Judgment of Non-Infringement Moots Appeal of PTAB Decision Sustaining Validity

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In ABS Global, Inc. v. Cytonome/St, LLC, [2019-2051] (January 6, 2021), the Federal Circuit dismissed the appeal of a PTAB decision in an inter partes review sustaining the patentability of certain claims of U.S. Patent No. 8,529,161, finding that it was unlikely that the ‘161 patent would be asserted against the petitioner in the future.

Two weeks after the Board’s final written decision, the district court granted in part ABS’s motion for summary judgment, concluding that ABS’s accused products did not infringe any of the ’161 patent claims. In June 2019, nearly two months after the district court’s summary judgment decision, ABS appealed the Board’s final written decision. Cytonome’s response brief, filed about three months later, included an affidavit by Cytonome’s counsel stating that Cytonome “has elected not to pursue an appeal of the dis-trict court’s finding of non-infringement as to the ’161 pa-tent and hereby disclaims such an appeal.” Cytonome then argued that, because it disavowed its ability to challenge the district court’s summary judgment that ABS did not infringe the ‘161 patent claims, ABS lacked the requisite injury in fact required for Article III standing to appeal the Board’s final written decision regarding validity of the claims of the ’161 patent.

The Federal Circuit, applying the voluntary cessation doctrine, concluded that Cytonome’s disavowal of its right to appeal the district court’s noninfringement judgment mooted ABS’s appeal of the IPR. The Federal Circuit first observed that Cytonome’s assertion of the ’161 patent against ABS—cannot reasonably be expected to recur. Although Cytonome’s
affidavit disavowing its appeal is unquestionably narrower than a covenant not to sue, Cytonome’s disavowal was “coextensive with the asserted injury” in fact. The Federal Circuit said that Cytonome’s disavowal estops Cytonome from asserting liability against ABS for infringement of the ’161 patent claims in connection with the accused products, thereby allowing ABS to make, use, and sell those products freely.

The Federal Circuit found that Because Cytonome has demonstrated that its disavowal encompasses all of its allegedly unlawful conduct, it was incumbent on ABS to indicate that it engages in or has sufficiently concrete plans to engage in activities not covered by the disavowal. The Federal Circuit concluded that ABS’s IPR appeal is moot because there is no injury sufficient to support an ongoing case or controversy.

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Even If Phrase Was In the Preamble, it is a Claim Limitation that was Not Met

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In Simo Holdings Inc. v. Hong Kong Ucloudlink Network Technology Ltd., [2019-2411] (January 5, 2021) the Federal Circuit reversed the district court’s final judgment of $8,230,654 for infringement of claim 8 of U.S. Patent No. 9,736,689, on apparatuses and methods that allow individuals to reduce roaming charges on cellular networks, rejecting the district court’s claim construction.

At issue was whether claim 8 required a a “non-local calls database.” The Federal Circuit noted that the language at issue follows, rather than precedes, the word “comprising,” which is one of the transition words that typically mark the end of the preamble, with what follows constituting the body of the claim. The Federal Circuit said that the placement of the language suggests that it is part of the body of the claim, a characterization that, if accepted, would place its limiting character beyond dispute. However. the parties treated the language at issue as part of the preamble, treating only the succeeding six paragraphs as the body of the claim. But even under that characterization, the Federal Circuit concluded, the language at issue is limiting. By supplying the only structure for the claimed apparatus, the Federal Circuit said that the preamble language supplies “essential structure,” and the body does not define “a structurally complete invention”—which are two key reasons for preamble language to be deemed limiting. Further supporting its conclusion that the “preamble” was limiting, the Federal Circuit noted thatthe opening language of the preamble provided an antecedent basis for terms in the body of the claim.

Simo argued that even if some parts of the preamble are limiting, some components, including the disputed “non-local calls database”, should not be deemed limiting, because they are “unnecessary to perform the functions specified after the preamble. However, the Federal Circuit declined to parse the preamble in that way where the preamble supplies the only structure of the claimed device and the disputed language does not merely identify an intended use or functional property but is “intertwined with the rest of the preamble.”

