The Board Misses the BRI with a Construction that was too Narrow

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In Owens Corning v. Fast Felt Corp., [2016-2613] (October 11, 2017), the Federal Circuit reversed the PTAB decision that the challenged claims of U.S. Patent No. 8,137,757, which describes and claims methods for printing nail tabs or reinforcement strips on roofing or building cover material, were not obvious.

On appeal Owens Corning argued that the Board effectively treated
the “roofing or building cover material” in the claims as limited to material that either has been or would be coated or saturated with asphalt or asphalt mix, and that this limited construction was incorrect under the broadest reasonable interpretation standard.

The Federal Circuit noted that that the Board construed the claim term “roofing or building cover material” to mean “base substrate materials such as dry felt, fiberglass mat, and/or polyester mat, before coating or saturation with asphalt or asphalt mix, and asphalt coated or saturated substrates such as tar paper and saturated felt.” While the Board correctly noted that this construction “does not require an asphalt-coated substrate,” when evaluating Owens Corning’s arguments regarding
motivation to combine and reasonable expectation of success, the Board made clear its understanding of its construction, and hence of the claims, as requiring materials that would eventually be coated with asphalt even if
they had not already been coated before printing.

After reviewing the Board’s rationale, the Federal Circuit concluded that the Board simply did not address roofing or building cover materials that would never be coated in asphalt, and this was a mistake.  The Federal Circuit concluded that the correct broadest reasonable construction of “roofing or building cover material” would include materials that neither have been nor are to be coated or saturated with asphalt or asphalt mix.

The Federal Circuit found that it was not necessary or appropriate to remand the case, however.  On the evidence and arguments presented to the Board, there is only one possible evidence-supported finding: the Board’s rejection of Owens Corning’s challenge, when the correct construction is employed, is not supported by substantial evidence.  Moreover, Fastfelt did not argue for remand.  The Federal Circuit reviewed the record and concluded that the challenged claims were unpatentable for obviousness.

 

October 9, 2017

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Back when crossing an ocean to an unknown destination in a 62 foot  boat was something worthy of praise, the life and travels of Christopher Columbus were celebrated, including in this patented badge and plaque.

       

Antigens Don’t Describe Antibodies, and the Value of Post-Priority Date Activity on Written Description and Enablement

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In Amgen, Inc. v. Sanofi, [2017-1480](October 5, 2017), the Federal Circuit found that the district court erred by excluding Appellants’ evidence
regarding written description and enablement, and improperly instructed the jury on written description, so the Federal Circuit reversed-in-part the judgment below and remanded for a new trial on written description and enablement (concluding that defendants/appellants were not entitled to JMOL of no written description and no enablement.

The case relates to U.S. Patent Nos. 8,829,165 and 8,859,741 on  antibodies that help reduce low-density lipoprotein cholesterol (LDLC),
or “bad cholesterol.”  The district court  excluded Appellants’ evidence about antibodies, including Appellants’ infringing Praluent, developed after the patents’ priority date of January 9, 2008, reasoning that because the
evidence did not illuminate the state of the art at the time of filing,” it was not relevant “to determine whether there is sufficient disclosure of the claimed invention.”

However, the Federal Circuit found that Appellants were not offering
post-priority-date evidence to show that Appellees’ claimed genus is not enabled because of a change in the state of the art. Instead, Appellants offered Praluent and other post-priority-date antibodies to argue that the
claimed genus fails to disclose a representative number of species. As explained above, the use of post-priority-date evidence to show that a patent does not disclose a representative number of species of a claimed genus is proper. It was thus legal error for the district court to categorically
preclude all of Appellants’ post-priority-date evidence of Praluent and other antibodies. The Federal Circuit reversed the district court’s decision and remanded for a new trial on written description.

