PTAB Needed to Do A Better Job Supporting its Obviousness Determination in Inter Partes Reexamination

In Icon Health and Fitness, Inc. v. Stava, Inc., [2016-1475] (February 27, 2017), the Federal Circuit vacated-in-part, affirmed-in-part, and remanded, the Board’s Decision in an appeal of a inter partes reexamination.

Ikon argued that the Examiner erred when he extensively cited to statements in the expert declarations submitted by Stava.  The Federal Circuit said that there is no per se prohibition against relying on an expert’s declaration in support of factual findings underlying a legal conclusion of obviousness solely because the declaration states that something “would have been obvious.”  To determine if an expert’s statement is directed to factual findings or the legal conclusion of obviousness, the court looks to the statement not in isolation, but in the context of the whole declaration.

As to claims 46, 57–62, 65, 74, 98-100, the Federal Circuit found that neither the PTAB nor the Examiner made the requisite factual findings or provided the attendant explanation, finding that both purported to incorporate by reference arguments drafted by Strava’s attorneys.  Thus the Federal Circuit vacated the decision and remanded the case for additional PTAB findings and explanation.  As to claim 43, 71, and 86, the Federal Circuit disagreed with Ikon, and found that The PTAB made the requisite factual findings with an adequate evidentiary basis and provided the attendant explanation.

This cases goes back to the Board, but O’Malley would have simply reversed, since the Board failed to meet its duty.  While certainly a pro-patentee position, it pins the fate of the challenger on the competence of the Board and the Examiner below, rather than the merits of the invalidity case.


The Song says 2 out of 3 Ain’t Bad; The Supreme Court says 1 is not “substantial”

In Life Technologies Corp. v. Promega Corp. [14-1538] (February 22, 2017), the Supreme Court reversed a Federal Circuit decision that supplying a single component of a multi-component invention from the United States is an infringing act under Patent Act section 271(f)(1):

Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.

Promega’s U.S. Patent No. RE 37,984, is directed to a toolkit for genetic testing.  Life Technology made a competing test kit in the United Kingdom.  One of the kit’s five components, an enzyme known as the Taq polymerase, was manufactured by Life Technologies in the United States and then shipped to the United Kingdom, where the four other components were made, for combination there.  A jury found for Promega.  The district court granted JMOL finding that “all or a substantial portion” did not encompass the supply of a single component of a multicomponent invention. The Federal Circuit reversed the district court, holding that a single important component could constitute a “substantial portion” of the components of an invention under §271(f)(1) and finding that in this case Taq polymerase was such a component.

The threshold determination was whether §271(f )(1)’s requirement of “a substantial portion” of the components of a patented invention refers to a quantita­tive or qualitative measurement.  The Supreme Court found that The Patent Act itself does not define the term “substantial,” and turned to its ordinary meaning, which turned out to be of little help.  Everyone agreed that the term is ambiguous and, taken in isola­tion, might refer to an important portion or to a large portion.

The Supreme Court found the context in which “substantial” appears in the stat­ute pointed to a quantitative meaning.  The neighboring terms  “all” and “portion” convey a quantitative meaning.  The Supreme Court noted that if a qualitative meaning was intended, the statute probably would have been worded differently, referring instead to the invention rather than to the components.

After determining that the term “substantial portion” refers to a quantitative measurement, the Court turned to the question of whether a single component can ever constitute a “substantial portion” so as to trigger liability under §271(f )(1), and the Court held it could not.

The Supreme Court reached this result in part by comparison with §271(f )(2), the Court noting that reading §271(f )(1) to cover any single component would not only leave little room for §271(f )(2), but would also undermine §271(f )(2)’s express reference to a single component “espe­cially made or especially adapted for use in the inven­tion.”

The Court said it was not defining how close to “all” of the compo­nents “a substantial portion” must be, and said it was only holding that one component does not constitute “all or a substantial portion” of a multicomponent invention under §271(f )(1).

