesses was the result of its having been surprised to learn A-12 that Dugan and Pedell would testify on the issue of medical efficacy. Brennan has not shown that he was prejudiced by the admission of this rebuttal testimony, or that there were unfair trial tactics or procedures, or that it was inap- propriate in rebuttal. The trial court did not abuse its discretion in allowing the testimony of these witnesses under the circumstances that prevailed. 2. Expert Testimony on Royalties Brennan’s position was that he would have obtained a patent and earned royalties on the invention at issue, were it not for the delay caused by Abbott’s maintenance of the interference proceeding. The district court ruled thot Dr. Coffey could not testify as an expert on the issue of royalties. Dr. Coffey had stated that he was not an expert on patent royalties, and that he had no prior experience of analyzing the market for a medical device, or any other product. The court could well have con- cluded that Dr. Coffey’s testimony on this issue was not of expert dimension. See Mannino v. International Manufac- turing Co., 650 F.2d 846, 851 (6th Cir. 1981) (“Under the Federal Rules of Evidence, the only thing a court should be concerned with in determining the qualifications of an expert is whether the expert’s knowledge of the subject matter is such that his opinion will likely assist the trier of fact in arriving at the truth.”) The tria! judge has broad discretion in determining whether to admit expert testimony on any subject. Its ruling may not be disturbed absent clear error. Lee Shops, Inc. v. Schatten-Cypress Co., 350 F.2d 12, 17, (6th Cir. 1965), —_ A-13 cert. denied, 382 U.S. 980 (1966). We discern no abuse of discretion in this refusal to allow Dr. Coffey to testify as an expert on the royalties Brennan would have earned. 3. Abbott’s Sales Projections Brennan states that the district court erred in exclud- ing evidence relating to Abbott’s sales projections for an intravenous delivery device that Abbott was developing at the time of the patent interference. Brennan sought this evidence to establish Abbott’s motive for tortiously inter- fering with Brennan’s business expectations. Abbott argued that this device was one of several being consid- ered by Abbott, and that the profit projections were not realized, and were speculative. The district court ruled that this evidence was not relevant because, inter alia, the documents did not show that the Abbott and Brennan proposed devices were similar. The court also expressed concern that allowing this evidence would create the risk of relitigating priority of invention, which issue had already been decided. When balancing probative value against possible prejudice, the trial court has broad discretion. See Fed. R. Evid. 403; Finch v. Monumental Life Ins.Co., 820 F.2d 1426, 1432 (6th Cir. 1987). A trial court’s admission or exclusion of evidence on grounds of relevance is reviewed for abuse of discretion. Clarksville-Montgomery County School System v. United States Gypsum Co., 925 F.2d 993, 999 (6th Cir. 1991). Excluded evidence is viewed in the light most favorable to its proponent, giving the “evidence its maxi- mum reasonable probative force and its minimum reason- able prejudicial value.” Laney v. Celotex Corp., 901 F.2d A-14 1319, 1320 (6th Cir. 1990) (quoting 1 J. Weinstein & M. Berger, Weinstein’s Evidence § 403[03] (1982)). The review- ing court, in order to reverse such a decision made at trial, must be firmly convinced that a prejudicial mistake was made. Schrand v. Federal Pacific Electric Co., 851 F.2d 152, 157 (6th Cir. 1988). We do not have that conviction. The trial court’s ruling will not be disturbed. 4. Jury Instructions on Tortious Interference Brennan asserts that the district court erroneously and inconsistently instructed the jury as to the proper standard of causation of damages from the tort of inter- ference with economic relations. The court told the jury: Before Mr. Brennan can prevail on either claim, he must prove by a preponderance of the evidence any damages sustained were prox- imately caused by the Defendants’ actions. Proximate cause is an act which, in the nat- ural and continuous sequence, directly produces the harm without which the harm would not have occurred. * * * When more than one act or factor may be the cause of the harm, it is necessary to deter- mine whether, but for the Defendants’ acts, Plaintiff would not have suffered any harm. = * * If the Defendants’ conduct was not a sub- stantial factor in causing a third party not to enter into a relationship or continue a relation- ship with Mr. Brennan, the Defendants cannot be found responsible for Mr. Brennan’s failure to VX A-15 enter into a relationship or continue a relation- ship. The conduct of the Defendants was not a substantial factor in causing the Plaintiff’s loss if reasonable men and women would not regard it as a cause of loss. Mr. Brennan argues that the “but for” instruction (in the third quoted paragraph) is inconsistent with the “sub- stantial factor” instruction (in the fifth paragraph), which Brennan asserts is the correct standard. This inconsis- tency, Brennan states, is reversible error requiring a new trial. Brennan had raised this objection to the district court, and thus the issue is properly before