Archive for the ‘prior art’ Category

PTAB Narrows Its Preliminary Claim Interpretation To Uphold Cellular Patent

Monday, February 13th, 2017

In July, 2014 Ericsson Inc. and Telefonaktiebolaget LM Ericsson (“Ericsson”) petitioned for inter partes review of claims 1, 2, 8-12 and 18-22 of U.S. Patent No. 7,787,431 owned by Intellectual Ventures II  LLC (“IV”).  In February, 2015, the Board instituted trial on claims 1 and 2 based on obviousness grounds, but denied institution of obviousness grounds for claims 8-12 and 18-22.  In a final written decision dated January 29, 2016, claims 1 and 2 of the ’431 patent were determined to be unpatentable.  (IPR2014-01195, Paper 37.)

Ericsson filed a second IPR petition in August, 2015, again challenging claims 8-12 and 18-22.  (IPR2015-01664, August 3, 2015.)  Claim 8 is representative:

8. A cellular base station comprising:

circuitry configured to transmit a broadcast channel in an orthogonal frequency division multiple access (OFDMA) coreband, wherein the core-band is substantially centered at an operating center frequency and the core-band includes a first plurality of subcarrier groups, wherein each subcarrier group includes a plurality of subcarriers, wherein the core-band is utilized to communicate a primary preamble sufficient to enable radio operations, the primary preamble being a direct sequence in the time domain with a frequency content confined within the core-band or being an OFDM symbol corresponding to a particular frequency pattern within the core-band,

wherein properties of the primary preamble comprise:

an autocorrelation having a large correlation peak with respect to sidelobes;

a cross-correlation with other primary preambles having a small cross-correlation coefficient with respect to power of other primary preambles; and

a small peak-to-average ratio; and

wherein a large number of primary preamble sequences exhibit the properties; and

circuitry configured to transmit control and data channels using a variable band including a second plurality of subcarrier groups, wherein the variable band includes at least the core-band.

In its Institution Decision, the Board provided a preliminary construction of “transmit[ting] a broadcast channel in an orthogonal frequency division multiple access (OFDMA) core-band.”  (Institution Decision, p. 11.)  The Board stated: “the plain meaning of transmitting a broadcast channel in a core-band merely requires transmitting some part of the broadcast channel in a core-band and does not exclude transmitting another part of the broadcast channel outside the core-band.” Id.

IV disagreed with the Board’s preliminary construction, asserting that an ordinarily skilled artisan would have understood the limitation to exclude transmitting any portion of the recited broadcast channel outside of the core-band. (Patent Owner Resp., pp. 35–36.)  According to the Board, Ericsson did not agree with or dispute IV’s assertion, and only asserted that IV’s proposed construction adds no clarity and that no construction is necessary.

In its Final Written Decision, the Board decided that its preliminary construction was unreasonably broad in view of IV’s arguments and its expert’s testimony:

Upon further review of the ’431 patent, particularly in view of Patent Owner’s arguments supported by Dr. Zeger’s testimony discussed above, we are persuaded that our preliminary partial construction was unreasonably broad to the extent that construction indicated the transmitting a broadcast channel limitation would be met by the transmission of a broadcast channel that is only partially within the core-band. Thus, we agree with Patent Owner that to show that the transmitting “a broadcast channel in an” OFDMA core-band limitation is met, Petitioner must demonstrate that the prior art teaches or suggests transmitting a broadcast channel, wherein the entire channel is contained within the core-band.

(Final Written Decision, pp. 8-9.)  The Board determined that Ericsson’s prior art combination failed to teach transmitting a broadcast channel in an OFDMA core-band, as recited in independent claims 8 and 18.  The Board found that a particular prior art reference (Yamaura) did transmit in the OFDMA core-band at times, but it did not have sufficient evidence that at other times it did not transmit outside of that band, and therefore it did not teach the recited OFDMA core-band limitation.

Even though the second IPR was instituted for trial on claims 8-12 and 18-22 based on a broad construction of the claims, the claims were not shown to be obvious based on a narrowed interpretation of the claims adopted in the Final Written Decision.

Are Patent-Friendly PTAB Decisions On the Rise?

Monday, February 6th, 2017

Patent litigation changed with passage of the America Invents Act. Overnight the PTAB became a new venue for challenging patent claims using IPRs, CBMs and PGRs. The initial reaction by the patent bar to the PTAB’s “take charge” approach to instituting review and canceling patent claims was met with approval by businesses under attack by patent trolls and with disdain by patent owners whose patents would have likely sailed through the assertion before the AIA. Some commentators blasted the PTAB for a high percentage of patent claims invalidated in PTAB proceedings.

Those who tried to paint the actions of the PTAB with a broad brush in the first years of IPRs were bound to be both right and wrong. Yes, institution rates were at an all-time high, but factors such as these made the first years of PTAB practice particularly hard to characterize:

  • the patent bar and the PTAB were learning how to litigate these new patent trials for the first time;
  • litigation teams did not have the luxury of seeing how the PTAB viewed patents under review, and to tailor their litigations accordingly; and
  • a number of patents already in litigation were selected based on a pre-AIA (pre-IPR) enforcement economic model:
    • discovery and litigation costs established a minimal nuisance settlement value (now it is the cost of IPR);
    • thinly capitalized patent owners who previously had to outlay only minimal investment in the litigation suddenly had to secure counsel to defend patent rights in these patent reviews for the first time; and
    • the patents under review were drafted to survive district court scrutiny and enjoy the presumption of validity and a clear and convincing standard of review (and many still are).

