Federal Circuit Issues a Rare Reversal on Behalf of Patent Owner in IPR

cafc1Yesterday, the Federal Circuit decided five appeals from as many IPR’s filed by Patent Owner PPC Broadband involving claim construction issues, most of which were decided in PPC’s favor. In a first appeal (2015-1364) taken from IPR2013-00342, the court agreed with PPC and held that the Board’s construction of “reside around” was unreasonably broad because the Board selected the broadest of several dictionary definitions (in the immediate vicinity of; near) and disregarded the definition (encircle or surround) that was consistent with the context provided by the claims, the specification, and the patented technology. This holding can be particularly useful to Applicants during prosecution when Examiners applying BRI select the broadest dictionary definition of a claim term and ignore the definition that is consistent with Applicant’s use of the term. The court also rejected the Board’s conclusion that the claim term “reside around” should be interpreted to mean something other than “encircle or surround” since the claim preamble recited a different term “surrounded” than the claim term “reside around.” The court clarified that such differentiation is less applicable where, as here, the preamble merely sets forth the general nature of the claimed invention and is not used to limit the claim.

Nonetheless, Appellee-Petitioner Corning argued that the Board’s interpretation should be upheld because it covers many of PPC’s embodiments. PPC’s numerous claims of varying scope, disclosure of various embodiments, and consistent use of the term “around” in the patent came to PPC’s rescue. Citing these facts, the court rejected Corning’s argument that the broadest reasonable construction is the one that covers the most embodiments. Instead, the court emphasized that the BRI must be reasonable in light of the claims and specification and that the construction covering more embodiments than another does not render that construction reasonable.

In other consolidated appeals (2015-1361, 2015-1366, 2015-1368, and 2015-1369), while the court affirmed some and rejected some of the Board’s interpretations, the court offered guidance regarding objective considerations, particularly commercial success, which can help patent owner. PPC alleged, and presented multiple declarations in support, that its connectors are commercial embodiments of the claimed connectors. Corning did not dispute the allegation. Yet the Board found that PPC did not present persuasive evidence of commercial success. The court held that where, as here, the patentee has presented undisputed evidence that its product is the invention disclosed in the challenged claims, it is error for the Board to find to the contrary without further explanation, which was missing here. The court held that since the evidence shows that PPC’s connectors are the invention disclosed and claimed in the patent, it presumed that any commercial success of these products is due to the patented invention. The court noted that while such a presumption won’t apply in ex parte context, where the PTO cannot gather evidence supporting or refuting the patentee’s evidence of commercial success, it applies in contested proceedings like IPRs, where the petitioner has the means to rebut the patentee’s evidence.

PTAB Discusses Nexus in Secondary Considerations Argument

plan CThere have been many attempts by Patent Owners to rebut a prima facie case of obviousness by pointing to secondary considerations of non-obviousness. To date, such efforts have been unsuccessful. Like the largely unsuccessful motion to amend practice, the best practitioners can hope for is to learn from the shortcomings of other attempts and hope to eventually hit upon the magic formula that leads to a successful presentation of such secondary considerations. In that light we discuss the Final Written Decision in Kyocera Corp. and Motorola Mobility, Inc. v. Softview, LLC, IPR2013-00007 and IPR2013-00256, involving US Pat. No. 7,461,353, wherein the Board addressed several types of failed secondary considerations arguments. The ‘353 patent relates to a scalable display of internet content.

Patent Owner made several arguments involving objective indicia of non-obviousness, all of which were rejected as not being linked to the claimed subject matter: First, Patent Owner argued that the praise it received from competitors was evidence of non-obviousness.  The Board disagreed, finding that the praise Patent Owner received from a competitor was not in praise of the ‘353 claimed subject matter or product, but rather in praise of a company-vision speech by Patent Owner’s CEO.  Therefore, there was no nexus between the secondary consideration and the claimed subject matter. Order at 31.

Second, Patent Owner argued that the commercial success of products (iPhone and Android devices) incorporating the claimed subject matter of the ‘353 patent is evidence of non-obviousness.  However, Patent Owner was unable to prove that commercial success of the iPhone and Android devices which incorporated the claimed matter of the ‘353 patent was a result of the presence of the ‘353 invention in devices (a requirement for a valid commercial success non-obviousness argument).  In fact, expert testimony supported the idea that numerous factors contribute to the commercial success of iPhone and Android devices, not just one factor such as the ‘353 claimed subject matter. Therefore, the Board again found no nexus between the secondary consideration and the claimed subject matter. Id. at 32.