Covered Business Method Patent: You Keep Using Those Words . . . We do not Think They Mean What You Think They Means

In Secure Access, LLC v. PNC BANK NATIONAL ASSOCIATION, [2016-1353] (February 21, 2017), the Federal Circuit vacated the Board’s decision in CBM2014-
00100 on the ground that U.S. Patent No. 7,631,191 on a system and method for
authenticating a web page” was not a business method patent.  Claim 1 of the patent recites:

1. A method comprising:
transforming, at an authentication host computer, received data by inserting an authenticity key to create formatted data; and
returning, from the authentication host computer, the formatted data to enable the authenticity key to be retrieved from the formatted data and to locate a preferences file, wherein an authenticity stamp is retrieved from the preferences file.

The Board started out in the right direction, quoting the statute, which is found in AIA § 18(d)(1) and which is repeated verbatim at 37 C.F.R. § 42.301(a),

a patent that claims a method or corresponding
apparatus for performing data processing or other
operations used in the practice, administration, or
management of a financial product or service . . .

and rejected the patent owner’s argument that it the patent was not a covered business method patent.  First, the Board rejected the argument that “financial product or service” as used in the definition included “only financial products such as credit, loans, real estate transactions, check cashing and processing, financial services and instruments, and securities and investment products.”  The Board reasoned that because the patent was directed to solving problems related to providing a web site to customers of financial institutions, it therefore covers the ancillary activity related to a financial product or service of Web site management and functionality and according to the legislative history of the AIA, perform operations used in the administration of a financial product or service.

Despite acknowledging the Federal Circuit’s guidance in Versata Development
Group, Inc. v. SAP America, Inc., 793 F.3d 1306 (Fed. Cir. 2015) questioning the use of various legislators’ competing statements in the legislative history of the AIA, the Board nonetheless found that at least one legislator appeared to view “customer interfaces” and “web site management and functionality,” as activity encompassed by the statutory language.  The Board buttressed its conclusion with the fact that the patent owner was in fact enforcing the patent against financial institutions.

The Federal Circuit looked at the question as whether eligibility for CBM review should be determined on its claim language in light of the specification as understood at the earliest effective filing date, or should the PTAB also consider post-grant evidence such as a patent owner’s litigation history?  The Federal Circuit Circuit viewed the case not as a question of whether the patent was in the statutory definition of covered business method patent, but as a legal question of whether the Board properly understood the scope of the statutory definition.  The Federal Circuit found that it did not.

The Federal Circuit examined the question “What does the statute mean when it says that a patent claims something?”  The Fedeal Circuit held that the meaning cannot be determined from an isolated reading of the claim itself:

A claim in a patent does not live in isolation from the rest of the patent, as if it can be cut out of the document and read with Webster’s Dictionary at hand. Established patent doctrine requires that claims must be properly construed—
that is, understood in light of the patent’s written description; that is a fundamental thesis in claim construction.

The Federal Circuit reasoned that if the use in the practice, administration, or
management of a financial product or service does not have to be part of the
claim as properly construed, essentially every patent could be the subject of a CBM petition.  The Federal Circuit found that Congress intended to give the CBM program a much more limited scope.  The Federal Circuit concluded that the statutory definition of a CBM patent requires that the patent have a claim that contains, however phrased, a financial activity element.  The Court said: just because an invention could be used by various institutions that include a financial institution, among others, does not mean a patent on the invention qualifies under the proper definition of a CBM patent.


Presidents Day Patents

Thomas Jefferson is the president most closely associated with the patents, although Abraham Lincoln is the only president to actually receive a patent. President’s day was established in 1885 in recognition of President George Washington, and it is still officially called “Washington’s Birthday” by the federal government. In 1971 it was moved from February 22, Washington’s actual birthday, to the third Monday in February as part of the Uniform Monday Holiday Act, which is when the popular name, “Presidents’ Day,” attached.  Although technically Washington’s Birthday, the day is also closely associated with Abraham Lincoln, whose birthday is also in February — February 12 — and is still celebrated in a number of U.S. states.

This post honors George Washington and Abraham Lincoln, both of whom have been frequently commemorated in the patents issued by the USPTO.