The Federal Circuit also found district court’s improper exclusion of post-priority-date evidence requires a new trial on enablement as well. Under the enablement requirement, the specification of a patent must teach
those skilled in the art how to make and use the full scope of the claimed invention without undue experimentation.  Appellants purportedly sought to introduce post-priority-date evidence showing that Appellees engaged in lengthy and potentially undue experimentation to enable the full scope of the claims. Such evidence could have been relevant to determining if the claims were enabled as of the priority date and should not have
been excluded simply because it post-dated the claims’ priority date.

The Federal Circuit turned to the jury instructions on written description.  The Federal Circuit said that the district court correctly instructed the jury that in order to satisfy the written description requirement, a patentee may disclose either a representative number of species falling within the scope of the genus or disclose structural features
common to the members of the genus so that one of skill in the art can visualize or recognize the members of the genus.  However the district court went on to instruct that “the correlation between structure and function may also be satisfied by the disclosure of a newly characterized antigen by its structure, formula, chemical name, or physical properties if you find that the level of skill and knowledge in the art of antibodies at the
time of filing was such that production of antibodies against such an antigen was conventional or routine.”  The Federal Circuit this instruction was not legally sound and is not based on any binding precedent.

The Federal Circuit said that this instruction improperly allowed a jury to find adequate written description merely from a finding of the ability to make and use the invention.  The Federal Circuit said that an adequate written description must contain enough information about the actual makeup of the claimed products—“a precise definition, such as by structure, formula, chemical name, physical properties, or other properties, of species falling within the genus sufficient to distinguish the genus from other materials,” which may be present in “functional” terminology “when the art has established a correlation between structure and function.”
However, it is still contested whether the that knowledge of the chemical structure of an antigen gives the required kind of structure-identifying information about the corresponding antibodies.  The Federal Circuit said that Section 112 requires a “written description of the invention,” not something that is not the invention.

The Federal Circuit affirmed the denial of JMOL of lack of written description and enablement, because with the exclusion of post-priority date evidence the record was incomplete to determine whether there is in fact a lack of written description and enablement.  The Federal Circuit also affirmed JMOL of non-obviousness, finding that the district court properly excluded the proffered prior art.  These references, two PCT applications were filed after the priority date, but claimed priority to provisional applications filed before the priority date.  The Federal Circuit noted that appellants did not proffer any evidence showing that the provisional applications contained representative species or common structural
elements sufficient to satisfy the written description requirement for the monoclonal antibodies claimed in the PCT applications.  Similarly, the Federal Circuit noted, Appellants provided no evidence that the claims of the PCT applications were enabled by the provisional application. Because the district court properly excluded the prior art relied upon by appellant, the court’s grant of JMOL of non-obviousness was proper.

Finally, the Federal Circuit vacated the permanent injunction because it vacated the district court’s judgment as to written description and enablement, and was remanding the case for a new trial.

It May Have Just Gotten a Little Easier to Amend Claims in an IPR; a Factionated Federal Circuit Holds that Petitioner has the Burden to Show Unpatenability

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In Aqua Products, Inc., v. Matal, [2015-1177] (October 4, 2017), a plurality of the Federal Circuit en banc held that §316(e) requires the petitioner to prove all propositions of unpatentability, including for amended claims.

The “decision” consists of five opinions spanning 148 pages: (1) the opinion of the plurality of five judges, joined by two who concur in the result; (2) a separate opinion by three of the five members of the plurality;  (3) a separate opinion by the two judges who concurred in the result, joined in part by four judges; (4) a dissent by four of the judges, in which the two concurring judges join in part; and (5) a separate dissent by two of the four dissenters.

The 66 page plurality opinion of five judges (joined by an additional two who concurred in the result), vacated the rejection of Aqua’s motion to amend its claims, and remanded the Final Written Decision to the Board for reconsideration with the burden of persuasion with respect to the patentability of Aqua’s amended claims on the petitioner, and to consider the motion on the entire record.

The plurality opinion finds the statute unambiguously places the burden on the petitioner, but because six of the eleven judges found the statute ambiguous, the plurality opinion dove into a detailed analysis of whether the USPTO’s actions were entitled to Chevron or Auer deference.  While a delight for Administrative Law aficionados, the bottom line is that the most reasonable reading of the AIA is one that places the burden of persuasion with respect to the patentability of amended claims on the petitioner, and the Board must  consider the entirety of the record before it when assessing the patentability of amended claims, and must justify any conclusions of unpatentability with respect to amended claims based on that record.