us. Fed. R. Ch. F Si. In reviewing the jury charge for correctness and ade- quacy, the jury instructions are viewed as a whole. How- ard v. Chesapeake and Ohio Ry. Co., 812 F.2d 282, 287 (6th Cir.), cert. denied, 484 U.S. 820 (1987). “Each instruction must be considered in connection with others of the series referring to the same subject.” Clarksville-Montgom- ery County School System, 925 F.2d at 1003. Generally, a charge that contains an inaccurate or ambiguous statement does not constitute reversible error if the inaccuracy or ambiguity is unlikely to misiead the jury. In considering whether an isolated clause in the jury instruc- tions is likely to have misled the jury, a review- ing court must consider the entire charge. Thus, the critical inquiry is whether the instructions as a whole provide the jury with sufficient guid- ance concerning the issues to be tried. A-16 ~——-Teal. E.I. du Pont de Nemours & Co., 728 F.2d 799, 802 (6th Cir. 1984) (citations omitted). Commentators have explained that the “but for” and “substantial factor” standards of causation generally yield identical results: Except in the classes of cases indicated [not here ~tetevant], no case has been found where the defendant’s act could be called a substantial factor when the event would have occurred without it; nor will cases very often arise where it would not be such a factor when it was so indispensable a cause that without it the result would not have followed. Prosser & Keeton, Torts, at p. 268 (5th ed. 1984) (footnotes omitted); see generally Restatement (2d) of Torts, § 431, comment a (1965) (explaining the distinction between substantial cause in the legal sense and cause in the “philosophic” sense). Michigan courts have treated the substantial factor test as the more rigorous: Causation in fact includes more than a simple “but for” relationship between the negligent act and the damage. The negligence must also be a “substantial factor” in producing the injury. Derbeck v. Ward, 178 Mich. App. 38, 443 N.W.2d 812, 814 (1989) (discussing causation in fact as an element of prox- imate cause). Applying this guidance, and viewing the instructions in context and in their entirety, Clarksville-Montgomery, supra, we conclude that the trial court did not mislead the jury on the factors to be considered and the law to be applied, and that Mr. Brennan was not prejudiced by the A-17 jury instructions. The court did not abuse its discretion in denying Brennan’s motion for a new trial on this ground. Cc The Antitrust Counterclaim Mr. Brennan argues that the district court erred in dismissing his counterclaim for violation of the Clayton and Sherman Acts. Inter alia, Brennan had alleged that Abbott, by continuing to prosecute the interference and by filing the § 146 action after having engaged in inequi- table conduct, was attempting to monopolize commerce in the subject matter of the contested invention.4 In determining whether to dismiss a claim pursuant to Fed. R. Civ. P. 12(b) (6), the district court accepts as true all of the factual allegations of the complaint. Appel- late review is on the same basis. Kerasotes Michigan The- atres, Inc. v. National Amusements, Inc., 854 F.2d 135, 136 (6th Cir. 1988), cert. dismissed, 490 U.S. 1087 (1989). Dis- missal under Rule 12(b) (6) is appropriate “if it is clear that no relief could be granted under any set of facts that * Section 2 of the Sherman Act, 15 U.S.C. § 2, prohibits monopolization or attempts to monopolize: Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a fel- ee Section 4(a) of the Clayton Act, 15 U.S.C. § 15(a), provides for civil action for treble damages for violation of the antitrust laws. A-138 could be proved consistent with the allegations.” Lamb v. Phillip Morris, Inc., 915 F.2d 1024, 1025 (6th Cir. 1990), cert. denied, 111 S. Ct. 961 (1991) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)). In an antitrust action “the complaint need only allege sufficient facts from which the court can discern the elements of an injury resulting from an act forbidden by the antitrust laws.” Kerasotes Michigan Theatres, 854 F.2d at 136 (quoting Newman v. Universal Pictures, 813 F.2d 1519, 1522 (9th Cir. 1987), cert. denied, 486 U.S. 1059 (1988)). The elements of a claim for attempted monopolization, as elaborated by tne Sixth Circuit, are: (1) a specific intent to monopolize; (2) anti-competitive conduct; and (3) a dan- gerous probability of success. Arthur S. Langenderfer, Inc. v. S.E. Johnson Co., 917 F.2d 1413, 1431 (6th Cir. 1990), cert. denied, 112 S. Ct. 51, 112 S. Ct. 247 (1991); White & White, Inc. v. American Hosp. Supply Corp., 723 F.2d 495, 506-07 (6th Cir. 1983) (citing Lorain Journal Co. v. United States, 342 U.S. 143, 153 (1951)). Brennan asserts that the allegations of his antitrust claim state a cause of action in accordance with Walker Process Equipment, Inc. v. Food Machinery and Chemical Corp., 382 U.S. 172, 147 USPQ 404 (1965). In Walker Process the Court held that maintenance and enforcement of a patent procured by knowing and willful fraud may meet the intent and conduct elements of violation of the Sher- man Act, provided that the ability to lessen or destroy competition, including market power in the relevant mar- ket, can also be shown. 