Blast from the Past: In Vivo Testing is Not Required for an Actual Reduction to Practice

In Medtronic, Inc., Medtronic Vascular, Inc., v. Teleflex Life Sciences Limited, [2022-1721, 2022-1722] (November 16, 2023) the Federal Circuit affirmed two Final Written Decisions of the PTAB that the challenged claims of U.S. Patent RE46,116 had not been shown to be unpatenable.  The patent was directed to a method for using a guide extension catheter with a guide catheter.

Medtronic alleged invalidity of the claims based upon the Itou reference.  Teleflex argued that Itou was not prior art because the claimed invention was (1) conceived prior to Itou’s filing date of September 23, 2005 (i.e., the critical date), and (2) was either (a) actually reduced to practice before the critical date or (b) diligently pursued until its constructive reduction to practice through its effective filing in May 2006.  The Federal Circuit found that the invention was constructively reduced to practice.

Unique to this case was the question whether or not in vivo testing was required for actual reduction to practice because the claims at issue are method claims reciting “advancing . . . a guide catheter . . . through a main blood vessel to an ostium of a coronary artery.” The Board found that such testing was not required, noting Medtronic “was unable to identify any legal precedent requiring in vivo performance of a claimed in vivo method to show actual reduction to practice.” The Board found that the viability of the claimed method could be verified using a physical model that replicates the anatomy in which the method would likewise be performed in vivo.”

The Board also found that the Teleflex patent was entitled to an early priority date that removed Root as a prior art reference.  This issue was eliminated by prior decisions involving related patents.

Have a Seat Over There — Petitioner Has No Standing to Appeal PTAB Decision

In Allgenesis Biotherapeutics Inc., v. Cloudbreak Therapeutics, LLC, [2022-1706] (November 7, 2023), the Federal Circuit dismissed the appeal of the PTAB’s final written decision that claims 4 and 5 of U.S. Patent No. 10,149,820 had not been shown to be unpatentable, because Allgenesis has failed to establish an injury in fact sufficient to confer standing to appeal.

Although a party does not need Article III standing to file an IPR petition or to obtain a Board decision, the party must establish Article III standing once it seeks review of the Board’s decision in this Court.  To meet the Article III standing requirements, an appellant must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.”  To establish an injury in fact, an appellant must show it has suffered an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical.

Allgenesis first argued it has suffered an injury in fact based on the potential infringement liability stemming from its development of nintedanib treatments for pterygium.  Where an appellant relies on potential infringement liability as a basis for injury in fact, 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.  The Federal Circuit found that Allgenesis failed to identify any specific, concrete plans for Allgenesis to develop a nintedanib product that might implicate claims 4 and 5 of the ’820 patent.

Allgenesis also argued it has suffered an injury in fact based on the Board’s priority determination. Specifically, the Board found that Allgenesis’ PCT, which has a later effective filing date of June 22, 2015, is not prior art to Cloudbreak’s application.  The Federal Circuit found that Allgenesis has not established that the Board’s decision will have preclusive effect, noting that collateral estoppel will not attach to the Board’s non-appealable priority determination.

The Board Should Not have to Decode a Petition to Locate Additional Arguments Beyond the One Clearly Made

Netflix, Inc., v. Divx, LLC, [2022-1203, 2022-1204]( October 25, 2023) the Federal Circuit affirmed two final written decisions of the Patent Trial and Appeal Board (Board) determining Netflix did not meet its burden of proving claims 1– 5 and 12 of U.S. Patent No. 9,270,720 and claims 1–6, 8–10, 13–14, 16–17, and 19 of U.S. Patent No. 9,998,515 unpatentable under 35 U.S.C. § 103.  The ’720 and ’515 patents, assigned to DivX, relate to a method for adaptive bitrate streaming of content on a playback device, such as a mobile phone or personal computer. “Adaptive bit rate streaming involves detecting the present streaming conditions (e.g., the playback device’s network bandwidth and video decoding capacity) in real time and adjusting the quality of the streamed media accordingly.”

The Federal Circuit began by stating “While the Board should not take an overly mechanistic view of a petition and decline to address an argument because the petitioner did not present it with ideal vigor and clarity, the Board should also not have to decode a petition to locate additional arguments beyond the ones clearly made. A petitioner may not rely on a vague, generic, and/or meandering petition and later fault the Board for failing to understand what the petition really meant. Ultimately, it is the petitioner’s burden to present a clear argument.

The Federal Circuit rejected Netflix’s contention that the Board was “absurd” in how it understood Netflix’s argument.  The Federal Circuit said that it did not wish to discourage petitioners from making arguments in the alternative. Rather, it was emphasizing that it is the petitioner’s burden to make clear when alternative arguments are being presented and to sufficiently expound on each one. The Board should not have to work as hard as Netflix wants to identify all arguments fairly presented in a petition.

