author: LANE, Judge. .

text:
    COMMONWEALTH OIL REFINING COMPANY, INC. v. The UNITED STATES The UNITED STATES v. COMMONWEALTH OIL REFINING COMPANY, INC.
    Customs Appeal No. 5488, 5489.
    United States Court of Customs and Patent Appeals.
    June 28, 1973.

      Robert S. Stitt, Thacher, Proffitt, Prizer, Crawley & Wood, New York City, attorneys of record for Commonwealth Oil Refining Co., Inc.
    Harlington Wood, Jr., Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Gilbert Lee Sandler, New York City, for the U. S.
    Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and CLARK, Justice, (Ret.), sitting by designation.
   LANE, Judge. .

This is an appeal and cross-appeal from the decision and judgment of the Customs Court, 67 Cust.Ct. 37, 330 F. Supp. 598, C.D. 4248 (1971), dismissing some protests and sustaining others after a consolidated trial of all the protests. The involved merchandise is described as gas oil. It was exported from Venezuela and entered at the port of Ponce, Puerto Rico, during the period 1962-1968.

No. 5488 is the appeal of the importer (hereafter referred to as Commonwealth) from the decision of the Customs Court granting the Government’s motion, to dismiss some of the protests on the ground that they were filed more than sixty days after liquidation. See § 514 of the Tariff Act of 1930. Commonwealth contends that the court was in error in finding that adequate notice of liquidation had been given. We disagree and affirm the court’s judgment in No. 5488.

No. 5489 is the Government appeal from the court’s decision sustaining the importer’s protest to the classification of the goods. For the reasons set forth below, we also affirm the court’s judgment in Appeal No. 5489.

We consider the two appeals seriatim in one opinion.

APPEAL NO. 5488 — NOTICE OF LIQUIDATION

Where notice of liquidation has not been given in accordance with the requirements of Customs Regulations prescribed by the Secretary of the Treasury in conformance with § 505 of the Tariff Act of 1930, the liquidation is incomplete and the 60-day period specified in § 514 of the Tariff Act of 1930 does not begin to run. United States v. Astra Bentwood Furniture Co., 28 CCPA 205, C.A.D. 147 (1940). See also Commonwealth Oil Refining Co. v. United States, 67 Cust.Ct. 155, 332 F.Supp. 203, C.D. 4267 (1971). Section 16.2(d) of the Customs Regulations, 19 C.F.R. § 16.2(d), sets forth the form and manner in which notice of liquidation is to be given, and reads in pertinent part as follows:

The bulletin notice of liquidation shall be posted as soon as possible in a conspicuous place in the customhouse for the information of importers or lodged at some other suitable place in the customhouse in such a manner that it can be readily located and consulted by all interested persons, who shall be directed to that place by a notice maintained in a conspicuous place in the customhouse stating where notices of liquidations of entries are to be found. The bulletin notice of liquidation shall be dated with the date of posting or, if not posted, with the date it is lodged in the above-described place for the information of importers.

Commonwealth contends that the requirements of notice were not satisfied in this case in essentially two particulars: (1) that the bulletin notice of liquidation was not posted in a “conspicuous” place but rather in “some other suitable place” to which there was no posted direction and (2) that the bulletin notice of liquidation was not dated with either the date of posting or lodging.

A substantial portion of the testimony and evidence adduced at trial is directed to the liquidation procedure in force in the 1963-64 period during which the merchandise involved in the dismissed protests was imported. The testimony and evidence are summarized in detail in the published opinion of the lower court.

Briefly, it appears that the gas oil in question was officially entered at Ponce, Puerto Rico, but liquidated at San Juan. The practice at San Juan included a determination of duty followed by the preparation of the bulletin notice of liquidation. With respect to those notices destined for Ponce, a clerk would assign a liquidation date some ten to fourteen days in the future and mail them to the Ponce customhouse. The notices were apparently supposed to be dated at Ponce when posted and then placed on a clipboard. There is substantial dispute as to whether the notices were dated when posted and as to the location of the clipboard in the Ponce customhouse.

The original bulletin notices relating to the specific entries involved here were not located, although other records pertaining to their liquidation were introduced in evidence. The Customs Court reviewed the record developed at trial and made several factual determinations.

The court found that the liquidating procedures used resulted in the mailing of the bulletin notices from San Juan to Ponce well in advance of the liquidation date pre-stamped on the notices and the posting of the notices on the date of liquidation. The court also determined that the date of posting was normally-stamped on the notices.

As to clipboard location, the court found that the clipboard normally hung on a nail on a wall near one of the windows at which customs business was transacted, although it occasionally might have been left on a counter. Relying on Standard Oil Co. of Louisiana v. United States, 33 CCPA 152, C.A.D. 329 (1946), and finding that when hung on the wall the clipboard containing the bulletin notices was plainly visible and accessible, the court concluded that the notices were posted in a “conspicuous” place within the meaning of Customs Regulations § 16.2(d), supra.

Based on the findings made, a conclusion of compliance with the requirements of liquidation notice was reached.

OPINION

(1) The “conspicuous place” question

After the Customs Court’s decision, Commonwealth filed a motion requesting rehearing on the basis of testimony given by a Government witness in a different proceeding, Commonwealth Oil Refining Co. v. United States, 67 Cust.Ct. 155, 332 F.Supp. 203, C.D. 4267 (1971), bearing on the location of the clipboard in the Ponce customhouse during the relevant period. The motion was opposed by the Government, and the court denied it.

Commonwealth contends that the court below should have granted the petition for rehearing and considered the evidence Commonwealth sought to introduce. However, the Customs Court is entrusted with the exercise of its sound discretion in ruling on petitions for rehearing of the causes brought before it. See Taggesell Co. v. United States, 17 CCPA 15, 18, T.D. 43318 (1929); United States v. Shell Oil Co., 44 CCPA 54, 56, C.A.D. 637 (1957). We have not been shown that the court’s ruling in the present case was manifestly erroneous, and we therefore will not disturb it. We accordingly do not consider the evidence sought to be introduced.

- We find that the determination of the Customs Court with respect to the location of the clipboard in the Ponce customhouse is supported by substantial evidence of record and is not contrary to the weight of the evidence. See United States v. F. W. Myers & Co., 45 CCPA 48, 52, C.A.D. 671 (1958). We will not disturb the findings of fact in that regard. We agree that the bulletin notices of liquidation at issue here were posted in a conspicuous place in the Ponce customhouse in accordance with the terms of § 16.2(d) of the Customs Regulations.

(2) The “date of posting” question Commonwealth primarily asserts that the weight of the evidence supports the conclusion that the bulletin notices of liquidation were not “dated with the date of posting * * * ” as mandated by the Customs Regulations. Commonwealth also disagrees that there is substantial evidence to support the determination of the Customs Court that the notices were posted on the date of liquidation and challenges a conclusion that such coincidence of dates would in any event satisfy the “date of posting” requirement of the regulation. In that regard, Commonwealth argues the following:

There is nothing to suggest that this requirement can be satisfied by a predated date of liquidation stamped on the document before mailing [from San Juan] to the sub-port [of Ponce] for posting. To so construe the regulation would violate its plain language and would deprive an importer of an important means of safeguarding full governmental compliance with its mandate, namely, that the notice be posted “as soon as possible” for his information.

We think that while such a practice might not deserve encouragement, the posting of the bulletin notice on the date of liquidation where that date is the only one appearing on the document satisfies the mandatory terms of the Regulations. In such a situation, the date of posting in fact appears on the document thus literally complying with the “date of posting” requirement. Although Commonwealth generally asserts that the practice would lead to posting at a time other than “as soon as possible,” there is no supportive foundation for such an assertion. In any event, there has been no charge that the bulletin notices of liquidation were not posted “as soon as possible,” and we need not attempt to construe the import of that phrase.

