Category Archives: IPR

Motivation to Combine Prior Art Can Come from Knowledge of those Skilled in the art, the Art Itself, or the Nature of the Problem

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In Acoustic Technology, Inc. v. Itron Networked Solutions, Inc., [2019-1061] (February 19, 2020), the Federal Circuit affirmed the PTAB’s determination in IPR2017-01024 that the challenged claim of U.S. Patent No. 6,509,841 was unpatentable,

The patent owners first ground of attack was that nine days after institution of the IPR, Silver Spring agreed to merge with Itron, Inc., an entity undisputedly time-barred under 35 U.S.C. § 315(b). However, the Federal Circuit held that the patent owner waived this argument because it failed to present those arguments before the Board.

As the the merits of the anticipation finding, the patent owner complained that the petitioner’s expert improperly testified about what a person of ordinary skill in the art would “recognize” from the reference, — arguing that this might be appropriate for obviousness, but not anticipate. The Federal Circuit disagreed, noting that in an anticipation analysis, the dispositive question is whether a skilled artisan would “reasonably understand or infer” from a prior art reference that every claim limitation is disclosed in that single reference. Expert testimony may shed light on what a skilled artisan would reasonably understand or infer from a prior art reference. Moreover, expert testimony can constitute substantial evidence of anticipation when the expert explains in detail how each claim element is disclosed in the prior art reference.

The Federal Circuit examined the testimony of Petitioner’s expert and concluded that he conducted a detailed analysis and explained how a skilled artisan would reasonably understand the cited prior art. The Court thus concluded that the Board’s finding of anticipate was supported by substantial evidence.

The Federal Circuit also rejected the patent owner’s argument that the Board improperly relied on “the same structures to satisfy separate claim limitations.” The Federal Circuit explained that it was clear from the disclosure that the identified structure may have different functions in a given embodiment.

Finally with respect to the obviousness of the claimed invention, the Federal Circuit rejected patent owners argument that the Board erroneously mapped the prior art onto the elements of the claim and that the Board’s motivation-to-combine finding is not supported by substantial evidence. On this later point the Federal Circuit pointed out that the motivation to combine prior art references can come from the knowledge of those skilled in the art, from the prior art reference itself, or from the nature of the problem to be solved. The Board found that motivation was adequately explained by expert testimony which was not conclusory or otherwise defective, and thus the Board was within its discretion to rely upon it.

Patent Office Ignores Federal Circuit, and Gets Away with It

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In Biodelivery Sciences International, Inc., v. Aquestive Therapeutics, Inc., [2019-1643, 2019-1644, 2019-1645] (January 13, 2020) the Federal Circuit declined to rehear this appeal en banc. The Federal Circuit earlier remanded IPR2015-00165, IPR2015-00168, and IPR2015-00169 for the PTAB to consider all claims as required by the Supreme Court in SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018). The PTAB failed to do so, and the panel on the resulting appeal allowed them to do so.  Judge Newman wrote separately in dissent “because of the significance of the balance of agency and judicial authority, and the rules of procedural law in the administrative state.”

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IPR Decision Wipes Out Patent Owner’s Earlier Victory in District Court

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Personal Audio, LLC, v. CBS Corporation, [2018-2256] (January 10, 2020), the Federal Circuit affirmed the district court judgment of infringement of U.S. Patent No. 8,112,504, on a a system for organizing audio files, by subject matter, into “program segments.”

A jury found that three claims of the ‘850 patent not invalid and were infringed.  Subsequently the PTAB issued a final written decision determining that those claims are unpatentable.  The district court, with the parties’ consent, stayed entry of its judgment in this case until completion of the Federal Circuit review of the PTAB decision.  The Federal Circuit affirmed the PTAB, and the parties agreed that CBS was entitled to entry of final judgment in its favor.  Personal Audio appealed.