Public sentiment was a moving target, but so was practice before the PTAB. After witnessing the PTAB’s heightened scrutiny of patentability, rather than file new suits many patent owners decided to wait and watch from the sidelines or take their assertions outside the U.S. Regardless, patent owners quickly learned the benefit of analyzing and selecting patents more likely to survive an IPR, CBM or PGR lodged by a defendant-petitioner before engaging in a patent litigation.

Now, with PTAB institution rates moderating, it remains to be seen whether the Board is easing its scrutiny on patentability or whether higher caliber patent assertions are being lodged in view of that heightened scrutiny.

For example, the PTAB recently rendered some decisions that might give patent owners reason to reconsider:

CASE STUDY 1: IPR2016-01453 – U.S. Patent 7,358,679 – Wangs Alliance Corp. d/b/a WAC Lighting Co. v. Philips Lighting North America Corp., Paper 8, (Feb. 2, 2017)

On February 2, 2017, the Board denied the ’679 IPR Petition filed by Petitioner Wangs Alliance Corp. (“WAC”) challenging Patent Owner Philips’ Lighting patent. The backstory of the dispute between Philips and WAC is quite interesting:

Philips has been embroiled in patent litigation with WAC since May, 2015. Koninklijke Philips N.V. et al. v. Wangs Alliance Corporation, Case No. 14-cv-12298-DJC (D. Mass.). Philips sued WAC for patent infringement of eight patents (not including the ‘679 patent) relating to lighting products and systems relating to LED lighting devices. WAC filed IPR petitions on seven of the eight patents, but obtained institution of only six of the seven IPR petitions. In January 2016, the district court litigation was stayed pending the outcome of the IPRs.

WAC later filed two IPR petitions against the ‘679 patent.  The ’679 patent does not appear in the litigation documents, but WAC identified it as claiming priority to U.S. 7,352,138 (which is in the litigation) and as related to U.S. 7,039,399 (also in the litigation).

The ‘679 patent relates to an LED-based lighting unit that resembles a conventional MR16 bulb having a bi-pin base connector configured to engage mechanically and electrically with a conventional MR16 socket. Claim 1 is representative:

 1. An apparatus, comprising:

at least one LED;

a housing in which the at least one LED is disposed, the housing including at least one connection to engage mechanically and electrically with a conventional MR16 socket; and

at least one controller coupled to the housing and the at least one LED and configured to receive first power from an alternating current (A.C.) dimmer circuit, the A.C. dimmer circuit being controlled by a user interface to vary the first power, at least one controller further configured to provide second power to the at least one LED based on the first power.

WAC’s ’679 IPR petition was denied when the Board adopted a claim construction of “alternating current (A.C.) dimmer circuit” that was narrower than the one proffered by Petitioner WAC.

WAC argued that “A.C. dimmer circuit” means “a circuit that provides an alternating current (A.C.) dimming signal.” WAC further asserted that it requires only receipt of an A.C. signal and the provision of power (A.C. or D.C.) to a light source. Patent Owner Philips countered that “A.C. dimmer circuit” requires an AC output from the AC dimmer circuit. The Board agreed with Philips, based on arguments and claim constructions from a related IPR (IPR2015-01294 which relates to U.S. 7,038,399), and because Patent Owner argued that “every instance of “A.C. dimmer circuit” in the ’679 patent’s specification describes an A.C. output from the A.C. dimmer circuit. (See Prelim. Resp. 4–5.)

A summary of the Philips patents and their IPR outcomes thus far (note: several decisions are still on appeal) shows that Patent Owner Philips is defending its patents well in these proceedings:

* The ’679 Patent is not appearing in litigation documents, but a claim of priority from U.S. 7,352,138 and a relationship to U.S. 7,039,399 is noted in WAC’s petitions. The ’679 IPR outcome is not yet determined because even though the -01453 IPR petition was unsuccessful the -01455 IPR institution decision remains to be decided and is not expected until later this month. Note: several of these decisions are on appeal, so these are not final results.

Philips’ IPR results are comparable to historical statistics when it comes to the number of IPRs instituted, but its results are substantially better than the statistical outcomes associated with IPR final written decisions from 2016 data. For example, early Board practice saw a very high percentage of IPR institutions (starting at ~90% in 2013 and dropping to ~70% in 2016). Upon institution, a patent owner’s chances of losing all claims if the IPR were to reach a final written decision would be roughly 70%.

In this Philips case study, the percentage of IPRs instituted remains relatively consistent with IPR institution outcomes (ignoring the ‘679 IPRs because they are not yet final, we get 5 out of 7 IPRs were instituted or ~70% ); however only one of the institutions resulted in a cancellation of all claims, which is much closer to 17% than the 2016 expected 67% cancellation rate for IPRs instituted which end in a final written decision (again, the results of the Federal Circuit appeals will not be known for some time). However, the data also shows a mixed claim decision outcome in 2 out of 6 IPRs (~33%), which equates to roughly double the typical percentage of mixed claim decisions (typically ~15%). Of course, mixed claim decisions are very hard to evaluate, because one has to know which claims are more likely to be infringed with substantial damages to know if the mixed result was a winner or a loser for a patent owner.

The Philips patent IPR outcomes are not yet final, but as of today Philips is substantially ahead of the 2016 percentages.