382 U.S. at 173, 177-78, 147 USPQ at 405, 407. Brennan asserts that market power is pre- sumed from the presence of a patent. a A-19 A patent does not of itself establish a presumption of market power in the antitrust sense. Walker Process, 382 U.S. at 178, 147 USPQ at 407 (considering, inter alia, whether there are non-infringing substitutes for the pat- ented device); American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1367, 220 USPQ 763, 776 (Fed. Cir.), cert. denied, 469 U.S. 821 (1984) (“patent rights are not legal monopolies in the antitrust sense of that word”). The commercial advantage gained by new technology and its statutory protection by patent do not convert the possessor thereof into a prohibited monopolist. See gener- ally United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966) (distinguishing the willful acquisition or mainte- nance of monopoly power from “growth or development as a consequence of superior product, business acumen, or historic accident.”) The patent right must be “coupled with violations of § 2”, and the elements of violation of § 2 must be met. Walker Process, 382 U.S. at 177-78, 147 USPQ at 407; see Hartford-Empire Co. v. United States, 323 U.S. 386, 406, 64 USPQ 18, 28 (1945) (discussing differ- ences between “legitimate use and prohibited abuse” of patent rights). Determination of whether the patentee meets the Sherman Act elements of monopolization or attempt to monopolize is governed by the rules of application of the antitrust laws to market participants, with due consider- ation to the exclusivity that inheres in the patent grant. See Loctite Corp. v. Ultraseal, Ltd., 781 F.2d 861, 876-77, 228 USPQ 90, 100-01 (Fed. Cir. 1985) (discussing relationship between the patent and the antitrust laws). In Jefferson Parish Hospital District No. 2. v. Hyde, 466 U.S. 1, 37 n.7 (1984), Justice O’Connor wrote in concurrence: A-20 A common misconception has been that a patent or copyright, a high market share, or a unique product that competitors are not able to offer suffices to demonstrate market power. While each of these three factors might help to give market power to a seller, it is also possible that a seller in those situations will have no market power: for example, a patent holder has no market power in any relevant sense if there are close substitutes for the patented product. See generally W. Montgomery, The Presumption of Economic Power for Patented and Copyrighted Products in Tying Arrangements, 85 Colum. L. Rev. 1140, 1150-51 (1985) (“the existence of a patent or a copyright provides little, if any, evidence of supernormal profits, barriers to entry, con- sumer preferences, or absence of adequate substitutes. It thus does not dispose of the question whether a product has market power”). Analysis under the rule of reason takes into consideration the policy underlying the patent grant and the national interest served; for the public purpose of the patent grant as an incentive to inventions, investment, and disclosure, is achieved solely by the stat- utory right to exclude. See generally W. Bowman, Patent and Antitrust Law 1-14 (1973). The Sixth Circuit has rejected “any absolute pre- sumption of market power for copyright or patented product”. A.I. Root Co. v. Computer/Dynamics, Inc., 806 F.2d 673, 676 (6th Cir. 1986) (discussing precedent in light of policy, economics, and the realities of the marketplace). Absent a presumption of market power, Brennan alleged insufficient facts to satisfy the elements of an antitrust violation. Lamb, 915 F.2d at 1025 (requiring allegations of facts). Allegations of legal conclusions are insufficient to a ————— A-21 withstand a motion to dismiss. Chapman v. City of Detroit, 808 F.2d 459, 465 (6th Cir. 1986). The district court correctly held that Brennan failed to state a cause of action under the Sherman Act. The dismissal of Brennan’s antitrust counterclaims is affirmed. I] ABBOTT’S CROSS-APPEAL Abbot appeals the judgment entered upon the jury finding of abuse of process, including the damages awarded for emotional distress. Abbott argues that Brennan’s counterclaim for abuse of process should have been dismissed as a matter of law, because no judicial process was involved in the interfer- ence proceedings before the United States Patent and Trademark Office, and because PTO proceedings are not subject to collateral attack under state law. The district court had denied Abbott’s motion for dismissal, ruling that the premises of the tort of abuse of process under Michigan law had been met. We review de novo the cor- rectness of the district court’s determination of state law. Salve Regina College v. Russell, 111 S. Ct. 1217, 1221 (1991). We need not decide the broad question of whether actions in connection with federal administrative pro- ceedings can ever provide the “process” for a common law claim of abuse of process. Before us is the narrow question of whether the state tort action for abuse of process can be invoked as a remedy for inequitable or a A-22 other unsavory conduct of parties to proceedings in the Patent and Trademark Office. We conclude that it can not. The patent grant is within the exclusive purview of federal law. Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 231 n.7, 140 USPQ 524, 527 n.7 (1964). Although certain traditional state law concerns may properly be raised when patent rights are litigated, see Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 154-56, 9 USPQ2d 1847, 1853-54 (1989) (such concerns including, inter alia, deceptive simulations of trade dress, trade secret protec- tion, and misappropriation of proprietary information), the issue at bar relates directly to administrative proceed- ings before the PTO Board of Patent Appeals and Interfer- ences. Prior judicial consideration of this question is sparse. In Baker Driveaway Co., Inc. v. Bankhead Enterprises, Inc., 478 F. Supp. 857, 207 USPQ 365 (E.D. Mich. 1979), the district court held that the filing of a protest against a patent application in the PTO did not support a state action for abuse of process. The court observed that the actions complained of occurred before a federal agency, and remarked that “the freedom of the public to petition the government . . . will not be curtailed without some extraordinary showing of abuse”, id. at 859, 207 USPQ at 367, citing California Motor Transport Co. v. Trucking Unlim- ited, 404 U.S. 508 (1972); Eastern Railroad Presidents Confer- ence v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961); and United Mine Workers v. Pennington, 381 U.S. 657 (1965). This reasoning supports the conclusion that an asserted abuse of process before the Patent and Trademark Office is not remediable by state action in tort, at least unless it is shown that the entire federal agency action was a A-23 “sham”, the word of Noerr, 365 U.S. at 144. Such a show- ing, Or assertion, was not here made. Although Brennan complains of the delay he experienced in receiving a patent after Abbott’s false affidavit of mailing, we take notice that delay is ubiquitous in PTO proceedings, and does not of itself support an action for abuse of process. The court in Baker Driveaway observed that the plain- tiffs were not challenging the way the proceeding before the PTO was handled, but instead were challenging the motives for its institution. This observation provided another reason for the court’s dismissal of the count, for under Michigan law the tort of abuse of process requires that “one must be challenging the way that some pro- ceeding is handled rather than the motives for its institu- tion.” Id. at 860, 207 USPQ at 367, citing Rowbotham v. D.A.1.1.E., 69 Mich App. 142, 244 N.W.2d 389 (1976). While Brennan states that his challenge is indeed to the way Abbott handled the interference proceeding before the PTO, and not to Abbott’s motives, that is contrary to his presentation. The Baker Driveaway court also discussed the policy of allowing the administrative agency to decide matters properly before it, and declined to create a new system of judicial overview of actions before the PTO. This reason- ing accords with that expressed in Gilbert v. Ben-Asher, 900 F.2d 1407 (9th Cir. 1990), cert. denied, 111 S.Ct. 177 (1990), wherein the Ninth Circuit affirmed the dismissal of an abuse of process claim in which the plaintiff chal- lenged a ruling of the state Board of Medical Examiners revoking his medical license. The court in Gilbert observed that the administrative ruling was subject to judicial review, that no such appeal had been taken, and A-24 thus that the issue on which the abuse of process claim was grounded had “already been litigated and decided”. Id. at 1411. Although Brennan’s claim before the adminis- trative agency had been decided in his favor, and thus was not appealable by him, that is not grounds for pro- viding another forum for litigating issues arising from the administrative process. The only authorities cited by Brennan in support of this action do not relate to analogous administrative pro- ceedings. E.g., Friedman v. Dozorc, 412 Mich. 1, 312 N.W.2d 585 (1981); Meehan v. Michigan Bell Telephone Co., 174 Mich. App. 538, 436 N.W.2d 711, 726 (1989); Vallance v. Brewbaker, 161 Mich. App. 642, 411 N.W.2d 808, 810 (1987). We note, however, the holding in Newmann v. Vidal, 710 F.2d 856 (D.C. Cir. 1983), wherein the court refused to dismiss a claim for abuse of process in the PTO when the basis was an anticompetitive motive. We believe that the better general rule is that based on judi- cial disfavor of collateral attack, under the common law, on proceedings before the PTO. We conclude that the federal administrative process of examining and issuing patents, including proceedings before the PTO’s boards, is not subject to collateral review in terms of the common law tort of abuse of process. The PTO procedures themselves provided a rem- edy for Abbott’s malfeasance.> An additional state action would be an inappropriate collateral intrusion on the regulatory procedures of the PTO, “under the guise of a complaint sounding in tort”, in the words of Gilbert v. > Brennan was awarded a patent although the PTO found that Brennan was not the first inventor of the subject matter. 