Category Archives: Inter Partes Review

Federal Circuit Asks PTAB to Give it a Go and Decide Whether Indefinite Claims Were otherwise Patentable

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In Samsung Electronics America, Inc. v. Prisua Engineering Corp., 2019-1169, 2019-1260 (February 4, 2020) the Federal Circuit affirmed the PTAB determination that claim 11 of U.S. Patent No. 8,650,591 was invalid for obviosuness, but vacated the PTAB’s decision declining to decide whether claims 1-4 and 8 were patentable because these claims were indefinite.

The claims of the ‘591 patent are directed to methods and apparatuses for generating a displayable edited video data stream from an original video data stream. The Board determined that claim 1 (and claims 2-4 and 8) claimed both an apparatus and a method, and thus was indefinite under IPXL Holdings. Because the claims were indefinite, the Board declined to determine whether they otherwise defined patentable subject matter. The Board also found the claims indefinite because of the inclusion of “digital processing unit” which the Board found invoked 112(f), without identifying any corresponding stucture in the claims.

Samsung appealed arguing that the Board should have declared the claims in valid for indefiniteness. The Federal Circuit agreed with the Board that the Board did not have the authority to invalidate claims on that ground.

Samsung’s secondary argument was that the Board should have nonetheless assessed the patentability of claims 1 and 4–8 under sections 102 or 103. On this point, the Federal Circuit agreed.

The Federal Circuit noted that on the first ground of indefiniteness — mixed method and apparatus claiming, the indefiniteness problem was one of understanding when infringement occurred, and not necessarily what the claim actually means. Moreover, the Federal Circuit noted that the Board had previously held that IPXL-type indefiniteness does not prevent the Board from addressing patentability.

Thus the Federal Circuit remanded the case for the Board to attempt to apply 102 and 103 to the claims.

As to the second ground of indefiniteness, that “digital processing unit” invoked 112(f) without providing corresponding structure in the claims, the Federal Circuit disagreed. The Federal Circuit said that the question whether the term “digital processing unit” invokes section 112, paragraph 6, depends on whether persons skilled in the art would understand the claim language to refer to structure, assessed in light of the presumption that flows from the drafter’s choice not to employ the word “means. The Federal Circuit said that the Board pointed to no evidence that a person skilled in the relevant art would regard the term “digital processing unit” as purely functional. In fact, the patent owner argued to the Board, based on testimony from its expert (the inventor), that the digital processing unit recited in the claims is “an image processing device that people in the art are generally familiar with.” Moreover, the fact that claim 1 required the “digital processing unit” to be operably connected to a “data entry device” supports the structural nature of the term “digital processing unit,” as used in the claim.

The Federal Circuit rejected the Board’s conclusion that the term “digital processing unit,” as used in claim 1, invoked means-plus-function claiming,
and that for that reason claims 1 and 4–8 cannot be analyzed for anticipation or obviousness.

General Knowledge is Available in Obviousness Inquiry Even Though IPRs are Limited to Documentary Prior Art

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In Koninklijke Philips N.V. v. Google, [2019-1177] (January 30, 2020), the Federal Circuit affirmed the PTAB determination that claims 1-11 of U.S. Patent No. 7,529,806 were unpatentable as obvious.

Philips presetnted three arguments on appeal. First, that the Board erred by instituting inter partes review on the ground that the claims would have been obvious over SMIL 1.0 in light of Hua because Google did not advance that specific combination in its petition. Second, that the Board erred in finding that the claims would have been obvious in view of SMIL 1.0 because the Board impermissibly relied on “general knowledge” to supply a missing claim limitation. Third, that the Board’s obviousness findings are nevertheless unsupported by substantial evidence.

On Philips’ first point, the Federal Circuit agreed, holding that the Board erred by instituting inter partes review based on a combination of prior art references not advanced in Google’s petition. 35 U.S.C. § 311(a) does not contemplate a petition that asks the Director to initiate whatever kind of inter partes review he might choose.