The Federal Circuit rejected the district court’s conclusion that claim 8 does not require a “non-local calls database.” The determinative issue was the phrase “a plurality of memory, processors, programs, communication circuitry, authentication data stored on a subscribed identify module (SIM) card and/or in memory and non-local calls database.” The Federal Circuit said that the district court treated the word “and” near the end of the phrase as meaning “and/or,” incorrectly concluding that “a plurality of” requires only “at least two” members selected from the entire list of identified items (memory, processors, etc.). The Federal Circuit said instead. “a plurality of” requires at least two of each of the listed items in the phrase at issue in claim 8.

Having concluded that the a non-local calls database was a required element, the finding of infringement should be reversed, and summary judgment of non-infringement should be granted.

Late Request For Leave to Amend Complaint to try to Save Patent on Ineligible Subject Matter Denied

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In Simio, LLC, v. Flexsim Software Products, Inc., [2020-1171](December 29, 2020), the Federal Circuit affirmed the dismissal of Simio’s action for infringement of U.S. Patent No. 8,156,468 System and Method for Creating Intelligent Simulation Objects Using Graphical Process Descriptions, and denial of Simio’s motion for leave to amend its Complaint.

The district court found that (1) the claims are directed to “the decades-old computer programming practice of substituting text[-]based coding with graphical processing,” which the court determined was an ineligible abstract idea and (2) considering the claim elements both individually and as an ordered combination, FlexSim “met its burden of showing no inventive concept or alteration of computer functionality sufficient to transform the system into a patent-eligible application.”

The Federal Circuit said that the ’468 patent showcases its key advance: using graphics instead of programming to create object-oriented simulations.  However, the Federal Circuit also noted that the ’468 patent acknowledges that using graphical processes to simplify simulation building has been done since the 1980s and 1990s.  The Federal Circuit said that “[s]imply applying the already-widespread practice of using graphics instead of programming to the environment of object-oriented simulations is no more than an abstract idea.”  The Federal Circuit said that the claim is directed to the use of conventional or generic technology i.e., graphical processing generally in a well-known environment i.e., object-oriented simulations, without any claim that the invention reflects an inventive solution to any problem presented by combining the two.

The Federal Circuit rejected Simio’s argument that the claimed invention “improves on the functionality of prior simulation systems through the use of graphical or process modeling flowcharts with no programming code required.” The Federal Circuit said that “improving a user’s experience while using a computer application is not, with-out more, sufficient to render the claims directed to an improvement in computer functionality.”  Citing Customedia, the Federal Circuit added: claiming the improved speed or efficiency inherent with applying the abstract idea on a computer is insufficient to render the claims patent eligible as an improvement to computer functionality.

At Step 2 of the Alice analysis, the Federal Circuit found that a claim directed to the idea of using graphics instead of programming to create object-oriented simulations—maybe a new idea, but it was still an abstract one—and lacking any inventive concept, any meaningful application of this idea, sufficient to save the claim’s eligibility.

On the issue of whether the district court properly denied Simio leave to amend its complaint, the Federal Circuit affirmed the court’s futility-based denial.  The Federal Circuit further found that nothing in the Complaint prevented resolving eligibility as a matter of law.  While Simio  argued that the district court erred by determining ineligibility without first conducting claim construction, Simio failed to explain how it might benefit from any particular term’s construction under an Alice § 101 analysis.

The Federal Circuit also affirmed because Simio failed to show good cause for seeking to leave to amend only after the scheduling order’s deadline.

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A Preference for Something Else is not a Teaching Away

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In General Electric Company v. Raytheon Technologies Corporation, [2019-1319] (December 23, 2020), the Federal Circuit vacated the Board’s decision finding Raytheon Technologies Corporation’s U.S. Patent No. 8,695,920 on a gas turbine engine not unpatentable for obviousness, and remanded the case for further consideration because the Board lacked substantial evidence for its conclusions.

The Board found that prior art disclosed all of the elements of the claimed invention, but then found that by expressly considering at least some of the one-stage versus two-stage tradeoffs and specifically chosing the one-stage option, the reference taught away from the combination asserted by GE. The Board alternatively held that, even if the reference did not teach away from the proposed combination, the evidence presented did not persuasively demonstrate a motivation to combine.

