Doctrine of Inurement Does Not Save Design Patent in IPR Proceeding

6686163_sThere are precious few opportunities to be able to write about the Doctrine of Inurement in inter partes review proceedings (or otherwise, for that matter). So, we take the opportunity here to consider the doctrine, in a design patent context, with the Board’s decision in Sensio, Inc. v. Select Brands, Inc., IPR2013-00580. In Sensio, the Board rejected Patent Owner’s attempt to antedate 102(a) prior art under the Doctrine of Inurement, finding that insufficient evidence supported a finding that the work of a third party inured to the benefit of Patent Owner.

More specifically, Patent Owner argued that it had communicated the design of the subject matter later claimed in the subject patent (design for a multiple-crock buffet server) to a third party for manufacture of a prototype. The first prototype was then manufactured and sent to Patent Owner by the third party months prior to the date of the prior art references relied upon in this challenge. There were no design changes in taking the prototype to the present day commercial model. Decision at 6-7. Patent Owner, assuming conception was established by photographs of the prototype and business records, argued that reduction to practice was achieved prior to the date of the prior art, as evidenced by several commercial product description documents which antedate the prior art by a few months. Id. at 7-8.

Petitioner responded by rebutting Patent Owner’s argument the doctrine of inurement applied (that acts by others working explicitly or implicitly at the inventor’s request will inure to the inventor’s benefit). The first requirement of inurement is that the inventor must have conceived of the invention prior to involving the third party. Petitioner argued: (1) because a third party (rather than the inventors) built the prototypes, there was no reduction to practice; (2) Patent Owner did not show that the third party building the prototypes inures to Patent Owner’s benefit; and (3) the photographs of the prototype produced by the third party were insufficiently clear to establish conception of the design by the inventors prior to involvement of the third party. Id. at 8-9.

After rejecting Patent Owner’s argument that the foundational case law of the doctrine of inurement does not apply to design patents (only to utility patents), the Board narrowed the key issue to whether the third-party-built prototypes inure to Patent Owner’s benefit.  Id. at 10.  The Board began by rejecting Patent Owner’s assumption that conception had taken place, and stated that Patent Owner had not, in fact, shown that conception of the claim design happened before the prior art date. The Board based this finding on a lack of corroboration of the inventor’s testimony regarding conception.  Id.at 12-13.  Patent Owner’s submission of various business records and product descriptions were inadequate, as they did not address the claimed ornamental design and focused more on the commercial product and its technical specifications.  Further, the Board weighed the fact there was no evidence of record which showed correspondence between Patent Owner and third party prior to production of the design prototype.  Id.  at 14.

Accordingly, the Board found that Patent Owner had not adequately shown that it invented the claimed design prior to the prior art date, and allowed the references at issue as prior art under 102(a).  Id. at 14.

PTAB Rules Lab Notebooks Insufficient to Prove Conception and Reduction to Practice

31859106_s (1)Swearing behind a reference is an enticing option for a Patent Owner, but the Board has again reminded parties that rigorous—and admissible—proof of conception and reduction to practice is still necessary.

This issue was addressed in Microsoft Corporation v. Surfcast, Inc., a consolidated opinion concerning four IPR petitions filed by Microsoft challenging one patent in which the Board found all claims unpatentable, and denied another motion to amend.  In its final written decision the Board rejected Patent Owner’s attempt to prove prior conception and reduction to practice despite extensive evidence.

Patent Owner tried to antedate a prior art reference via testimony from inventors regarding conception and reduction to practice.  The Patent Owner also proffered corroborating evidence in the form Exhibits consisting of emails between inventors, lab notebook pages, and other assorted papers.  Decision at 15.

Petitioner challenged the authenticity of the evidence, as all corroborating Exhibits consisted of inventor-generated documents and correspondence between inventors.  Patent Owner responded by providing inventor testimony to authenticate the exhibits. This was insufficient, because it meant the Patent Owner was essentially authenticating documents corroborating inventor testimony with further statements by the inventor.  Accordingly, the Board deemed the authentication defective, as it was not sufficiently independent.  Id. at 16-17.

Patent Owner further argued that corroboration was not necessary when a party attempts to prove conception and reduction to practice through use of physical exhibits.  The Board disagreed, that corroboration of the dates in the exhibits purported to establish conception is still required.  Id. at 17.