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Hypothetical Claim in Doctrine of Equivalents Analysis Cannot Narrow Claim Scope

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In Jang v. Boston Scientific Corp., [2016-1275, 2016-1575](September 29, 2017), the Federal Circuit affirmed the district court’s denial of Jang’s motion for JMOL, its vacatur of the jury verdict of infringement under the doctrine of equivalents, and its entry of judgment of non-infringement.

At issue was U.S. Patent No. 5,922,021 on coronary stents, which the jury found not literally infringed, but infringed under the Doctrine of Equivalents.  The Federal Circuit noted that the district court must uphold a jury’s verdict if it is supported by substantial evidence, which is evidence adequate to support the jury’s conclusion, even if it is also possible to draw a contrary conclusion, and in the Ninth Circuit reverses the denial only if the record lacks any evidence supporting the verdict or if the district court made a mistake of law.   The Federal Circuit noted that Jang failed to persuade the district court that BSC’s non-infringement arguments were legally erroneous, and that it was similarly unpersuaded.

On the Doctrine of Equivalents, the Federal Circuit noted that a doctrine of equivalents theory cannot be asserted if it will encompass or “ensnare” the prior art.  This is true even if a jury has found equivalence as to each claim element.  The Federal Circuit explained that a hypothetical claim analysis is a practical method to determine whether an equivalent would impermissibly ensnare the prior art. The Federal Circuit agreed with the district court that Jang’s hypothetical claims were improper because they both expaneded and narrowed the scope of the actual claims, and such narrowing is not permitted.  While use of a hypothetical claim may
permit a minor extension of a claim to cover subject matter that is substantially equivalent to that literally claimed, one cannot, in the course of litigation and outside of the PTO, cut and trim, expanding here, and narrowing there, to arrive at a claim that encompasses an accused
device, but avoids the prior art.

The Federal Circuit explained that when utilizing the hypothetical
claim tool, that burden starts with proposing a proper hypothetical claim that only broadens the issued asserted claims, and said that Jang cannot  transfer the responsibility of defining the range of equivalents to which he is entitled to the district court.  Jang failed to meet this burden, and thus the district court thus correctly vacated the jury verdict of infringement under the doctrine of equivalents.

 

 

 

 

Broadest Reasonable Construction is Not One Not Precluded by the Specification, but is One Consistent with the Specification

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In re: Smith International, Inc., [2016-2303] (September 26, 2017), the Federal Circuit reversed the PTAB’s affirmance of the Examiner’s rejections of claims in an ex parte reexamination of U.S. Patent 6,732,817 directed to a downhole drilling tool for oil and gas operations.

The Board affirmed the examiner’s interpretation of the term “body” as a broad term that may encompass other components such as “mandrel” and “cam sleeve,” reasoning that only the term “body” is recited in the
claims without further limiting features and that the specification neither defines the term “body” nor prohibits the examiner’s broad reading of it.  The Federal Circuit concluded that the Board’s construction of “body”
was unreasonably broad. Even when giving claim terms their broadest reasonable interpretation, the Board cannot construe the claims “so broadly that its constructions are unreasonable under general claim construction principles.”

The Federal Circuit noted that some of the claims at issue recite a
broad term “body” without further elaboration on what the term “body” encompasses. However the Federal Circuit noted that the remainder of the specification does not use the term as a generic body. There is no dispute that the patent specification consistently describes and refers to the body as a component distinct from others, such as the mandrel, piston, and drive ring.

On this record, the Board concluded that the Examiner’s broad construction was not precluded.  However the Federal Circuit  found that the correct inquiry in giving a claim term its broadest reasonable interpretation in light of the specification is not whether the specification proscribes or precludes some broad reading of the claim term adopted by the Examiner.  Nor is it simply an interpretation that is not inconsistent
with the specification. It is an interpretation that corresponds with what and how the inventor describes his invention in the specification, i.e., an interpretation that is “consistent with the specification.”