The Federal Circuit found that the Board lacked substantial evidence for its finding that reference taught away form the combination. The Federal Circuit said a reference does not teach away if it merely expresses a general preference for an alternative invention but does not criticize, discredit, or otherwise discourage investigation into the invention claimed.

The Federal Circuit also found that the Board lacked substantial evidence for its conclusion that GE did not establish a motivation to combine the references. The Federal Circuit said that the Board made certain findings that, on their own, could establish obviousness. The Federal Circuit said that these findings set forth reasons that an artisan might seek to modify the prior art, and a reasonable expectation of success in doing so.

Finally, the Board lacked substantial evidence for holding that GE did not establish the obviousness of claim 10 “as a whole.” The Federal Circuit said that the law has always evaluated the motivation to combine elements based on the combination of prior art references that together disclose all of the elements of the invention. The Federal Circuit said that

the Board’s approach would require a motivation to com-bine each element of the claim—even those present together in a reference. This analysis unduly dissects prior art references into collections of individual elements, requiring a party showing obviousness to re-do the work al-ready done in the prior art reference. The claimed invention and an invention in the prior art must both be analyzed as a whole for the same reason: an invention is more than the sum of its individual elements.

Because the Board lacked substantial evidence for its underlying factual conclusions from which it found the claims non-obvious, the Federal Circuit vacated the Board’s decision and remanded the case to the Board for further proceedings.

Breach of Confidentiality Agreement Required Transfer for Resulting Patents

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In Sionyx, LLC, v. Hamamatsu Photonics KK, [2019-2359, 2020-1217] (December 7, 2020), the Federal Circuit affirmed the district court’s judgment that (1) Hamamatsu breached its Non-Disclosure Agreement SiOnyx”; (2) Hamamatsu willfully infringed U.S. Patent 8,080,467; (3) SiOnyx is entitled to $796,469 in damages and $1,091,481 of pre-judgment interest for breach of the NDA; (4) SiOnyx is entitled to $580,640 in damages and $660,536 of pre-judgment interest for unjust enrichment; (5) SiOnyx is entitled to post-judgment interest at the statutory rate for its breach of contract and unjust enrichment claims; (6) Dr. James Carey is a co-inventor of U.S. Patents 9,614,109; 9,293,499; 9,190,551; 8,994,135; 8,916,945; 8,884,226; 8,742,528; 8,629,485; and 8,564,087; (7) SiOnyx is entitled to sole ownership of the Disputed U.S. Patents; (8) SiOnyx is entitled to an injunction prohibiting Hamamatsu from practicing the Disputed U.S. Patents for breach of the NDA; and (9) SiOnyx is entitled to an injunction prohibiting Hamamatsu from practicing the ’467 patent for infringement; and rreversed the district court’s denial of SiOnyx’s motion to compel Hamamatsu to transfer ownership of the corresponding foreign patents to SiOnyx.

Eric Mazur discovered a process for creating “black silicon” by irradiating a silicon surface with ultra-short laser pulses. In addition to turning the silicon black, the process creates a textured surface, and the resulting black silicon has electronic properties different from traditional silicon. After discovering the process for making the material, Mazur worked with his students, including Carey, to study its properties and potential uses. Based on this work, Mazur and Carey filed patent applications which resulted in the issuance of several patents, including U.S. Patent No. 8,080,467.

Mazur and Carey founded SiOnyx to further develop and commercialize black silicon. SiOnyx met with Hamamatsu, a producer of silicon-based photodetector devices, enteringg an NDA to allow the parties to share confidential information relating to “evaluating applications and development opportunities of pulsed laser process doped photonic devices.

After the NDA was terminated, Hamamatsu continued to develop new photodetector devices, filing patent applications and introducing products,. SiOnyx met with Hamamatsu to discuss ownership of the disputed U.S. and Foreign patents, but the parties did not reach an agreement, so SiOnyx sued Hamamatsu claiming (1) breach of contract; (2) unjust enrichment; (3) infringement of the ’467 patent; and (4) change of inventorship of the Disputed U.S. Patents.