Perhaps envisioning an appeal, the Board still proceeded to analyze Patent Owner’s evidence of reasonable diligence towards a reduction to practice.  Patent Owner offered invoices from Patent Owner’s law firm, time entries from an interested party, and declarations of two interested parties who weren’t an inventor.  Here again, though, the Board rejected Patent Owner’s documentary evidence because it was not authenticated by a non-interested person (instead, the authentication declarants each had an interest in the outcome of the case).   Id. at 18-19.

The Board further noted that even if the corroboration was adequate, diligence was not proven on the merits.  The expert testimony purporting to support diligence in reduction to practice was by an expert who worked on later-assigned matters out of chronological order, creating a week of inactivity on the subject application and several gaps in activity.  Id. at 20-21.

Accordingly, the Board found that Patent Owner also failed to prove reasonable diligence to a reduction to practice.  Id. at 20.

PTAB Rejects Two Attempts by Patent Owners to Antedate Prior Art

6686163_sThe fact-based nature of conception/reduction to practice issues makes it worthwhile to consider a number of these types of cases as they arise. Here, we discuss such issues from two Board decisions, K-40 Electronics, LLC v. Escort, Inc., IPR2013-00240 and Handi Quilter, Inc. and Tacony Corporation v. Bernina International AG, IPR2013-00364. In both cases, the Board rejected Patent Owner’s attempt to antedate the prior art-at-issue.

The K-40 Electronics case involves US Pat. No. 6,670,905, relating to a radar detector and a location positioning device.  Decision at 3. Patent Owner relied upon declaration testimony from the inventor of the ‘905 patent, which stated that the claims at issue were conceived and reduced to practice prior to the effective art dates of two references relied upon by Petitioner. Of course, to establish reduction to practice, a party must show: (1) construction of an embodiment that meets all claim limitations; (2) determine that the invention would work for the intended purpose; and (3) sufficient evidence to corroborate inventor testimony as to the events.  ‘240 Decision at 11.

The inventor testimony stated that a 1992 prototype of the ‘905 invention was constructed prior to the priority date of the references-at-issue. and used a tape recorder to record geographical location of a radar signal. The inventor alleged that this feature met the claimed limitation of a “position determining circuit.” The Board rejected this contention, citing back to its claim construction determination, finding that a tape recorder did not determine geographic position; rather, a tape recorder was only an electronic notepad to record observations of the invention. Id. at 12-13.  Accordingly, the prototype did not reduce all claim limitations to practice.

Inventor also testified that a different 1996 prototype also had a “position determining circuit” in which software code was drafted to demonstrate global positioning capability.  The inventor was forced to concede, however, that the software did not disclose a position determining circuit. The inventor testified that some of the lines of software were missing and Patent Owner could not find any version of the software that contained the missing code.

This hole in the evidence presented by Patent Owner exposed a critical flaw in its objective evidence corroborating reduction to practice; namely, Patent Owner was using the software to corroborate expert testimony, but simultaneously had to use expert testimony to corroborate missing features of the software. Id. at 14-15. The Board also found several statements by the Inventor regarding claimed features of the invention allegedly being reduced to practice to generally lack adequate evidentiary corroboration. Id. at 15.  Accordingly, with a general lack of evidence, Patent Owner in IPR2013-00240 failed to prove conception and reduction to practice prior to the art date of two references relied upon by Petitioner.  Id. at 17.

The Handi-Quilter case involves US Pat. No. 6,883,446, which relates to a method and apparatus for stitching together fabric layers. ‘364 Decision at 12. Patent Owner generally failed to prove conception of several features of the ‘446 invention.  Specifically, Patent Owner did not provide evidence that the inventor had conceived of the limitation, that required controlling the stitch head or needle arm so that it actuates in response to detected movement, prior to the priority date of the art at issue.  Id. at 12.  In fact, the inventor admitted on the record that he had not decided on a control circuit for the prototype until after the art date of the reference at issue.

Further, the Board questioned the reliability of the evidence presented to establish conception and reduction to practice.  The evidence presented was a hand-written sketch of the invention with a date well before that of the reference at issue. Though the hand-written document had a date printed on it, the record showed no corroboration beyond the inventor’s sworn statement that this date was in fact the date the document was created or last-modified.  Id. at 13.  In fact, the document was not seen by anyone besides the inventor until seven years after the date written on the paper.  Further, other testimony attempting to corroborate the inventor’s sworn statement of conception was found to be either unreliable or consisting of bare legal conclusions, not underlying facts. Id. at 14-15. Lastly, demonstrations of the invention by the inventor as detailed by the inventor’s wife weren’t persuasive because the inventor’s wife either did not actually witness the demonstration or the demonstration was only of part of the invention, not all claimed features.  Unsworn statements by the inventor’s sons also weren’t given weight because they weren’t sufficiently independent from the inventor. Id. at 16. Accordingly, the Board found that Patent Owner had failed to prove conception and reduction to practice in attempting to antedate a prior art reference.