Let’s consider another case study:

 

CASE STUDY 2: IPR2015-01769, — U.S. Patent 7,793,433 — Zero Gravity Inside, Inc. v. Footbalance System OY, , Paper 49, (Feb. 3, 2017)

Footbalance System OY sued Zero Gravity Inside, Inc. et al. alleging patent infringement in May, 2015 and filed amended complaints, including a third one filed on October 21, 2016. Footbalance alleged patent infringement of its US Patents 7,793,433 and 8,171,589. The patents related to apparatus and method for producing an individually formed insole.

In response, Zero Gravity filed two IPR petitions challenging claims of each patent on August 19, 2015. Both IPR challenges failed.

The ’589 IPR petition alleged obviousness of claims 1-3, but was not instituted in a Decision Denying Inter Partes Review dated January 13, 2016 (IPR2015-01770, Paper No. 17, January 13, 2016).

The ’433 IPR petition was instituted based on alleged obviousness of claims 1-7, but on February 3, 2017, the Board found that Petitioner Zero Gravity failed to show by a preponderance of the evidence that claims 1-7 of the ’433 patent were unpatentable under 35 U.S.C. § 103. Footbalance managed to maintain its claims despite institution of the IPR.

The Board decided Petitioner failed to show that the prior art taught “wherein the at least one layer of thermoplastic material is configured to reach out from under a heel of a foot only to the metatarsophalangeal joint of the foot”, as recited in Claim 1 (“the MTP limitation”).

According to the Final Written Decision, Petitioner first asserted that the MTP joint extended approximately ¾ of the way down the foot, but Patent Owner countered that a person of skill in the art would understand the MTP limitation requires a precise anatomic location of the MTP joint and not an approximation or average, such as ¾ the length of the foot. The Board found that Petitioner then shifted its argument to assert that the prior art, which taught a pad before the ball of the foot was “so close to the requirements of the MTP limitation that the MTP limitation would still have been obvious to a POSA in light of either of these teachings.” Paper 48, 8-9 (italics in original). The Board was not persuaded:

Petitioner’s contentions in the Petition are not persuasive because they are not based upon the broadest reasonable construction of the MTP limitation. As discussed above, we construe the MTP limitation to require a layer formed to extend to, but no further than, the location of the MTP joint of a specific foot. [ ]. Petitioner, however, does not sufficiently show that an insole having a ¾-length moldable support layer teaches a layer formed to extend to, but no further than, the location of the MTP joint of a specific foot. [ ]

Petitioner’s contentions in its Reply also are not persuasive. Dieckhaus discloses that thermoplastic layer 6 “extends from the back or heel portion of the insole, to approximately just short of the ball section of the foot” [ ].  Approximately just short of the ball section of the foot is not the location of the MTP joints (i.e., the location of the heads of the metatarsal bones and the corresponding proximal phalanx). [ ] Further, Petitioner does not sufficiently show that it would have been obvious to one of ordinary skill in the art to modify Dieckhaus’s thermoplastic layer 6 to extend to, but no further than, the location of the MTP joint of a specific foot. Petitioner’s assertion that such a modification would have been obvious because Dieckhaus’s disclosure is “so close” is a mere conclusory statement. “To satisfy it burden of proving obviousness, a petitioner cannot employ mere conclusory statements. The petitioner must instead articulate specific reasoning, based on evidence of record, to support the legal conclusion of obviousness.” In re Magnum Oil Tools Int’l, Ltd., [cites omitted].

The Footbalance litigation is still in its very early stages, so it is too early to tell how the litigation may turn out, but the Board did not cancel claims from either patent.

These recent outcomes do not establish a trend, but they do show that some patent owners are succeeding despite the heightened scrutiny of PTAB proceedings.  They also show that the PTAB will provide relief to patent owners at both institution and final written decision stages of the PTAB trial.  They also give lessons on better patent drafting, which will be the subject of future posts.

 

Federal Circuit Employs Phillips Claim Construction to Measure Claims Amended in Reexamination for Possible Intervening Rights

Monday, February 22nd, 2016

When patent owners sue an accused infringer for patent infringement, one way for the accused infringer to avoid liability is to show noninfringement of the patent claims.  But if the claims are extremely broad, the accused infringer may find it difficult to prove noninfringement and instead may have to rely on a showing of invalidity to avoid liability.  However, a showing of invalidity requires clear and convincing evidence, which is a high standard.  Enter post-grant proceedings, which provide the petitioner (or “requester,” when employing reexamination) a lower evidence standard for patent challenges.

Should the patent be subject to review under post-grant proceedings, the patent owner will likely want to avoid amendment if possible, because amendment that results in substantive changes to the claimed invention can trigger intervening rights, which may provide some reduction of infringement liability for the accused infringer should the claim be substantively narrowed in the post-grant proceeding.  Stakeholders want to know how to determine substantive amendment, triggering intervening rights.  For example, is substantive amendment to be measured by the claim construction standard typically used in the post-grant proceeding (currently “broadest reasonable interpretation,” but pending review by the Supreme Court in Cuozzo), or the claim construction standard used in district court (Phillips)?  The Federal Circuit recently addressed this question when considering amendments made in reexamination for using the Phillips standard in Convolve, Inc. v. Compaq Computer Corp. (Fed. Cir., 2014-1732, Feb. 10, 2016).