After a jury verdict in SiOnyx’s favor, Hamamatsu appealed. Hamamatsu first argued that the claim was barred by the statute of limitations, which Hamamatsu argued was triggered by its failure to return confindential information as required by the NDA, and by Hamamatsu emailing SiOnyx a diagram of a photodiode that SiOnyx perceived to be identical to the parties’ 2007 work. SiOnyx argued that Hamamatsu’s failure to return SiOnyx’s confidential information was an immaterial breach that did not begin the limitations period, or that Hamamatsu concealed its later use of SiOnyx’s confidential information through its repeated assurances that its new products did not infringe SiOnyx’s intellectual property. The Federal Circuit agreed with the district court that a reasonable juror could have determined that SiOnyx was not harmed by Hamamatsu’s failure to return the confidential information and that the breach was therefore immaterial and did not cause SiOnyx’s claims to accrue, as to the email disclosures, the Federal Circuit perceived no reason to upset the jury’s verdict here.

Hamamatsu also argued that the district court erred in awarding pre-judgment interest for unjust enrichment and breach of contract claims. The Federal Circuit agreed with the district court that pre-judgment interest was avaialble for both claims.

Hamamatsu challenged the injunction against infringement of SiOnyx’s ‘467 patent, arguing that SiOnyx argues primarily that SiOnyx failed to demonstrate irreparable harm and an inadequate remedy at law. SiOnyx responded that its products compete with Hamamatsu’s, and that it will suffer irreparable harm from Hamamatsu’s continued sales. The Federal Circuit was not convinced that the district court clearly erred in finding that the accused products are competitive with SiOnyx’s products, and Hamamatsu did not refute the demonstration of irreparable harm.

Hamamatsu also challenged the injunction for breach of contract. However, due to the similarity of the legal standard, the parties’ arguments were substantially similar to those made with respect to the injunction for patent infringement, and the Federal Circuit reached the same conclusion.

Hamamatsu filed a post-trial motion for judgment as a matter of law that SiOnyx is not owed damages for the breach of contract and unjust enrichment claims after the confidentiality period of the NDA expired. SiOnyx responded that the jury reasonably could have inferred that Hamamatsu continued to benefit from its breach beyond the expiration of the confidentiality period. The Federal Circuit agreed that the jury’s verdict could be reasonably construed to incorporate a finding that Hamamatsu continued to reap the benefit of their earlier breach by selling products that it had designed using SiOnyx’s confidential information, and declined .” Id. slip op. at 3. We agree that such an inference is reasonable, and we de-cline to alter the jury’s damages award.

On appeal, Hamamatsu argues that the district court erred in granting SiOnyx sole ownership of the disputed U.S. Patents because the jury’s finding of co-inventorship necessarily implied that the jury found that Hamamatsu also contributed to the patents. The NDA provided that “a party receiving confidential information acknowledges that the disclosing party claims ownership of the information and all patent rights “in, or arising from” the information.” Thus the Federal Circuit found that the district court’s decision transferring ownership of the patents according to the terms of the NDA was an equitable remedy which is reviewed for abuse of discretion (under Massachusetts law). The Federal Circuit said that absent evidence that Hamamatsu contributed confidential information to the patents under the NDA, it was not entitled to co-ownership of the patents under the agreement.

On appeal, Hamamatsu maintained that its infringement was not willful, challenging the adequacy of the evidence presented at trial to support the jury’s finding. However, the Federal Circuit said that given that the district court awarded no enhanced damages based on willfulness, it is not apparent what effect the jury’s finding of willfulness had on the district court’s judgment, and it is likewise not apparent what the effect a reversal by this court would be. Hamamatsu was in effect requesting an advisory opinion, which the Federal Circuit lacks the authority to provide.

