Board Gives No Deference to District Court Litigation Claim Construction in Denying IPR Petition

iStock_000003752861XSmallIn a rare Patent Owner victory, Sony and Axis Communications were unsuccessful in placing any of the 3 challenged claims of a Network-1 Security Solutions patent into a trial for inter partes review in a case styled as Sony Corp. of Am.; Axis Comm. AB; and Axis Comm., Inc. v. Network-1 Security Solutions, Inc. (IPR2013-00092), involving U.S. Pat. No. 6,218,930.

The ‘930 patent relates to “the powering of 10/100 Ethernet compatible equipment,” and more specifically, “automatically determining if remote equipment is capable of remote power feed.” Further, the patent states that, “if it is determined that the remote equipment is able to accept power remotely then [power will be provided] in a non-intrusive way.”

The Board began with an in-depth claim construction analysis, construing four claim terms.  Interesting in this analysis is how the Board gave no deference to positions taken by the Patent Owner in co-pending litigation, nor did it give deference to the district court’s claim construction rulings in that litigation.  Of course, the district court and PTAB have different claim constructions standards, but a gap has seemingly opened up that allows a Patent Owner to make different claim construction arguments in various proceedings.  For example, the ‘930 patent was actually involved in two prior district court proceedings and for several of the claim terms, Patent Owner argued one definition in one litigation, a second definition in the second litigation, and now a third definition before the Board.

Relatedly, it is not surprising that, as the Board turned from claim construction to its analysis of the proposed challenged grounds, the above claim constructions played a key role in the Board determining that a reasonable likelihood that one or more claims was unpatentable was not met.  With regarding to several grounds, the Board determined that one or more limitations was missing based on the Board’s prior interpretation of the claim terms.  See, e.g., Order at 23.  Further, the Board was unimpressed with Petitioner’s characterizations of the art of record.  In short, doomed by those mischaracterizations, Petitioner was unable to get any of the 3 challenged claims of the ‘930 patent into a trial for inter partes review.

Lastly, it is worth noting that Patent Owner tried to get the Petition summarily dismissed by arguing that Petitioner failed to meet comply with 37 CFR §42.104(b), by failing to set forth claim construction positions. The Board did not reach the issue, though, stating instead that the petition was denied on the merits anyway.  Stay tuned for confirmation of whether a Petitioner’s mere reliance on previous Patent Owner litigation positions as its claim construction argument is sufficient in IPR proceedings.

33 and 34 for 35: Two Inter Partes Review Trials Instituted Where Patent Waived Preliminary Response

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Kyocera is a believer in the new inter partes review proceedings, having filed three IPR petitions.  Its first two attempts have been met with initial success as it obtained favorable decisions (HERE and HERE) from the PTAB in instituting inter partes review trials against two Softview LLC patents. The cases are styled Kyocera Corporation v. Softview LLC (IPR2013-00004 and IPR2013-00007), involving US Pat. Nos. 7,831,926 and 7,461,353.

As noted in our Report on the first six months of inter partes review proceedings, just 6% of Patent Owners have decided to waive their right to file a Preliminary Patent Owner Response.  Softview is a big part of that statistic, having decided in both of these proceedings to not file a Patent Owner Preliminary Response.  Interestingly, it does not appear that Softview waived the response to speed the proceedings – instead, it just let the deadline for filing its preliminary response lapse without filing anything.  There is nothing in the Board’s decisions, however, suggesting that the waiver impacted the Board’s consideration.

The ‘926 and ‘353 patents are drawn to the scalable display of Internet content, e.g., HTML based content, cascade style sheets (CSS) and XML, on mobile devices by enabling the content to be rendered, zoomed and panned for better viewing on small screens and standard monitors. A client side viewer receiving the Internet content has an Internet browser and uses the simple vector format (SVF) originally designed to handle common computer-aided design (CAD) file formats to describe the current web content. Translation of the content into a scalable vector representation can be done by a third party proxy service, the content provider’s web site, or the client.

