Archive for the ‘PTAB Patent Trials’ Category

ChanBond Avoids Institution of Six Cisco IPR Petitions

Monday, April 3rd, 2017

ChanBond sued several cable company defendants alleging patent infringement of three wideband signal distribution system patents in the District of Delaware in 2015.  The defendants included Atlantic Broadband Group, Bright House Networks, Cable One, Cablevision, Cequel Communications, Charter Communications, Comcast Communications, Cox Communications, Mediacom Communications, RCN Telecom Services, Time Warner Cable, WaveDivision Holdings, and Wideopen West Finance (District of Delaware case nos. 15-cv-842 to -854).  Non-party Cisco filed eight IPR petitions against the three ChanBond patents in September 2016, and a stay was ordered on March 3, 2017 pending the PTAB’s decisions to institute IPR.

Cisco’s IPR petitions had mixed results.  The day the stay was ordered the PTAB instituted inter partes review of claims 1,2, 5, 6, 19, 20, 23 and 29 from US Patent 7,941,822 (IPR2016-01744), but denied institution of claims 13 and 14 in a second IPR petition of the ‘822 patent (IPR2016-01746).  (Note:  RPX filed an IPR petition on claims 1-31 of the ‘822 which was instituted for trial and oral arguments were held in January 2017.  A final written decision has not been issued by the PTAB yet.  See IPR2016-00234.)

On March 29, 2017, six IPR petitions for US Patent Nos. 8,341,679 and 8,984,565 were denied institution.  The denial was based on a difference in opinion about the broadest reasonable interpretation for the term “RF channel,” which affected every claim Cisco sought to have reviewed.  (For brevity, only the documents relating to IPR2016-01898 will be referenced in the following discussion, since the other 5 IPR petitions were denied on substantially identical grounds in the remaining five proceedings:  IPR2016-01899, -01900, -01889, -01890, and -01891).

Cisco took the position that “RF channel” encompasses not only radio transmissions in different frequency bands, but also radio transmissions that can be in the same frequency band that use a code multiplex to encode the transmission into different “channels.”  Cisco proposed a construction for “RF channel” that “includes ‘an RF path for transmitting electric signals.'”  (Petition at 13, citing the ‘679 patent at 6:62-65.)  Cisco’s prior art was also directed to Code Division Multiple Access (CDMA) systems which rely on spread spectrum (“a wideband channel,” as stated in Ex. 1002, ¶ 58) as opposed to different transmission bands.

ChanBond filed Preliminary Responses that rejected such a broad interpretation of “RF channel,” asserting “the invention is directed to using multiple separate RF channels to transport a data stream — a specific type of frequency-division multiple access (FDMA).”  (Prelim. Resp. at pp. 6, 14-24.)  ChanBond asserted that Cisco’s CDMA prior art “is the polar opposite of [its specific FDMA] invention.”  (Prelim. Resp. at p. 7.)

The PTAB rejected Cisco’s assertion that multiple channels are multiplexed on the same frequency bands, and that code channels or CDMA channels could be an RF channel within the meaning of the ‘679 patent.  The panel cited an inconsistent statement by Cisco’s expert which described a FDMA and CDMA hybrid system using Walsh codes:  “[t]he mutual orthogonality of Walsh codes allows one particular coded channel to be isolated and decoded from all other coded channels, even though they are all broadcasting on the same RF channel.” (italics added by the panel).  The panel reasoned that this statement referred to a particular frequency band as an “RF channel” and to divisions within the RF channel as “coded channels,” and therefore gave no weight to the expert’s testimony regarding the meaning of “RF channel.”

The PTAB concluded that the term “RF channel” as used in the ‘679 patent “does not include code channels – for example data streams created by CDMA– but instead refers only to frequency bands, such as those created by FDMA.”  (Final Written Decision of IPR2016-01898, p. 13.)  All six of the IPR petitions of the ‘679 and ‘565 patents were denied based on the claim construction issue and because Cisco’s grounds were based CDMA prior art.

It appears that the one year window after service to file IPRs has passed, so it will be interesting to see if a request for rehearing is filed by Cisco to challenge the panel’s decision.  It is not clear if the interpretations proffered by the panel will somehow pose issues for ChanBond to enforce its patents as planned, but it has at least avoided further review of the ‘679 and ‘565 patents for now.