Convolve sued Compaq and others in 2000 for infringement of its U.S. Patent No. 6,314,473 relating to minimization of vibrations of a disk drive for quieter operation.  Convolve’s patent ultimately was reexamined and in 2008 certain words were added to the claims during the reexamination.  The court considered whether the amended claims were substantively identical to decide if intervening rights would apply:

“A patentee of a patent that survives reexamination is only entitled to infringement damages for the time period between the date of issuance of the original claims and the date of the reexamined claims if the original and the reexamined claims are ‘substantially identical.’” R & L Carriers, Inc. v. Qualcomm, Inc., [ ]. “[I]t is the scope of the claim that must be identical, not that identical words must be used.” Slimfold Mfg. Co., Inc. v. Kinkead Indus., Inc., [ ]. As a result, amendments made during reexamination do not necessarily compel a conclusion that the scope of the claims has been substantively changed. [ ] This is true even where the claims at issue were amended during reexamination after a rejection based on prior art. Laitram Corp. v. NEC Corp., [ ] Rather, “[t]o determine whether a claim change is substantive it is necessary to analyze the claims of the original and the reexamined patents in light of the particular facts, including the prior art, the prosecution history, other claims, and any other pertinent information.” Laitram[ ].

Accordingly, the Federal Circuit employed a Phillips standard when reviewing the claim amendments:

In determining the scope of the claims, we apply the traditional claim construction principles of Phillips v. AWH Corp.,[ ] (en banc), paying particular attention to the “examiner’s focus in allowing the claims” after amendment. R & L Carriers [ ]; see also Laitram Corp. v. NEC Corp., [ ] (When an amendment is made during the reexamination proceedings to overcome a prior art rejection, that is a “highly influential piece of prosecution history.”).

In one example, the original claims recited “acoustic noise,” but were amended in reexamination to “seek acoustic noise.”  The issue that the Federal Circuit considered is whether this narrowing was a substantive amendment for purposes of its intervening rights analysis.  It could have been deemed the amendment to have been a substantive change, because other types of motor noises could have been ruled out by the amendment, but instead the court considered:

  • the specification, which focused on the seek process and the noise it generates;
  • the claims, which relate “acoustic noise” to the seek time and seek process; and
  • the original prosecution history of the patent, where the patent owner argued that the reason for the amendment.

It concluded:

On their face, the original claims recite only “acoustic noise,” which could encompass any manner of acoustic noise, including that generated from the spindle. But when read in conjunction with the remaining claim limitations and in light of the specification and prosecution history, a person of ordinary skill in the art would understand the claims to be limited to seek acoustic noise.

Consequently, the Federal Circuit decided the claim amendments resulted in substantively identical claims before and after amendment, and therefore intervening rights do not apply:

In sum, we conclude that the addition of the term “seek” before “acoustic noise” did not alter the scope of the claim.  [] Here, the language of the claims, read in light of the specification and prosecution history, especially the applicant’s 2001 remarks and amendment, compel a conclusion that the claims as originally drafted were limited to seek acoustic noise despite the lack of an express recitation in the claims.

The Federal Circuit reversed the lower court’s grant of summary judgment of noninfringement based on the lower court’s determination that liability was precluded by intervening rights.

The Federal Circuit concluded that the claim scope prior to the amendment would have been interpreted to be the same as the scope after amendment using a Phillips construction based on the specification, claims, and prosecution history.  Had the court instead relied upon the broadest reasonable interpretation from reexamination as its gauge, the claims would presumably have been deemed substantively different and the district court summary judgment would have been affirmed.  Convolve allows patent owners an opportunity to avoid intervening rights when amended claims would obtain the same Phillips claim construction as the claims prior to amendment.

 

IPRs And Settlement of Patent Infringement Cases

Sunday, February 14th, 2016

The passage of the AIA is still relatively recent, yet statistics are starting to emerge that demonstrate the effective use of IPRs to settle patent infringement cases.  IAM magazine recently published an interesting report by Unified Patents showing that IPRs have the effect of increasing the median time to settle litigations (from 211 to 420 days), but when viewed from the time that the first IPR filing is made, the median time of the “adjusted duration” (163 days) is shorter than the median time for litigations without IPRs (211 days):

For the 15,000 cases filed between 2012 and 2014 that settled before the end of 2015, the median duration was around 211 days. By contrast, for the much smaller subset of 1,100 cases which were identified as related matters to at least one inter partes review proceeding, the median overall duration was 420 days.

At first glance, this result seems counter-intuitive and contrary to the America Invents Act’s efficiency and cost-saving goals. However, a closer look at this subset of 1,100 related matters reveals that most settled within 180 days of the earliest inter partes review filing date. Specifically, the median adjusted duration for these cases was 163 days as of the end of 2015.

This timing data demonstrates that settlement is statistically likely before an institution decision is made (which can take place as late as 6 months after the filing date of the petition).  The report offers a few explanations for the observed data:

One explanation for the increase in pre-institution settlements may be that settling the dispute earlier allows patent owners to eliminate the risk that an adverse decision could be used as grounds for institution in a later case. [ ]

A second explanation may be that defendant petitioners have an increased incentive to settle claims before institution due to the low rate of institution – although this seems less likely.