On Philips’ second point, the Federal Circuit disagreed with Philips’ argument that because 35 U.S.C. § 311(b) expressly limits inter partes reviews to “prior art consisting of patents or printed publications,” and because general knowledge is neither of those, § 311(b) prohibits use of general knowledge to supply a missing claim limitation in an inter partes review. The Federal Circuit explained that although the prior art that can be considered in inter partes reviews is limited to patents and printed publications, it does not follow that we ignore the skilled artisan’s knowledge when determining whether it would have been obvious to modify the prior art.

The Federal Circuit also disagreed with Philips that the Board’s reliance on “general knowledge” violated Arendi. The Federal Circuit explained that in Arendi it cautioned that although “common sense and common knowledge have their proper place in the obviousness inquiry,” (a) invoking “common sense . . . to supply a limitation that was admittedly missing from the prior art” should generally only be done when “the [missing] limitation in question [is] unusually simple and the technology particularly straightforward;” and (b) references to common sense “cannot be used as a whole-sale substitute for reasoned analysis and evidentiary support.” The Federal Circuit said that in Arendi, the Board relied on nothing more than “conclusory statements and unspecific expert testimony” in finding that it would have been “common sense . . . to supply a limitation that was admittedly missing from the prior art.” Conversely, in the present case, the Federal Circuit found that the Board relied on expert evidence, which was corroborated by Hua, in concluding that pipelining was not only in the prior art, but also within the general knowledge of a skilled artisan.

Finally, the Federal Circuit disagreed with Philips third point, that the finding of obvious was not supported by substantial evidence. The Federal Circuit noted that the Board thoroughly explained why the modified prior art disclosed all the limitations of claim 1, The Federal Circuit said that relying on an expert declaration and reference as evidence of a skilled artisan’s general knowledge, the Board found that a skilled artisan “would have been motivated to modify the prior art. The Board also determined that there would have been a reasonable expectation of success. The Federal Circuit concluded concluded that the Board’s findings are supported by substantial evidence.

Federal Circuit Gives the PTAB an Inferiority Complex

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In Arthrex, Inc. v. Smith & Nephew, Inc., [2018-2140](October 31, 2019), the Federal Circuit vacated and remanded the Final Written Decision of the PTAB in IPR2017-00275 because the decision was issued while there was an Appointments Clause Violation.

The Board held that claims 1, 4, 8, 10–12, 16, 18, and 25–28 of Arthrex’s U.S. Patent No. 9,179,907 were unpatentable as anticipated. Arthrex appealed, contending that the appointment of the Board’s Administrative Patent Judges (“APJs”) by the Secretary of Commerce, as currently set forth in Title 35, violates the Appointments Clause of the constitution (Art. II, § 2, cl. 2). The Federal Circuit agreed concluding that the statute as currently constructed improperly makes the APJs principal officers.

More specifically, Arthrex argued that the APJs who presided over its inter partes review were not constitutionally appointed; they were principal officers who must be, but were not, appointed by the President with the advice and consent of the Senate. The issue was whether the APJs were in fact “Officers of the United States” and if so, whether they are inferior officers or principal officers. The Federal Circuit held that in light of the rights and responsibilities in Title 35, APJs were principal officers.

The Federal Circuit, under cover of Free Enterprise Fund v. Public Company Accounting Oversight Board, 561 U.S. 477 (2010) determined that the solution was to sever the problematic portions of the patent act, while leaving remaining provisions intact. The Federal Circuit thus severed the portion of the Patent Act restricting removal of the APJs, thereby rendering the APJs inferior officers and solving the constitutional appointment problem.

Poof. Fixed.

We Shall fight in the Fields and in the Streets, We Shall Fight in the Hills; We Shall Never Surrender.

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In Papst Licensing GmbH & Co. KG v. Samsung Electronics America, Inc., [2018-1777] (May 23, 2019), the Federal Circuit affirmed the PTAB’s determination that claims 1–38 and 43–45 of Papst’s U.S. Patent No. 9,189,437 are unpatentable for obviousness. The ‘437 patent, titled “Analog Data Generating and Processing Device Having a Multi-Use Automatic Processor” is directed to an interface device for communication between a data device (on one side of the inter-face) and a host computer (on the other).