Concluding that the Board’s interpretation of Netflix’s arguments was not unreasonable, the Federal Circuit affirmed.

Statute 2 Desperate Patent Owner 0

CyWee Group Ltd. v. Google LLC, [2020-1565, 2020-1567] (February 8, 2023), the Federal Circuit affirmed the USPTO’s Director’s decision not to rehear two Final Written Decision determining that all of the challenged claims in CyWee’s patents were unpatentable.

CyWee also argued that the Board’s institution decisions and final written decisions were untimely. According to CyWee, it was not enough that the Board instituted the IPRs within the statutorily required three months of receiving CyWee’s preliminary responses. Nor was it enough that the Board issued its final written decisions within the time the statute contemplates (i.e., one year from institution, plus in this case an additional one month due to joinder). CyWee argued that not only must the Director be able to review institution decisions and final written decisions, she also must perform (or have the opportunity to perform) such a review within the statutory deadlines applicable to those decisions.

The Federal Circuit made short work of finding CyWee’s arguments “meritless,” noting that the statutory provisions setting specific deadlines for institution decisions and final written decisions say nothing of deadlines for any further Director review of those decisions. The Federal Circuit said that the Director properly delegated authority to institute proceedings to the Board, and said that if the Board makes that determination within the § 314(b) deadline and here (as it did) —the institution decision is timely, notwithstanding the possibility that the Director may later revisit that decision.

Similarly, with respect to the final written decision, Director properly delegated authority to the Board to extend the one year deadline for a Final Written Decision in the case of joinder. The Federal Circuit said that delegation to the Board of the authority to decide on institution without a mechanism for parties to subsequently request Director review does not present Appointments Clause problems.

PTAB Should Have Resolved Dispute Among Authors of a Reference to Determine Whether They All Made Contributions to the Ultimately Claimed Subject Matter

In Google LLC, v. IPA Technologies Inc, [2021-1179, 2021-1180, 2021-1185] (May 19, 2022), the Federal Circuit vacated the PTAB decision that Google had not shown the challenged claims in U.S. Patent Nos. 6,851,115 and 7,069,560 to be unpatentable.

During the prosecution of the ’115 patent, various claims were rejected based on the Martin reference, which the examiner identified as being prior art. In response, SRI contested the prior art status of the reference by submitting inventor declarations by Martin and Cheyer under 37 C.F.R. §1.132, asserting that Dr. Moran was “not a co-inventor of the subject matter described in the subject matter disclosed and claimed in the instant application[s].”
If Dr. Moran was not a co-inventor of the Martin reference, the Martin reference was not prior art because it was made by the same inventive entity as the ’115 and ’560 patents and not “by others.” 35 U.S.C. § 102(a) (pre-AIA).1 After receiving the declarations, the examiner withdrew the rejections based on the Martin reference and continued examining the applications. The patents were granted and ultimately assigned to appellee IPA
Technologies, Inc. (“IPA”).

Google petitioned the Board for inter partes review of various claims of the ’115 and ’560 patents, relying the same Martin reference, and contending that the Martin reference was prior art as work “by others” because it described the work of an inventive entity (Martin,
Cheyer and Dr. Moran) different from the inventive entity of the challenged patents (Martin and Cheyer). The Board instituted IPR, but concluded that Google had not provided sufficient support that Moran was a co-inventor, and dismissed the Petition. On appeal, Google argued that the Board improperly put the burden on Google to provide that the Martin reference had a different inventive entity than the challenged patents.

The Federal Circuit noted that the term “burden of proof” has been used to describe two distinct concepts: the burden of persuasion and the burden of production. The burden of persuasion is “the ultimate burden assigned to a party who must prove something to a specified degree of certainty.” In an IPR, “the burden of persuasion is on the petitioner
to prove ‘unpatentability by a preponderance of the evidence,’ and that burden never shifts to the patentee.” In contrast, the burden of production, or “going forward with evidence,” is a shifting one, “the allocation of which depends on where in the process of trial the issue arises.” The burden of production may be met either by “producing additional evidence” or by “presenting persuasive argument based on new evidence or evidence already of record.”

The Federal Circuit said that Google, as the petitioner, had the ultimate burden of persuasion to prove unpatentability by a preponderance of the evidence and this burden never shifted. It found no error with the Board’s requiring that Google establish the Martin reference was prior art “by another” by showing that Dr. Moran made a significant enough contribution to the portions relied on to invalidate the challenged patents to qualify as a joint inventor of those portions.

