In Droplets, Inc., v. E*Trade Bank, [2016-2504, 2016-2602] (April 19, 2018), the Federal Circuit affirmed the Board’s decision finding all claims of U.S. Patent No.
8,402,115 invalid as obvious over a published grandparent application due to an improper priority claim.

This application claimed priority to it’s immediate parent application, and to its ultimate  great grand parent application, but failed to mention a priority claim between the parent application the grand parent application, or between the grand parent application and the great grand parent application:

One might think that if B claims priority to A, C claims priority to B, and D claims priority to C, that this is sufficient for D to get credit for the filing date of A. D After all should D be entitled to priority of C, C should get the priority of B and B should get the priority of A.  However, that is not how the Federal Circuit interpreted Sections 119 and 120 in this case, nor how it has interpreted these statutes in the past.

The Federal Circuit noted that consistent with 35 U.S.C. § 120 and 37 C.F.R. § 1.78,
MPEP § 201.11 III.C. provides detailed guidance on how to claim priority from multiple prior-filed applications. It states that the reference to the prior applications must identify
all of the prior applications and indicate the relationship (i.e., continuation, divisional, or continuation-in-part) between each nonprovisional application in order to establish copendency throughout the entire chain of prior applications.

The Federal Circuit rejected Droplets’ characterization of the issue as “hypertechnical.”  The Federal Circuit also rejected Droplets’ more creative argument that the priority claim was incorporated by reference from the application whose priority was properly claimed, finding §120’s “specific reference” requirement does not contemplate incorporation by reference.

The Federal Circuit reiterated that a patent must contain a specific reference to each prior-filed application to be entitled to those applications’ earlier filing dates, and added that incorporation by reference cannot satisfy this statutorily mandated specific reference requirement. Because the patent at issued contained only a reference to its immediate parent, and not its grand parent, or great grand parent, the Federal Circuit affirmed the Board’s decision finding all claims of the patent invalid as obvious.