The critical date from the standpoint of protest filing is the date of liquidation. Posting subsequent to the date of liquidation could well give rise to actual prejudice to the importer. However, posting on or before that date would not be prejudicial. The pre-dating procedure used in San Juan was structured to avoid posting subsequent to liquidation. We conclude that pre-dating complies literally with the constructive notice provision of the Customs Regulations and is not inconsistent with the spirit of that provision.

Commonwealth has not directed our attention to evidence tending to prove that the notices here involved were not posted on the date of liquidation, as found by the Customs Court, and we have found no such evidence. It is presumed that public officials perform their duties in a manner consistent with law, see Olavarria & Co. v. United States, 47 CCPA 65, 66, C.A.D. 729 (1960), and under our construction of § 16.2(d), the posting of pre-dated notices on the date of liquidation is such a manner. We agree with the Government that Commonwealth has failed to rebut the presumption. We also think there is substantial evidence of record which supports the determination of the Customs Court that the notices were posted on the date of liquidation.

Conclusion

We are not persuaded of error in the Customs Court’s holding that notice of liquidation was given in accordance with the conditions of § 16.2(d) of the Customs Regulations. Notice having been properly given, and protest not having been timely made with respect to the entries enumerated in the lower court’s published opinion, dismissal of those protests was proper. We accordingly affirm the judgment of the Customs Court in Appeal No. 5488.

APPEAL NO. 5489 — CLASSIFICATION OF THE MERCHANDISE

The merchandise consists of gas oil which is a petroleum distillate separated from the crude oil in the initial stage of the refining process. The gas oil was imported from Venezuela and then further refined at Commonwealth’s plant at Guaynilla Bay, Puerto Rico, to produce gasoline.

Since the entries involved in the consolidated protests spanned a period during which the tariff laws were changed, there are separate provisions for gas oil imported up to August 30, 1963, and that imported after that date. In either case, the essence of the dispute arises out of classification of the imported gas oil by customs officials at Puerto Rico as a liquid derivative of crude petroleum whereas Commonwealth claims that it should be classified as fuel oil.

The Customs Court agreed with Commonwealth that gas oil similar to that here imported had long been classified as fuel oil by the Bureau of Customs and concluded that a construction of “fuel oil” as used in the relevant statutory provisions which encompasses Venezuelan gas oil is, by virtue of the long established administrative practice, controlling. The Government seeks reversal of the decision of the Customs Court sustaining the timely filed protests contending that to be classified as fuel oil, the imported gas oil would have to be chiefly used as fuel oil which, in fact, it is not. On appeal, Commonwealth urges that the court below correctly found the existence of a uniform and consistent administrative practice and contends that such practice extended from as early as 1922 to at least 1967 with the exception of the action of the customs officials responsible for classification of the goods here involved. The Government is of the view that no such practice has been proved and that in any event such practice, even if found to exist, should not override the plain meaning of “fuel oil” as oil chiefly used in its imported state as fuel.

The Statutory Provisions

The evolution of the statutory provisions at issue is relevant to our inquiry. Paragraph 1733 of the Tariff Act of 1930, which was similar in all material respects to paragraph 1633 of the Tariff Act of 1922, provided free entry of petroleum products. The imported goods were classified under paragraph 1733 of the 1930 Act, and that classification is not disputed. The provision reads as follows:

Oils, mineral: Petroleum, crude, fuel, or refined, and all distillates obtained from petroleum, including kerosene, bezine, naphtha, gasoline, paraffin, and paraffin oil, not specially provided for.

Therefore, from at least the effective date of the 1922 Act, gas oil was unquestionably entitled to free entry whether considered a fuel oil or simply a distillate of petroleum. . However, duty was imposed by virtue of the Internal Revenue 'Code of 1939, § 3422 of which reads as follows:

Crude petroleum, 1/2 cent per gallon; fuel oil derived from petroleum, gas oil derived from petroleum, and all liquid derivatives of crude petroleum, except lubricating oil and gasoline or other motor fuel, ½ cent per gallon.

As can be seen, § 3422 expressly provided for “gas oil derived from petroleum.” Under the Venezuelan Trade Agreement of 1939, T.D. 50015, § 3422 of the I.R.C. was modified to reduce the rate of duty to yy. per gallon on:

Crude petroleum, topped crude petroleum, and fuel oil derived from petroleum including fuel oil known as gas oil.

In a published letter from W. R. Johnson, Commissioner of Customs, to the collector at New York dated December 16, 1939, 75 Treas.Dec. 248, T.D. 50060, the following was said concerning the Venezuelan Trade Agreement, T.D. 50015:

* * * prior to the enactment of the Revenue Act of 1932, certain specifications were developed and approved by various industries and were promulgated and issued by the Department of Commerce in 1929 as Commercial Standards CS12-29. Oil which meets these specifications and is known as fuel oil or gas oil, should be regarded as within the description in item 3422 * * *.

By Presidential Proclamation of 1952, T.D. 53107, the Venezuelan Trade Agreement of 1939 was supplemented so that 3422 of the I.R.C. was written in the form which governs the duty to be imposed on those goods here imported up to August 30, 1963. The provisions read as follows:

[Claimed as]
Crude petroleum, topped crude petroleum, and fuel oil derived from petroleum (Including fuel oil known as gas oil):
Testing under 25 degrees A.P.I.....Vet per gal.
[Classified as]
Liquid derivatives of crude petroleum
* * * .......................Vtit per gal.

Included in the Treasury Decision publication of T.D. 53107 is a letter “To Collectors of Customs and Others Concerned,” written by Prank Dow, Commissioner of Customs, 87 Treas.Dec. 283 (1952), which states:

You will note that, by virtue of these proclamations, the tariff-rate quota on crude petroleum, fuel oil, gas oil, and topped crude petroleum will be removed, and the import tax assessable under section 3422, Internal Revenue Code, will be reduced from J4 cent to % cent per gallon on these products testing under 25 degrees A. p j * *

The Tariff Schedules enacted pursuant to the Customs Simplification Act of 1954 apply to the gas oil here imported subsequent to August 30, 1963. The relevant provisions are as follows:

[Classified as]
Mixtures of hydrocarbons not specially provided for, derived wholly from petroleum, shale, oil, natural gas, or combinations thereof, which contain by weight not over 50 percent of any single hydrocarbon compound:
475.65 In liquid form ..........[V4$ per gal.]
[Claimed as]
Crude petroleum (including reconstituted crude petroleum); topped crude petroleum; crude shale oil; and distillate and residual fuel oils (including blended fuel oils) derived from petroleum, shale, or both, with or without additives.
475.05 Testing under 25 degrees A.P.I.
......................[Vai per gal.]

Although as compared to § 3422 of I.R. C., as modified by T.D. 53107, TSUS item 475.05 makes no mention of “fuel oil * * * (including fuel oil known as gas oil),” and refers to “distillate and residual fuel oils,” the Government does not advance any contention to the effect that the TSUS perfected a change in the treatment of gas oil such as that here involved. The Government’s position is that the imported gas oil is not classifiable as a fuel oil in either ease.