Turning to the question of whether Google satisfied its burden, the Federal Circuit said that it is evident that Dr. Moran made general technical contributions to the project, but that that was not the relevant inquiry. To be a joint inventor of the Martin reference, Dr. Moran must have made an inventive contribution to the portions of the reference relied upon and relevant to establishing obviousness. The Federal Circuit said that the testimony of Dr. Moran, if credited, might well establish that he was a co-inventor of the particular portions of the Martin reference relied on by Google. The Federal Circuit found, however, that the Board
did not complete the full Duncan analysis. Instead, it appeared to the Federal Circuit that the Board concluded that Dr. Moran’s testimony was insufficiently corroborated.

The Federal Circuit found that although coauthorship does not presumptively make a co-author a coinventor, it is significant corroborating evidence that a co-author contributed to the invention. Thus, the Federal Circuit said, the issue was not lack of corroboration for
Dr. Moran’s testimony, but rather whether his testimony should ultimately be credited over Cheyer and Martin’s conflicting testimony during the IPR proceedings. The Federal Circuit said that instead of resolving the conflicts, the Board stated that it found the testimony of Dr. Moran, Mr. Martin, and Mr. Cheyer credible. The Federal Circuit thus vacated the Board’s decision, and remanded,

The Proper Claim Construction of a Term is Not Necessarily the Sum of its Parts

In Intel Corp. v. Qualcomm Inc., [2020-1664] (December 28, 2021), the Federal Circuit affirmed the final written decision of the originally challenged claims of U.S. Patent No. 8,229,043, but vacated and remanded as to the substitute claims.

The Federal Circuit addressed first considered the phrase “radio frequency input signal” in ’043 patent claims 17, 19, and 21. Intel argued that the term should be given its ordinary meaning, while Qualcomm argued for a more specific construction. The Federal Circuit noted that ‘[e]ven without considering the surrounding claim language or the rest of the patent document, . . .it is not always appropriate to break down a phrase and give it an interpretation that is merely the sum of its parts.” The Federal Circuit said that the surrounding language points in favor of Qualcomm’s construction, adopted by the Board. The Federal Circuit said the linguistic clues suggested that “radio frequency input signal,” to the relevant audience, refers to the signal entering the device as a whole, not (as Intel proposes) to any radio frequency signal entering any component. The Federal Circuit said that the specification provides further support for the Board’s reading.

The Federal Circuit concluded that in sum, while Intel’s interpretation may have superficial appeal, Qualcomm’s better reflects the usage of “radio frequency input signal” in the intrinsic record, and affirmed it.

On the question of obviousness, the Federal Circuit concluded that substantial evidence does not
support the Board’s determination that a skilled artisan would have lacked reason to combine the prior art to achieve substitute claims 27, 28, and 31. The Federal Circuit rejected the Board’s rationale for determining that it would not have been obvious to combine the references. The Federal Circuit noted that a rationale is not inherently suspect merely because it’s generic in the sense of having broad applicability or appeal.

IPR’s Survive More Constitutional Challenges

In Mobility Workx, LLC v. Unified Patents, LLC, [2020-1441] (October 13, 2021), the Federal Circuit concluded that Mobility’s constitutional arguments were without merit, and without reaching the merits of the Board’s decision, in light of Arthrex, it remanded to the Acting Director to determine whether to grant rehearing.

Mobility argued that the structure and funding of the Board violates due process.  First, because “the fee-generating structure of AIA review[] creates a temptation” for the Board to institute AIA proceedings in order to collect post institution fees (fees for the merits stage of the AIA proceedings) and fund the agency.  Second, because individual APJs have an unconstitutional interest in instituting AIA proceedings because their own compensation in the form of performance bonuses is favorably affected.  The Federal Circuit found no merit to these defenses.

Mobility raised several additional constitutional challenges not raised before the agency that have been previously rejected by this court in other cases.  Mobility argued that the Director’s delegation of his authority to institute AIA proceedings violates due process and the Administrative Procedure Act because the Director has delegated the initial institution decision to “the exact same panel of Judges that ultimately hears the case.” Mobility additionally argued that subjecting a pre-AIA patent to AIA review proceedings “constitutes an unlawful taking of property.”  The Federal Circuit rejected these challenges.

Finally, Mobility raised an Appointments Clause challenge. The Federal Circuit agreed that a remand is required under the Supreme Court’s decision in Arthrex to allow the Acting Director to review the final written decision of the APJ panel pursuant to newly established USPTO procedures, and remanded the case.