IPR Patent Owner Succeeds in Antedating Key Prior Art

4928629_sA witness credibility battle erupted in Dynamic Drinkware LLC v. National Graphics, Inc., IPR2013-00131, where the Board found that Patent Owner antedated a key prior art reference…despite the fact that the inventor testified on behalf of Petitioner. To uphold its burden of proving an earlier invention, Patent Owner relied on testimony from two fact witnesses who explained the steps undertaken by Patent Owner in conceiving and reducing to practice the claimed invention. Order at 7. In rebuttal, Petitioner relied on testimony from the inventor himself. Id. The inventor testified that while working for Patent Owner and developing the product, “None of the products [were produced]…in a way that was consistent with the claims of the ‘196 patent.” Id. at 10. The inventor further testified his notebook entry “confirms that we still had a long way to go [for commercialization].”

The Board sided with Patent Owner, finding that “[t]here is no requirement that the invention, when tested, be in a commercially satisfactory stage of development.” Steinberg v. Seitz, 517 F.2d 1359, 1363 (Fed. Cir. 1975) “The fact that further refinements of the invention were made is not relevant.” Farrand Optical Co. v. United States, 325 F.2d 328, 333 (2d Cir.1963). Order at 13.

Thus, the testimony from the inventor himself did not persuade the Board that the invention was not reduced to practice prior to the critical date of a key prior art reference. Id. at 17. The Board found Patent Owner’s witnesses properly antedated the reference and, without that prior art, the proposed challenge grounds from the Petition failed.

Board Considers Proof of Diligent Reduction to Practice

22397198_sPatent Owner’s attempt to disqualify prior art in an inter partes review failed because it could not show diligence from conception to reduction to practice in Medtronic, Inc., et al. v. Troy R. Norred, M.D., IPR2014-00395, U.S. Patent No. 6,482,228.

Patent Owner’s preliminary response sought to remove one of the allegedly-anticipatory references as prior art by providing evidence of conception prior to the effective filing date of the reference and diligence to reduction to practice (the filing of the patent application, in this instance). To remove a reference with an art-date during 1999, Patent Owner argued that the claims at issue of the ‘228 patent were conceived in late 1998 and there was reasonable diligence until reduction to practice. To support the argument, Patent Owner submitted documentary evidence and exhibits to the Board.

The Board was not persuaded, however, finding that the exhibits were not sufficiently linked to each claim limitation to prove reasonable diligence during the period between conception and filing of the patent application. The Board specifically pointed out that though some exhibits pertained to drawings present in the ‘228 patent, those drawings were not relied upon to illustrate claimed features of the invention. Further, the evidence presented did not show several claimed features of the ‘228 invention, including a “tissue valve.” Therefore, reasonable diligence was not proven for all claimed features and the reference at issue was deemed to be prior art.

Corroborating Evidence Insufficient in Final Written Decision Canceling All Claims

iStock_000028428166_SmallOne of the more fact-dependent inquiries in patent disputes is the issue of conception and reduction to practice.  This issue was raised in an inter partes review setting in CBS Interactive Inc. v. Helferich Patent Licensing, LLC, IPR2013-00033, Paper 122 (Final Written Decision), wherein Patent Owner sought to swear behind cited prior art by filing a declaration from the inventor and a handwritten specification claimed to have been written before the critical date. Id. 44.

The art at issue was 35 U.S.C. § 102(e) art — filed “before the invention by the applicant for patent.”  In the inventor’s declaration, he testified that he conceived the subject matter of each challenged claim prior to the filing date of the prior art.  As corroborating proof of this earlier invention, the inventor cited to an undated, handwritten specification allegedly describing the claimed invention. The inventor testified that he completed the handwritten specification prior to the critical date.  Id. at 45.