The Nature of the Gas Oil

Sam Zamudio, a chemical engineer by degree and technical adviser to the vice president of Commonwealth responsible for refining and petrochemicals, was called by Commonwealth and testified as to the nature of gas oil. Zamudio characterized gas oil as “in essence, part of crude oil * * * derived [in fact] from the very first distillation step of crude oil.” He noted that the gas oil is a distilled fraction which has been separated from the crude, but unchanged. Direct examination of Zamudio including the following:

Q. Now, will this gas oil we have been talking about burn? A. Yes, it would burn like every other hydro-carbon.
Q. And will it produce heat and power? A. Yes. The gas oil ranges will burn without any particular difficulty. They normally produce about 18,500 BTU’s to the bound [sic: pound?] of heat release.
Q. Could the gas oil be marketed in its imported form ?
* *****
* * * A. Well, yes, the gas oil, as such, could be marketed in its imported form, and it would be marketed under the regulations of No. 5 fuel oil.
Q. Now, is such gas oil, in fact marketed in imported form? A. No, because from a practical point of view all refineries are in the process of generating optimum profits or at least this is what we all strive for. Any gas oil, as such, must be processed further to optimize on profitability. Marketing gas oil in its raw form, as such, would be a loss of money.
Q. Now, how is gas oil, again speaking generally within the industry, further refined? A. Earlier, when I was telling you about the virgin and cracked fractions — a virgin fraction such as gas oil would be processed by any one of two means, either thermal decomposition or catalytic decomposition. In our plant, we don’t have any thermal crackers for gas oil but we do have catalytic crackers. So, therefore, the gas oil is processed through a catalytic cracker down to fractions, similar to those of crude oil, gas, gasolines, naphthas, and cycle oils.
Q. How long has if been industry practice to further refine a crack gas oil? A. Well, this has started from what I would call day 1. The day somebody took oil out of the ground it really wasn’t very good in its physical form, but boiling it off and taking off the light ends, and throwing away the heavy residuals did produce distillates used for heating oil, lamps, early gasoline engines, and that sort of thing. So, this really starts from the day that the industry got going.

One of the exhibits received in evidence (Exhibit 32), a publication of the Commerce Department which discusses fuel oils, describes “No. 5” fuel oil as “Residual-type oil for burner installations equipped with preheating facilities.” It defines the minimum flash point, maximum water and sediment content, maximum ash content, and viscosity ranges of No. 5 fuel oil. The record includes other source material concerning the nature of No. 5 fuel oil.

The Customs Court stated as follows: Mr. Zamudio’s testimony was clear in its assertion that the importations could be marketed in their imported form as No. 5 fuel oil. The court has examined a multitude of source materials placed in evidence for the purpose of clarifying the nature of fuel oils and their identifying characteristics. [Footnote omitted.] The court has also examined the customs laboratory report cards relating to the importations. Concerning these, the parties stipulated that “ [n] otwithstanding the statements on the various customs laboratory report cards that the samples did not conform to ASTM (American Society for Testing Materials) or other specifications for fuel oil, the only tests conducted of the plaintiff’s gas oil importations were those specifically enumerated on the cards themselves, namely API gravity, viscosity and, in some cases, sediment and water.” The important tests for flash point and ash contents were not performed. Thus the laboratory reports, as far as they went, are consistent with a finding that the importations possessed the characteristics of No. 5 fuel oil, while the positive testimony of Mr. Zamudio — unrebutted and uneontradicted — serves to establish the fact that the imported gas oil did indeed possess the characteristics of No. 5 fuel oil.

We think that there is substantial evidence to support the trial court’s determination that the imported gas oil “possessed the characteristics of No. 5 fuel oil.” However, there is no assertion by Commonwealth that the goods are in fact used as fuel oil, and the indication is that use as fuel oil is commercially impractical. The evidence tends to prove that the importations were in fact further refined. We conclude that the imported gas oil possesses the characteristics of No. 5 fuel oil. However, we also conclude that it is not chiefly used as such and that it would not be economically feasible to use the gas oil as imported for fuel oil.

The Customs Court

In addition to evidence concerning the nature of the gas oil, Commonwealth introduced testimony and documentary evidence allegedly demonstrating administrative practice and legislative intent with respect to the statutory provisions relevant to this appeal. Commonwealth took the depositions of several customs officials of the port of Philadelphia— Edward Henry, district director, Arthur Grill, chief chemist, and Frederick Pantella, lead import specialist. Some 14 entries of gas oil made at Philadelphia during the period' 1961-1968 were brought into evidence. Those entries were found by the customs laboratory to have the characteristics of No. 5 fuel oil and were classified as fuel oil.

The Customs Court, in its opinion, relied upon the testimony of the Philadelphia customs officials in finding the existence of long-standing, established practice at that port with respect to the classification of Venezuelan gas oil having the characteristics of No. 5 fuel oil. The court found, as indicated above, that the imported gas oil likewise “meets commercial specifications for No. 5 fuel oil.” It accordingly held the imported merchandise to fall within the scope of the established practice. Specifically, the Customs Court reasoned as follows:

The testimony of the Philadelphia customs officials establishes that Philadelphia is a leading port for importations of petroleum. * * *
The evidence herein further shows that the importations in question possess the characteristics of No. 5 fuel oil and as such are similar to the importations which were classified at the port of Philadelphia as fuel oil until 1967. * * * [W]e conclude that this [merchandise] is similar to Venezuelan gas oil which was entered at the port of Philadelphia.
In this connection it is basic that a long established practice by the Bureau of Customs, the agency entrusted with the administration of the tariff laws, will be given great weight in the interpretation of those laws. [Citations omitted.] It appears from the evidence that the practice at the port of Philadelphia was to classify importations such as those at bar pursuant to the appropriate provision for fuel oil, and that this classification represented the established practice in these matters.
Defendant has failed to come forward with a justification for the change in customs treatment accorded the instant importation[s]; but rather has primarily addressed itself to the contention that the provisions for fuel oils are [use] provisions which are not applicable to importations utilized for purposes other than fuel.

The court gave controlling effect to the “customs practice, which continued uninterruptedly at least until 1967,” of classifying gas oil having the characteristics of No. 5 fuel oil, and therefore suitable for such use, pursuant to the provisions for fuel oil. The court held the “weight of competent evidence” to require a judgment sustaining Commonwealth’s protests.

Is Long-Standing, Established Administrative Practice An Issue Relevant to This Appeal?

The Government contends that there is insufficient evidence upon which to conclude that established administrative practice existed. However, the Government more fundamentally assails consideration of such practice as inappropriate where, as allegedly here, there is no ambiguity in the statutory provisions. The Government contends that the fuel oil provisions before us are plainly “use” provisions, that the Customs Court so held with respect to I.R.C. § 3422 in Cities Service Oil Co. v. United States, 16 Cust.Ct. 110, C.D. 994 (1946), and that to fall within the classification of a “use” provision, merchandise must be chiefly used according to that “use.” The relevance of the consideration integral to the trial court’s decision is therefore the threshold legal issue.

Long-established administrative practice has several conceptual connotations. Section 315(d) of the Tariff Act of 1930, codified as 19 U.S.C. § 1315(d), provides that:

No administrative ruling resulting in the imposition of a higher rate of duty or charge than the Secretary of the Treasury shall find to have been applicable to imported merchandise under an established and uniform practice shall be effective with respect to articles entered for consumption or withdrawn from warehouse for consumption prior to the expiration of thirty days after the date of publication in the weekly Treasury Decisions of notice of such ruling; but this provision shall not apply with respect to the imposition of anti-dumping duties.

In Asiatic Petroleum Corp. v. United Sates, 59 CCPA 20, 440 F.2d 1309, C.A. D. 1029 (1971), this court held a reference to “an established and uniform practice” in a letter written by the Acting Commissioner of Customs to the collector of customs at New York to constitute a “finding” of such a practice by the delegate of the Secretary of the Treasury within the meaning of § 315(d). Customs could effect a change in that practice only by following procedures consistent with § 315(d) which include publishing notice of such change.

There is no assertion in the present case that a “finding” of “an established and uniform practice” with respect to Venezuelan gas oil has ever been made by the Secretary of the Treasury or his representative. We are therefore not here concerned with established practice in the statutory sense, a change in which requires due notice as prescribed.