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.

 

Patent Due Diligence and Evaluation After the AIA

Monday, July 18th, 2016

Many factors must be considered for due diligence and valuation of a patent portfolio. The patent owner’s desire to have broad claims that capture a large number of infringements must be tempered against its need for claims that will not be deemed invalid in view of prior art.

Before the America Invents Act (AIA), patents were crafted to survive federal court scrutiny.  An assertion of broad claims was more likely than sweating the details about validity because it was harder to prove a patent was invalid than it was to prove it was infringed.

With the enactment of the AIA, the Patent Trial and Appeal Board (PTAB or Board) is empowered to review patent validity in administrative trials (AIA Trials). Patents are more readily invalidated in these AIA Trials using a lower burden of proof than required in federal district court. Furthermore, the Board’s administrative patent law judges have both scientific and patent law training, which enables them to scrutinize patents more carefully than a typical district court judge or jury.

The “new normal” is that a patent’s validity is likely tested in the PTAB (in IPR, CBM, or PGR) before it is enforced in federal district court. Savvy companies are taking extra measures to review their patents carefully before acquiring and asserting them to reduce or avoid the cost and delay that comes with PTAB proceedings.

WHAT ARE THE DOWNSIDES FOR PATENTS THAT ARE NOT AIA-READY?

  • RISK: AIA Trials statistically favor the Petitioner/Defendant. Don’t invest in a portfolio or a litigation that won’t deliver value.
  • DELAY: Patent Office Trials are one more reason for a stay of parallel federal district court proceedings. Justice delayed is justice denied.
  • COST: Patent owners dragged into an IPR, PGR or CBM can expect six figure defense costs with the best-case outcome being that the claims are upheld—which is essentially the patent’s original status.
  • CLAIM CORRECTION UNLIKELY: Amendments are
    rarely allowed in IPRs, CBMs, and PGRs. Don’t expect to fix defective patents without a lengthy proceeding that is conducted after the AIA Trial.
  • HARM TO FUTURE ACTIONS: If claims survive the AIA Trial validity challenge, admissions may be made that could reduce the effectiveness of any district court infringement action.

Poorly crafted patent claims are typically cancelled in an AIA Patent Trial. High quality patents are more likely to bypass review, and those patent owners avoid the cost, delay, and risk of defending weak claims in AIA Trials.

To get a good read of a patent’s ability to survive AIA review, seek the opinion of patent counsel that is experienced in patent prosecution, patent litigation, and post-grant proceedings.

In case you missed it, I put together a simple 2 minute video with 4 tips to make your patent portfolio AIA-ready.

4 Tips to Make Your Patent Portfolio AIA-Ready

Wednesday, July 13th, 2016

The America Invents Act (AIA) has changed the way that patents are enforced. In traditional patent litigation, a patent was drafted to perform in district court. After the AIA, when patents are asserted, they are first challenged in administrative proceedings before the Patent Trial and Appeal Board (PTAB). These proceedings, called IPRs (inter partes reviews), PGRs (post-grant reviews), and CBMs (covered business method reviews), are conducted by skilled administrative law judges who have both scientific and legal experience. Patents that fail in these more-stringent reviews will never get a day in court, so patent applicants should be adapting their patent strategies to make their patents AIA-ready.

Check out our video for tips on how to make stronger patents that will withstand AIA reviews.

PTAB Relies on the Federal Circuit’s Recent § 101 Decision to Deny CBM Institution

Monday, June 6th, 2016

On May 12, 2016, the Federal Circuit issued a decision on 101 patent eligibility  that overturned a summary judgment finding of § 101 invalidity for software used for databases.  Enfish, LLC v. Microsoft Corp., No. 2015-1244, 2016 WL 2756266 (Fed. Cir. May 12, 2016).  The Enfish v. Microsoft decision interpreted the “abstract idea” first prong of patent eligibility under the Mayo/Alice line of cases.  It reversed the district court’s grant of summary judgement based on § 101, finding that the data storage and retrieval system for a computer memory recited by five claims on appeal of U.S. Pat. No. 6,151,604 were patent-eligible.