2 Eo —eE A-25 Ben-Asher, 900 F.2d at 1411, and is contrary to Congress’ preemptive regulation in the area of patent law. Bonito Boats, supra. The judgment of abuse of process is reversed, as is the award of damages therefor. Summary On Mr. Brennan’s appeal, the denial of sanctions under Rule 11, the dismissal of the antitrust counter- claims, and the denial of a new trial on the tortious interference counterclaim, are affirmed. On Abbott’s cross-appeal, the judgment of abuse of process, and the award of damages therefor, is reversed. Other issues raised on this appeal, such as prejudgment interest, are mooted. No costs. AFFIRMED IN PART, REVERSED IN PART in A-26 APPENDIX B United States Court of Appeals for the Federal Circuit 90-1268 ABBOTT LABORATORIES, ANDREW J. MUETTERTIES and JOSEPH N. GENESE, Plaintiffs-Appellees, Vv. JOHN F. BRENNAN, Defendant-Appellant. ORDER (Filed Jan. 27, 1992) Before NEWMAN, Circuit Judge, MAYER, Circuit Judge, LOURIE, Circuit Judge. A petition for rehearing having been filed in this case, UPON CONSIDERATION THEREOF, it is ORDERED that the petition for rehearing be, and the same hereby is denied. The suggestion for rehearing in banc is under consid- eration. The mandate will issue on February 3, 1992. FOR THE COURT, Dated: January 27, 1992 /s/ Francis X. Gindhart Francis X. Gindhart Clerk cc: MICHELLE A. THOMAS MICHAEL DOCKTERMAN A-27 ABBOTT LAB V BRENNAN, 90-1268 (DCT -— 86-70935) ee ee ae ae a a a a a a a a oo Note: Pursuant to Fed. Cir. R. 47.8, this order is not citable as precedent. It is a public record. he he ae ae ae a ea a oe a a a a a a a AA AAA AAA EH EH A-28 APPENDIX C United States Court of Appeals for the Federal Circuit 90-1268 ABBOTT LABORATORIES, ANDREW J. MUETTERTIES and JOSEPH N. GENESE, Plaintiffs-Appellees, v. JOHN F. BRENNAN, Defendant-Appellant. ORDER (Filed Feb. 6 1992) A suggestion for rehearing in banc having been filed in this case, UPON CONSIDERATION THEREOF, it is ORDERED that the suggestion for rehearing in banc be, and the same hereby is, declined. FOR THE COURT, /s/ Francis X. Gindhart Francis X. Gindhart Clerk Dated: February 6, 1992 cc: MICHELLE A. THOMAS MICHAEL DOCKTERMAN ABBOTT LAB V BRENNAN, 90-1268 (DCT — 86-70935) f 5 A-29 SESS SESE SESE ESE SEES EEE EEE EERE EEE EEE EEE EEE EEE EEE EEE EEE EE EE Note: Pursuant to Fed. Cir. R. 47.8, this order is not citable as precedent. It is a public record. a A-30 APPENDIX D No. 90-1379 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT Abbott Laboratories; Plaintiff Counter Defendant-Appellant, Andrew J. Muetterties; Joseph N. Genese, Plaintiffs Counter Detendants ORDER (Filed Jun. 20, 1990) V. John F. Brennan, Defendant Counter Plaintiff-Appellee BEFORE: MILBURN and NELSON, Circuit Judges; and LIVELY, Senior Circuit Judge. me eee eee ee” This matter is before the court on a motion to dismiss which presents the question of whether jurisdiction in this appeal is properly with this Court or the Court of Appeals for the Federal Circuit. The plaintiff/counter-defendant, Abbott Laborato- ries, has appealed judgment for the defendant/counter- plaintiff, John F. Brennan. Brennan appealed the same judgment and certain pretrial and post-judgment rulings to the Federal Circuit Court of Appeals. Brennan has moved for dismissal of this appeal on grounds that the Federal Circuit has exclusive jurisdiction pursuant to 28 U.S.C. § 1295(a). Abbott filed a response in opposition, ee, A-31 and Brennan replied. Subsequent to theses filings, the Federal Circuit issued an order denying Abbott’s motion to dismiss Brennan’s appeal in that Court. Brennan has filed a supplemental memorandum in support of his motion to dismiss with this Court, and Abbott has responded. Upon review and consideration we conclude that this Court lacks jurisdiction in this appeal. Pursuant to 28 U.S.C. § 1295(a) the Federal Circuit has exclusive jurisdic- tion in an appeal from matters arising “in whole or in part” from 28 U.S.C. § 1338(a), or in an appeal from a district court decision in a case brought under 28 U.S.C. § 146. In this case the district court’s jurisdiction was initially invoked by a complaint seeking review of a patent law claim. Accordingly, jurisdiction to hear the appeal is with the Federal Circuit. Christianson v. Col! Industries, 486 U.S. 800 (1988). Although this Court lacks jurisdiction, when an appellate court “finds that there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action or appeal to any other court in which the action or appeal could have been brought at the time it was filed or noticed. .. . ” 28 U.S.C. § 1631. Accordingly, this action shall not be dismissed, but shall be transferred to the Federal Circuit. It is therefore ORDERED that this appeal is trans- ferred to the Federal Circuit Court of Appeals. The defen- dant’s request for costs and attorneys’ fees is denied. The A-32 Clerk shall take all appropriate steps to transfer this appeal to the Federal Circuit. ENTERED BY ORDER OF THE COURT /s/ Leonard Green, Jr Clerk A-33 APPENDIX E UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION ABBOTT LABORATORIES, ANDREW J. MUETTERTIES and JOSEPH N. GENESE, jointly and severally, inti Civil Action ree No. 86-70935 ™ Hon. Bernard A. JOHN F. BRENNAN, Friedman Defendant. ORDER This matter having come before the court on Abbott's motion to clarify judgment, Brennan’s motion for sanc- tions, Abbott’s motion for sanctions, Brennan’s motion for new trial, and Abbott’s motion for judgment N.O.V., new trial and/or remittitur, a hearing having been held on February 22, 1990, counsel for all parties being pre- sent, the court otherwise being fully informed in the premises, for the reasons stated on the record, IT IS HEREBY ORDERED that Abbott’s motion to clarify judgment is granted to the following extent: pre- judgment interest is not allowed on the jury award for attorney's fees or for costs, or on the damages awarded during periods when the case was stayed. Prejudgment interest shall be awarded on the damages, for the periods when the case was not stayed, at an annual rate of 12% pursuant to M.C.L. § 600.6013(4). Postjudgment interest is A-34 allowed pursuant to 28 U.S.C. § 1961(a) at an annual rate of 7.66%. IT IS FURTHER ORDERED that Brennan’s motion for sanctions is denied. IT IS FURTHER ORDERED that Abbott’s motion for sanctions is denied. IT IS FURTHER ORDERED that Brennan’s motion for new trial is denied. IT Is FURTHER ORDERED that Abbott’s motion for judgment N.O.V., or for a new trial is denied. IT Is FURTHER ORDERED that Abbott’s motion for remittur is denied as to the award for emotional injuries, but granted as to the awards for costs and attorney fees. Costs are remitted to $11,951.381; attorney fees are remit- ted to $89,439.75. SO ORDERED. /s/ Bernard A. Friedman BERNARD A. FRIEDMAN U.S. District Judge Dated: FEB 26 1990 1 BAF as per phone 2/26/90 4:45 from BOTH - BAF A-35 APPENDIX F UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION ABBOTT LABORATORIES, ANDREW J. MUETTERTIES and JOSEPH N. GENESE, jointly and severally, mpanied by supporting declarations and exhibits, wherein Brennan opposed the requested extension of time on several grounds. One of the grounds was that although the request for an extension of time bore a certificate of mailing date of April 12, 1982, “it may well have been either backdated or not deposited with the United States Postal Service on that date.” On April 26, 1982, the Board received a “MOTION BY MUETTERTIES, ET AL. FOR RECONSIDERATION OF A-54 THE DECISION OF THE EXAMINER DENYING MUET- TERTIES, ET AL. MOTION FOR EXTENSION OF TIME,” accompanied by an affidavit by Abbott’s attorney, in which the attorney explained that the principal reason for the request “was [his] extensive absence . . . from the offices of Abbott Laboratories during the period set for response, and, concurrently, extensive periods of absence of the inventors . . . from Abbott Laboratories during this same period.” He also provided the dates and reasons tor these absences. It was also aileged that the attorney “had an extensive calendar during the period set for response, which . . . made it more difficult to respond in a timely manner.” citing in particular the negotiation and drafting of three licensing agreements during this period. In a decision mailed May 21, 1982, the patent interfer- ence examiner again denied Abbott’s request for addi- tional time, citing three grounds: (1) the request did not include a certification of the manner in which Brennan had been served, as required by 37 C.F.R. § 1.247, (2) the request apparently was not deposited with the U.S. Postal Service on April 12, and (3) the showing by Abbott did not establish diligence by Muetterties et al. in attempting to file their preliminary statement. On June 7, 1982, Brennan filed a “Motion by Junior Party for Award of Priority in View of Fraud by Senior Party and Brief in Support Thereof,” based on the allegedly false certification of Muetterties’ request for an extension of time. This was followed on July 27, 1982, by a “Motion by Muetterties et al. For Judgment and Award of Priority based on Fraud by Brennan,” the alleged fraud consisting of the obliteration of a postage meter stamp on an exhibit. A-55 On June 8, 1982, Abbott filed a petition to the Com- missioner, in which it contended that the interference examiner’s denial of its request for an extension was “an abuse of discretion under the facts.” In a decision dated September 21, 1982, the petition was granted, holding that (1) it was improper for the interference examiner to object to the form of the certificate of service in his decision on reconsideration when he did not raise this issue in his initial decision, (2) the interference examiner should not have accepted Brennan’s arguments concern- ing falsification of the certificate of mailing without fur- ther investigation, and (3) the showing submitted with Abbott’s motion for reconsideration should have been accepted as sufficient under 37 C.F.R. § 1.246.3 Regarding the motions of both parties for an award of priority based on alleged fraud by the other party, the decision stated: As indicated in the Commissioner’s Notice of August 11, 1980, 998 O.G. 8,4 questions of fraud ° § 1.246 (1984) Late papers. A motion or other paper belatedly filed will not normally be considered except upon a showing, under oath or in the form of a declaration (§ 1.68), of sufficient cause as to why such motion or paper was not timely presented... . 