Other potential reasons why IPRs encourage settlement include:

  • Weak patent assertions are more likely to attract IPR petitions by defendants.
    • Well-educated defendant petitioners are incentivized to file IPR petitions to combat weak patents.
    • As long as there is an inexpensive validity challenge option, weak patent assertions are inherently easier to settle than cases involving strong patents.
  • IPR filings quickly inform the parties about the strengths and weaknesses of each other’s case.
    • Strong IPR petitions educate the patent owner about any potential weaknesses of the challenged patent.
    • Weak IPR petitions inform the patent owner about the weakness of the publication prior art.
    • Expectations of each party will converge more quickly if they learn more about their case early in the patent contest.
  • IPRs require the parties to communicate relatively early in a patent assertion.  These communications provide more opportunities for the parties to understand their case and to discuss and settle the dispute.

Those active in post-grant proceedings know that IPRs also provide a limited mechanism for settlement before the IPR petition is filed.  Of course, it is difficult to account for settlements that occur before an IPR petition is filed, but pre-filing settlements were discussed in an earlier post, and will be part of a half hour presentation I will be making for Patexia’s webinar series on March 24, 2016: “Posturing IPRs for Early Settlement.”  More information about that seminar can be found by clicking on this link.

Board Limits Multiple IPR Challenges in Samsung Electronics v. Rembrandt Wireless Technologies

Monday, June 22nd, 2015

June 22, 2015

Rembrandt Wireless Technologies sued Samsung and Research in Motion for infringement of  U.S. Patent 8,457,228 in June 2013.  The ‘228 patent relates to data communications, and in particular to a data communication system in which a plurality of modems use different types of modulation in a network.

In June of 2014, Samsung filed six IPR petitions to challenge various claims of the ’228 patent.  (IPR2014-00889 to -00893 and -00895.)   Only half of Samsung’s six petitions were instituted for trial, but claim 21 was the only claim of the ’228 patent in the district court litigation that was not instituted for trial in the PTAB.  (Rembrandt also asserted U.S. Patent 8,023,580, which was also the subject of six IPR petitions, and had additional claims not instituted for trial.)

In the original IPR challenge of claim 21 (IPR2014-00892), Samsung unsuccessfully asserted a combination of “admitted prior art” (“APA”) with U.S. Patent 5,706,428 (“Boer”).  Samsung filed another IPR petition in January 2015 with a motion for joinder to IPR2014-00892 proposing new grounds for the unpatentability of claim 21.  (IPR2015-00555.)  These new grounds combined a new reference, U.S. Patent 5,537,398 (“Siwiak”), to the originally asserted prior art.  But on June 19, 2015, the Board again denied institution of trial of claim 21 and without considering Siwiak:

We do not reach the merits of Petitioner’s additional reasoning in the instant Petition as to why Petitioner asserts that the subject matter of claim 21 would have been obvious over the combination of APA, Boer, and Siwiak. Instead, for the reasons discussed below, we exercise our discretion under 35 U.S.C. § 325(d) to deny institution of inter partes review in this proceeding.

35 U.S.C. § 325(d) states:

In determining whether to institute or order a proceeding under . . . chapter 31, the Director may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office.

To reject the second IPR petition, the Board integrated § 325(d) with 37 C.F.R.  § 42.1(b):  “[37 C.F.R. § 42] shall be construed to secure the just, speedy, and inexpensive resolution of every proceeding.”  The Board explained its denial of the petition:

Petitioner [ ] presents no argument or evidence that Siwiak was not known or available to it at the time of filing IPR ’892. In fact, Petitioner applied Siwiak in proposed grounds of rejection against claim 21 of the ’228 patent in another petition filed the same day as that in the IPR ’892 proceeding. See IPR2014-00889, Paper 2 at 58–60.  On this record, we exercise our discretion and “reject the petition” because “the same or substantially the same prior art” previously was “presented to the Office” in the IPR ’892 proceeding. [cites omitted]

Petitioner is requesting, essentially, a second chance to challenge the claims. We, however, are not persuaded that a second chance would help “secure the just, speedy, and inexpensive resolution of every proceeding.” 37 C.F.R. § 42.1(b). Permitting second chances in cases like this one ties up the Board’s limited resources; we must be mindful not only of this proceeding, but of “every proceeding.”  [cites omitted]

In this proceeding, however, we are not apprised of a reason that merits a second chance. Petitioner simply presents arguments now that it could have made in IPR ’892, had it merely chosen to do so.  In view of the foregoing, and especially in light of the fact that, barring joinder, this petition is time-barred under 35 U.S.C. § 315(b), we exercise our discretion [to deny the petition].

To conserve its limited resources, the Board must be more selective in petitions it will consider.  Petitioners must provide reasons why the Board should consider new grounds proffered in a subsequent petition, including why the new grounds could not have been presented in an earlier-filed petition.

Federal Circuit Interprets Board’s Broadest Reasonable Interpretation Standard – Part II

Thursday, June 18th, 2015

In Microsoft Corp. v. ProxyConn, Inc. v. Michelle K. Lee, Intervenor (Fed. Cir. cases 2014-1542 and -1543), the Federal Circuit reversed claim constructions made by the Board in the underlying IPRs.  One of the claim constructions that was reversed related to the interpretation of components of a packet-switched network.  In particular, the claims recite a gateway that is “connected to the packet-switched network in such a way that network packets sent between at least two other computers pass through [the gateway],” as stated in claim 6 of U.S. Patent No. 6,757,717:

6. A system for data access in a packet-switched network, comprising:

a gateway including an operating unit, a memory and a processor connected to said packet-switched network in such a way that network packets sent between at least two other computers pass through it;

a caching computer connected to said gateway through a fast local network, wherein said caching computer includes an operating unit, a first memory, a permanent storage memory and a processor;

said caching computer further including a network cache memory in its permanent storage memory, means for a digital digest and means for comparison between a digital digest on data in its network cache memory and a digital digest received from said packet-switched network through said gateway.