On SiOnyx’s cross appeal, SiOnyx aruged that the district court should have granted it ownership of the corresponding foreign patents as well. The Federal Circuit agree with SiOnyx that the evidence that established SiOnyx’s right to sole ownership of the disputed U.S. Patents also applied to the disputed foreign patents. Because the district court erroneously perceived that it lacked authority to compel the transfer of ownership, the Federal Circuit said it was an abuse of discretion to distinguish between the two groups of patents. The Federal Circuit stated that the district court had authority to transfer foreign patents owned by the parties before it.

Petitioner Can Substantiate Prior Art When Challenged by Patent Owner

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In Vidstream LLC v. Twitter, Inc., [2019-1734, 2019-1735] (November 25, 2020) affirmed the PTAB determination that claims 1-35 of U.S. Patent No. 9,083,997 on Recording and Publishing Content on Social Media Websites were invalid for obviousness.

The issue on appeal was whether a book authored by Anselm Bradford and Paul Haine is prior art against the ‘997 Patent. The Federal Circuit said whether a document is prior art under 35 U.S.C. § 102(a) is a legal determination, based on the specific facts. While the book bore a copyright date of 2011, the copy relied upon by Petitioner bore a date of 2015. When challenged by VidStream, Twitter provided additional information to support the 2011 date. VidSream complained that this evidence was provided too late because was not provided with the IPR petitions, and petitioner may not submit new evidence or argument in reply that it could have presented earlier.

Twitter responded that the information filed with its replies was appropriate in view of VidStream’s challenge to Bradford’s publication date, and that this practice is per-mitted by the PTAB rules and by precedent, which states:

[T]he petitioner in an inter partes review proceeding may introduce new evidence after the petition stage if the evidence is a legitimate reply to evidence introduced by the patent owner, or if it is used to document the knowledge that skilled artisans would bring to bear in reading the prior art identified as producing obviousness.

VidStream also argued that it was deprived of a fair opportunity to respond to the evidence submitted with Twitter’s replies. Twitter pointed out that VidStream was not prejudiced, for the Board authorized VidStream to file a sur-reply, and it did so.

The Board denied VidStream’s Motion to Exclude, holding that it was appropriate to permit Twitter to respond to VidStream’s challenge by providing additional evidence to establish the Bradford publication date. The Federal Circuit concluded that the Board acted appropriately, for the Board permitted both sides to provide evidence concerning the reference date of the Bradford book, in pursuit of the correct answer.

The Board found that although no one piece of evidence definitively establishes Bradford’s public accessibility prior to May 9, 2012, the evidence, viewed as a whole, sufficiently does so. The Federal Circuit agreed, noting the evidence well supports the Board’s finding that Bradford was published and publicly accessible before the ’997 patent’s 2012 priority date, and affirmed the Board’s ruling that Bradford is prior art against the ’997 patent.

Posted in IPR

Apparatus Claims Sometimes Incorporate Process Limitations, but Not this Time

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In Vectura Limited v. Glaxosmithkline LLC, [2020-1054] (November 19, 2020), the Federal Circuit affirmed the district court determination that U.S. Patent No. 8,303,991 directed to the production of “composite active particles” for use in pulmonary administration was not invalid and was infringed. The jury awarded $89,712,069 in damages, and after unsuccessful motions for JMOL and a new trial, Glaxosmithkline appealed.

The construction of two claim terms were relevant to the appeal. First, the court construed the phrase “promotes the dispersion of the composite active particles” (the dispersion limitation) to mean “wherein a composition that contains one or more composite active particles has increased dispersion of the active material upon activating a delivery device for inhalation into the lungs by a patient, as compared to the same composition wherein unmodified active particles are substituted for the composite active particles.” Second, the court construed the term “composite active particles.” The court construed the term to mean “[a] single particulate entit[y/ies] made up of a particle of active material to which one or more particles of additive material are fixed such that the active and additive particles do not separate in the airstream.”

The parties agreed that, under the district court’s construction of the dispersion limitation, Vectura needed to prove that the use of magnesium stearate in the accused inhalers improves the dispersion of the active ingredient compared to identical products in which only the lactose excipient is coated with magnesium stearate. On appeal GSK argued that there was no substantial evidence of infringement as to that limitation because Vectura staked its case on a defective scientific test. However the flaw in GSK’s position was that Vecture did not rely exclusively on the allegedly defective tests.