George Washington

U.S. Patent No. 537666

U.S. Patent No. D9161

U.S. Patent No. 21357

Although with some commemorations, it is hard to determine whether it is a positive or a negative tribute:

U.S. Patent No. D25387

Abraham Lincoln

U.S. Patent No. D2983 features President Lincoln

Of course, some commemorations are tackier than others:

U.S. Patent No. D12634

U.S. Patent No. D9403

U.S. Patent No. 1634713

Hindsight Cannot be the Thread that Stitches the Prior Art Patches into the Claimed Invention

In Metalcraft of Mayville, Inc., v. The Toro Company, [2016-2433, 2016-2514] (February 16, 2017), the Federal Circuit affirmed a modified preliminary injunction against Toro’s continued infringement of U.S. Patent No. 8,186,475 on platform suspension systems for lawnmowers.

The claims required “an operator platform that supports the seat and an entire body of an operator during use of the utility vehicle,” while Toro maintained that because part of the user’s body were supported by the controls, which were not mounted on the operator platform, its accused lawnmowers do not meet the limitation “an entire body of an operator.”

On appeal Toro argued that the district court’s construction of “an entire body of an operator” was improper because it excludes the operator’s hands and arms. The Federal Circuit disagreed, finding that nowhere did the district court conclude that “an entire body of an operator” excluded the operator’s arms and hands.  The Federal Circuit said that the patent makes clear that it is the suspended operator platform that supports “an entire body of an operator” and that the operator platform is a separate and distinct element from the steering controls. However this really did not address Toro’s argument that if the controls are connected to the platform, then the platform supports the users entire body, but when the controls are attached to something else, something else helps support the user’s body.

Toro also argued that if the steering controls are not mounted on
the operator platform, the operator’s hands will not be isolated from shock loads. However, the Federal Circuit rejected this argument as importing limitations into the claims.

On the question of validity, the district court rejected Toro’s obviousness contention because a patent composed of
several elements is not proved obvious merely by demonstrating
that each of its elements was, independently,
known in the prior art.  The district court said that Toro provided “no reason, and the Court cannot imagine one, that a person of ordinary skill in this field would combine a motorcycle shock with a suspended truck cab and come up with a suspended operator platform.”

The Federal Circuit agreed that Toro provided no explanation or reasoning for concluding that one of skill in the art would have combined these particular references to produce the claimed invention. Without any explanation as to how or why the references would be combined to arrive at the claimed invention, we are left with only hindsight bias that KSR warns against.  The Federal Circuit said that while it understands that the obviousness
analysis cannot be confined by a formalistic conception of the words teaching, suggestion, and motivation, it also recognizes that it “cannot allow hindsight bias to be the thread that stitches together prior art patches into something that is the claimed invention.”

The Federal CIrcuit also agreed with the district court that there was irreparable harm, because “it is impossible to quantify the damages caused by the loss of a potentially lifelong customer.”

Finally, the Federal Circuit agreed with the scope of the injunction, rejecting Toro’s argument that that it was too broad.

Someone Forgot to Tell the PTAB That There is No IPR Estoppel

In Great West Casualty Co. v. Intellectual Ventures II LLC, [IPR2016-01534] (February 15, 2017), the PTAB declined to institute an IPR because petitioners were estopped by their prior challenge to U.S. Patent No. 7,516,177.

The Board noted that the instant Petition was the fifth petition filed by Petitioners challenging claims 11–20 of the ’177 patent. Of the four prior petitions IPR2015-01706 and IPR2015-01707 (“prior completed proceedings”) were the only two of the four petitions for which trial was instituted.  In these, the Board issued final written decisions that claims 11–13 and 15–20 of the ’177 patent were unpatentable.

The current petition is substantively identical to a petition filed by Oracle Corporation and HCC Insurance Holdings, Inc., and Petitioner moved to join the proceedings.

The PTAB began with 35 USC 315(e)(1) which provides that a after a final written decision, Petitioner may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.  The PTAB noted that 35 U.S.C. 315(e) applies estoppel on a claim-by-claim basis.

Before the Board, then was the scope of “any ground that the petitioner raised or reasonably could have raised during that inter partes review.”  The current proceeding relied upon the Robinson reference, which was not at issue in the two completed proceedings, which further focused the Board on “reasonably could have raised.”