The Federal Circuit referenced Figure 11 of the patent to show one embodiment where the caching computer is connected to the gateway, and the gateway is connected to receiver and sender computers:

FIG 11

The interpretive issue is whether the “two other computers,” could be any two computers, including the caching computer recited in claim 6 immediately after the gateway.  This interpretation is important because the asserted prior art arguably included a gateway connected to at least one other computer and the caching computer, but not a gateway connected to receiver and sender computers and a caching computer.  Microsoft argued for the broader interpretation, which included the caching computer as potentially one of the two connected computers.  But ProxyConn argued for the narrower interpretation that the “two other computers” referred only to the sender and receiver computers.  The Board adopted the  broader interpretation, and decided the prior art rendered such claims unpatentable.

The Federal Circuit reversed the Board’s construction, first by analyzing the claim language:

The Board erred in concluding that the “two other computers” could include the caching computer.  Beginning with the language of the claims, claim 6 recites a system comprising a gateway, a caching computer, and “two other computers.”  ’717 patent col. 10 l. 54–col. 11 l. 12. Not only are the “two other computers” recited independently from, and in addition to, the gateway and caching computers, the word “other” denotes a further level of distinction between those two computers and the specific gateway and caching computers recited separately in the claim.

Then the Federal Circuit turned to the specification:

The specification confirms that the phrase “two other computers” is limited to the sender/receiver and computer/receiver.  Other than in claim 6 itself, the phrase “two other computers” is used three times in the specification, each time as part of the embodiment containing the gateway and caching computer intermediaries.  [cites omitted]  And in each instance where it is used, the phrase “two other computers” describes components that are separate and distinct from the gateway and the caching computer.  [ ]

For example, the specification states: “Gateway 60 is connected to a wide-area packet-switched network in such a way that network packets sent between at least two other computers 42 and 46 pass through the gateway 60.  The caching computer 62 uses a part of its permanent storage memory for network cache memory 66.”  [cites omitted] (emphases added).  As shown in referenced Figure 11, the “two other computers 42 and 46” in this passage are the sender/computer and receiver/computer, respectively.  Read together with labeled Figure 11, this portion of the specification makes clear that the gateway, the caching computer, and the “two other computers” are each separate and distinct components of the overall system.  The Board’s construction, which expands the “two other computers 42 and 46” to include the separately identified caching computer, is unreasonably broad in light of the language of the claims and specification.

The Federal Circuit vacated the Board’s findings of unpatentability of claims 6, 7, and 9, and remanded “for proceedings consistent with this opinion.”

Some takeaways from this portion of the appellate decision are:

  • The Federal Circuit supports the PTO’s adoption of the broadest reasonable interpretation (BRI) standard for IPRs, consistent with Cuozzo.
  • It will actively provide guidance on what constitutes a proper BRI for IPRs.
  • A BRI determination may be guided by analysis of the claim language and the patent specification, including the drawings.

We will explore more about the claim constructions and decision on the Patent Owner’s motion to amend in future posts.

PTAB Denies 2Wire IPR Petitions

Wednesday, June 10th, 2015

June 10, 2015

TQ Delta LLC sued Pace Americas, Inc. for patent infringement in the U.S. District Court for the District of Delaware in November 2013.  TQ Delta LLC v. 2Wire Inc., Case no. 1:13-cv-01835-RGA. The complaint was amended to name defendants Pace PLC, Pace Americas, LLC and 2Wire, Inc. in January 2014. TQ Delta ultimately alleged infringement by the defendants of 24 patents it owned. These patents relate to digital subscriber line (“DSL”) technology, including for example asymmetric digital subscriber line (“ADSL”) technology and very-high-bit-rate digital subscriber line (“VDSL”) technology.

On November 7, 2014, 2Wire, Inc. filed six inter partes review (IPR) petitions to challenge certain claims of six different patents owned by TQ Delta LLC that were asserted in the suit. (IPR2015-00239 to -00243 and -00247.)  Each IPR petition included a declaration by a technical expert and numerous exhibits. TQ Delta filed Preliminary Patent Owner Responses to each IPR petition.

On May 29, 2015, the Board denied all six IPR petitions. Why?

Each IPR petition was reviewed on its own merits, but in general the Board found that the Petitioner failed to prove its claims of obviousness:

A patent claim, however, “is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art.” Id. at 418. “Rather, obviousness requires the additional showing that a person of ordinary skill at the time of the invention would have selected and combined those prior art elements in the normal course of research and development to yield the claimed invention.” Unigene Labs., Inc. v. Apotex, Inc., 655 F.3d 1352, 1360 (Fed. Cir. 2011).  [. . .] Further, an assertion of obviousness “‘cannot be sustained by mere conclusory statements; instead, there must be some articulated reasoning with some rational underpinning to support the legal conclusion of obviousness.’” Id. (citing In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006)).

Petitioner does not explain sufficiently in the Petition why a person of ordinary skill in the art would have had reason to combine the teachings of [the prior art] to achieve the method of [the challenged claims]. Petitioner merely alleges that the claims would have been “obvious” in view of the three items of prior art, and describes how [certain prior art documents] allegedly teach various aspects of the claims. . . .