While the allegedly defective test was not perfect, the Federal Circuit said that a jury could conclude that despite its drawbacks, the study generally supported the view that coating the active ingredient with magnesium stearate improves dispersion of the active ingredient. The Federal Circuit said that regardless of any infirmities in the test, there was ample other evidence at trial indicating that magnesium stearate improves the dispersion of active ingredients.

GSK also challenged the district court’s construction of the claim term “composite active particles,” contending that the court should have construed that term to require that the composite particles be produced by the “high-energy milling” process referred to in the specification. The Federal Circuit noted that GSK’s argument falls between two prior cases: Continental Circuits LLC v. Intel Corp., 915 F.3d 788 (Fed. Cir. 2019), and Andersen Corp. v. Fiber Composites, LLC, 474 F.3d 1361 (Fed. Cir. 2007). In Andersen, the Federal Circuit construed an apparatus claim to include a process limitation. While in Continental Circuits, the Federal Circuit declined to import a process limitation into an apparatus claim. In both cases, the Federal Circuit recognized that “process steps can be treated as part of the product claim if the patentee has made clear that the process steps are an essential part of the claimed invention.”

The Federal Circuit noted that although the ’991 patent contains a few statements suggesting that its high-energy milling is required, those statements are outweighed by the numerous statements indicating that high-energy milling is merely a preferred process. The Federal Circuit thus concluded that the specification of the ’991 patent does not make its milling method an essential part of apparatus claim 1. The Federal Circuit also rejected also reject GSK’s argument that the prosecution history requires “composite active particles” to be construed to include a process limitation, and affirmed the district court’s claim construction

Finding Claims Non-obvious Was Not Error; It Was the Application of the Proper Evidentiary Standard

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In Apple Inc. v. VOIP-PAL.com, Inc., [2018-1456, 2018-1457] (September 25, 2020), the Federal Circuit affirmed the PTAB’s determination that claims of U.S. Patent No. 8,542,815 and 9,179,005 were not invalid for obviousness, and the PTAB’s imposition of sanctions against VOIP-PAL.

The ‘815 and ‘005 patents describe the field of invention as “voice over IP communications and methods and apparatus for routing and billing” and relate to routing communications between two different types of networks—public and private.

The Federal Circuit noted that the appeal was moot as to 18 claims that a court held were directed to unpatentable subject matter. As to the 15 remaining claims, the Federal Circuit rejected Apple’s argument of mootness, and considered the merits of the non-obviousness determination.

Apple argued that the Board violated the Administrative Procedures Act (“APA”) and its due process rights when the Board imposed non-enumerated sanctions for Voip-Pal’s ex parte communications. The Board’s actions are reviewed for abuse of discretion, and the Board abuses its discretion if the sanction (1) is clearly unreasonable, arbitrary, or fanciful; (2) is based on an erroneous conclusion of law; (3) rests on clearly erroneous fact findings; or (4) involves a record that contains no evidence on which the Board could rationally base its decision.

37 C.F.R. § 42.12(b) provides that sanctions “include” those enumerated subsection (b). The Federal Circuit said that “key” here was that Section 42.12(b) uses the term “include,” which signifies a non-exhaustive list of sanctions. The Federal Circuit held that the plain reading of Section 42.12(b) provides the Board with discretion to issue sanctions and that the Board did not commit an APA violation when it issued a sanction not explicitly listed under Section 42.12. The Federal Circuit noted that the Board’s decision to (a) allow Apple to petition for rehearing before a new panel, and (b) provide Apple with a meaningful opportunity to respond to Voip-Pal’s letters was a reasonable course of action and one that it would not not disturb, and did not find that Apple was deprived of due process.

Apple argued on appeal that the Board legally erred in rejecting its motivation-to-combine argument by improperly applying the now-rejected teaching, suggestion, motivation test rather than the flexible obviousness analysis required under KSR. The Federal Circuit found that the Board did not fault Apple for not citing explicit teachings, suggestions, or motivations to combine the prior art. Rather, the Federal Circuit said, the Board noted that Apple’s expert provided only “conclusory and insufficient” reasons for combining the prior art and failed to articulate reasoning with some rational underpinning. The Board did not legally err but rather held Apple to the proper evidentiary standard.