Petitioner argued that Shaw Industries limited estoppel effect to grounds actually instituted.  The Board disagreed, saying taht it was unpersuaded that the words “reasonably could have raised during that inter partes review” from Section 315(e)(1) should be interpreted as limited to grounds actually raised during the prior completed proceedings.  Instead, the Board interpreted Shaw Industries as meaning that estoppel does not apply to any ground of unpatentability that was presented in a petition.

The Board observed:

a petitioner makes an affirmative choice to avail itself of inter partes review only on certain grounds. That choice, however, comes with consequences, most prominently, that grounds petitioner elects not to raise in its petition for inter partes review may be subject to the consequences of Section 315(e)(1).

The Board next turned to Petitioner’s argument that Robinson is, nevertheless, not a ground that Petitioner “reasonably could have raised” because (1) Petitioner was unaware of Robinson prior to the filing of the petition in IPR2016-01434 despite an exhaustive, litigation-motivated prior art search, and (2) there is not a shred of evidence suggesting that Robinson could be found in the types of places a diligent prior art searcher.  The Patent Owner however identified several searches that would have found Robinson, so the Board concluded that it could have been raised, and thus the Petitioner was estopped.

The Board denied institution at to claims 11-13 and 15-20 because of estoppel, and exercised its discretion not to institute as to claim 14, to which the parties agreed estoppel did not apply.

At least at the Board, estoppel applies to grounds that could have been raised (which does not include grounds presented by for which Board does not institute).

Just Because One Could Doesn’t Mean One Would

In Personal Web Technologies, LLC v. Apple, Inc., [2016-1174] (February 14, 2017), the Federal Circuit affirmed the Board’s claim construction, but vacated the Board’s obviousness determination because the Board did not adequately support its findings that the prior art disclosed all elements of the challenged claims and that a relevant skilled artisan would have had a motivation to combine the prior-art references to produce the claimed inventions.

The Federal Circuit said that in the obviousness theory presented by Apple and adopted by the Board, the Board had to make findings, supported by evidence and explanation, on two points.  First, the Board had to find all of the elements of the ’310 patent claims at issue.  Second, the Board had to find that a person of ordinary skill in the art would have been motivated to combine the prior art in the way claimed by the ’310 patent.

The Federal Circuit noted that in KSR the Supreme Court said “it can be important to identify a reason that would have prompted a person of ordinary skill in the relevant field to combine the elements in the way the claimed new invention does” and added that “[t]o facilitate review, this analysis should be made explicit.”

The Federal Circuit said that in order to allow effective judicial review, the agency is obligated to provide an administrative record showing the evidence on which the findings are based, accompanied by the agency’s reasoning in reaching its conclusions.  The Federal Circuit concluded that the Board’s decision was inadequate; it found that the Board did not sufficiently explain and support the conclusions that (1) the references disclose all of the elements recited in the challenged claims and (2) a relevant skilled artisan would have been motivated to combine the art in the way the ’310 patent claims and reasonably expected success.

The Federal Circuit noted that the Board’s decision cited a different reference for an element than Apple asserted in its Petition, and the Board’s citation to Apple’s petition was incorrect.  The Federal Circuit further noted that the Board’s analysis did not address motivation.  The Federal Circuit found that the Board’s reasoning seems to say no more than that a skilled artisan, once presented with the two references, would have understood that they could be combined. The Federal Circuit said that is not enough: it does not imply a motivation to pick out those references and combine them to arrive at the claimed invention.

The Federal Circuit said that the Board’s reasoning does not meet
the requirements for a sustainable obviousness determination
in this case.  The Federal Circuit explained that the remand is not merely for explanation or clarification of what the Board meant in the decision; the remand is for the Board to reconsider the merits of the obviousness challenge.

I ♥ Patents

The technology documented by the U.S. patent collection has information relevant to every human endeavor, and Valentine’s Day is no exception.  Consider the following patents on solutions to the vexing problems presented by Valentine’s Day:

U.S. Patent No. D85,341 protects a Love Tester.