Patent Challenger referred to Patent Owner’s proffered claim constructions from co-pending litigation in its Petitions – arguing that such constructions were reasonable.  The Board agreed. It seems clear, in this instance, that Patent Owner took a broad view of the scope of the patent claims before the federal district court and Patent Challenger is using that broad scope to its advantage in the inter partes review proceeding.

The Board then proceeded to go through a workmanlike obviousness analysis using an element by element approach. In the end, the Board granted trial on all challenged claims in both cases, using obviousness grounds that involved a combination of up to four references in some instances. It is not surprising, given that Softview waived its preliminary response, that no key disputes were discussed in the Board’s decisions that bear mentioning here.  If anything, the Board’s decisions were more detailed in its obviousness analysis than most; most likely reflecting the fact that Patent Owner did not “concede” any limitations in a preliminary response.

19 for 20: Tire Pressure-Monitoring Patent is 19th Put Into Inter Partes Review Trial

OLYMPUS DIGITAL CAMERASchrader-Bridgeport was successful in forcing a patent owned by Continental Automotive Systems US into an inter partes review trial, in the case styled as Schrader-Bridgeport International, Inc. v. Continental Automotive Sys. US, Inc. (IPR2013-00014), involving US Patent No. 6,998,973.  The Board granted the IPR trial based on all 10 challenged claims and on one of 9 grounds for challenge.

The subject matter of the ‘973 patent involves a data transmission method for a tire-pressure monitoring system of a vehicle.  More particularly, the method prevents data collisions from the various wheel units of an automobile through the use of internal clocks in each wheel unit.  The main dispute between the parties involved the last clause of independent claim 1, including the terms “natural time lag” and “used to prevent collisions.”

Starting with the step of claim construction, the Board noted that Patent Challenger’s claim construction of “natural time lag” corresponds to a position taken by Patent Owner in concurrent district court litigation.  That definition, which Patent Owner urged the Board to adopt for purposes of this IPR, comprises “sensors with any amount of imprecision, even lower than +/- 1%, creates a sufficient ‘natural lag’ to be covered by the claim.”  Because the Board could not discern how this definition aligned with a litigation position, or why the +/- 1% limitation should be included, it found that the proposed construction was overly broad in light of the patent specification.  Instead, the Board looked to the specification and found that one of ordinary skill would have understood that term to mean that tolerance of the clocks is sufficiently poor so as to automatically and randomly induce time shifting of transmission from the clocks.  Order at 8.

Turning to the term “used to prevent collisions,” the Board agreed with the definition proposed by Patent Challenger; namely that the occurrence of collisions is reduced. All other terms in the challenged claims were given their ordinary and customary meanings.  Id.

Having construed the above-two terms, the Board turned to the issue of anticipation, noting that Patent Challenger’s arguments relied upon implicit disclosures.  That is, Patent Challenger relied upon inherency.  Order at 10.  With regard to the first reference at issue, the Board found that Patent Challenger’s inherency argument neglected to consider the entirety of the teachings of the reference.  In light of that more complete analysis, the disclosure would not necessarily function in a manner consistent with the claimed invention.  MEHL/Biophile International Corp. v. Milgraum, 192 F.3d 1362, 1365 (Fed. Cir. 1999) (“Inherency” requires that a given fact must necessarily result, and not be established based on mere probability or possibility).  Order at 12.  Relatedly, the Board found that the second reference upon which Patent Challenger asserts under an inherency theory was similarly insupportable.  Order at 13.

The Board was more persuaded, however, by Patent Challenger’s grounds for challenge based on obviousness.  The Board’s analysis overcame Patent Owner’s arguments that the combinations at issue were: 1) based on non-analogous art, 2) taught against the combination, and 3) there was “no reason” to combine.  With respect to the non-analogous art argument, the Board found that, while the art may not have been in the same field of endeavor, the test for whether a reference is analogous could, alternatively, be based on the fact that the reference is reasonably pertinent to the particular problem at issue.  Wyers v. Master Lock Co. 616 F.3d 1231, 1238 (Fed. Cir. 2010).  Order at 17.

