Dell Ends Up With a Mixed Bag of Results in 2 IPR Petitions Filed Against Acceleron

Silver Servers Rack - Hosting ThemeIn two separate challenges of a single patent, Dell had lukewarm success with 23 claims being placed in an inter partes review trial, but three claims and multiple grounds also denied by the Board in Dell, Inc. v. Acceleron, LLC (IPR2013-00440 and IPR2013-00443), involving U.S. Pat. No. 6,948,021.

The ‘021 patent relates to a computer network device having components of CPU modules, a power module, and an Ethernet switch module which incorporates “hot-swappable” connectors. The hot-swappable connectors allow for more efficient and speedy repair of the device.

The first issue of interest in the Board’s decision came as part of the claim construction for “is a stand-alone computer.”  Petitioner sought to broaden the scope of that term, based on a claim differentiation argument, but the Board found no reason to deviate from the plain and ordinary meaning of the term.  ‘440 Order at 6.

Also of interest was Petitioner’s inherency argument relating to the limitation of claim 24 that required a limitation relating to filtering communications to limit collisions caused by communications traffic.  Petitioner argued that such filtering was inherent to Ethernet switches, and supplied a declaration that “simply reiterates this position.”  ‘440 Order at 12.  But the Board was not persuaded by this inherency argument.  The patent at issue teaches that ethernet switch modules perform the claimed filtering, not simply a switch.  Because Petitioner did not allege that a switch was the same as a switch module, the Petition failed to set forth a reasonable likelihood of anticipation of claim 24.

Of brief note from the Board’s obviousness analysis, in what is a growing trend, the Board made special mention of the fact that Petitioner articulated a reason for combining the references underlying its obviousness contentions.  That is, not only did Petitioner demonstrate that the combination met all limitations, it also “articulated a sufficient reason with a rational underpinning for combining the teachings…”  ‘440 Order at 15.

In sum, in the ‘440 proceeding, the Board found that 23 of the 26 challenged claims should be placed into an IPR trial.

Turning to the ‘443 proceeding, Patent Owner’s most critical arguments centered on the priority date for certain claims of the ‘021 patent.  To that end, Petitioner argued that certain claims were not entitled to the filing date of a related provisional application.  ‘443 Order at 7.  In its Preliminary Response, Patent Owner set forth the support from the provisional application for the challenged claims and the Board agreed – finding that the claims were properly supported and were, therefore, entitled to the provisional application filing date.

This finding had a ripple effect on the prior art relied upon by Petitioner.  For example, the Board then turned to a prior art reference, that similarly claimed priority to provisional applications.  Patent Owner argued that the reference was not entitled to the priority date of the provisional applications because the excerpts relied upon by Petitioner were not found in the provisional applications.  The Board agreed, finding it important that neither Petitioner, nor its expert, cited to the provisional applications.  Further, Petitioner did not even provide copies of the applications as exhibits.  ‘443 Order at 10.

In the end, Dell’s efforts resulted in a mixed bag – partial success in having 23 of 26 challenged claims entered into an IPR trial based on one petition, but all challenges rejected in the second petition.

49 for 54: Successful Rehash of Old Arguments in Grant of 2 IPR Trials

Innolux’s decision to spread a challenge to a Semiconductor Energy Laboratory patent over two separate IPR cases paid off, as they successfully forced all 33 challenged claims into two trials in cases styled as Innolux Corp. v. Semiconductor Energy Lab. Co., Ltd. (IPR2013-00064 and IPR2013-00065), involving US Pat. No. 7,923,311. Trial was instituted for all 10 challenged claims in the IPR2013-00064 case and all 23 challenged claims in the IPR2013-00065 case.

[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]35 U.S.C. § 325(d) — “…during the pendency of any post-grant review under this chapter, if another proceeding or matter involving the patent is before the Office, the Director may determine the manner in which the post-grant review or other proceeding or matter may proceed, including providing for the stay, transfer, consolidation, or termination of any such matter or proceeding. In determining whether to institute or order a proceeding under this chapter…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.”[/pullquote]The ‘311 patent describes a thin film transistor (TFT) and a method for forming the transistor. The patent described numerous problems associated with prior art methods of crystalizing amorphous silicon layers used in devices. The patent went on to claim that layer crystallization by laser irradiation of semiconductor materials in the channel region and the activation of the ohmic contact region of the source and drain provides improvements in electrical conductivity and avoids the prior art problems.