Long-established administrative practice may bear on the construction of the tariff laws as noted by the Customs Court. See United States v. Fred Whitaker Co., 40 OCPA 19, 29, C.A.D. 492 (1952); United States v. Electrolux Corp., 46 CCPA 143, C.A.D. 718 (1959). However, this court has recognized such practice to be comparable to other extrinsic aids to ascertaining legislative intent which come into play when the construction of a statutory provision is in doubt. See Armand Schwab & Co. v. United States, 32 CCPA 129, 133, C.A.D. 296 (1945); United States v. C. I. Penn, 27 OCPA 242, 245-246, C.A.D. 93 (1940). Indeed, in C. J. Tower & Sons v. United States, 44 CCPA 41, 44, C.A. D. 634 (1957), the court expressed agreement with the proposition that an administrative practice prejudicial to the importer shown to be clearly erroneous would be reversible despite its age. In C. J. Tower, the court also recognized the reenactment of an ambiguous statute without substantive change to have incorporated the administrative construction where that construction had been followed consistently for a long time. See also United States v. Edward I. Petow & Son, 34 CCPA 55, 64, C.A.D. 343 (1946).

In the present case, the importer alleges a forty-five year period up to 1967 of consistent and uniform classification of Venezuelan gas oil as fuel oil. If in fact there has been an established practice of that tenure surviving the various tariff legislation enacted during that period, an interpretation of “fuel oil” in the provisions in issue consistent with that practice may be strongly suggested. Compare Electrolux, supra, 46 CCPA at 146; United States v. H. Bayersdorfer & Co., 16 Ct.Cust.Appls. 43, 46, T.D. 42717 (1928).

We do not think the court below erred in looking to the evidence of established practice. The tax provision which Commonwealth claims to be the proper classification expressly includes within the term “fuel oil,” “fuel oil known as gas oil.” The Government apparently is of the view that the gas oil must first be chiefly used as fuel oil to be a fuel oil known as gas oil. However, an interpretation . that brings gas oil having the characteristics of fuel oil within that phrase is a reasonable alternative. In light of the statutory evolution, the TSUS provision which does not expressly include “fuel oil known as gas oil,” but which does newly refer to “distillate and residual” fuel oils, is likewise amenable to several reasonable constructions. Under the circumstances, we conclude that the statutory provisons at issue are ambiguous as to the intended scope and meaning of the term “fuel oil.” Resort to extrinsic aids in ascertaining the legislative intent is therefore warranted in this case.

The Government advances the Cities Service case, supra, as a judicial construction of the fuel oil provision of I. R.C. § 3422. In Cities Service the importer claimed that the merchandise, which was invoiced as “tar” was properly classifiable and taxable as fuel oil. The Government contended that the tar had to be chiefly used as fuel oil to be so classified. The Customs Court there agreed with the Government, but found that in fact the tar was chiefly used as fuel oil. The Customs Court here regarded Cities Service as merely including the tar at issue before the court within the fuel oil provision and not as excluding all substances which might not be chiefly used as fuel oil. We agree with that analysis. Since the goods in Cities Service were found to be chiefly used as fuel oil, the court’s concession to the Government position was not essential to the decision. The court did not have to carefully weigh the merits for and against characterization of the fuel oil provision as a “use” provision as a prerequisite to rendering a dispositive decision. Moreover, the considerations relevant to a determination of whether or not “tar” is fuel oil did not include evaluation of the phrase “fuel oil * * * including fuel oil known as gas oil.” Cities Service is not a judicial construction of the provisions here involved which persuades us of a legislative intent regarding the tariff and tax treatment of gas oil having the characteristics of No. 5 fuel oil.

In sum, we think that the evidence of legislative intent offered by Commonwealth is relevant to the issues before us, and we proceed to a review of that evidence.

The Practice at Philadelphia

As noted above, the customs officials Henry, Grill and Pantella testified and evidence of entries made between 1961 and 1968 was introduced. The Customs Court appears to have relied principally on the evidence bearing on the practice at Philadelphia. However, the Government advances several basic contentions with which we agree.

While the testimony of the deponents does establish that Philadelphia is a leading port of entry for petroleum, it also indicates that it is a minor port of gas oil entry. On cross-examination, in 1968, Grill stated:

The Port of Philadelphia has imported within the last eight years approximately only a dozen cargoes of gas oil, which is a minor proportion of that imported throughout the rest of the country.

Pantella, on cross-examination, characterized the volume of gas oil importation relative to that of other petroleum products at Philadelphia as “small.” By contrast, the entries involved in this appeal, made at Ponce, Puerto Rico, during the period 1962-1968, numbered in excess of 50. We think the assumption that the experience at Philadelphia is such that the view of its customs officials regarding classification of gas oil is more credible than that of customs officials at other ports lacks evidentiary basis.

We also agree with the Government that the inquiry relevant to long-established administrative practice should not be one which weighs the merits of the practice at one port against the merits of the practice at another port oecuring approximately contemporaneously. We hold that the evidence of the classification practice employed at Philadelphia during the period 1961-1968 is insufficient to prove established administrative practice.

As to the period prior to 1961, we are directed to no specific evidence of entries of gas oil at Philadelphia and their classifieatiqn. Commonwealth relies on the testimony of Pantella wherein the witness agreed that under the various tariff and tax acts commencing with the Act of 1922, gas oil would have been classified in the same paragraph as fuel oil. The Customs Court made general reference to Pantella’s testimony. However, our review of Pantella’s deposition fails to reveal any substantial basis for concluding that in fact there had been shipments of gas oil prior to 1961 received at Philadelphia and that there had in fact been a practice of classifying such gas oil as fuel oil. The tenor of Pantella’s testimony is that he assumed that gas oil would have been so classified and that he was aware of no shipments which had been classified otherwise. Pantella himself began working for the Bureau of Customs in 1962.

We think that Commonwealth has failed to come forth with affirmative, convincing evidence of the existence of a long-established practice at Philadelphia. Lacking substantial evidence in the record, the finding of the Customs Court in this regard cannot be sustained.

Commonwealth’s Overall Case for Legislative Intent to Classify Gas Oil as Fuel Oil

Our conclusions respecting the alleged established practice at Philadelphia to some extent undermine the rationale of the Customs Court as expressed in its opinion. However, Commonwealth’s overall case for legislative intent with regard to gas oil is broader and includes other evidence which was before the court below. We feel that the overall case presented by Commonwealth is convincing.

Commonwealth’s Exhibit 2 is a copy of a portion of the Summaries of Tariff Information, prepared in 1948 by the Tariff Commission. The copied portion discussed the tariff rate applied to “Distillate fuel oil (including gas oil)” under the various tariff and tax laws commencing with the 1922 Tariff Act. It notes that “[i]n the trade agreement with Venezuela [discussed supra] the excise tax on imports of crude petroleum, topped crude, fuel oil, and gas oil was reduced * *

Exhibit 34 is a copy of a portion of Schedule A of the Statistical Classification of Commodities Imported into the United States published in 1950 by the Department of -Commerce. The document refers to the classification of “Gas oil (including Diesel oil) and finished distillate fuel oil.” This classification was distinguished from that for “Unfinished oils for futher processing, including topped crude.”

The letters of Commissioners Johnson and Dow, T.D. 50060 and T.D. 53107, have been discussed above in connection with the evolution of the statutory provisions. They were introduced as Commonwealth’s Exhibits 33 and 5, respectively. The Johnson letter made reference to Commercial Standards CS12-29, published in 1929, as disclosing certain standards. Collectors were advised that oil “known as fuel oil or gas oil” which met those standards was to be classified under the fuel oil provision. Exhibit 32 is a copy of Commercial Standard CS12-48, the 1948 revision of 1929 standards. That publication has been discussed supra in connection with the consideration of the nature of the gas oil and the finding that there was substantial evidence to support the trial court’s determination that the imported gas oil possesses the characteristics of No. 5 fuel oil.