Two weeks later, in a CBM review, the Patent Trial and Appeal Board (PTAB) denied institution on the reviewed claims of U.S. Pat. No. 6,006,227 on § 101, referencing Enfish v. Microsoft.  Apple v. Mirror World Technologies, CBM2016-00019, Paper 12, May 26, 2016.  Mirror World’s ‘227 patent covers a “Document Stream Operating System,” as represented by claim 13:

13. A method which organizes each data unit received by or generated by a computer system, comprising the steps of:

generating a main stream of data units and at least one substream, the main stream for receiving each data unit received by or generated by the computer system, and each substream for containing data units only from the main stream;

receiving data units from other computer systems;

generating data units in the computer system;

selecting a timestamp to identify each data unit;

associating each data unit with at least one chronological indicator having the respective timestamp;

including each data unit according to the timestamp in the respective chronological indicator in at least the main stream; and

maintaining at least the main stream and the substreams as persistent streams.

The Board determined that the ‘227 was a covered business method patent eligible for review under AIA § 18, but that the claims do not recite an abstract idea.  The Board based its decision on a number of reasons, including:

  • Patent Owner demonstrated that the claims recite a solution to a problem that is “necessarily rooted in computer technology,”
  • Patent Owner identified a number of problems solved by the claimed invention that did not exist in the pre-computer world, and
  • The Board was persuaded by Patent Owner’s assertion that the claims cannot be performed entirely by the human mind or with pen or paper, and that certain steps of the claims specifically call for operations that must be performed by a computer.

The Board then relied on this excerpt from Enfish:

We do not read Alice to broadly hold that all improvements in computer-related technology are inherently abstract and, therefore, must be considered at step two. Indeed, some improvements in computer-related technology when appropriately claimed are undoubtedly not abstract, such as a chip architecture, an LED display, and the like. Nor do we think that claims directed to software, as opposed to hardware, are inherently abstract and therefore only properly analyzed at the second step of the Alice analysis. Software can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route. We thus see no reason to conclude that all claims directed to improvements in computer-related technology, including those directed to software, are abstract and necessarily analyzed at the second step of Alice, nor do we believe that Alice so directs. Therefore, we find it relevant to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea, even at the first step of the Alice analysis.

Decision at p. 16 citing Enfish v. Microsoft at *4,  (emphasis added).

The Board concluded that the first prong of the Mayo/Alice test was not met.  The Board also went on to find that the second prong of the Mayo/Alice test was not met, noting DDR Holdings.  Consequently, the Board issued its order denying CBMR.

As noted in earlier posts, the Board has been known to rapidly adopt decisions from the courts, and this case demonstrates the velocity at which decisions are integrated into practice before the Board.

New PTAB Trial Practice Rules Effective May 2, 2016

Monday, May 23rd, 2016

On April 1, 2016 the PTO published its final rule on Amendments to the Rules of Practice for Trials Before the Patent Trial and Appeal Board.  A small correction to these Amendments was published on April 27.  I presented a summary of these rule changes at the AIPLA Spring Meeting in Minneapolis, MN on May 18, 2016.  The slides from my presentation are attached.

The comments in the final rule make it clear that the PTAB will be publishing an updated Office Patent Trial Practice Guide to address these new rules and changes in practice since publication of the first Office Patent Trial Practice Guide.

Patent Trends to Watch in 2016

Friday, January 29th, 2016

2016 is starting off with a bang!  A number of interesting new developments have occurred as we enter into this new year:

AIA 2015 Stats

 

So we will monitor practices by the courts, the PTAB, stakeholders, and patent practitioners to observe the effects and interplay of these decisions and actions over the course of the year.  In particular, it will be interesting to see how the Board and the courts handle claim construction issues knowing that BRI may be revised by the Supreme Court.  Also of great interest is how parallel patent infringement trials will be impacted by the PTAB proceedings on the underlying patents.

 

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.

 

New PTAB Rule Changes Published Yesterday

Wednesday, May 20th, 2015

A small number of rule changes were published yesterday which affect all involved in post-grant trials at the USPTO.  The fixes make the rules more specific and make for more uniform proceedings.  They are effective May 19, 2015.  A copy of the Federal Register notice can be found here.