The Federal Circuit noted that there were several other inter partes reviews and corresponding appeals relevant to this proceeding, in particular, six weeks before the Board rendered its ’437 Patent Decision, the Board rendered final written decisions in two other IPRs (requested by Samsung among other petitioners) involving two other Papst-owned patents (U.S. Patent Nos. 8,966,144 and 8,504,746) which share a specification with the ’437 patent and contain claim terms related to those involved in the the appeal. While Papst initially appealed those decisions, it later voluntarily dismissed those appeals, which had the effect of making those decisions final.

The Federal Circuit noted that it has held that issue preclusion doctrine can apply to the Patent Trial and Appeal Board’s decision in an IPR once it becomes final. While there is an exception to the preclusion doctrine where the prior matter was of disparately low value compared to the current proceeding, the Federal Circuit found that this did not apply because Papst fully litigated the prior case up to the eve or oral argument, and did not avail itself of the opportunity to simply disclaim the claims, if they were not worth fighting for.

Upon examining whether issue preclusion did in fact apply, the Federal Circuit noted that the Board’s ruling in the prior decision was not just materially identical to the Board’s claim construction ruling in the present case, it was essential to that determination. The Federal Circuit thus concluded that issue preclusion therefore applies to the only two issues properly preserved for and presented on appeal, and affirmed the Board’s decision on that basis.

The Federal Circuit gratuitously continued, however, to confirm that Papst’s would have failed on the merits, even apart from issue preclusion, finding substantial evidence supported the Board’s decision.

The clear lesson taught the Federal Circuit is that when dealing with multiple post grant proceedings on related patents — or at least patents with related claim elements — the parties must consider how the timing and manner of dropping portions of the proceedings might create issue preclusion. Winston Churchill once famously said:

We shall defend our island, whatever the cost may be, we shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender.

So, too, in patent disputes, sometimes, surrender is not an option.

Another IPR Petitioner Had No Standing to Appeal; Does Estoppel Apply to Such Petitioners?

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In AVX Corp. v. Presidio Components, Inc., [2018-1106] (May 13, 2019), the Federal Circuit dismissed the appeal of a PTAB Final Written Decision because the Petitioner/Appellant lacked judicial standing to appeal.

The Federal Circuit noted that because the Constitution limits its grant of the “judicial power” to “Cases” or “Controversies,” U.S. Const., Art. III, § 2, any party that appeals to it must have standing under Article III before it can consider the merits of the case. Thus in IPR appeals, an appellant must . supply the requisite proof of an injury in fact when it seeks review of a Final Written Decision.

AVX argued that it is injured by the Board’s rejection of its obviousness challenges to the upheld claims because of the statutory estoppel provision, 35 U.S.C. § 315(e). The Federal Circuit rejected this argument because it has previously estoppel as a sufficient basis for standing, and because it has yet to decide whether estoppel applies to Petitioners who lack Article III standing to appeal.

AVX also argued that it was injured by the decision because it reduces its ability to compete with the patent owner, citing decisions that, in nonpatent contexts, have found “competitor standing” to challenge certain government actions. . The Federal Circuit noted that in all the cases in which standing rested on competitive harm, the challenged government action non-speculatively threatened economic injury to the challenger by the ordinary operation of economic forces. The Federal Circuit found the government action in an IPR was quite different. The Federal Circuit said that government action in an IPR is the upholding of specific patent claims, which does not address prices or introduce new competitors, but rather give exclusivity rights over precisely defined product features.

The Federal Circuit said a patent claim could have a harmful competitive effect on a would-be challenger if the challenger was currently using the claimed features or nonspeculatively planning to do so in competition, i.e., if the claim would block the challenger’s own current or nonspeculative actions in the rivalry for sales. However taking all of AVX’s allegations as true, the Federal Circuit concluded that AVX has not shown that it is engaging in, or has nonspeculative plans to engage in, conduct even arguably covered by the upheld claims of the ʼ639 patent.