IPR Estoppel: It’s Not A Second Bite at the Apple, if You Didn’t Get a First Bite

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In Network-1 Technologies, Inc. v. Hewlett-Packard Co., [2018-2338, 2018-2339, 2018-2395, 2018-2396] (September 24, 2020), the Federal Circuit affirmed-in-part and reversed-in-part the district court’s claim construction and remanded, vacated the district court’s JMOL on validity and remanded, and affirmed the district court’s decision with respect to improper claim broadening.

U.S. Patent No. 6,218,930, titled “Apparatus and Method for Remotely Powering Access Equipment over a 10/100 Switched Ethernet Network,” discloses an apparatus and methods for allowing electronic devices to automatically determine if remote equipment is capable of accepting remote power over Ethernet.

On appeal Network-1 argued that the district court incorrectly construed the claim terms “low level current” and “main power source,” and that this error entitled it to a new trial on infringement. The Federal Circuit agreed that the district court erred in its construction of “main power source,” and as a result of that error, Network-1 was entitled to a new trial on infringement.

On appeal HP argued that the district court erroneously granted JMOL with respect to the ’930 patent’s validity based on its determination that HP was estopped under 35 U.S.C. § 315(e) from presenting obviousness challenges as a consequence of its joinder to the Avaya IPR. The district court reasoned that HP reasonably could have raised” its invalidity arguments during the IPR that HP joined. The district court stated that allowing HP to raise arguments “that it elected not to raise during the IPR would give it a second bite at the apple and allow it to reap the benefits of the IPR with-out the downside of meaningful estoppel.

The Federal Circuit began by point out that under 35 U.S.C. § 315(e) party is only estopped from challenging claims in the final written decision based on grounds that it “raised or reasonably could have raised” during the IPR. However, the Federal Circuit noted, because a joining party cannot bring with it grounds other than those already instituted, that party is not statutorily estopped from raising other invalidity grounds.

In fact, HP initially tried to join the IPR and raise additional grounds, which the PTAB correctly denied, it was HP’s second attempt to join the IPR based only on the grounds already instituted, that was granted.

Thus, since party like HP that joins an IPR cannot raise any additional grounds, it is not estopped as to any ground not actually raised in the IPR. The Federal Circuit observed that its not a second bite at the apple, when the first bite was denied. The Federal Circuit remanded the case rather than simply reversing because there was an outstanding request for a new trial.

On appeal HP argued that by adding two dependent claims during reissue, the Network-1 improperly broadened the original claim from which they depend. The Federal Circuit rejected the idea that adding dependent claims broadens the underlying independent claim, and thus affirmed the district court’s determination that claim 6 was not improperly broadened.

§315(c) Does Not Allow Board to Join IPRs or to Add Issues to an IPR via Joinder

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In Facebook, Inc. v. Windy City Innovations, LLC, [2018-1400, 2018-1401, 2018-1402, 2018-1403, 2018-1537, 2018-1540, 2018-1541] (September 4, 2020), the Federal Circuit affirmed-in-part, vacated-in-part, and remanded the Board’s final written decisions on the ’245 and ’657 patents in IPR2016-01156 and IPR2016-01159, affirmed the Board’s final written decision on the ’552 patent in IPR2016-01158, and affirmed-in-part the Board’s final written decision on the ’356 patent in IPR2016-01157; and dismissed as moot Facebook’s appeal of the Board’s final written decision on the ’356 patent with respect to claims 14 and 33.

Windy City Innovations filed a complaint accusing Facebook of infringing U.S. Patent Nos. 8,458,245, 8,694,657, 8,473,552, and 8,407,356 (“the ’356 patent”). The ’245, ’657, ’552, and ’356 patents share a common specification, claim priority to the same parent application, and generally relate to methods for communicating over a computer-based network.