(See, for example, Decision Denying Institution of Inter Partes Review, IPR2015-00240, Paper 18, pp. 8-9.)

Additionally, the Board found that the Petitioner merely stated conclusory results of the asserted combination, but did not proffer a rationale to modify the components of the prior art documents:

Petitioner’s first statement that it “would have been obvious” to combine [certain prior art references] is conclusory and does not demonstrate a reason to combine. See KSR, 550 U.S. at 417–18; Unigene, 655 F.3d at 1360; In re Chaganti, 554 F. App’x 917, 922 (Fed. Cir. 2014) (“It is not enough to say that there would have been a reason to combine two references because to do so would ‘have been obvious to one of ordinary skill.’ Such circular reasoning is not sufficient—more is needed to sustain an obviousness rejection.” (citation omitted)).

(Id at 9.)

Moreover, the Board explained that the Petition must state these things explicitly, and cannot merely incorporate arguments from the expert declaration to draw its conclusions of obviousness. The Board found that the expert’s analysis was not reflected in the Petition, and relied on that to explain its decision to deny institution.  (Id at 11-12.)

* * *

One of the takeaways from this is that post-grant practitioners have to carefully consider how to best present their case to the Board.  Technical cases may involve a great deal of complex information, which must be organized and presented within the very limited pages afforded by the trial rules.  And, depending on the facts of each case, a Petitioner may not get a second chance to challenge the patent before the Board.

 

In re Cuozzo Speed Technologies: Federal Circuit Affirms Board Finding of Unpatentability in First IPR

Thursday, February 5th, 2015

The Federal Circuit affirmed the final determination of the Board in the first inter partes review under the Leahy-Smith America Invents Act (AIA).   Garmin petitioned for IPR of claims 10, 14 and 17 of U.S. Patent No. 6,778,074 owned by Cuozzo Speed Technologies.  The Board found these claims obvious and denied Cuozzo’s motion to amend the ’074 patent by substituting new claims 21, 22, and 23 for issued claims 10, 14, and 17.  The Federal Circuit affirmed the Board’s final determination of obviousness, upheld the Board’s application of the broadest reasonable interpretation standard (BRI), and the Board’s denial of Cuozzo’s motion to amend.

One irony of this case is that Cuozzo challenges the Board’s adoption of BRI as an interpretive standard, yet Cuozzo asserts a construction of the phrase “integrally attached” that is broader than the definition adopted by the Board in the IPR:

Claim 10 includes the following limitation: “a speedometer integrally attached to said colored display.” ’074 patent col. 7 l. 10. Cuozzo argues that the board improper-ly construed the phrase “integrally attached.” The Board construed “integrally attached” as meaning “discrete parts physically joined together as a unit without each part losing its own separate identity.” J.A. 9. Cuozzo contends that the correct construction of “integrally attached” should be broader—“joined or combined to work as a complete unit.” Appellant’s Br. 33. Before the Board, Cuozzo stated that its construction would cover “a display that both functionally and structurally integrates the speedometer and the colored display, such that there only is a single display.” J.A. 10. Cuozzo argues that the Board’s claim construction improperly excludes a single-LCD embodiment of the invention wherein the speedometer and the speed limit indicator are on the same LCD.

Some may be confused by a patent owner who complains of the USPTO’s use of a broader interpretative standard, but simultaneously asserts a broader construction than the USPTO for a phrase.  Cuozzo needed the broader interpretation to argue that its amended claims should have been entered by the Board.   Cuozzo’s amended claims were directed to a particular embodiment of the invention employing a speedometer and speed limit indicator on the same LCD; however, the Board’s interpretation of “integrally attached” excluded that particular embodiment.  The Board relied on its claim construction to deny Cuozzo’s amended claims and the Federal Circuit upheld the Board’s narrower claim construction:

We see no error in the Board’s interpretation. The word “attached” must be given some meaning. As the Board explained, it would “be illogical to regard one unit as being ‘attached’ to itself.” J.A. 9. The specification further supports the Board’s construction that the speedometer and the speed limit are independent—it repeatedly refers to a speed limit indicator independent of any speedometer and states that “the present invention essen-tially comprises a speed limit indicator comprising a speed limit display and an attached speedometer.” ’074 patent col. 2 ll. 52–54. The Board did not err in its claim construction.

The majority opinion (filed by Judge Dyk, and joined by Judge Clevenger) and the dissent (by Judge Newman) reach several additional post-grant topics, which will be discussed in future posts.

PTAB Joinder Practice Update: Board Interprets 35 U.S.C. § 315(c) to Require Party Joinder

Tuesday, September 30th, 2014

Sep. 30, 2014

In at least two decisions last week, the Patent Trial and Appeal Board (PTAB or Board) interpreted the IPR joinder provision, 35 U.S.C. § 315(c), to preclude a joinder request by an existing party to the proceeding.  The Board had allowed this practice in the past, for example, when a party timely filed its request for joinder with a petition that asserted new grounds of challenging one or more claims of the patent under IPR.  In these most recent decisions, the Board seems to have decided that § 315(c) requires “party joinder.”