The totality of the evidence lends substantial support to a conclusion that the executive departments considered gas oil possessing the characteristics of fuel oil to be properly classified and assessed with duty at the same rate as fuel oil irrespective of the particular importation’s actual or chief use. The Bureau of Customs assumed and directed such classification, and there is no evidence tending to indicate that classification in that manner ,was not observed. The case for a long-standing administrative construction of the relevant fuel oil provisions as encompassing gas oil appears to us to be strong.

We stress that the language of the statutory provisions is plainly amenable to that construction. “Fuel oil known as gas oil” is a phrase which on its face could well include gas oil having the characteristics of fuel oil. As we attempt to assess the correctness of the interpretation placed upon it by the Customs Court, we are moved by the weight of the evidence to agree that the various statutory provisions were, and should be, interpreted according to that construction. In the absence of evidence, or even argument, which might persuade us to consider that in adopting the TSUS the Congress sought to modify the scope of the I.R.-C provision for fuel oil, we are not disposed to assume such an intent. We accordingly find that the construction given the I.R.C. provision applies as well to the TSUS item.

The Government has failed to offer any convincing rebuttal to the evidence we have mentioned. At oral argument, Government counsel referred to the Commissioners’ letters and the Summaries as very “general.” We think their import is clear and that, in fact, they are quite specific. We have no doubt that the Commissioners and the Tariff Commission as then constituted would have regarded the present importations to be properly classified as fuel oil or “fuel oil known as gas oil.”

At oral argument there was some discussion of the ability of the Bureau of Customs to change its mind with respect to classification. As noted above, the Bureau can make administrative rulings and change rulings within the scope of its authority by following due procedures. Commonwealth has argued that only the Congress can now change the classification of gas oil. We agree not because we would agree with a proposition that an agency can be frozen into one interpretation, but rather because we have considered the contemporaneous construction of certain Acts of Congress in ascertaining the proper meaning of language contained in those acts. We have to our satisfaction determined the intent of Congress with respect to ambiguous language.

We conclude that the Customs Court correctly interpreted the relevant statutory provisions as providing for the classification of the imported gas oil as fuel oil. The decision and the judgment of the Customs Court in No. 5489 is accordingly affirmed.

SUMMARY

The judgment of the Customs Court in Appeal No. 5488 is affirmed. The judgment of the Customs Court in Appeal No. 5489 is affirmed.


source: Caselaw Access Project

author: LANE, Judge.

license: Public Domain

text:
    Application of Hector Alfons Vanden EYNDE et al.
    Patent Appeal No. 8934.
    United States Court of Customs and Patent Appeals.
    July 19, 1973.

      Alfred W. Breiner, Arlington, Va., attorney of record, for appellants.

      S. Wm, Cochran, Washington, D. C., for the Commissioner of Patents. Raymond E. Martin, Robert D. Edmonds, Washington, D. C., of counsel.
    Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and ALMOND, Senior Judge.

      . Serial No. 471,437 filed July 12, 1965, entitled “Fluoro-Alkylhydrazines and Process for the Preparation Thereof.”

   LANE, Judge.

This appeal is from the decision of the Patent Office Board of Appeals, adhered to on reconsideration, sustaining the rejection of claims 16-21 of appellants’ application as based on a specification which fails to satisfy the requirements of the first paragraph of 35 U.S. C. § 112. We remand this case to the board for the reasons and purposes hereafter set forth. The most difficult aspect of this appeal is the determination of the propriety of the board’s refusal to consider certain patents and publications submitted by appellants subsequent to the board’s original decision as an accompaniment to a request for reconsideration. To fairly explain the issues before us and our resolution of them, we initially recount the positions of the principals as developed below.

THE PROCEEDINGS BELOW

The Invention

The claims on appeal are all chemical compound claims. Claim 16 defines the genus and reads as follows:

16. A fluoro-alkyl hydrazine corresponding to the following formula:
(X-CF2)n -(^H-NH-NHa R
wherein:
X is a member of the group consisting of a hydrogen atom and a fluorine atom,
R is a member of the group consisting of a hydrogen atom, lower alkyl or phenyl, and n is a positive integer from 1 to 25 inclusive.

The specification characterizes the invention as relating to “new fluoro-alkylhydrazines” and “[m]ore particularly,” “a process for the preparation thereof.” Indeed the specification for the most part discusses the manner of making the claimed compounds. As for utility, the specification states the following:

The fluoro-alkyl hydrazines according to the present invention are important starting materials for the synthesis of several organic compounds such as l-fluoroalkyl-2-pyrazoline-5one colour couplers, which form magenta azomethine dyes on colour development of exposed light-sensitive silver halide materials with aromatic primary amines.

Proceedings Before The Examiner

That statement of utility was the focus of the examiner’s rejection of the claims first under both sections 101 and 112, and later under section 112 alone. The examiner considered the statement “vague and indefinite,” and generally regarded it as insufficient to teach one skilled in the art how to use the claimed invention. The examiner questioned the manner in which the claimed hydrazines could be converted to color couplers and the manner in which the so-formed couplers could be used to yield magenta dyes on color development.

Appellants contended that one skilled in the relevant art would have been able to make color couplers from the hydra-zines and would have known how to use the couplers in color development. Appellants generally argued that the utility requirements and all disclosure requirements of the patent laws were satisfied.

At one point during prosecution, appellants introduced a page of a treatise on photographic chemistry by Glafkide, the relevant portion of which reads as follows:

(d) Pyrazolines. These magenta couplers with the structure

are very widely used for colour films.
* * #
The pyrazolones are prepared by hot condensation of a phenylhydrazine Ar — NH—NH2 with a keto compound such as acetoacetic ester CH3-CO-CH2 — CO—O —C2H5 in the presence of water and alcohol. They are insoluble in water, but soluble in caustic soda. Their sulphonated derivatives are soluble.
The simplest coupler is 1 -phenyl3-methyl - 5 - pyrazolone. The aryl sulphonated compound is prepared from sulphophenylhydrazine. With diethyl-p-phenylene diamine, a magenta dye is obtained with the formula:

Before coupling, the keto group — CO —CH2— is isomerized to the enol f orm-C (OH) < CH-.
Appellants stated that:
[Glafkide] teaches the “classical” method of producing magenta color couplers with a pyrazolone structure by means of the hot condensation of a hydrazine with a carbonyl containing compound such as a substituted acetoacetic ester. Thus, the method of converting the fluoroalkyl hydrazine of the present invention to 1-fluoroalkyl-2-pyrazoline-5-one color couplers is well known in the art.

The examiner first commented on Glafkide in his Answer stating:

The Glafkide publication does disclose' the reaction of a phenylhydrazine with a keto compound to give a pyrazolone which then couples a primary aromatic amine to give a magenta azomethane compound, but the instant hydrazines are not phenylhydrazines and there is no assurance that the instant hydrazines would so react or what the reaction conditions would be. [Emphasis in original.]

The examiner continued to hold that the specification disclosure of utility is insufficient, although he limited the basis of the rejection to the first paragraph of § 112.

In a reply brief following the Examiner’s Answer, appellants expressly acknowledged the examiner’s comment regarding the Glafkide publication. Appellants argued:

This statement would have greater significance if not for the expressed and implied indication by appellants that the conditions used with a phenylhydrazine when applied to the fluoroalkyl-hydrazines will result in a useful product.