The Federal Circuit said that to the extent that Personal Audio challenges the Board’s final written decision, the district court lacked jurisdiction to consider the challenges, and the Federal Circuit had no jurisdiction to review them on appeal from the district court’s judgment. The Federal Circuit said that the exclusive avenue for review of the PTAB decisions was a direct appeal from the final written decision.

The Federal Circuit said that to the extent that Personal Audio challenges the district court’s determination of the consequences of the affirmed final written decision for the proper disposition of this case, Personal Audio conceded that governing precedent required judgment for CBS, and thus the Federal Circuit affirmed.

Posted in IPR

Petitioner Allowed to Supplement Evidence that Reference was Available

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In Telefonaktiebolaget LM Ericsson v. TCL Corp., [2017-2381, 2017-2385] (November 7, 2019) the Federal Circuit affirmed the Board’s decision that the specified publication is an available reference, and based on this publication in combination with other prior art it affirmed the Board’s decision of invalidity of the challenged claims.

Ericsson argued that the Jentschel article is not prior art because it was not publicly available more than one year before Ericsson’s earliest asserted filing date, and thus is subject to antedating by Ericsson’s invention date. During the trial TCL sought to provide evidence of the date of availability of this journal issue in university libraries in Germany.

TCL first submitted to the PTAB a letter from a librarian from the “Periodicals Team” at the Technische Informationsbibliothek and Universitätsbibliothek in Hannover, Germany. Ericsson objected to the letter as inadmissible hearsay, and the statement was withdrawn when the librarian declined to provide a sworn statement and declined to testify in the United States. TCL then moved to submit the sworn Declaration of Doris Michel, a librarian at the Technische Universität Darmstadt in Germany. Ericsson again objected, stating that the submission was not in compliance with the Board’s Rules, which required a petitioner to present sufficient evidence, at the petition stage, and requires that a party who seeks to submit new or supplemental information more than one month after the date an IPR is instituted must show why the supplemental information rea-sonably could not have been obtained earlier, and that consideration of the supplemental information would be in the interests-of-justice.

TCL responds that Regulation § 42.123(b) gives the Board discretion to accept a tardy submission and to consider the interest of justice. TCL argues that the Jentschel article is very close prior art and that Ericsson was allowed to file supplemental briefing and to depose Ms. Michel.

The Federal Circuit concluded that the Board did not abuse its discretion in admitting the Michel Declaration, for when the challenged evidence is reasonably viewed as material, and the opponent has adequate opportunity to respond and to produce contrary evidence, the interest of justice weighs on the side of admitting the evidence.

Ericsson argues that the date of availability to the public of the Jentschel reference was not established by the Michel Declaration, even if that Declaration were deemed admissible. The Federal Circuit explained that a reference is deemed publicly available if it has been disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art, exercising reasonable diligence, can locate it. The Federal Circuit noted that Ericsson provided no evidence to counter the Michel Declaration, the date on the face of the journal, and the Library’s records showing receipt of the journal and its shelving. The Federal Circuit found that substantial evidence supports the Board’s ruling that Jentschel was accessible to the public in the May/June 1996 period, and that the Board did not abuse its discretion in receiving the Jentschel article as a reference.

The Federal Circuit further concluded that substantial evidence supports the Board’s finding that Jentschel renders obvious the claims.

PTAB Reconsideration Did Not Violate Due Process

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In AC Technologies S.A., v. Amazon.com, Inc., [2018-1433] (January 9, 2019) the Federal Circuit affirmed the Final Written Decision of the PTAB ruling certain claims of AC Technologies S.A.’s U.S. Patent No. 7,904,680 unpatentable. AC complained that the Board, on reconsideration, invalidated claims based on a ground of unpatentability raised in their petition but not addressed in the original Final Written Decision, arguing that the Board exceeded its authority and deprived it of fair process by belatedly considering this ground.