THIS forum selection clause in THIS NDA agreement did not bar the IPRs

In Kannuu Pty Ltd. v. Samsung Electronics Co., [2021-1638] (October 7, 2021) the Federal Circuit affirmed the district court denial of Samsung’s motion for a preliminary injunction compelling Samsung to seek dismissal of Samsung’s petitions for inter partes review at the Patent Trial and Appeal Board (Board).

In 2012, Samsung contacted Kannuu, an Australian start-up company that develops various media-related products (including Smart TVs and Blu-ray players), inquiring about Kannuu’s
remote control search-and-navigation technology. Kannuu and Samsung entered into a non-disclosure agreement (NDA), to protect confidential business information while engaging in business discussions and the like. Among other things, the agreement provided:

Any legal action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby must be instituted exclusively in a court of competent jurisdiction, federal or state, located within the Borough of Manhattan, City of New
York, State of New York and in no other jurisdiction.

Following over a year of discussions, the parties ceased communications. No deal (i.e., intellectual property license, purchase, or similar agreement) over Kannuu’s technology was made. Six years later, Kannuu sued Samsung for patent infringement and breach of the NDA.
Samsung then filed petitions for inter partes review of the patents. Kannuu argued that the that review should not be instituted because Samsung violated the NDA’s forum selection
clause in filing for such review. When the Board institued proceedings as to some of the petitions, Kannuu sought rehearing, which was denied. Kannuu then sought a preliminary injunction to compel Samsung to seek dismissal of the instituted inter partes reviews. The
motion was denied, and Kannuu appealed.

The issue before the district court, and before the Federal Circuit on appeal, was whether the forum selection in the non-disclosure agreement prohibited Samsung from petitioning for inter partes review of Kannuu’s patents at the Board. The District Court found it did not, and the Federal Circuit found no abuse of discretion.

Though the district court held the forum selection clause was valid and enforceable, it concluded that the plain meaning of the forum selection clause in the NDA did not encompass the inter partes review proceedings. Specifically, the district court found that the inter partes review proceedings did not “relate” to the Agreement or transactions contemplated under it. The Federal Circuit said that the district court correctly concluded that the inter partes review proceedings “do not relate to the Agreement itself.” The connection between the two—the inter partes review proceedings and the NDA—is too tenuous for the inter partes review proceedings to be precluded by the forum selection clause in the NDA, which is a contract
directed to maintaining the confidentiality of certain disclosed information, and not related to patent rights.

Neither the district court nor the Federal Circuit said that a forum selection clause in an NDA could not bar an IPR, rather they both held that this forum selection clause in this NDA agreement did not bar the IPRs. Under appropriate circumstances, a properly drafted forum selection cause in an NDA could bar an IPR between the parties, just as such clauses in a license agreement can bar challenges to the licensed patents before the PTAB.

Broad, Functional Claims Made it Hard to Presume Nexus for Commerical Succes

In Teva Pharmaceuticals International GmbH v. Eli Lilly and Company, [2020-1747, 2020-1748, 2020-1750] (August 16, 2021), the Federal Circuit affirmed that Board’s determination that the claims of U.S. Patent Nos. 9,340,614, 9,266,951, and 9,890,210 are unpatentable because they would have been obvious over the cited prior art. The patents are directed to humanized antagonist antibodies that target calcitonin gene-related peptide (“CGRP”), that has been shown to be a potent vasodilator in the periphery.

Teva raised three challenges to the Board’s decision. First, Teva contended that the Board erred as a matter of law in its motivation to combine analysis by deviating from the motivation asserted by Lilly in its petitions for inter partes review. Second, Teva contended that even under the motivation to combine that the Board did analyze, substantial evidence does not support the Board’s factual findings. And third, Teva contended that the Board erred in its analysis of secondary considerations of nonobviousness.

Lilly asserted that a skilled artisan would have been motivated to combine the teachings of the references to make a humanized anti-CGRP monoclonal antibody for therapeutic use in humans, but the Board instead considered whether a skilled artisan would have been motivated to make the antibody merely to study or use it. Teva insists that by not requiring Lilly to support its therapeutic motivation, the Board incorrectly discounted important safety and efficacy concerns that would have been demotivating factors—i.e., reasons why a skilled artisan would have been motivated not to make a humanized anti-CGRP monoclonal antibody. The Federal Circuit held that the Board did apply the motiviation that Lilly asserted. The Federal Circuit said that “common sense and scientific reality dictate that scientists do not “study or use” humanized anti-bodies with an end goal of treating diseases in test tubes or in rats. At bottom, the prior art supports a motivation to humanize antibodies with the goal of treating human disease.”