Proceedings Before The Board

The board quoted the statement of utility appearing in appellants’ specification and phrased the appellants’ position as follows:

It appears to be appellants’ view that, in the light of the Glafkide publication, one having ordinary skill in the art would know how to use the claimed compounds as starting materials to produce the l-fluoroalkyl-2-pyrazoline-5-one compounds, and furthermore would know how 'to employ the latter for the suggested purpose in photographic emulsions, all without further disclosure than that quoted above.

The board agreed with the examiner’s view of Glafkide stating:

We note * * * that the starting hydrazines and compounds produced by the Glafkide publication are different from those which would be employed and produced according to appellants’ suggestion, in that they have aryl groups in place of the fluoroalkyl groups. We do not find that one skilled in the art would be able to predict with certainty that the fluoroalkyl compounds would react identically and under the same conditions as the aryl compounds of Glafkide, nor is there evidence in the record that they in fact do so.

In support of this conclusion the board made reference to a patent (hereafter the Eynde patent) issued on an application (hereafter the Eynde application) filed by appellants on July 14, 1965, two days subsequent to the filing date of the application involved in this appeal. The Eynde patent discloses in detail the manner of using the fluoroalkyl hydrazines to form color couplers and the use of such couplers in color development.

It was presumably intended that the Eynde application be filed concurrently with the present application, and the present specification as originally filed made express reference to the Eynde application for a disclosure of the preparation of color couplers. However, the Eynde application was filed later for one reason or another, and reference thereto was deleted from the present application. The board was therefore aware of the Eynde patent which matured from the Eynde application and of the fact that appellants contemplated the methods disclosed therein as the means for converting the fluoroalkyl hydrazines to color couplers.

The board held as follows:
We note that in * * * [the Eynde patent] the conditions actually used are not the same as in the publication. The patent in all cases conducts the reaction in the presence of acetic acid; the reference employs a hot condensation in the presence of water and alcohol. It therefore is not even apparent from the record before us that the claimed compounds can in fact be used in the same manner as the known compounds of Glafkide * " *. Nor do we find that it would have been obvious that the fluoroalkyl pyrazoline-5-one compounds would be usable in the same manner in photographic compositions. * * * At the most, it might appear “obvious to try” the reactions and conditions indicated by the Glafkide publication upon appellants’ novel hydrazine compounds, but this does not appear to be the standard by which sufficiency of disclosure under the first paragraph of 35 U.S.C. 112 is determined. We will therefore sustain the rejection for lack of sufficient disclosure of how to use the compounds.

We observe at this point that the examiner had not based his conclusions on the differences between the Eynde patent reaction environment and that disclosed in Glafkide. That was clearly a rationale new to the proceedings. We cannot ascertain the extent to which the board’s rationale influenced its affirmance. For example, we do not know whether the board considered it an alternative basis for affirmance or whether the board regarded it is providing essential support to the examiner’s reasoning.

Appellants filed a request for reconsideration of the decision of the board accompanied by a number of patent and publication references offered for the purpose of demonstrating the knowledge possessed by those skilled in the art. The board noted that the references were not “urged upon [it] in the brief,” and since the references were not of record prior to the board’s original decision, the board refused to consider them.

The board adhered to its original decision.

In response to the board’s refusal to consider the reference material, appellants contended that the board erred in its assessment of appellants’ position, noted above, to the effect that “in the light of the Glafkide publication,” one skilled in the art would have known how to use the claimed compounds. Appellants justified the submission of additional reference material as follows:

Appellants asserted and assert that having the teaching of the specification, one skilled in the art of photographic chemistry would be able to employ the invention in light of the disclosure of utility at page 3 of appellants’ specification. The Glafkide reference was referred to as being exemplary of what was known and available to the skilled photographic chemist. It was not intended to be a summary of the only knowledge known and available to the skilled photographic chemist. Appellants, in their Petition for Reconsideration, referred to the numerous other patents and publication [s] to clearly establish the host of art in this area. This is art which was available to the Examiner in the Patent Office and to the Board of Appeals to determine what knowledge was available to a skilled photographic chemist. This art could have been obtained merely by calling an examiner in Group 160, the art unit responsible for examining photographic cases.
An applicant is presumed to have all prior art before him at the time he makes an invention. It is submitted that it is not too much for an applicant to ask that the examiner and the Board of Appeals be held to the same standard, with it being presumed that all the pertinent art was available to the Examiner. [Emphasis in original.]

The Positions of the Parties on Appeal

The solicitor states that the rejection here involved is based on the “how-to-use” requirement of the first paragraph of section 112. It is emphasized to the court that the truth of the assertions that the fluoroalkyl hydrazines can be converted to pyrazoline-one color couplers and that such color couplers function in the manner described in the specification is not here questioned. Rather, the gist of the rejection is said to be that one skilled in the art would not have known how to so utilize the claimed compounds, at least in the absence of probative evidence to the contrary.

The solicitor urges that the board correctly refused to consider the reference material submitted after its decision. He observes that the board agreed with the examiner that Glafkide is insufficient since directed to phenylhydrazmes, and he argues that none of the references subsequently filed bears directly on the additional point raised by the board respecting the differences between the Glafkide and Eynde patent reaction environment conditions. The solicitor concludes that the board made no new factual assumptions the rebuttal of which might justify considering additional reference material.

Appellants contend that the claimed compounds have utility and that one skilled in the art would know how to use them given the specification statement of utility. Appellants additionally contend that Glafkide demonstrates the manner in which the claimed compounds can be used. They argue that as a matter of fact, the phenyl portion of the Glafkide structure, like the fluoroalkyl group of their own compound, is not involved in the pyrazoline-one-forming reaction.

Appellants assert that in any event the additional reference material clearly establishes that at the time the present application was filed, the level of skill in the pertinent art was such that the manner of using the compounds would have been apparent. It is appellants’ position that a “new rationale” of the board prompted the submission of that material and that In re Moore, 444 F.2d 572, 58 CCPA 1340, 170 USPQ 260 (1971) is authority for the proposition that the board should have considered it. Alternatively, they ask this court to take judicial notice of those prior patents and publications.

OPINION

The “How-to-Use” Requirement

We accept the solicitor’s view that the rejection before us is based solely on the “how-to-use” requirement of § 112. The first paragraph of § 112 requires in pertinent part that:

The specification shall contain a written description * * * of the manner and process of * * * using * * * [the invention] in such full, clear, concise, and exact terms as to enable any person skilled in the art * * * to * *' * use the same * *

That statutory requirement is fulfilled where one possessed of the knowledge had by one skilled in the art could use the invention given the specification disclosure without undue experimentation. A patent applicant may offer evidence, such as patents and publications, to show the knowledge possessed by those skilled in the art and thereby establish that a given specification disclosure is enabling. See, e. g., Martin v. Johnson, 454 F.2d 746, 59 CCPA- (1972). In such a situation, it is the knowledge possessed by those skilled in the art as of the filing date that is of relevance. See Tummers v. Kleimack, 455 F.2d 566, 568, 59 CCPA-,-(1972).

When an examiner initially turns to an application, he may properly lodge a rejection of a claim as based upon a specification which is not in compliance with § 112, first paragraph, if it appears reasonable to conclude that one skilled in the art would have been unable to use the invention at the time the application was filed. When that conclusion is reasonable, the burden is on to the applicant to rebut it, if he can, such as by offering evidence as discussed above. See, e. g., In re Gardner, 475 F.2d 1389 (CCPA 1973).

It is clear that an applicant must be permitted to respond to a position assumed by the examiner or the board. However, the response must be timely. If an applicant fails to challenge the examiner’s conclusion regarding enablement, or fails to do so timely, the rejection stands.