Exactly one year after being served with Windy City’s complaint Facebook timely petitioned for inter partes review (“IPR”) of several claims of each patent (IPR2016-01156, IPR2016-01157, IPR2016-01158, IPR2016-01159). At that time, Windy City had not yet identified the specific claims it was asserting. The PTAB instituted IPR of each patent. After Windy City identified the claims it was asserting in the district court, Facebook filed two additional petitions for IPR (IPR2017-00659, IPR2017-00709) of additional claims of the ’245 and ’657 patents, along with motions for joinder to the already-instituted IPRs on those patents. By the time of these filings, the one-year time bar of §315(b) had passed, but the PTAB nonetheless instituted Facebook’s two new IPRs, granted Facebook’s motions for joinder, and terminated the new IPRs.

The Board delivered a mixed result, holding that Facebook had shown by a preponderance of the evidence that some of the challenged claims are unpatentable as obvious but had failed to show that others were unpatentable as obvious. Many of the claims the Board found unpatentable were claims only challenged in the late-filed petitions. Facebook appealed, and Windy City cross-appealed on the Board’s obviousness findings and challenging the Board’s joinder decisions allowing Facebook to join its new IPRs to its existing IPRs and to include new claims in the joined proceedings.

The Federal Circuit held that the Board erred in its joinder decisions in allowing Facebook to join itself to a proceeding in which it was already a party, and also erred in allowing Facebook to add new claims to the IPRs through that joinder. Because joinder of the new claims was improper, it vacated the Board’s final written decisions as to those claims. However the Federal Circuit lacked authority to review the Board’s institution of the two late-filed petitions, so it remanded them to the Board to consider whether the termination of those proceedings finally resolved them.

The Federal Circuit began by rejecting Facebook’s argument that the Board’s joinder decision was not reviewable. The Federal Circuit said that the plain language of § 315(c) requires two different decisions. First, the statute requires that the Director determine whether the joinder applicant’s petition for IPR “warrants” institution under § 314. The Federal Circuit said that it may not review this decision, whether for timeliness or to consider whether the petitioner is likely to succeed on the merits. Second, to effect joinder, § 315(c) requires the Director to exercise his discretion to decide whether to “join as a party” the joinder applicant. The statute makes clear that the joinder decision is made after a determination that a petition warrants institution, thereby affecting the manner in which an IPR will proceed. The joinder decision is a separate and subsequent decision to the intuition decision. Nothing in § 314(d), nor any other statute, overcomes the strong presumption that the Federal Circuit has jurisdiction to review that joinder decision.

Windy City argued that § 315(c) does not authorize same-party joinder and that it does not authorize joinder of new issues material to patentability, such as new claims or new grounds. Facebook disputed both points, arguing that § 315(c) authorizes same-party joinder and that it does not prohibit joinder of new issues. The Federal Circuit agreed with Windy City on both points. The clear and unambiguous text of § 315(c) does not authorize same-party joinder, and does not authorize the joinder of new issues. Beginning with the statutory language, § 315(b) articulates the time-bar for when an IPR “may not be instituted.” 35 U.S.C. § 315(b). But § 315(b) includes a specific exception to the time bar. By its own terms, “[t]he time limitation . . . shall not apply to a request for joinder under subsection (c).” Subsection (c) provides that after an inter partes review has been instituted, the Director, in his or her discretion, “may join” “as a party to that inter partes review” “any person” who has filed “a petition under section 311 that the Director . . . determines warrants the institution of an inter partes review under section 314.

The Federal Circuit held that the clear and unambiguous meaning of § 315(c) does not authorize joinder of two proceedings, and does not authorize the Director to join a per-son to a proceeding in which that person is already a party. The Federal Circuit found the Board’s interpretation of § 315(c) is contrary to the unambiguous meaning of the statute for a second reason. The Federal Circuit said that the language in §315(c) does no more than authorize the Director to join 1) a person 2) as a party, 3) to an already instituted IPR. This language does not authorize the joined party to bring new issues from its new proceeding into the existing proceeding. §315(c) authorizes joinder of a person as a party, not “joinder” of two proceedings.