The Federal Circuit dismissed the appeal. However the Federal Circuit’s suggestion that estoppel might not apply to IPR’s where the petitioner lacks standing to appeal causes one pause. If this turns out to be the case, a patent challenger might be better off concealing its plans to make a competitive product, so that it can take a “free swing” at the patent before the PTAB, without incurring the cost of estoppel from an adverse decision.

Abandoning Infringing Conduct Caused Loss of Standing to Appeal IPR

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Momenta Pharmaceuticals, Inc. v. Bristol-Myers Squibb Co., [2017-1694] (February 7, 2019), the Federal Circuit dismissed the appeal of the PTAB Final Written Decision sustaining patentability of claims 1 through 15 (all the claims) of United States Patent No. 8,476,239, for lack of standing/jurisdiction and for mootness.

The ‘239 patent covered compounds under the generic name “abatacept” and the BMS brand name Orencia®, used in treatment of immune system disorders such as rheumatoid arthritis. Momenta’s proposed product failed its Phase 1 clinical trials and had been withdrawn, so BMS moved to dismiss the appeal because Momenta no longer had standing. Momenta responded that it had not abandoned its intent to produce a counterpart and that the ’239 Patent is an obstacle to these activities, and that it is injured by the estoppel provision of 35 U.S.C. § 315(e). Momenta cited to the “relaxed” standard for Article III compliance when the right of appeal is established by statute.

The Federal Circuit said that Congress cannot erase Article III’s standing requirements by statute. Noting that Momenta had initially stressed that it had spent millions of dollars in its development of a biosimilar, upon Momenta’s termination of all potentially infringing activity, Momenta has not shown “an invasion of a legally protected interest” that is “actual or imminent, not conjectural or hypothetical.” The Federal Circuit concluded that upon abandoning development of this product, Momenta has no legally protected interest in the validity of the ’239 Patent, and there is no real need to exercise the power of judicial review.

The Federal Circuit rejected the Momenta’s argument that the estoppel effect of the decision created stating, noting that estoppel cannot constitute an injury-in-fact when Momenta “is not engaged in any activity that would give rise to a possible infringement suit.”

The Federal Circuit further found that Momenta’s abandonment of the development of a biosimilar made the appeal moot: the cessation of potential infringement means that Momenta no longer has the potential for injury, thereby mooting the inquiry.

Collateral Estoppel Exposes the Failure to have Legitimate Plan B

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In Virtnex Inc. v. Apple, Inc., [2017-2490, 2017-2494] (December 10, 2018) the Federal Circuit affirmed the PTAB that claims 1–11, 14–25, and 28–30 of U.S. Patent No. 8,504,696 were unpatentable as obvious., noting that VirnetX was collaterally estopped from relitigating the threshold issue of whether prior art reference was a printed publication and because VirnetX did not preserve the only remaining issue of whether inter partes review procedures apply retroactively to patents that were filed before Congress enacted the America Invents Act.

During the pendency of VirnetX’s appeal, the Federal Circuit summarily affirmed seven final written decisions between VirnetX Inc. and Apple in which the Board found that RFC 2401 was a printed publication.  The Federal Circuit said that Rule 36 summary dispositions could be the basis collateral estoppel, and that the only issue was whether the printed publication issue was necessary or essential to the judgment in the prior cases.  The Federal Circuit held that it was.

VirnetX also argued that it preserved in its opening brief the issue of whether inter partes review procedures apply retroactively to patents that were filed before Congress enacted the AIA, pointing to a single paragraph in its Opening Brief, filed prior to the Supreme Court’s decision in Oil States.  The Federal Circuit said that this paragraph raised the specific question later decided in Oil States, and under a very generous reading, the paragraph also arguably raises a general challenge under the Seventh Amendment, but it in no way provides any arguments specifically preserving the retroactivity issue.

The Federal Circuit concluded that VirnetX did not preserve the issue of whether inter partes review procedures apply retroactively to patents that were filed before Congress enacted the AIA and that, therefore, the conclusion that VirnetX was collaterally estopped from raising the printed
publication issue resolved all other issues in the appeal.  The Federal Circuit affirmed.