Patent Owner’s primary argument was based on the fact that, during prosecution of the application leading to the ‘311 patent, the Examiner previously considered all of the same prior art references. Following a now established trend, the Board rejected Patent Owner’s arguments because they failed to show that the Examiner considered substantially the same arguments – namely that Petitioner included evidence not considered by the Examiner, such as the Petitioner’s expert declaration. Order at 7. The Board has set a very high hurdle for any Patent Owners who wish to dismiss an inter partes review by arguing that the prior art references have been previously considered.  To date, no argument based on 35 U.S.C. § 325(d) has been adopted by the Board.

Echoing an argument tried in other IPRs involving the same parties, the Board also rejected Patent Owner’s argument that Petitioner failed to identify all real parties-in-interest, arguing that other defendants in co-pending litigation joined in a motion to stay pending the outcome of the present inter partes review and agreed to be bound by its outcome. The Board found that the other defendants did not need to be listed as real parties-in-interest because they did not have any control over the proceeding. Order at 8.

As a last procedural issue, the Board considered Petitioner’s “administrative estoppel” argument, based on the fact that a sister patent was reexamined and that proceeding resulted in many invalidated and canceled claims. At this stage of the proceeding, however, the Board declined this argument, finding that Petitioner had not shown the claims to be patentably indistinct. Order at 9.

After dispensing with the above-procedural issues, the Board provided only a brief claim construction analysis, simply adopting a prior district court construction of “overetching.”  Then, in its obviousness analysis, the Board rejected Patent Owner arguments that: 1) there was no motivation to combine the underlying references (Order at 14-15); 2) as such, the reference taught away from combination (Order at 15), 3) that a combination would render a reference disabled or unfit for its intended purpose (Order at 15), 4) that there would be no need to combine because a problem was already solved (Order at 16), and 5) that the combination would be impossible to manufacture (Order at 16-17).

In the end, although the same patent was spread out over two IPR cases, the Board granted trial on all challenged claims – ignoring a prior determination at the Patent Office based on the rationale that an expert declaration provided with the Petition was new evidence that precluded the applicability of 35 U.S.C. § 325(d).

37 for 42: Previously-Considered Art Lives Again in Grant of Inter Partes Review Trial

iStock_000014464933XSmallThe Board has again failed to toss aside argument and art previously considered by the Patent Office (this time in an ex parte reexamination) and, instead, instituted an inter partes review trial on all six challenged claims in a case styled Nexans, Inc. v. Belden Technologies, Inc. (IPR2013-00057), involving US Pat. No. 6,074,503. Four of 9 proposed grounds for challenge were granted in the Board’s decision.

The invention of the ‘503 patent involves a method of producing a cable. The method includes a step of passing a plurality of transmission media such as wires and a core through a first die which aligns the plurality of transmission media with surface features of the core and prevents twisting motion of the core. The method includes another step of bunching the aligned plurality of transmission media and core using a second die which forces each of the plurality of transmission media into contact with the surface features of the core. The bunched plurality of transmission media and core are twisted close to the cable, and the closed cable is jacketed.

Patent Owner first argued that because three of the references contained in the petition were already considered by the examiner in a prior ex parte reexamination which resulted in confirmation of the claims, the Board should deny those portions of the petition. The Board cited 35 U.S.C. § 325(d) and stated the statute gives the Director the authority not to institute review on the basis that the same or substantially the same prior art or arguments were presented previously to the USPTO, but does not require so. Because the Patent Challenger’s alleged unpatentability grounds have some merit, the Board declined to deny the petition under 35 U.S.C. § 325(d). Order at 8. This continues a trend of the Board’s willingness to consider references even if they were previously considered during original prosecution or a reexamination.

The Board then turned to its claim construction analysis and interpreted the terms “core” and “prevents twisting motion of the core.” Basing its definition of “core” strictly on the specification of the ‘503 patent, the Board found that the term “core” does not have to have a bulky or extensive cross-section and there is no reason to exclude structure in the form of thin tape from forming or constituting the core. The Board also determined that “prevents twisting motion of the core” was met by the prevention of twisting in the area where the core passes through the first die once the desired position of the core for alignment during production is established. Thus, twisting of the core need not be prevented (1) at all places along the axial length of the core, or (2) before the desired alignment of the core has been determined and put in place and cable production has commenced.

The Board then considered several grounds asserting anticipation of the challenged claims.  To that end, Patent Challenger argued that a prior art reference disclosed a branching board of a first die which inherently prevented twisting of the core. The Board rejected the argument, stating that because the disclosure does not show an axial view of the branding board in the direction of cable feed, it could not be known what manner the core passes through the branching board. To establish inherent disclosure, the limitation at issue necessarily must be present in the corresponding element described in the prior art reference. Inherency may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient to establish inherency. Order at 26. The Board found that even if the branching board, in some circumstances, prevented twisting of the core, the possibility is inadequate to establish inherent disclosure of twist prevention.