The Federal Circuit disagreed, noting that precedent mandated that the Board consider all grounds of unpatentability raised in an instituted petition. The Board complied with due process, and AC did not persuade it that the Board erred in either its claim construction or its ultimate conclusions of unpatentability.  The Petition contained three grounds, Ground 1 alleged unpatentability giving the claims, and in particular, the term “computer unit” a narrow construction.  Grounds 2 and 3 asserted unpatentability over the same reference, giving “computer unit” a broader construction.

The Board invalidated claims based upon Grounds 1 and 2, but not three.  When the inconsistency was pointed out on request for rehearing, the Board address Ground 3.  The Federal Circuit said that no due process violation occurred here. As AC admits, after the Board decided to accept Amazon’s rehearing request and consider Ground 3, it permitted AC to take discovery and submit additional briefing and evidence on that ground. The Federal Circuit noted that alhough AC did not receive a hearing specific to Ground 3, it never requested one. Had AC desired a hearing, it should have made a request before the Board.

Posted in IPR

Expert Testimony Critical to Determining Meaning of Prior Art to a PHOSITA

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In IXI IP, LLC v. Samsung Electronics Co.. Ltd., [2017-1665] (September 10, 2018), the Federal Circuit affirmed the PTAB’s determination that the challenged claims of U.S. Patent No. 7,039,033 were unpatentable.  The ’033 patent is directed to a system that accesses information from a wide area network (WAN), such as the Internet, and local wireless devices in response to short-range radio signals.

The Federal Circuit noted that issues relating to a motivation to combine prior art references and a reasonable expectation of success are both questions of fact, reviewed for substantial evidence.  Substantial evidence is “such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.”

The single issue on appeal is whether a PHOSITA would read the prior art as implicitly
describing an implementation in which the JINI LUS, which identifies services provided on the network, is located on the gateway device, i.e., the cellphone.  Samsung acknowledged that the reference does not expressly state that the JINI LUS is located on a mobile phone, but nonetheless, contended, and the Board agreed, that a PHOSITA would read the reference to understand that JINI LUS may be located on the cellphone.

After examining the evidence, the Federal Circuit held that the Board’s determination
that a POSITA reading the reference would understand that the cellphone is the master of the ad-hoc network and contains the LUS is reasonable and was supported by substantial evidence.  The determination of how a PHOSITA would understand the references was based on the weighing expert testimony from both parties, with Samsung’s expert being credited by the Board.

Petitioner Bears the Ultimate Burden of Persuasion With Respect to Real Party in Interest

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In Worlds Inc. v. Bungie, Inc., [2017-1481, 2017-1546, 2017-1583](September 7, 2018), the Federal Circuit vacated the Final Written Decision in three inter partes reviews because the Board erred in its real party in interest analysis, and remanded.  The appeal involved three related patents: U.S. Patent Nos. 7,945,856, 8,082,501, and 8,145,998, relating to the computer-generated display of avatars in a virtual world, including methods and systems to determine which particular avatars are displayed
in a given situation.

Worlds sued Activision on the patents, and while the suit was pending indicated that it was going to add products developed by Bungie, but distributed by Activision to the suit.  Bungie filed the three petitions for IPR challenging Worlds’ patents more than a year after Activition was served with the Complaint, and Bungie did not name Activision as a real party in interest.

The Federal Circuit pointedly observed that absent from the Board’s analysis of the real-party-in-interest issue is any clear statement of what, if any, burden framework the Board used to analyze the evidence presented in these IPRs, including an identification of which party the Board viewed as bearing the burden of persuasion.   The Federal Circuit largely agreed with the burden framework used in Atlanta Gas Light. The Federal Circuit said that the IPR petitioner bears the burden of persuasion to demonstrate
that its petitions are not time-barred under § 315(b) based on a complaint served on a real party in interest more than a year earlier, and the petitioner’s initial identification of the real parties in interest should be accepted unless and until disputed by a patent owner.  The patent owner must produce some evidence to support its argument that a particular third party should be named a real party in interest. The Federal Circuit rejected the Board’s practice of creating a “presumption” that the petitioner’s initial
identification of the real parties in interest is correct.  While the patent owner must produce some evidence that tends to show that a particular third party should be named a real party in interest.  A mere assertion that a third party is an unnamed real party in interest, without any support for that assertion, is insufficient to put the issue into dispute.