U.S. Patent No. 5,318,327, protected a Romantic Card

U.S. Patent No. 5,213,509 Protected a Lover’s Game and Method of Play

U.S. Patent No. 6,434,805 protects a Method of Making a Heart-Shaped Diamond

U.S. Patent No. D449,147 Protected a Heart-Shaped Chocolate

U.S. Patent No. 4,194,629 Protected a Love Box

U.S. Patent No. 4,993,184 Protected a Heart-Shaped, Free-Standing, Living Horticultural Plants

U.S. Patent No. 5,727,565 Protects a Kissing Shield

U.S. Patent No. D592,393 Protects a Heart-Shaped Umbrella

U.S. Patent No. D82,863 Protects a Valentine Envelope

U.S. Patent No. D360,366 Protects a Love Clock

U.S. Patent No. D284,595 Protected Cupid Unicorn (Cupicor) the Love Unicorn

U.S. Patent No. 372,594 protects a Pizza Pan

U.S. Patent No. 286,301 Protects a Long Stem Valentine Card

U.S. Patent No. D491,338 Protects Heart-Shaped Pepperoni Slices

The Removal of Matter from the Provisional Application is Significant to the Interpretation of the Claims in the Non-Provisional Application

In MPHJ Technology Investments, LLC. v. Ricoh Americas Corp., [2016-1243] (February 13, 2016), the Federal Circuit affirmed the PTAB decision that claims 1-8 of U.S. Patent No. 8,488,173 were
invalid on the grounds of anticipation or obviousness.

On appeal MPHJ argued that “interfacing” and “Go button” were single step operations, and that the PTAB erred in construing these claim elements as not limited to single-step operations. MPHJ was relying upon portions of its prior provisional application, which Ricoh pointed out were omitted from the final regualr utility application. MPHJ responded that these omitted sections were not explicitly disclaimed, and therefore that they are part of the prosecution history and are properly relied on to explain and limit the claims, even if the passages do not appear in the issued patent.

The Federal Circuit agreed that a provisional application can contribute to understanding the claims, but found that it was the deletion from the provisional application that contributes understanding of the intended scope of the final application.  The Federal Circuit concluded that a person of skill in this field would
deem the removal of these limiting clauses to be significant.  The Federal Circuit noted that the ’173 Patent in its final form contains no statement or suggestion of an intent to limit the claims to the
deleted one-step operation. Neither the specification nor
the claims state that this limited scope is the only intended
scope. Instead, the ’173 Patent describes the single step
operation as “optional.”

Based upon this construction, the Federal Circuit affirmed that the claims were anticipated or obvious over the prior art.

Strong Presumption that Markush Claim Elements are Closed to Additional Elements

In Shire Development. LLC v. Watson Pharmaceuticals, Inc., [2016-1785] (February 10, 2017), the Federal Circuit reversed a finding of infringement because the accused product did not meet the Markush claim element, and remanded for entry of an order of non-infringement.

The claims of U.S. Patent No. 6,773,720 required:

an outer hydrophilic matrix wherein the lipophilic matrix is dispersed, and said outer hydrophilic matrix consists of compounds selected from the group consisting of polymers or copolymers of acrylic or methacrylic acid, alkylvinyl polymers, hydroxyalkyl celluloses, carboxyalkyl celluloses,

polysaccharides, dextrins, pectins,

starches and derivatives, alginic acid, and natural or synthetic gums

After noting that a Markush claim is a particular kind of patent claim that lists alternative species or elements that can be selected as part of the claimed invention, the Federal Circuit pointed out that the Markush elements used the language “consisting of” which is presumed to be closed to additional elements.   Though the “consisting of” presumption is very strong,
there have been rare exception for “aspects unrelated to the

The Federal Circuit found that magnesium stearate, an excipient
not within the claim 1(b) Markush group, was present in the outer hydrophilic matrix, and thus the claim 1(b) limitation was literally violated.  The district court nonetheless found infringement because the component outside of the Markush group—i.e., the lipophilic magnesium stearate in the hydrophilic outer matrix—was unrelated to the invention.  The Federal Circuit disagreed with the district court’s interpretation of what constitutes a component unrelated to the invention.  The Federal Circuit found that the magnesium stearate structurally and functionally relates to the invention, and its presence in the outer matrix violates the “consisting of” requirement in claim 1(b).

While the magnesium stearate was included as a lubricant, rather than for its lipophilic properties, this was not sufficient to overcome the strong presumption of the closed nature of the claim.  Even the fact that examples in the patent included magnesium stearate was insufficient to overcome this strong presumption.