With Patent Owner’s arguments for secondary indicia of non-obviousness failing on lack of nexus to the claimed subject matter, the Board found all challenged claims of the ‘353 patent to be unpatentable.

Four More IPR Final Written Decisions Go Against Patent Owners

On Monday, March 10th, the PTAB issued four additional Final Written Decisions, each of which resulting in total victory for the Petitioner.  The first three were all related – Micron Tech., Inc. v. Board of Trustees of the Univ. of Ill., IPR2013-00005, -00006, and -00008.  The fourth is styled as Xilinx v. Intellectual Ventures I LLC, IPR2013-00029.

In general, the Micron Tech. cases involve straightforward obviousness analyses, comprising a combination of two to three references to make out a prima facie case of obviousness.  Of interest, though, was the Board’s discussion of secondary considerations.  On the issue of unexpected results, the Board discounted Patent Owner’s evidence because Patent Owner failed to compare the results of the claimed invention to the closest prior art.  See, e.g., -00008 Order at 19-20.  On the issue of failure by others, again the Board discounted Patent Owner’s evidence because it failed to account for the prior art teachings of the closest prior art.  Id. 

The Xilinx case involves a continuation of an ongoing battle between Xilinx, Inc. and Intellectual Ventures that has already resulted in Final Written Decisions against four Xilinx patents.  In this proceeding, Xilinx gains a bit of revenge by knocking out the three challenged claims of an IV-owned patent.  Of interest in this case was the Board’s decision to “slightly” modify its earlier claim construction for “light-shutter matrix system.”  Order at 8-12.  In general, the Board undertook a more detailed evaluation of the term, including referencing a dictionary definition, to come up with a broadest reasonable interpretation to be used in the Final Written Decision.  Ultimately, after disposing with several other claim construction issues, the Board determined that two combinations of art rendered the challenged three claims unpatentable.

Also of note was the Board’s denial of yet another Motion to Amend.  In this case, Patent Owner argued that all claims should be given their ordinary and customary meaning.  But, because Patent Owner did not provide specific claim constructions for two of the limitations added to the proposed claims, the Board found that Patent Owner had not met its burden.  More specifically, the Board found that “interpreting both phrases is critical to determining whether the proposed substitute claims are patentable…”  Order at 41.

With MLB Spring Training in full swing, it is worth noting that Patent Owners are batting .000 in Motions to Amend to date.

Trio of Final Written Decisions Go Against Patent Owner

iStock_000020200155XSmallEarly results of Inter Partes Review proceedings continue to favor Petitioners as all challenged claims in a threesome of Columbia University patents have been cancelled by the PTAB in Illumina, Inc. v. The Trustees of Columbia Univ. in the City of N.Y., IPR2012-00006, -00007, and -00011.

The inventions at issue in the three Illumina decisions involve sequencing DNA by incorporating a base-labeled nucleotide analogue into a primer DNA strand, and then determining the identity of the incorporated analogue by detecting the label attached to the base of the nucleotide.

In general, the Board’s analysis of the prior art in coming to its findings of obviousness with respect to all the challenged claims comprises a fairly straightforward analysis, with heavy reliance on the expert witness testimony elicited in the case.

Of greater interest was the Board’s consideration of secondary considerations relative to the claimed invention.  To that end, Patent Owner argued that the obviousness challenges fail because of: 1) unexpected results, 2) the invention received praise and awards, 3) commercial success, 4) evidence of copying, 5) skepticism, and 6) attempts by Petitioner to license the patents.  -00006 Order at 29.  The Board did not find the proffered evidence on these points persuasive:

Unexpected results: Citing In re Baxter Travenol Labs., 952 F.2d 388, 392 (Fed. Cir. 1991), the Board found that, like that case, here “[m]ere recognition of latent properties in the prior art does not render nonobvious an otherwise known invention.”  Id. at 31.  Further, the Board noted that unexpected results must be made relative to the closest prior art.  In this case, the Board found that the argued unexpected results were not performed relative to the closest prior art, rendering the evidence unpersuasive.  Id. at 33.

Praise and Awards: The Board cursorily brushed aside this evidence, finding “it of insufficient weight and relevance to deem it persuasive.”  -00006 Order at 38.

Commercial Success:  The Board noted that commercial success involves establishing success in the marketplace of a product encompassed by the claims and a nexus between the commercial product and the claimed invention.  In this case, Patent Owner’s expert testified that he reviewed the Petitioner’s technical documents and found that all elements of the patented claims were met by Petitioner’s offering. Commercial success of the product must, however, “be due to the merits of the claimed invention beyond what was readily available in the prior art.”  -00006 Order at 36.  Because the aspects of the invention argued to be the commercial success nexus were found in the prior art, that evidence was unpersuasive.