In two IPRs styled Target Corp. v. Destination Maternity Corp. (IPR2014-00508 and -00509) the Board provided its rationale for why subsequent IPR petitions by Target could not be joined to the instituted IPR proceedings (IPR2013-00531 and -00533, respectively).  The Decision Denying Motion for Joinder for the -00508 IPR provides this reason (which is referenced by the parallel Decision Denying Motion for Joinder in the -00509 IPR):

The statute does not refer to the joining of a petition. Rather, it refers to the joining of a petitioner (i.e., “any person who properly files a petition . . .”). Id. Further, it refers to the joining of that petitioner “as a party to [the instituted] inter partes review.” Id. Because Target is already a party to the proceeding in IPR2013-00531, Target cannot be joined to IPR2013-00531.

The -00508 IPR Decision included a dissent which summarized prior cases allowing such joinder:

The majority opinion chooses not to address the issues as presented by the parties. Instead, the majority bases its decision to deny the motion entirely on a construction of 35 U.S.C. § 315(c), concluding that the statute enabling joinder does not apply here because it allows only joinder of parties, not joinder of issues. According to the majority, the language in § 315(c) addresses only joinder of a “party” to a proceeding, and does not permit joinder in the situation present in this case, where Petitioner seeks the “joinder” of additional grounds by the same party. The majority opinion acknowledges, however, the Board has consistently allowed joinder of additional grounds by the same party See, e.g., Ariosa Diagnostics v. Isis Innovation Ltd., Case IPR2012-00022 (PTAB Sept. 2, 2014) (Paper 66)(“Ariosa”); Samsung Elecs. Co. v. Virginia Innovation Scis., Inc., Case IPR2014-00557, (PTAB June 13, 2014) (Paper 10); Microsoft Corp. v. Proxyconn, Inc., Case IPR2013-00109 (PTAB Feb. 25, 2013) (Paper 15); ABB Inc. v. Roy-G-Biv Corp.,Case IPR2013-00282 (PTAB Aug. 9, 2013) (Paper 15).

As the majority opinion observes, the Board in Ariosa concluded that the language in § 315(c) that allows joinder of “any person who properly joins a petition under section 311” should be construed as not prohibiting the joinder of inter partes review proceedings involving the same party. Here, however, the majority opinion concludes that “the relief described in § 315(c) is something an existing party already has, namely, party status in the instituted inter partes review.” The majority opinion states further in a footnote that

solely focusing upon “any person” does not give full effect to the other words in the statute that limit who “any person” may be. Other language in § 315(c) excludes from “any person” at least two persons from among those who may be joined to a proceeding. More specifically, the phrase “who properly files a petition under section 311” excludes the patent owner, and “as a party,” excludes persons who are already a party.

We note initially that as this issue of statutory construction was not addressed, and thus not briefed, by the parties, the majority should not have denied joinder solely on statutory construction grounds. Apart from and independent of this failure to address the issues presented by the parties, however, we disagree with the majority’s construction of § 315(c), for the reasons discussed below.

Joinder is of particular importance to PTAB practitioners because the AIA imposes strict rules on the timing and content of IPR petition filings to challenge patentability.  It is especially important in IPRs, because a petitioner is barred from filing another petition over a year after service of a complaint alleging infringement under 35 U.S.C. § 315(b).  Before the decisions of the past week, a petitioner had one more chance to argue a different ground of challenge in an IPR using § 315(c) joinder.  Although not guaranteed, on occasion the Board had allowed joinder of a later-filed petition by the same petitioner to an instituted proceeding when the later-filed petition met certain conditions of timeliness and where the later-filed petition will not pose an undue delay or burden on the existing proceeding.  This afforded the petitioner one more opportunity to “tune” challenges when the Board granted partial institution of the claims challenged in the instituted IPR after the one-year bar.  It also afforded the petitioner another chance to challenge claims newly added in a parallel litigation after the one-year IPR bar.  Essentially, the former practice gave the petitioner one more opportunity to consolidate challenges in one proceeding.

If the Board follows the recent decisions precluding joinder requests by a party to the proceeding, petitioners will have to be more diligent to challenge every claim that could be possibly asserted in the parallel litigation.  Petitioners will have to continue to be thorough in exploring the best prior art challenges in the original petition and to assert robust grounds of unpatentability that will withstand the Board’s institution decision.  Accordingly, time will tell if last week’s ruling will be the rule for joinder and whether it will result in more IPR petitions to meet these challenges.  After all, in post-grant practice, that which you do not successfully challenge is likely to be harder to challenge later.

SAP Files Ex Parte Reexamination Request using Prior Art from Ongoing Litigations

Monday, May 6th, 2013

As you may recall from earlier posts, on September 16, 2012, SAP filed a petition for review of U.S. Pat. No. 6,553,350 to begin the first covered business method patent review (CBM2012-00001) under the America Invents Act.  To advance its PTAB trial date, SAP agreed to limit its argument to 35 U.S.C. 101 challenges set forth in its petition and not assert its prior art  challenges in the CBM.

The PTAB trial was held on April 17, 2103, and we are awaiting a decision in that trial.  The Federal Circuit also just decided the appeal in the parallel district court action last week.  The Federal Circuit affirmed the infringement and damages findings by the lower court, but remanded for correction of the injunction ordered by the lower court.

SAP recently filed papers in the PTAB action indicating that it has requested an ex parte reexamination based on its prior art R/3 documentation of the same ‘350 patent.  Ex parte reexamination requests are still prosecuted in the Central Reexamination Unit and using “special dispatch.”  It will be interesting to see if the CRU will be able to expedite these reexaminations in light of the changes brought by the AIA.  One important change being the shift of future inter partes proceedings to the PTAB (legacy inter partes reexaminations are still being completed in the CRU).