The Federal Circuit held that giving the term “body” such a strained breadth in the face of the otherwise different description in the specification was unreasonable.  With the correct construction, the Federal Circuit reversed the rejection of the claims.

Employee Residence is Not the Defendant’s Regular and Established Place of Business

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In re: Cray Inc., 2017-129 (September 21, 2017), the Federal Circuit granted Cray’s Petition for Writ of Mandamus and directed the Eastern District of Texas to transfer a patent infringement action pursuant to 28 U.S.C. §1406(a).  The Federal Circuit found that the district court misinterpreted the scope and effect of its precedent in determining that Cray maintained “a regular and established place of business” in the Eastern District of Texas within the meaning of 28 U.S.C. §1400(b).

Although Cray did not rent or own an office or any property in the Eastern District of Texas, it allowed Harless and Testa to work remotely from their respective homes in the district.  The district court found that activities of Harless working from his home as a “sales executive” made his personal residence Cray’s regular and established place of business in the district.

The Federal Circuit found that although the law was unclear and the error understandable, the district court misunderstood the scope and effect of our decision in Cordis, and its misplaced reliance on that precedent led the court to deny the motion to transfer, which we find to have been an abuse of discretion.

The only question before the court was whether Cray has a “regular and established place of business” in the Eastern District of Texas within the meaning of §1400(b).  The Federal Circuit agreed with the district court that “the regular and established place of business standard requires more than the minimum contacts necessary for establishing personal jurisdiction or for satisfying the doing business standard of the general venue provision.”

The Federal Circuit said that:

The statutory language we need to interpret is “where the defendant . . . has a regular and established place of business.” 28 U.S.C. § 1400(b). The noun in this phrase is “place,” and “regular” and “established” are adjectives modifying the noun “place.” The following words, “of business,” indicate the nature and purpose of the “place,” and the preceding words, “the defendant,” indicate that it must be that of the defendant. Thus, § 1400(b) requires that “a defendant has” a “place of business” that is “regular” and “established.” All of these requirements must be present. The district court’s four-factor test is not sufficiently tethered to this statutory language and thus it fails to inform each of the necessary requirements of the statute.

In deciding whether a defendant has a regular and established place of business in a district, no precise rule has been laid down and each case depends on its own facts.  However, the analysis must be closely tied to the language of the statute.  The first requirement is that there “must be a physical place in the district.” The second requirement for determining venue is that the place “must be a regular and established place of business.”  sporadic activity cannot create venue.  Finally, the third requirement when determining venue is that “the regular and established place of business” must be “the place of the defendant.”  Thus, the defendant must establish or ratify the place of business. It is not enough that the employee does so on his or her own.  Relevant considerations include whether the defend-ant owns or leases the place, or exercises other attributes of possession or control over the place.  In the final analysis, the court must identify a physical place, of business, of the defendant.

The Federal Circuit stressed that no one fact is controlling, but that taken together, the facts cannot support a finding that Cray established a place of business in the Eastern District of Texas. Thus venue cannot exist there under § 1400(b).

Corroboration of the Inventor is Necessary, but Evaluated Under a Rule of Reason, Considering the Totality of the Circumstances

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In NFC Technology, LLC v. Matal, [2016-1808] (September 20, 2017), the Federal Circuit reversed the PTAB’s final written decision that claims of U.S. Patent 6,700,551 we obvious, and remanded for the board to determine whether NFC presented sufficient evidence that the prototype embodied the claimed invention

The Board rejected NFC’s attempt to antedate the prior art with a prototype embodying the claimed invention before the priority date of the prior art.  The Board held that even assuming that the prototype embodied the invention, NFC had not adequately established that a third party’s fabrication of the prototype inured to NFC’s benefit.