The Federal Circuit then turned to the question of who should bear the burden of persuasion, noting a complete absence of any statement as to which party should bear the burden of persuasion.  The Federal Circuit could not discern whether the Board placed the burden on Worlds, the patent owner, to persuade the Board that Bungie failed to list a real party in interest that would render the petitions time barred under § 315(b), which would have been improper.  Moreover, the Federal Circuit was concerned that the Board may have relied on attorney argument as evidence that Activision was not controlling or funding these IPRs.

In light of these concerns, the Federal Circuit found it appropriate to remand the case to the Board for further consideration of the real-party-in-interest issue.

 

Posted in IPR

Undue Process: You Can Ask the PTO to Review a Patent, but if They Blow it, You may be Powerless to Appeal

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In JTEKT Corp. v. GKN Automotive Ltd., [2017-1828](August 3, 2018), the Federal Circuit the Federal Circuit dismissed the appeal of a PTAB determination that claims 2 and 3 of U.S. Patent No. were not unpatentable, because Appellee, JTEKT, lacked standing to appeal.

JTEKT filed a petition alleging that claims 1–7 of the ’440 patent were invalid. After the Board instituted as to all challenged claims, GKN disclaimed claims 1, 4, and 5, so the IPR focused on the patentability of claims 2 and 3.

Under the IPR statute, any person or entity may petition the Patent Office to institute an IPR proceeding. 35 U.S.C. § 311(a). There is no requirement that the petitioner have Article III standing, as “[p]arties that initiate [IPRs] need not have a concrete stake in the outcome; indeed, they may lack constitutional standing.” Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2143–44 (2016).  The statute also provides that an unsuccessful petitioner may appeal an adverse final written decision. 35 U.S.C. § 141(c).  However the Federal Circuit has held that the statute does not do away with the Article III standing requirement.  Phigenix, Consumer Watchdog, stressed that the “obligation to
establish an injury in fact” for appellants “remains firm.”  In order to demonstrate the requisite injury in an IPR appeal, the appellant/petitioner must show that it is engaged or will likely engage “in an[] activity that would give rise to a possible infringement suit.”

The fact that JTEKT had no product on the market at the present time does not preclude Article III standing, either in IPRs or in declaratory judgment actions.  But where the party relies on potential infringement liability as a basis for injury in fact, but is
not currently engaging in infringing activity, it must establish that it has concrete plans for future activity that creates a substantial risk of future infringement or likely cause the patentee to assert a claim of infringement.  While JTEKT has submitted two declarations in support of its standing, these declarations do not establish that its planned product would create a substantial risk of infringing the claims on appeal.

Because JTEKT has failed to establish an actual injury sufficient to confer Article III standing, we dismiss this appeal.  Assuming the correctness of the Federal Circuit reasoning, this is another demonstration of how ill-conceived the AIA was.  A party can challenge a patent in an IPR or PGR, but no matter how badly the USPTO handles the IPR, that party may not be able to appeal.  Where is the justice in such a scheme?  Should there be estoppel with respect to a decision that cannot be reviewed?  That sounds even more unjust.

Posted in IPR

While §315(b) Determinations are Appealable, in the Case the Board Got it Right

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In Wi-Fi One, LLC v. Broadcom Corporation, [2015-1944] (April 20. 2016), the Court of Appeal for the Federal Circuit, after deciding en banc that the PTAB’s decisions relating to §315(b) time-bars were appealable, affirmed the PTAB’s  determination that the petitioner in three related IPR’s were not time-barred.