4 Petitions in Interference Cases to Strike Applications for Alleged Violations of 37 C.F.R. § 1.56 Not infrequently a party in an interference will file a petition requesting the Commissioner to enter (Continued on following page) A-56 arising in an interference are ancillary to prior- ity and are treated by the Board of Patent Inter- ferences. (Continued from previous page) an order under 37 C.F.R. § 1.56(d) striking from the files a patent application involved in an interference. The issues raised by such a petition have been deter- mined to be ancillary to priority within the meaning of 37 C.F.R. § 1.258(a). See e.g., Norton v. Curtiss, 57 CCPA 1384, 433 F.2d 779, 167 USPQ 532 (1970); Lan- ger v. Kaufman, 59 CCPA 1261, 465 F.2d 915, 175 USPQ 172 (1972). Hence, the issues may be consid- ered by the Board of Patent Interferences at final hearing if properly and timely presented. The normal disposition of a petition to strike an application involved in an interference is to dismiss the petition, without prejudice to renewal following termination of the interference. Such a disposition allows the parties to develop the issues before the Board of Patent Interferences. If the party filing the petition ultimately prevails in the interference, fur- ther action on the petition may be unnecessary. Should action on the petition be necessary, the Com- missioner has the benefit of the view of the Board of Patent Interferences on the issues. Under present practice, the Board of Patent Interferences generally will hold a petition to strike an application involved in an interference until the time for opposition has expired. The file is then forwarded to the Commissioner, where the petition is normally disposed of as indicated in the preceding paragraph. This practice is time consuming and needlessly delays the interference. (Continued on following page) A-57 Accordingly, the interference is remanded to the Board for appropriate action concerning these motions. Subsequent to this decision, on July 16, 1982, Abbott tiled the ‘791 and ‘792 reissue applications and moved to add them to the ‘817 interference. The ’791 reissue appli- cation was added to the ’817 interference and a second interference, i.e., the ‘078 interference, was declared involving the ‘792 reissue application, the Muetterties patent and the Brennan application. In addressing the matter of the conduct by Abbott’s attorney in its decision on priority, dated January 8, 1986. the Board said it considered his testimony “to the effect that he prepared and placed the Request in the Abbott mailing system on April 12, 1982 to be incredible” and (Continued from previous page) In order to prevent such delays, in the future the Patent Interference Examiner is authorized to enter an order dismissing a petition to strike an applica- tion involved in an interference, without prejudice to renewal of the petition after termination of the inter- ference. The petition should be dismissed imme- diately upon receipt, without Suspension of the interference. Petitions to strike an application not involved in an interference will continue to be handled in the Office of the Assistant Commissioner for Patents in the manner previously announced. SIDNEY A. DIAMOND, Dated: Aug. 11, 1980. Commissioner of Patents and Trademarks A-58 found that he “prepared the Request (BX 2) no earlier than April 13, 1982 and back-dated the Certificate of Mailing to April 12, 1982 and falsely stated in his affi- davit (BX 11) that the Request had been mailed in a ‘timely manner.’” After holding that either the back- dating or the false affidavit would be sufficient to consti- tute inequitable conduct, the Board concluded that “nei- ther Muetterties nor Muetterties et al. can be awarded priority in these interferences.” The board also found that the evidence failed to establish any inequitable conduct by Brennan. After awarding priority to Brennan based on fraud by Abbott’s attorney, the Board, although not required to do so, went on to address the question of who would have been entitled to priority in the absence of the inequi- table conduct by Abbott’s attorney. The Board found that “Muetterties would, on the basis of inventive acts alone, [have been] entitled to priority as to all of the counts in the ‘078 interference.” As for the ‘817 interference, the Board found that Muetterties, on the basis of its earlier filing date, would have been entitled to priority as to all of the counts. C. The Michigan Action 1. Abbott’s motion for summary judgment In its “MEMORANDUM OF LAW IN SUPPORT OF ABBOTT LABORATORIES’ MOTION FOR SUMMARY JUDGMENT” (“Memo.”), filed in the Michigan action, Abbott argued that “[d]espite finding that Abbott was the first and true inventor, the Board awarded priority to A-59 Brennan as a sanction against Abbott for ‘inequitable conduct’ by an Abbott attorney during the interference” (Memo. at 2). According to Abbott, the old interference rules “did not give the Board the authority to deny prior- ity as a sanction for inequitable conduct” (Memo. at 6). While the Board was authorized under the old interfer- ence rules to impose sanctions for failure to comply with a discovery order issued by the Board, 37 C.ER. § 1.287(d)(2),5 “[a]ny other allegedly inequitable conduct was to be referred to the Commissioner of Patents [and Trademarks] for appropriate action after the Board ful- filled its obligation to determine priority. 37 C.F.R. § 1.259 (1982),” citing Lund v. Bentley, 188 USPQ 9 (Bd. Pat. Int. 1974), and Norton v. Curtiss, 433 F.2d 779, 167 USPQ 532 (CCPA 1970).! > § 1.287 (1984) Discovery. (d)(2) Any failure to comply with an order under the provisions of paragraph (c) of this section may be considered by the Board of Patent Interferences as [a] basis for applying appropriate restrictions against the party failing to comply, for holding certain facts to have been established, and in an appropriate case for awarding priority against him, or for taking such other action as may be deemed appropriate. © However, in the Lund interference, the Board on the basis of a false § 1.204(c) affidavit submitted vy Lund et al. first awarded priority to Bentley before it referred the Lund et al. application to the Commissioner under § 1.259 for consider- ation of further action (i.e. striking the application) under § 1.56. 