In the obviousness challenge grounds analysis, the Board determined that inserting an additional die upstream of a wire-splitting board of the assembly of a prior art reference involved merely a predictable use of a prior art element disclosed in other references.  Further, Board held that such a combination need not be predicated on any specific teachings; that is, the Board “need not seek out precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ.” Order at 33.

Patent Owner sought exclusion of one of the Patent Challenger’s exhibits on the ground that it constituted inadmissible hearsay. The exhibit is a collection of selected trial transcripts from related litigation, including the testimony of an expert witness. The Board stated that exclusion of evidence at this stage of the proceeding is premature. Order at 41. In any event, the exhibit appeared to have been relied on by the Patent Challenger only in connection with arguments regarding a reference that was not applied as a basis for any granted challenge grounds.

In the end, the Board instituted trial on all challenged claims including, notably, some challenge grounds that used a reference that was previously considered during an ex parte reexamination.

32 for 33: PTAB Again Allows Re-Argument of Grounds Denied in Earlier Reexamination

iStock_000019792592XSmallThe PTAB continued its trend of not providing any deference in an inter partes review to previous actions by the Patent Office with respect to a previously-challenged patent in a case styled Vestcom Int’l, Inc. v. Grandville Printing Co. (IPR2013-00031), involving US Pat. No. 8,020,765. Three of the fourteen challenge grounds were granted, with the Board finding the other 11 grounds to be redundant.

The invention of the ‘765 patent relates to a method of printing, distributing, and placing price tags and point-of-purchase signs for use in retail store shelves and displays. According to the ‘765 patent, the invention is particularly useful for “just-in-time” printing, delivery of price tags with minimal lead times, and faster price tag changes at stores – all while reducing labor costs.

As has become its pattern, the Board first construed two key claim limitations.  First, the Board adopted Patent Challenger’s definition for “digital press,” after noting that Patent Owner did not contest the construction.  Second, the Board, sua sponte, construed the term “just-in-time,” finding that its meaning “is not apparent to us.”  Order at 13.  In construing that term, the Board first noted that the ‘765 patent did not contain an explicit or special definition of “just-in-time.”  As such, the Board turned to a dictionary definition, citing to an online resource (xreferplus.com).  Order at 15.

After construing the two claim terms, the Board proceeded to analyze the Patent Owner’s estoppel argument, that Patent Challenger previously filed a request for inter partes reexamination of the ‘765 patent that included 405 proposed grounds of rejection (fourteen of which were identical to those contained in the present petition for inter partes review). In the prior reexamination, the PTO issued a Reexamination Order denying the petition for inter partes reexamination.  Based on this denial, Patent Owner sought a finding that the present petition for inter partes review should be denied.  The Board disagreed.

First, the Board determined that the previously-codified estoppel provisions of inter partes reexamination (35 USC §317(b)) did not apply to inter partes review. Order at 17. Next, the Board determined that the current version of 35 USC §318(a) did not apply because that section only related to final, written decisions based on a petition for inter partes review, not inter partes reexamination. Order at 17-18. Finally, the Board determined that issue preclusion did not apply because the prior Reexamination Order only addressed a different claim not challenged in the present inter partes review and did not include any substantive analysis or draw any conclusions relative to the claims challenged in the present inter partes review, even though those claims were included in the prior request for inter partes reexamination.  That is, because the specific denial of the reexamination petition only applied the art to claim 1, not the claims challenged here, issue preclusion was inappropriate. Order at 18-19. Therefore, the Board held that Patent Challengers were not estopped from presenting identical grounds for unpatentability.

In the end, the Board granted trial on all thee challenged claims based on three obviousness challenge grounds each involving a combination of at least three prior art references. Important to that analysis was the Board’s rejection of Patent Owner’s argument that there was insufficient rationale to combine the references cited by Patent Challenger. In rejecting this argument, the Board noted that Patent Owner did not provide “credible evidence or arguments concerning any technological difficulties” that would prevent the combination.  Order at 24.  Of course, Patent Owner was unable to put forth expert testimony at this stage of the proceeding.

Lastly, the Board denied an argument that secondary considerations militated against a finding of a reasonable likelihood that one or more claims was unpatentable.  Order at 25.  To that end, the Board found that there was no showing of a nexus between the claimed commercial success and the claimed invention.  To establish commercial success, Patent Owner had to show that the success was “directly attributable” to the claimed features.  Further, Patent Owner needed to address whether other factors, including advertising and promotion, contributed to the commercial success.

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.