Of course, an inventor’s testimony, standing alone, is insufficient to prove conception — some form of corroboration is required.  In re NTP, Inc. 654 F.3d 1279, 1291 (Fed. Cir. 2011). Id. at 45. The Board determined that the undated, handwritten specification did not qualify as corroborating evidence because it was undated and unsigned. The inventor’s testimony, that he prepared and completed the specification prior to the critical date, was deemed insufficient to corroborate the date of the specification.  Further, an inventor’s own testimony is not “independent” corroboration of proof that comes from the inventor himself.  Id. at 47.  Failing to swear behind the critical prior art, the Board ultimately determined that all challenged claims were unpatentable.

131 Declaration That Was Successful in Prosecution Deemed Insufficient in Inter Partes Review

iStock_000019749872SmallThe Board proved willing to overturn a previous patent examiner’s judgment in another type of issue in Iron Dome LLC v. E-Watch, Inc., IPR2014-00439, where, in instituting an inter partes review trial, the Board found that Patent Owner did not properly swear behind a prior art reference, despite the fact that, during earlier prosecution, the Patent Office found that the prior art was properly antedated.

The prior art at issue had an effective filing date of April 25, 1995 qualifying it as prior art under 35 U.S.C. §§ 102(a) and 102(e) because it was not issued or published more than one year prior to the effective filing date as the ‘871 patent, but the effective filing date was earlier than the effective filing date of the ‘871 patent. Id.

During the original prosecution of the patent-at-issue, the Examiner found that the inventor’s submitted declaration sufficiently antedated the prior art reference. Id at 6. The Board took a fresh look at the declaration in the inter partes review, however, and disagreed with the Examiner’s earlier determination. Id at 8. As such, the prior art was relevant in the IPR and the Board determined that there was a reasonable likelihood that the challenged claims were unpatentable in view of that art.

Patent Owner will, of course, have another opportunity with its Patent Owner Response to seek to antedate the prior art at issue, but in the meantime, this is another example of the Board’s willingness to reconsider issues that were purportedly decided during previous examination or reexamination.

Board Gives No Weight to Previous Examiner and District Court Decisions that Prior Art Was Antedated

iStock_000003288988XSmallThe Board continued its record of taking a fresh look at old records in placing 10 challenged claims of an Escort patent into a trial for inter partes review in a case styled as K-40 Electronics v. Escort, Inc. (IPR2013-00203), involving U.S. Pat. No. 7,999,721.

The ‘721 patent relates to a GPS-enabled radar detector. More specifically, the patent describes that the detector is “designed to process dynamically radar sources based on previously-stored geographically referenced information.”

The Board’s decision was notable for its analysis of prior art cited by Petitioner that Patent Owner had overcome in both the examination of the application that matured into the ‘721 patent and in related district court litigation.

More specifically, during prosecution of the ‘721 patent, inventor submitted a Rule 131 Declaration seeking to antedate one of the prior art references.  The Examiner found the declaration to be sufficient, and withdrew rejections based on that prior art.  The Board, however, changed course and sided with Petitioner in deciding that the declaration that was submitted was deficient.  Order at 6.

Relatedly, Patent Owner directed the Board to district court litigation in which Patent Owner successfully argued to the Board that the invention of the ‘721 patent was reduced to practice before the effective date of relevant prior art.  The Board was not persuaded by this information because the district court decision was not final and because the litigation did not involve Petitioner, so Petitioner was not bound by the result.  Order at 14.

Relatedly, the Board also refused to deny the petition, under 35 USC § 325(d), because the same art and arguments were previously considered.  As the Board has found in every other instance in which this provision has been raised, it deemed the record in the inter partes review to be different, such that the statutory option of § 325(d) was not applicable.

In short, Patent Owner’s arguments that the petition should be denied in view of the previously-considered art were denied in their entirety and, ultimately, an inter partes review trial was instituted with regard to all challenged claims.

Petitioners Strike First: PTAB Issues First Final Decision – Claims Unpatentable and Motion to Amend Denied

Business Finish LineWe finally made it!  Almost 16 months after Garmin kicked off this fun IPR roller coaster we have been riding, the PTAB has issued its first Final Written Decision, finding that all three claims-at-issue in the IPR trial styled as Garmin Int’l, et al., v. Cuozzo Speed Tech. LLC, IPR2012-00001 (Paper 59), involving U.S. Patent No. 6,778,074, are unpatentable and that Patent Owner’s motion to amend is denied.