Teva also argued that the substantial evidence did not support the Board’s factual findings. The Federal Circuit agreed with Lilly that substantial evidence supports a motivation to make a humanized anti-CGRP antibody to study its therapeutic potential for use in treatment of human disease, noting that Lilly identified evidence that supports the Board’s reasonable readings of each reference. Under the deferential standard of review, the Federal Circuit could not replace the Board’s reasonable interpretation of references with Teva’s interpretation.

Finally, with respect to secondary considerations, the Board found that the commercial products and the license lacked sufficient nexus to the challenged claims. Teva argued that the Board made two legal errors: first, in finding no presumption of nexus between the claims and the secondary considerations based on the commercial products; and second, with regard to the asserted licenses, Teva argued that the Board erred by focusing on the licensee’s products rather than the scope of the license.

The Federal Circuit found that the Board erred in its articulation of the standard for presuming nexus, but nonetheless conducting the necessary factual analysis of the unclaimed features of the commercial products, and reached the correct conclusion that no presumption of nexus applied. The Federal Circuit noted that the claims at issue used functional language, and that a claim to “anything that works” hardly has a nexus to any particular product. Because the claims in this case have a broad scope due to their lack of structural limitations, the unclaimed features in the commercial products cited here are of particular importance to the coextensiveness analysis. The Federal Circuit thus found that the Board’s factual findings regarding unclaimed features are thus supported by substantial evidence, and Teva has not shown otherwise.

Teva also argued that the Board erred by requiring a direct nexus between the challenged claims and the licensee’s products. The Federal Circuit found that the Board’s conclusion that the license lacked nexus to the challenged claims was supported by substantial evidence. The significance of licensing a patent as a secondary consideration in enhancing the nonobviousness of an invention is that an independent party with an interest in being free of the patent has chosen to respect it and pay a royalty under it rather than litigate and invalidate it. Such action tends to support its validity. The Federal Circuit said that given that 188 patents were licensed, the nexus between the license and the validity of any particular claim is rather tenuous to say the least. The Federal Circuit noted that Teva failed to show anything more than the existence of the license. Teva did not present direct evidence that the licensee’s motivation for entering into the license was related to the validity or enforceability of the patents at issue.

PTAB Departure from Agreed Claim Construction Required Notice and Opportunity to be Heard

In Qualcomm Inc. v. Intel Corp., [2020-1589, 2020-1590, 2020-1591, 2020-1592, 2020-1593,
2020-1594] (July 27, 2021), the Federal Circuit vacated and remanded six inter partes review final written decisions determining that claims 1–15, 17–25, and 27–33 of U.S. Patent
No. 9,608,675 would have been obvious.

The ’675 patent relates to techniques for generating a power tracking supply voltage for a circuit that processes multiple radio frequency signals simultaneously, using one power amplifier and one power tracking supply generator. During the IPR’s the parties never disputed that the signals were required to increase user bandwidth, and in the International Trade Commission, the Commission’s construction of the term also included the increased
bandwidth requirement.

The Board issued six final written decisions concluding that all challenged claims were unpatentable. In reaching its conclusion, the Board construed the term “a plurality of carrier aggregated transmit signals” in each asserted claim to mean “signals for transmission on multiple carriers,” omitting any requirement that the signals increase or extend bandwidth.

Qualcomm argued that it was not afforded notice of, or an adequate opportunity to respond to, the Board’s construction of “a plurality of carrier aggregated transmit signals,” and the Federal Circuit agreed. The Federal Circuit began by noting that “[a] patent owner in [an IPR] is undoubtedly entitled to notice of and a fair opportunity to meet the grounds of rejection,”
based on due process and Administrative Procedure Act (APA) guarantees.

The Board may adopt a claim construction of a disputed term that neither party proposes
without running afoul of the APA. Parties are well aware that the Board may stray from disputed, proposed constructions, however, but in the instant case the issue of whether increased bandwidth was a required part of the claim construction was not in dispute. The Federal Circuit noted that the patent owner owner agreed with the increased bandwidth requirement proposed by the petitioner. While the Board did not change theories midstream or depart from a construction it previously adopted, it is still difficult to imagine either party anticipating that this agreed-upon matter of claim construction was a moving target. The Federal Circuit said that unlike with disputed terms, it is unreasonable to expect parties to brief or argue agreed-upon matters of claim construction. Thus the Federal Circuit found that in the
the circumstances of this case, the Board needed to provide notice of, and an adequate opportunity to respond to, its construction. The Federal Circuit further found that Qualcomm did not receive notice or an opportunity to be heard regarding the Board’s construction that departed from the agreed-upon increased bandwidth requirement, and thus, the Board violated Qualcomm’s procedural rights under the APA.