The Federal Circuit said that an inventor’s testimony, standing alone, is insufficient to prove conception—some form of corroboration must be shown.  However, there is no particular formula that an inventor must follow in providing corroboration of conception.  Corroboration is determined by a “rule of reason” analysis, in which an evaluation of all pertinent evidence must be made so that a sound determination of the credibility of the inventor’s story may be reached.

The Federal Circuit found that when taken as a whole, the documents corroborate Charrat’s account of conception.  While the Board was unpersuaded that the NFC had provided sufficient evidence to demonstrate that the prototype was produced according to the inventor’s design, the Federal Circuit Federal Circuit found that dorroboration of
every factual issue contested by the parties is not a requirement
of the law.  The Federal Circuit concluded that on the fact, particularly considering the amount of time that has passed, the inventor’s account was adequately corroborated.

The Federal Circuit noted that the Board’s analysis raised the question of who, if not the inventor, designed the prototype — the named inventor is the only source identified by the evidence for the design
of the prototype. There was no record evidence of any other employee communicating with the fabricator.  The Federal Circuit concluded that under the rule of reason, the totality of the evidence establishes the credibility of the inventor’s account.  Thus, the Board erred in concluding that NFC had not submitted adequate evidence of conception, and in finding that the inventor’s account was not adequately corroborated.
was not supported by substantial evidence.

The Federal Circuit remanded, however, so that the Board could determine whether the prototype embodied the claimed invention.

 

Response Arguments Do Not Have to Be Preemptively Addressed in the Petition or Institution Decision

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In Idemitsu Kosan Co., Ltd. v. SFC Co. Ltd., [2016-2721](September 15, 2017), affirmed the PTAB decision that claims of U.S. Patent No. 8,334,648 were invalid for obviousness.

On appeal Idemitsu argued that the Board erred in finding that prior art taught combining the particular compounds for the purpose of creating a light emitting layer in an electroluminescent device.  The Federal Circuit found that what Idemitsu characterizes as an argument raised “too late” was simply the by-product of one party necessarily getting the last word.
Idemitsu argued that the prior art teaches away from combinations, and SFC simply countered, as it was entitled to do. The Federal Circuit found that to the extent Idemitsu suggests that the Board could not reach a counterargument because it was not preemptively addressed by the petition or institution decision, Idemitsu is plainly mistaken. The Federal Circuit noted that there is no requirement, either in the Board’s  regulations, in the APA, or as a matter of due process, for the institution decision to anticipate and set forth every legal or factual issue that might arise in the course of the trial.

 

Federal Court Lacked Jurisdiction over DJ for Non-Infringement; Where Defendant Did not Own the Patent

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In First Data Corp. v. Inselberg, [2016-2677, 2016-2696] (September 15, 2017), the Federal Circuit affirmed the district court’s dismissal of plaintiff’s declaratory judgment and defendant’s counterclaims.

The ownership dispute regarding Inselberg’s patent portfolio stemmed from a $500,000 loan that Interactive received from Bisignano, which  Inselberg personally guaranteed, and for which Interactive granted Bisignano a security interest in the portfolio of patents it owned at the time.  Inselberg and Interactive defaulted on the loan from Bisignano, and Inselberg and Bisignano entered into an agreement that purported to
convey Interactive’s patent portfolio to Bisignano.

Inselberg claimed that the assignment to Bisignano was invalid, and that Bisignano and First Data were infringers.  Bisignano and First Data brought a declaratory judgment action of non-infringement in Federal Court, and Inselberg brought an action in state court attacking the assignment to Bisignano, which Bisignano removed to Federal Court.  However the district court found that the rights at issue in the case were ownership rights turning on questions of state law, and remanded the case to state court, finding that there was no federal cause of action unless and until Inselberg recovers the patents.

The Federal Circuit agreed with the district court, and further found that the case was not ripe for adjudication Inselberg’s claim rests upon a contingent future event, that may not occur as anticipated or may not occur at all.  The Federal Circuit further found that the decision to remand was based on 28 U.S.C. § 1447(c), and thus Section 1447(d) precluded it from reviewing the district court’s remand order.