The Board also found the “teaching away” argument to be unavailing.  Order at 18.  While the art at issue may recognize a particular preferred benefit, the reference did not criticize, discredit, or otherwise discourage investigation into other viable benefits.  DePuy Spine Inc. v. Medtronic Sofamor Danek, 567 F.3d 1314, 1327 (Fed. Cir. 2009).  Lastly, the board denied that there was “no reason” to combine the teachings of the subject references.  Because the combination constituted implementing known teachings concerning the basic technology at issue, this reasoning by Patent Owner was not given weight.  Order at 18-19.

In the end, the IPR trial was instituted based on a number of obviousness grounds.  Other grounds, deemed redundant to the above-discussed grounds, were denied.  Interestingly, the Board did provide additional background on this point, as compared to earlier decisions.  Specifically, the Board suggested that, if it did not succeed on the grounds put into the trial, Patent Challenger would likely fail with regard to the other grounds, as well.

Sixth Inter Partes Review Initiated

As part of the Patent Trial and Appeal Board’s busy February 12th, 2012, the Board initiated an inter partes review trial in the proceedings styled as Motorola Mobility LLC v. Arnouse (IPR2013-00010) (J. Chang).  Continuing the winning streak for patent challengers, the Board initiated the trial on all seven challenged claims – that makes six out of six trials initiated, half of which trials were instituted against all challenged claims.

The technology at issue in this inter partes review proceeding relates to a portable computer that connects to a reader adapted for use with the portable computer.  The key limitation of the challenged patent claims required that a user could not interact with the portable computer without a reader; that is, by itself, the portable computer cannot provide information to a user or receive information from a user.

As has become a major trend in the Orders instituting inter partes review trials, claim construction took center stage in the decision.  At threshold, Patent Owner sought to have the petition dismissed, arguing that Patent Challenger actually disavowed claim construction, failing to meet one of the requirements of a petition, by including a reservation of rights statement.  More particularly, the Patent Challenger stated that it “expressly reserves the right to present other interpretations of any of the ‘484 patent claims at a later time, which interpretation may differ, in whole or in part, from that presented within.”  Order at 6.  The Board refused to dismiss the petition, finding first that there was sufficient information provided in the petition to ensure that Patent Challenger’s claim construction position was articulated.  Further, the Board largely dismissed this reservation, finding that the attempt to reserve the right to present different interpretations in the future “to carry little, if any, weight.”  Order at 6.

While the specific claim constructions adopted by the Board are beyond the scope of this article, it is worthwhile continuing to catalogue the considerations and caselaw cited by the Board in coming to its decision.  In addition to the typical citations to the Phillips en banc decision, it is worth noting that the Board gave some weight to statements made by the parties in related litigation.  Specifically, the Board found that “[s]tatements made in a related litigation may shed useful light to the meaning of the claim terms.”  Order at 7, n.2.  Thus, the Board used statements made by Patent Owner in related litigation to inform its claim construction.

Relatedly, the Board used the preamble of the challenged claims to inform its claim construction, as well.  To that end, the Board held that the Preamble is limiting and entitled to patentable weight because it recites additional structure that is not included in the claim body.  Order at 8.

Lastly, without detailed analysis, the Board determined that the subject limitation was a means-plus-function element that invoked 35 USC §112(f), and then merely recited the structure that it determined was corresponding to the recited function from the claim.

In its patentability analysis, the Board made detailed findings regarding three of the five proposed grounds from the petition, holding that two of those three grounds met the “reasonable likelihood” standard requiring institution of the inter partes trial.  As it held in a separate order instituting an IPR trial, however, the Board denied the remaining two grounds as cumulative.  As we previously commented, while the Board may believe at this stage that the additional grounds are unnecessary, it will be interesting to see what transpires should Patent Owner rebut the grounds that were accepted as part of the trial.