The lesson, of course, is to correctly predict the future and simply preserve the issues you will need.  Virtnex can hardly be faulted for not preserving the issue, when they had a more substantive issue before it, buy it always pays to have a legitimate Plan B.

“Capable of” Construction (Rather than “Configured to” Construction) Dooms Apparatus, but Not Method Claims

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In Parkervision, Inc. v. Qualcomm Incorporated, [2017-2012, 2017-2013, 2017-2014, 2017-2074] (September 13, 2018), the Federal Circuit affirmed the PTAB’s determination in related inter partes review proceedings, The certain apparatus claims of U.S. Patent No. 6,091,940, generally related to telecommunications devices,  were unpatentable as obvious under 35 U.S.C. § 103(a), and that certain method claims were not unpatentable.

The Federal Circuit rejected the argument that the Board erred by basing its
patentability decisions on theories and evidence regarding the phrase “plurality of harmonics” that Qualcomm did not present in its petitions.  The case came down to whether the claim language required the production of the “plurality of harmonics,” or simply the capability of producing the “plurality of harmonics” —  The Federal Circuit found the claim language merely required the capability of producing the plurality of harmonics, which was met by the prior art that was similarly capable.

The method claims presented a different story —  while Qualcomm was only required to identify a prior art reference that discloses an apparatus “capable of” performing
the recited functions to prove that the apparatus claims would have been obvious, more was required with respect to the method claims. Specifically, Qualcomm needed to present evidence and argument that a person of ordinary skill would have been motivated to operate the prior art in a manner that satisfied the “plurality of harmonics”
limitation, which Qualcomm failed to do.

Do Over — Different Evidence and Different Evidentiary Standard Allow IPR to Reach Different Conclusion of Validity than ITC

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in Nobel Biocare Services AG v. Instradent USA, Inc., [2017-2256] (September 13, 2018), the Federal Circuit affirmed the PTAB’s determination that claims 1-5 and 19 of U. S. Patent No. 8,714,977,directed to dental implants, were anticipated.

The undisputed critical date of the ‘977 patent was May 23, 2003, and Instradent alleged that the claims were anticipated by an ABT “Product Catalog” with the date
“March 2003” on the cover.  The ITC, applying a clear and convincing evidentiary standard, had previously determined that the claims were not anticipated, and the Federal Circuit affirmed.

Meanwhile, Instradent petitioned for IPR.  While the Board adopted the same claim construction as the ITC, and considered the same evidence presented to the ITC, the Board also considered new evidence not considered by the ITC, including the declarations and deposition testimony of Hantman and Chakir that the catalog was available to the industry in March 2003.  The Board determined that a preponderance of the evidence establishes that the ABT Catalog qualifies as a prior art printed publication under 35 U.S.C. § 102(b).

On appeal, the parties disputed whether the ABT Catalog qualifies
as a “printed publication” under § 102(b).  The Federal Circuit said that whether a reference qualifies as a “printed publication” is a legal conclusion based on underlying factual findings, including The parties dispute whether the ABT Catalog qualifies
as a “printed publication” under pre-AIA § 102(b). Whether a reference qualifies as a “printed publication” is a legal conclusion based on underlying factual findings, including whether a reference was publicly accessible. Public accessibility has been called the touchstone in determining whether a reference constitutes a “printed publication.”  A reference will be considered publicly accessible if it was 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 it was not bound by its prior affirmance of the ITC’s holding that there was insufficient evidence to find pre-critical date public accessibility, observing that the evidentiary standard in IPRs, “preponderance of the evidence” is different from the higher standard applicable in ITC proceedings.  The Federal Circuit further noted that the Board also had more evidence on this issue than what was before the ITC.  Finally the Federal Circuit said that under the substantial evidence standard, the inconsistent conclusions from the evidence does not prevent an administrative agency’s finding from being supported by substantial evidence.