We reject the contention advanced by appellants that evidence submitted by an applicant in response to a § 112 rejection is timely at any point during prosecution because the examiner or board could have located it. We adhere to the view that it is the applicant’s responsibility to prove that a prima facie reasonable conclusion of nonenablement is in fact unreasonable in view of the state of the art. Orderly and logical examining procedure compels that view. Moreover, we reject the notion that judicial or administrative notice may be taken of the state of the art. The facts constituting the state of the art are normally subject to the possibility of rational disagreement among reasonable men and are not amenable to the taking of such notice. If evidence of the knowledge possessed by those skilled in the art is to be properly considered, it must be timely injected into the proceedings.

We do agree with appellants that where the board advances a position or rationale new to the proceedings, as it is empowered to do and quite capable of doing, the appellant must be afforded an opportunity to respond to that position or rationale by the submission of contradicting evidence. This court so held in In re Moore, supra, and we expressly reaffirm that view. The board’s refusal to consider evidence which responds to such a new rationale is error.

The Board’s Refusal to Consider the Evidence in This Case

Appellants in this case strenuously and primarily asserted that the board misconstrued the import of the submission of the Glafkide reference during prosecution before the examiner. They argued that the board treated Glafkide as the only evidence of the state of the art whereas they intended it as merely exemplary of many patents and publications in the field of photographic chemistry. In appellants’ view, the position of the board as to the role of Glafkide in establishing the state of the art was itself a new rationale which justified the submission of additional evidence.

Appellants’ contention is untenable. The board originally decided the appeal on the record before it. Glafkide was the only reference material which appellants had offered to that point.

In discussing the submitted material in the request for reconsideration, appellants pointed to disclosures which allegedly tend to support the view that those skilled in the art would have considered the reaction of a phenylhydrazine to form a pyrazoline color coupler to be directly applicable to the conversion of a fluoroalkyl hydrazine contrary to the examiner’s and board’s belief. Appellants were confronted with this argument in the Examiner’s Answer and expressly acknowledged it, and attempted to answer it, in a reply brief. If there is evidence to support their position, appellants should have presented it at that point. The board did not raise that issue, and we agree with the solicitor that there is no basis in the board’s decision for a justification for the submission of evidence on that issue after the board’s decision. The board did not err in refusing to consider the later-filed evidence to that extent.

However, the board clearly went off on its own in considering the differences between the Glafkide reaction environment and the Eynde patent reaction environment. Appellants offered evidence allegedly showing the prior art use' of the Eynde patent conditions in hydrazine-to-eolor coupler reactions. By demonstrating that both the Glafkide and Eynde patent reaction conditions were known prior to filing, appellants might have convinced the board that at the time of filing, one skilled in the art would not have had reason to doubt the efficacy of the Glafkide environment. We disagree with the solicitor’s analysis of the evidence offered on this point, and we conclude that the board did commit error in refusing to consider that evidence in rebuttal of the board’s newly advanced position.

The Manner of Using the Color Couplers

Thus far in our opinion we have not mentioned the board’s findings with respect to the manner of using the color couplers. We agree that in order for the specification to be enabling in the sense of § 112, one skilled in the art would have to have been able to use the claimed hydrazines in the manner asserted in the specification, i. e., as a starting material for the synthesis of color couplers. However, color couplers are, in general, unquestionably well known materials, and utility for color couplers per se need not be separately established. We accordingly see no necessity for appellants to demonstrate how to use the color couplers. Given that the claimed compounds are useful in the manufacture of products having known utility, appellants’ specification is sufficient if it enables one skilled in the art to make those products. We accordingly hold that the board was also in error to the extent that it agreed with the examiner that the specification is insufficient for failure to teach how to use the pyrazoline-one color couplers.

The Remand

We have made two findings of error which seriously undermine the decision of the board. We have found that the board erroneously refused to consider evidence allegedly bearing on its new rationale and that it erroneously regarded inquiry into the manner of using products obtained by reaction of the claimed compounds as proper. We remand.this case to the board for action not inconsistent with these findings or this opinion in general.

Remanded.

      . Glafkide, Photographic Chemistry, vol. II, page 601, Fountain Press (London 1960).

      . U.S. Patent No. 3,462,270 issued August 19, 1969.

      . Serial No. 472,017.


author: RICH, Judge.

text:
    David J. CARLSON, Appellant, v. Minoru NAGATA and Minoru Ono, Appellees.
    Patent Appeal No. 8955.
    United States Court of Customs and Patent Appeals.
    July 12, 1973.
    Kenneth R. Schaefer, New York City, Roland A. Linger, Arlington, Va., attorneys of record, for appellant.
    Ernest F. Marmorek, Marmorek & Bierman, New York City, attorneys of record, for appellees.
    Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and ALMOND, Senior Judge.
   RICH, Judge.

This appeal is from the decision of the Patent Office Board of Interferences, adhered to on reconsideration, awarding the junior party, Nagata and Ono (hereinafter “Nagata”), priority of invention as to count 4 relating to an electronic amplifier circuit employing an insulated gate field-effect transistor, on the ground that the application of the senior party Carlson, lacks support for the count. We reverse.

The Contested Subject Matter

The invention relates to an electronic amplifier circuit employing an insulated gate field-effect transistor (IGFET). Priority as to independent count 1 and counts 2-3 dependent thereon was awarded to Carlson, while priority as to count 4, which is also dependent on count 1, was awarded to Nagata since the board found that the Carlson application does not support count 4. Count 1 specifies (our emphasis):

1. A transistor amplifier comprising a field effect transistor provided with a semiconductor substrate; a channel layer formed on said semiconductor substrate; source and drain electrodes fitted on both ends of said channel layer; an insulating layer formed on said channel layer; a first gate electrode fixed on said insulating layer and a second gate electrode fixed on said semiconductor substrate; a bias voltage source; an operating power source; a single [signal ?] source; a load; means to connect said load and operating power source in series with said source and drain electrodes; means to connect said bias voltage source to one of said first and second gate electrodes; and means to connect said signal source to the other gate electrode.

Count 4 specifies (our emphasis):

4. The transistor amplifier as defined in count 1, wherein said signal source is connected between said first gate electrode and the operating power source, and said bias power source is connected between said first and second gate electrodes.

The critical limitation of count 4 which the board found unsupported by Carlson is the requirement that “said bias power source is connected between said first and second gate electrodes.”

The issue on appeal is therefore whether the Carlson application supports this limitation of count 4. If it does, then priority on the count must be awarded to Carlson.

The Carlson Application and the Board’s Decision

Without describing the details of the insulated gate field-effect transistor amplifier circuit which is the invention here, we will deal directly with those portions of the Carlson application which we find to describe the bias voltage source. We reproduce Carlson’s Figs. 6 and 8:

The insulated gate field-effect transistor 70 (70' in Fig. 8) is seen at the center; it is a four terminal, or contact, device. Reference number 72 (72') indicates the “source,” 74 (740 the “drain.” The “first (insulated) gate” is 76 (760, and the substrate, or “second gate electrode,” is 78 (780- The issue, therefore, is whether there is a bias voltage source connected between the first gate electrode 76 (76') and the second gate electrode 78 (780-

To place things in perspective, we note that Fig. 6 clearly shows no bias voltage source between 76 and 78, because there is a short-circuiting connection 88 therebetween. The Carlson specification states of Fig. 6:

Signals to be amplified from a source 84 are coupled through a signal coupling capacitor 86 to the [first] gate electrode 76 and to the substrate [second gate] electrode 78 through a direct current conductive connection 88. The gate and substrate electrodes 76 and 78 are biased to the desired operating potential by an adjustable source of operating potential 90 which is connected in series with a resistor 92 between the gate electrode 76 and ground. As is shown the gate and substrate electrodes are biased negatively with respect to ground.