By way of brief procedural history, Petitioner initially sought an IPR trial on 20 claims of the ‘074 patent.  In its decision to institute the trial, however, the Board found that there was a reasonable likelihood of unpatentability with respect to 3 of the 20 challenged claims.  Of course, as the trial progressed, this case gave us the now ubiquitous Garmin factors for proving the required “good cause” to obtain additional discovery.

Turning to the actual decision, we note that the details of the technology involved, and other aspects of the ‘074 patent, were set forth in the Decision to Initiate.  As such, we focus here on what struck us as the most interesting aspects of the Board’s Final Written Decision:

  • In general, the Board’s extensive 50-page decision is detailed, well-sourced, and unambiguous.  The Board refers often to relevant Federal Circuit case law and to the record (such as deposition testimony, briefing, and oral hearing argument) as part of a methodical treatment of all the defenses raised by Patent Owner.
  • The meaning of the term “integrally attached” was a key component of both the Decision to Initiate and the Final Written Decision.  The Board did not change its definition from its initial decision to the final decision, despite Patent Owner’s strong opposition thereto (including at oral argument).
  • While ostensibly working under the “broadest reasonable interpretation” claim construction standard, the Board’s analysis mimics that engaged by a federal court – relying on the intrinsic evidence of the ‘074 patent.  There is nothing discernible from the decision that would indicate how a district court would have come to a different claim construction analysis than that adopted by the Board, despite the ostensibly different standards.
  • In coming to its claim construction decision, the Board discounted the expert testimony provided by Patent Owner because that testimony, regarding what one of skill would have known, was vague.  The Board could not discern “just how much is deemed to be described by the disclosure itself, and how much is filled-in or completed by one with ordinary skill in the art, who possesses ordinary creativity and is not an automaton.”  Order at 14. Further, “[w]hat would have been obvious to one with ordinary skill in the art does not establish what actually is described in the specification.”  Id.  This is an ongoing theme with the Board in their consideration of expert testimony – mere allegations that mimic attorney argument are not enough, even if coming through the mouth of an expert. The Board is requiring a detailed and factual basis for the opinions of these experts.
  • Patent Owner sought to constrain the Board’s construction of “integrally attached” by referring to a district court case that construed “integrally connected.”  The Board explained why the terms were different, in the context of this IPR, but also more broadly suggested that comparison of two terms from different proceedings will not be given much weight in the future.  To that end, the Board pointed out that the patents had different disclosures; the field of invention is not the same; the level of ordinary skill in the art was different; the context in which the terms were used in the claims was not discussed by Patent Owner; and, of course, the terms “connected” and “attached” are different.  Order at 16-17.
  • The Board engaged in an extensive discussion relating to the priority date of the invention, including evidence of earlier conception and reduction to practice.  Among that evidence included a denial of Patent Owner’s use of a speeding ticket as corroborating evidence: “Exhibit 3001 corroborates only that the inventor received a speeding ticket on November 28, 1999, not anything that [inventor] conceived on that day.”  Order at 21.  As to other purported corroborating evidence, Patent Owner did not offer the testimony of a witness who purportedly signed the document and did not properly establish the document as a business record.  Order at 23.
  • The Board went on to discuss the inventor’s reasonable diligence in reducing his invention to practice, finding inadequate justification for two periods of “little activity” – one period spanning 2 months, and the other spanning 5 months.  Order at 25.  As a cautionary note, the Board found that Patent Owner’s excuse for the delay – a difficulty in obtaining money to file for patent protection – may have been satisfactory.  In this case, however, the delay was deemed too long because Patent Owner did not adequately explain such difficulties in obtaining the required money.  Order at 27.  Again, the lack of a factual basis for a position.
  • The Board’s ultimate comparison of the properly construed claims to the prior art was similar to the analysis from its Decision to Institute.  Ultimately, having decided the “integrally attached” claim construction issue, the art disclosed each element of the challenged claims and the Board did not accept Patent Owner’s teaching away arguments.
  • Lastly, the Motion to Amend Claims was denied by the Board because the amended claims did not have adequate support in the specification.  Failing the written description requirement of 35 USC § 112, ¶1, the motion was denied.

In the end, the Board’s first Final Written Decision contains few surprises.  As has been the case in their decisions to institute, and other ancillary decisions, the Board undertook a thorough job of examining the merits, took unambiguous positions on those merits, and rendered a decision that is comprehensive and detailed.  Next stop on this IPR ride: the Federal Circuit.