Copying:  The Board did not comment on this evidence.

Skepticism:  With the evidence of “praise,” the Board cursorily brushed aside this evidence, finding “it of insufficient weight and relevance to deem it persuasive.”  -00006 Order at 38.

Licensing:  While the Board recognized the evidence of Petitioner’s offers to license the technology, it found that there was “insufficient evidence that the licensing strategy was driven by a recognition of the merits of the claimed invention, rather than knowledge of a patent potentially covering their own product.”  -00006 Order at 38.

Also of interest in the decisions, was the Board’s reconsideration of an earlier reconsideration relating to an issue of incorporation by reference.  In its Decision to Institute, the Board did not grant a challenge ground based on a reference that incorporated another piece of prior art by reference.  In a decision based on Petitioner’s motion for reconsideration, the Board, in a rare move, changed its mind and included the ground in the trial.  In the Final Written Decision, however, the Board went back to its original position that the incorporation by reference was insufficient.

Lastly, it is worth noting that another three Motions to Amend went down to defeat in these three Illumina decisions.  Patent Owners are winless on the point.

Obtaining Additional Discovery in an Inter Partes Review Remains Difficult

The provision for “additional discovery” in inter partes review proceedings has consistently fallen victim to the PTAB’s steadfast resolve to ensure just, speedy, and inexpensive inter partes review proceedings.  With one notable exception, each request for additional discovery has been denied by the Board, typically with a holding that the movant has failed to meet the requirement that such discovery is “necessary in the interest of justice.”  37 CFR § 42.51(b)(2). Below, we summarize the most recent decisions relating to Motions for Additional Discovery and the key guidance from the Board that can be learned from each such decision.

Motions Denied

Smith & Nephew, Inc. v. Convatec Tech., Inc., IPR2013-00097, Paper 27 (August 21, 2013).  ConvaTec sought discovery into certain submissions made by Smith & Nephew to the FDA that related to a commercial product ConvaTec alleged was covered by its patent-at-issue.  Briefly, ConvaTec alleged that, during a UK proceeding, Smith & Nephew made confidential statements that suggested that it had failed to make the product by its own method and was forced to use methods claimed in ConvaTec’s patent.  This evidence would, per ConvaTec, be relevant secondary considerations of non-obviousness relating to copying and failure of others.  The Board denied the request, finding that ConvaTec failed to provide sufficient explanation and evidence that something useful would be uncovered if discovery were granted.  More specifically, the Board found that, even if the FDA had found that Smith & Nephew’s product was “substantially equivalent,” such a statement would be insufficient evidence of copying.  Order at 5.  Further, the “failure of others” argument was not deemed sufficient to allow discovery because, to establish that factor, there must be evidence of widespread efforts of skilled workers, having knowledge of the prior art, that failed to find a solution to the problem.  This single incident of failure, if proven, would not demonstrate such widespread efforts and failure.  Order at 7.

Blackberry Corp. v. Wi-Lan USA Inc., IPR2013-00126, Paper 15 (August 19, 2013).  Wi-Lan served a “First Request for Production of Documents and Things,” and Blackberry requested a conference call with the Board for guidance on whether it needed to respond to the requests.  In short, the Board said Blackberry need not respond to the requests.  The requests were based on the Routine Discovery provisions of the Patent Office regulations, but with some broadening caveats.  For example, Wi-Lan sought documents “relating to information inconsistent with…,” instead of “information inconsistent with…” as required by the Rules.  Even had the requests identically mirrored the Rules, however, the Board would still have ruled that they need not be responded to.  In short, Routine Discovery is self-executing and self-enforcing and, thus, there is no need for the service of discovery requests to get that information.  Order at 2.

St. Jude Medical, Cardiology Division, Inc. v. Board of Regents of the University of Michigan, IPR2013-00041, Paper 20 (July 31, 2013).  The University of Michigan sought documents St. Jude exchanged with the FDA in obtaining approval to market products covered by the patent-at-issue.  This information was sought for the purpose of seeing if it contained secondary considerations evidence, among other reasons.  St. Jude opposed given the magnitude of the burden on St. Jude to review and produce the documents.  Because Michigan only identified a “possibility” of finding useful information, the request for additional discovery was deemed insufficient by the Board.  Order at 3. University of Michigan was also deemed not to have acted timely in making the request (it having been made only shortly before the Patent Owner Response was due).