188 USPQ at 16. (Continued on following page) A-60 Abbott further noted that 37 C.F.R. § 1.223(c)” pro- vided a specific sanction for failure to file a preliminary statement, i.e., testimony will not be received to prove (Continued from previous page) In the Norton interference, Norton charged that Curtiss committed fraud on the PTO during ex parte prosecution of his application and that, as a result of this fraud, the Curtiss application should be stricken under § 1.56 and priority awarded to Norton. The Board, however, concluded that there was no adequate basis for holding that Curtiss committed any fraud on the PTO. In considering whether the Board should have instead referred the question of fraud to the Commis- sioner for his consideration, the court stated: We find the action taken by the Ass’t Commissioner in his decision on the initial petition to strike, citing the probability that the board would necessarily con- sider many of the matters relevant to the fraud ques- tion, and enjoining that body to make an appropriate recommendation under Rule 259 if it found fraud to exist, was tantamount in its effect to a direct delega- tion of the responsibility to make any further find- ings regarding the question of fraud. We find no problems with such delegation. The board fully dis- posed of all questions relating to the fraud issue. Since that issue is a necessary preliminary to any finding that the application should be stricken, the board’s decision was obviously determinative of the question. As such, it is within our jurisdiction to review. 7 § 1.223 (1984) Effect of statement. (c) If a party to an interference fails to file a statement, testimony will not be received subse- quently from him to prove that he made the inven- tion at a date prior to his effective filing date. . . A-61 that he made the invention prior to the effective filing date (Memo. at 7), and argued that “the Board could have restricted Abbott’s proofs and referred any inappropriate conduct relating to the preliminary statement to the Com- missioner.”§ Furthermore, Abbott argued that if a party files a late preliminary statement without leave, either he may be allowed to file it (as was authorized by the Commissioner in the present case) or he may be restricted to his filing date under 37 C.ER. § 1.223(c) (Memo. at 7). Abbott also cited Standard Oil Co. v. Montedison, S.p.A., 540 F.2d 611, 191 USPQ 657 (3d Cir. 1976), as standing for the proposition that “it is the function of the Board to determine which party is the first and true inventor. Any fraud or inequitable conduct during the interference proceeding will not change that fact, and must be referred to the Commissioner pursuant to Rule 259.9 * Note, however, that since § 1.223(c) Says that “testimony will not be received,” it does not appear to give the Board discretion to receive testimony in the absence of a preliminary statement. 9 Standard Oil was an appeal, in an action under 35 U.S.C. § 146, from a district court order denying a motion by Standard Oil for leave to amend the complaint to add new charges against Montedison based on unpatentability, misjoinder of inventors and fraud, issues which had not been raised before the Board during the interference proceeding in the PTO. Rather than holding that the Board must refer issues of fraud to the Commissioner under § 1.259, the Third Circuit in fact Stated that the Board itself may consider fraud in determining priority in an interference proceeding: (Continued on following page) A-62 Finally, Abbott argued that the current authority of the Board to award judgment against a party guilty of (Continued from previous page) Fraud in prosecuting a party’s case in an interference proceeding may obviously affect the Board’s deter- mination of priority and may, therefore, be raised before the Board [citing Norton v. Curtiss and Langer v. Kaufman, supra]. If so raised it may, of course, also be raised in the § 146 suit in the district court. 540 F.2d at 616 & n.9, 191 USPQ at 661 & n.9. Furthermore, the court stated: We note that the Board of Patent Interferences itself has taken the position that it should consider only those issues of fraud which relate to priority. See Poole v. Sugaya v. Iwabuchi, 182 U.S.P.Q. 571 (Pat.Off.Bd. of Pat.Int.1974). It may be that the Board is empowered to consider other issues of fraud as being ancillary to priority, as the Court of Customs and Patent Appeals appears to have held [citing Norton v. Curtiss and Langer v. Kaufman]. This we need not here decide. 540 F.2d at 617, 191 USPQ at 662. Regarding the actual issue in Standard Oil, which was whether the district court could consider an issue of fraud raised for the first time in a § 146 action, the Third Circuit said that “in appropriate circumstances the district court may, in such an action, in the exe [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_0531%3A1. Public record. Not legal advice.