The Federal Circuit agreed with Instradent that substantial evidence supported the Board’s finding that the ABT Catalog was publicly accessible prior to the critical date. The Board credited Chakir and Hantman’s testimony that Chakir obtained a copy of the ABT Catalog at the March 2003 IDS Conference and that Hantman retained that copy in
his records thereafter. Furthermore, Hantman’s declaration included excerpts of his copy of the ABT Catalog taken from his files. The Board found that Hantman’s copy of the ABT Catalog and the copy offered as prior art by Instradent in the IPR had identical pages except for some handwriting on the cover of Hantman’s copy.

The Federal Circuit noted that corroboration is required of any witness whose testimony alone is asserted to invalidate a patent, regardless of his or her level of interest.  Corroborating evidence may include documentary or testimonial evidence, and circumstantial evidence can be sufficient corroboration.  The Federal Circuit listed eight factors to be considered in evaluating corroboration:

(1) the relationship between the corroborating witness and the alleged prior user,
(2) the time period between the event and trial,
(3) the interest of the corroborating witness in the subject matter in suit,
(4) contradiction or impeachment of the witness’ testimony,
(5) the extent and details of the corroborating testimony,
(6) the witness’ familiarity with the subject matter of the patented invention and the prior use,
(7) probability that a prior use could occur considering the state of the art at the time,
(8) impact of the invention on the industry, and the commercial value of its practice.

Applying a “rule of reason” analysis to the corroboration requirement, which “involves an assessment of the totality of the circumstances including an evaluation of all pertinent evidence, the Federal Circuit held the corroboration to be sufficient, noting “there are no hard and fast rules as to what constitutes sufficient corroboration, and each case must be decided on its own facts.”

The Federal Circuit rejected the challenges to the claim construction, and affirmed the Board.

 

 

Change In Construction of Claims from Petition Required Board to Allow Petitioner to Respond

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In Ericsson Inc. v. Intellectual Ventures I LLC, [2017-1521] (August 27, 2018), the Court of Appeals for the Federal Circuit held that the PTAB did not consider portions of Ericsson’s Reply, and vacated and remanded the Final Written decision that claims 1–3, 6–9, and 12–14 of U.S. Patent No. 5,602,831 were not unpatentable under 35 U.S.C. § 103.

Under PTO regulations, the Board is entitled to strike arguments improperly raised for the first time in a reply. Such decisions related to compliance with the Board’s procedures are reviewed for an abuse of discretion.  An abuse of discretion is found if the decision: (1) is clearly unreasonable, arbitrary, or fanciful; (2) is based on an erroneous conclusion of law; (3) rests on clearly erroneous fact finding; or (4) involves a record that contains no evidence on which the Board could rationally base its decision.

Ericsson argued on pages 13 and 14 of its Reply that, given the admitted state of the art regarding interleaving disclosed in the patent at issue, the prior art’s teachings render obvious the claimed invention.  The Board characterized this portion of Ericsson’s Reply as raising a new theory of obviousness, one that was not addressed in the Petition or
responding to arguments raised in the Patent Owner Response, but the Federal Circuit disagreed, noting the portions of the Reply the Board declined to consider expressly follow from the contentions raised in the Petition.

The Federal Circuit found that the Board’s error was parsing Ericsson’s arguments
on reply with too fine of a filter. The error was exacerbated by the fact that the significance arose after the Petition was filed, in that the Board adopted a different
construction of the terms after the Petition instituting inter partes review was granted, and the issue was the essential basis of the Board’s decision in concluding that  the claim had not been shown unpatentable, Ericsson should have been given an opportunity to respond.  Undoubtedly, this was a special case in which Petitioner, Patent Owner, and the Board all initially applied the broadest reasonable interpretation claim construction standard (despite the fact that the patent had expired when it filed the petition), and only after institution applied Phillips instead. In light of these changed circumstances, the Board revisited its approach to the claims in light of this error, and Ericsson likewise deserved an opportunity to do the same.

The Federal Circuit said that its decision should not be viewed as changing or challenging the Board’s practice of limiting the scope of replies pursuant to its regulations; precedent supports the Board’s discretion to reject arguments raised for the first time in a reply.