Illumina, Inc. v. The Trustees of Columbia University in the City of New York, IPR2012-00006, Paper 42 (May 7, 2013).   Columbia University sought to file a motion for additional discovery to use evidence obtained from Illumina in co-pending litigation.  The Board held that permission to use such evidence was unnecessary – simply, Columbia did not need to take any discovery at all, such discovery had already occurred.  The request for authorization to file the motion was denied, therefore, as moot.

Synopsis, Inc. v. Mentor Graphics Corp., IPR2012-00042, Paper 24 (April 25, 2013).  Mentor Graphics sought discovery relating to the issue of assignor estoppel.  Briefly, Mentor Graphics believed that additional discovery may have led to evidence proving that the petitioner was in privity with an assignor of the patent-at-issue.  For purposes of this motion, the Board assumed it could hear the issue of assignor estoppel, but ultimately denied the motion, in any event, because Mentor Graphics had not proven that the discovery was necessary in the interest of justice.  More specifically, Mentor Graphics: (1) failed to provide an explanation with evidence sufficient to show that something useful will be uncovered by the discovery: (2) failed to provide what efforts it had made to acquire, on its own, the discovery it now seeks; and (3) proffered discovery requests that were burdensome in terms of finances, human resources, and meeting the IPR time schedule.

Redline Detection, LLC v. Star Envirotech, Inc., IPR2013-00106, Paper 31 (August 27, 2013).  In an analogous case to the Mentor Graphics decision discussed above, Star Envirotech’s Motion for Additional Discovery, seeking information that would prove the applicability of an assignor estoppel defense, was denied because this three judge panel decided that assignor estoppel cannot be successfully raised as a defense in an inter partes review.  Thus, because assignor estoppel was not deemed to be a valid defense in inter partes review proceedings, Star Envirotech could not meet its burden to show that the requested discovery was necessary in the interest of justice.

The Exception

Corning Inc. v. DSM IP Assets B.V., IPR 2013-00043, Paper 27 (June 21, 2013).  Proving that it was not simply hitting the “NO Button” with regard to each Motion for Additional Discovery, the Board partially granted DSM’s request for Additional Discovery, allowing DSM discovery into laboratory notebooks and related documents that contained protocols and testing that underlie test results submitted by Corning’s expert.  In this IPR proceeding, Corning took the position that the subject matter in the challenged claims was unpatentable over the prior art based on inherent properties not explicitly recited in the prior art.  As such, Corning’s experts recreated the prior art compositions and tested them to prove that the properties from the DSM patent claims were inherent in those compositions.  DSM obtained the Board’s permission to discover the lab notebooks of Corning’s experts, but not actual samples of the compositions prepared by Corning, nor any testing results that were inconsistent with Corning’s testing (the latter discovery being deemed required already by “Routine Discovery”).

47 for 52: Expert Declaration Provides Support for Grant of Inter Partes Review Trial

Mobile phone and tablet with battery chargers in white backgroundExpert testimony played a key role in Motorola successfully forcing three challenged claims of a Mobile Scanning Technologies patent into an IPR trial, in a case styled Motorola Solutions, Inc. v. Mobile Scanning Technologies, Inc. (IPR2013-00093), involving US Patent No. 6,065,880.  Trial was instituted for all three challenged claims based on 5 out of 18 challenge grounds.  Notably, the ‘880 patent was previously involved in a reexamination proceeding, during which the claims at issue were amended.

The ‘880 patent describes an adapter electrically coupled to a PDA. The adapter includes a laser or other light source which emanates a light beam that can be modified into a digital signal to download information to a PDA equipped with a photo detector or used as a presentation pointer. Also, electronic components of the adapter can be integrally incorporated into the PDA, so as to eliminate the need for the adapter.  This single, embedded PDA design is the subject of the challenged claims.

At threshold, the Board addressed three preliminary matters raised by Patent Owner in its Preliminary Response.  First, the Board addressed a defense raised by Patent Owner that the Petition was barred in light of a previous settlement, wherein the Eastern District of Texas retained exclusive jurisdiction over any future action relating to the ‘880 patent.  This issue was addressed in a prior decision by the Board.  In general, the Board found that it was not the right venue to decide if the district court’s order was being complied with.  The requirements for an IPR petition were met, so it was appropriate to move forward.  Patent Owner was instructed to approach the district court to enforce any of that court’s orders.  Second, the Board addressed Patent Owner’s defense that the non-patent references cited in the Petition were not authenticated.  Also, discussed in the earlier order, the Board found that it “will determine the proper weight to accord to the various references at each stage of the proceeding.”  For purposes of this stage, an adequate evidentiary showing had been made.  Third, Patent Owner argued that the IPR is duplicative of the prior reexamination.  The Board held, however, that given that the ongoing reexamination was stayed, that issue was moot.