The Federal Circuit said that a review of the Board’s decisions, in the context of the arguments Wi-Fi made at each stage, show that the Board did not apply a legally erroneous standard in deciding the “real party in interest, or privy” issue.  The Board correctly found that petitioner Broadcom was not in privity with the parties in the prior litigation.

The Federal Circuit also affirmed the Board’s denial of additional discovery on the issue of privity, noting that the Board explored the discovery issue in detail and applied the proper legal test for finding privity or real party in interest status under section 315(b).  Under these circumstances, the Federal Circuit declined to hold that the Board abused its discretion when it concluded that additional discovery was not warranted in this case.  Finally, the Federal Circuit rejected the patent owner’s contention that the Board did not adequately explain its rulings on the §315(b) issue, noting the Board’s multiple and detailed discussions of the section 315(b) issue, the Federal Circuit said that the “Board cannot fairly be accused of not providing an adequate explanation for its decision on that question.”

 

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Obviousness v. Anticipation: That Which Doesn’t Disclose Still Could Teach

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In CRFD Research, Inc., v. Matal, [2016-2198] (December 5, 2017), the Federal Circuit affirmed two Final Written Decisions invaliding claims of U.S. Patent No. 7,191,233 on user-directed transfer of an on-going software-based session from one device to another device, and reversed one Final Written Decision that the claims were not obvious.

What is interesting about this case beyond the fact that a patent owner should have to simultaneously defend three IPR attacks on its patent, the loss of any one of which would be fatal, is the Federal Circuit’s reversal of the Board’s determination that Hulu had not shown the challenged claims to have been obvious.  The Federal Circuit said “the Board erred, both in how it performed its obviousness analysis and in the merits of its determination of nonobviousness.”

The Board concluded that the Bates reference did not anticipate certain challenged claims because it did not meet the claim requirement of “transmission of session history after discontinuation.”  Hulu complained, and the Federal Circuit agreed that the Board improperly
relied on its finding that Bates did not anticipate various asserted claims to support its finding of nonobviousness without considering whether Bates suggests transmission of session history after
discontinuation.  The Federal Circuit said that “Even if a reference’s
teachings are insufficient to find anticipation, that same reference’s teachings may be used to find obviousness.”

Hulu further argued that it would have been obvious, based on Bates, to
transmit session history after session discontinuation.  Hulu argued the obviousness of the claims based upon Bates, but the Board declined to institute on grounds of redundancy.  The Federal Circuit noted that Hulu expressly incorporated this argument as part of other grounds of unpatentability on which the Board instituted trial.  The Federal Circuit found that:

To bar Hulu from pressing an argument it raised in a ground the Board found “redundant” and that it expressly incorporated into other proposed grounds of unpatentability on which the Board instituted would not only unfairly prejudice Hulu, but would also raise questions about the propriety of the Board’s redundancy  decision.

Of course, even if it does “raise questions about the propriety of the Board’s redundancy decision,” that should not be a concern of the Federal Circuit because according to Cuozzo institution decisions are not reviewable.  The Federal Circuit went on to find that Bates did in fact sufficiently teach what it did not exprsessly disclose, and reversed the Board’s determination that the claims were not shown to be obvious.

This case illustrates that some of the mischief that arises from a Board’s finding of redundancy.  The petitioner is allowed to use the arguments in the non-instituted redundant ground to support its position in the instituted grounds — at least if they are sufficiently “incorporated.”  Another problem with redundancy is that the estoppel effect is unclear.  The Federal Circuit has indicated that estoppel does not apply to grounds that are not instituted.  HP Inc. v. MPHJ Tech. Inv., LLC, 817 F.3d 1339, 1347-48 (Fed. Cir. 2016).  If this interpretation applies to grounds denied for redundancy, it means that a patent owner could prevail in the IPR, and later face a challenge based upon the redundant ground — one found by the Board to indistinguishable from the ground on which the patent owner prevailed.