It is Fig. 8 and the accompanying description upon which appellant primarily relies for a description of the connection of a voltage source between the first and second gate electrodes. Appellant’s specification states, in pertinent part:

If desired, the cut off characteristic of an amplifier may be tailored to a predetermined characteristic by applying different biasing voltages to the [first] gate and substrate [second gate] electrodes as is shown in FIGURE 8. The circuit of FIGURE 8 is similar to that of FIGURE 6, and like components are given like reference numerals. The main difference between the circuits of FIGURE 6 and FIGURE 8 is that the gate electrode 76' and the substrate electrode 78' are isolated for direct currents by a d-c blocking capacitor 98. In addition, different d-c bias voltages are applied to the gate electrode 76' and substrate electrode 78' through resistors 100 and 102 respectively. The initial biasing voltages on the gate and substrate electrodes may be set to provide an initial maximum transconductance characteristic. The control bias applied to one of the electrodes 76' and 78' may be made more negative while the bias to the other of these electrodes is maintained at a fixed potential, or after a predetermined delay made more positive.

The board, considering appellant’s argument that the pertinent limitation of count 4 is supported by Fig. 8 and the above language in the Carlson specification, said:

We fail to find in this any suggestion that the respective terminals of a source of bias voltage be connected to the two gate electrodes which we consider to be required by count 4. Rather, the entire thought appears to be independent selection or variation of the biasing potentials applied to the gate and substrate electrodes, apparently with respect to ground. Accordingly, the Carlson application lacks support for count 4 and Nagata is entitled to an award of priority as to this count.

The board’s apparent conclusion that count 4 required “that the respective terminals of a source of bias voltage be connected to the two gate electrodes,” was apparently based only upon consideration of the language of the counts because the board noted early in its opinion that “since Nagata [appellee] has not contended that the counts are ambiguous, reference to the Nagata specification is therefore not justified,” citing Weiss v. Roschke, 425 F.2d 772, 57 CCPA 1264 (1970).

Appellant, in a petition for reconsideration before the board, stated that the impact of the board’s decision “was to the effect that the count requires that the bias source be limited to two terminals, one connected to each of the gate electrodes,” whereas all that is necessary to meet the count is that there be a difference in voltage between the two gate electrodes. Appellant maintains that his specification, which teaches the independent variation of the value of voltages at the first and second gate electrodes with respect to a reference voltage (the voltage at the source electrode), inherently teaches that a voltage source equal to the difference between the voltages at the two gate electrodes is applied between the electrodes.

The board stated, in a decision on the petition for reconsideration, that:

It is clear that in Figure 8 of Nagata et al [where a precharged capacitor is connected between the two gate electrodes] it is the intention to relate the bias on one gate electrode to that of the other whereas the Carlson specification quoted in our original decision [quoted supra with reference to Fig. 5] clearly indicates that the biasing of the two gate electrodes is intended to be mutually independent. In view of the latter statement we are not convinced by Carlson’s arguments that two bias sources fixed with respect to a reference potential such as ground can properly be regarded as a single “bias power source.”

OPINION

We agree with the board that the basic consideration is what the language of the counts defines as the invention and that only if the count is ambiguous should the specification of appellees’ patent be consulted to determine its meaning. See Hemstreet v. Rohland, 433 F.2d 1403, 58 CCPA 743 (1970). The board found that the counts were not contended to be ambiguous by appellees and determined, therefore, that reference to the Nagata Specification was not justified. Appellant has not challenged this determination, nor will we. We accept the ground rule of the board that no reference to the Nagata specification is justified and proceed to consider whether the language of count 4, that the “bias power [voltage] source is connected between said first and second gate electrodes,” finds support in the Carlson specification. We think it does.

' The board was not convinced that the teachings of the Carlson specification that two separate mutually independent bias sources, fixed with respect to a reference potential, supplied to the two separate gate electrodes could be regarded as a single “bias power source.” However, we think it inherent in the use of two different independently variable bias sources in the circuit of Fig. 8 of the Carlson specification, as compared with the circuit of Fig. 6, that there exists a potential difference, i. e., a voltage, between the two electrodes to which the separate bias sources are applied. That is all that we find to be required by the language of the count. A source of voltage between two points exists not only where a single two-terminal source, such as a battery, is connected therebetween but also where a different voltage is supplied at each of the points. To the extent that the board may have limited the count to a two-terminal power source device being connected between the gate electrodes, we do not find that one of ordinary skill in elementary electronics would so regard the words of the count.

While the two independently variable d-c bias voltages of Fig. 8 of Carlson could conceivably be at the same voltage level (as is always the case with the two gate electrode terminals in the circuit of Fig. 6), we believe that inherent in the concept of independent variation and in the language of the Carlson specification which states that the “control bias applied to one of the electrodes 76' and 78' may be more negative while the bias to the other * * * is maintained at a fixed potential,"(our emphasis) is a disclosure that there be a difference in voltage, or a voltage drop, therebetween.

In Woofter v. Carlson, 54 CCPA 917, 367 F.2d 436 (1966), this court considered a similar contention that the application of Woofter did not contain a written description of the invention giving Woofter the right to make the counts. We there said, 367 F.2d at 441, 54 CCPA at 922:

The test of the right to make counts is to be found in the total disclosure. Thus, the omission of a written description in the specification of an application will not necessarily prevent the reading of a count on a structure shown in the drawing and described in general terms in the specification. Here, the function of the disclosed structure is inherent in the structure shown in the drawings forming a part of the application. * * *

In Padgett v. Warner, 104 F.2d 957, 26 CCPA 1403, this court observed:

As appellee’s rollers are so arranged that they are free to move longitudinally in the cups, as clearly appears from the drawings in appellee’s application, it is immaterial, so far as the issue here is concerned, that no reference was made in appellee’s application to such longitudinal movement.

It seems clear, therefore, that the Woofter application discloses the structure recited in the counts in issue. Also, the functional statement at the end of count 4 seems to be inherently satisfied by the structure shown in Woofter Fig. 5.

We believe that here, as in Woofter and in Padgett v. Warner, the language of the count is satisfied by the disclosure of Fig. 8 and the accompanying language of the Carlson specification which teaches that the voltage levels at the first and second gate electrodes may be different. One of ordinary skill would find inherent in the teachings of the Carlson application a “bias power [voltage], source connected between said first and second gate electrodes.” Compare Brand v. Thomas, 96 F.2d 301, 25 CCPA 1053 (1938). Accordingly, the decision of the. board awarding priority of invention as to count 4 is reversed.

Reversed.

      . Minoru Nagata and Minoru Ono, involved on their patent No. 3,311,756, issued Mar. 28, 1967, on application serial No. 376,322, filed in the United States June 19, 1964, claiming priority of a Japanese application filed June 24, 1963, and assigned to Kabushiki Kaisha Hitachi Seisakusho.

      . David J. Carlson, involved on his application serial No. 245,063, filed Dec. 17, 1962, assigned to RCA Corporation.

      . Appellant tells us that this should more properly be treated as reciting a bias voltage source. The board’s treatment of this limitation as requiring a “source of bias voltage” is consistent with this more accurate characterization, and count 1, upon which count 4 depends for antecedent basis, recites a bias voltage source.

      . The board’s reference to appellees’ specification was initially made because appellant bad argued that Nagata’s elements, in particular the capacitor, were the same as appellees’, but it seems that the board improperly extended its consideration of the specification to interpret the language of the count which it had said it would not do.

      . Even considering the Nagata specification, as the board did (see n. 4 and accompanying text), to show an “intention to relate the bias on one gate electrode to that of the other” we find appellant’s teachings that the “control bias applied to one of the electrodes may be made more negative while the bias to the other is maintained at a fixed potential” to likewise “relate the bias on one gate to that of the other.”