The Board then moved to a claim construction analysis of disputed terms “PDA” and “microcontroller.”  Turning first to the specification, the Board declined Patent Owner’s efforts to read a synchronization feature or a personal information manager into the definition of “PDA”, finding that the terms were not mentioned in the patent and Patent Owner pointed to no evidence in the prosecution history or other documentary evidence to limit the “PDA” claim term. Without citing evidence, Patent Owner stated that those skilled in the art would recognize that a “microcontroller” is a highly integrated system-on-a-chip and that the term “microcontroller” is not used interchangeably with the term “microprocessor” in the ‘880 patent. However, the specification used both terms and the Board held that there was no distinction between them for the purposes of the claims of the ‘880 patent. Unsurpisingly, given that Patent Owner was unsuccessful in arguing narrower claim constructions, the Board went on to grant trial on all challenged claims.

In finding a likelihood of anticipation of claim 18 by one of the references, the Board relied on the Petitioner’s expert declaration as evidence that components were necessary for a scanner to operate and were inherent in the reference’s disclosure of a bar code processor connected to a microprocessor. Order at 25. Later, the Board relied on evidence from the Petitioner’s expert declaration that an integrated scan engine must have a photo detector positioned to receive light reflected from the bar code an analog-to-digital converter to process the signal and that it was inherent in another reference. Order at 29. Further, the expert declaration was used to establish that the use of visible red lasers in scanners, and the use of a visible laser diode to emit a visible red beam, was well known by the mid-1990s. Order at 34-35. In short, Petitioner’s expert declaration provided significant ammunition to support the Board’s decision.

Patent Owner sought to dissuade the IPR trial by arguing that Petitioner’s sales of mobility products proved non-obviousness, but the Board rejected the argument because Patent Owner did not provide evidence concerning the size and product scope of the relevant market, the Petitioner’s market share, or evidence of a nexus between the Petitioner’s alleged sales and the claimed invention.

In the end, the Board granted trial on all three challenged claims, based on 5 challenge grounds.

31 for 32: Secondary Considerations Argument Comes Up Short in Decision to Institute Inter Partes Review Trial

iStock_000000967953XSmallCBS was successful in forcing all 41 challenged claims of a Helferich patent into an inter partes review trial. The case is styled CBS Interactive Inc., The New York Times Company, G4 Media, Bravo Media LLC, and Phoenix Newpaper, Inc. v. Helferich Patent Licensing, LLC (IPR2013-00033), involving US Pat. No. 7,155,241. Each claim was challenged based on a single ground, but that was all that was required to institute the trial.

The ‘241 patent discloses a paging system that notifies the user of a paging transceiver that a message has been received, but without sending the entire message. The paging system allows the user to determine the priority of the message and whether the user wants to retrieve, play, erase, store, forward, or reply to the message at a convenient time, such as downloading the entire message at less expensive off-peak hours.

The Board started its analysis with a claim construction analysis that primarily involved means plus function claim limitations.  To that end, the Board undertook a fairly detailed analysis of the specification in identifying corresponding structure for the several means-plus-function limitations. In some instances, the Board noted that Patent Owner’s claim construction was insufficient because, although Patent Owner contested Patent Challenger’s constructions, Patent Owner did not identify any specific portions of the specification that described any corresponding structure. Order at 18.

The Board then proceeded to an obviousness analysis, finding that the prior art met the “reasonable likelihood” standard required to institute an inter partes review trial.  In so doing, the Board rejected Patent Owner’s argument for secondary considerations of nonobviousness. Patent Owner had argued that the enormous licensing success of “Helferich patents” was sufficient to overcome an obviousness determination, but the Board found that such an argument, detached from the patent-in-suit, was unpersuasive.  Order at 22. Further, the Board found that Patent Owner failed to provide the required nexus between the merits of the invention and the licenses themselves.  Id.  As such, the secondary considerations arguments put forth by Patent Owner were rejected by the Board.

The Patent Owner also argued that the Board should deny the petition because the Patent Challenger used the same arguments as during a previous reexamination argument. The Board was not persuaded by the argument because the ‘241 patent was not involved in the previous reexamination, and even if it was, section 325(d) does not require the Director to defer to a prior determination in the Office, even one which considered the same prior art and arguments. Order at 24.

In the end, the Board granted trial for all challenged claims, granting on the single challenge ground for approximately half the claims, and another single challenge ground for the remainder of the claims.