Uniloc USA v. Sega of America: Evaluating the Priority Date of a Means + Function Claim

Uniloc USA owns US 5,490,216 (‘216), with claims directed to “[a] registration system for licensing execution of digital data in a use mode….” Sega petitioned for IPR of the ‘216 patent, arguing that Claims 1–20 are anticipated by US 5,509,070 (“Schull”), which was filed on 15 December 1992. The ‘216 patent was filed on 21 September 1993, but claims priority to AU PL5524, filed on 26 October 1992. In other words, Schull is only prior art if ‘216 does not get the benefit of the Australian filing date. The PTAB concluded that the Australian application did not provide adequate written description support for the U.S. claims, and held that Schull anticipates ‘216 Claims 1–20.

At issue was the limitation “generating means” in the U.S. claims. In a previous lawsuit between Uniloc and Microsoft, the Federal Circuit had construed “generating means” to mean “to generate a local or remote licensee unique ID/registration key,” and agreed with the district court that the corresponding structure was “a summation algorithm or a summer.” The PTAB concluded that no such summation algorithm was present in the Australian application, and therefore the U.S. claims could not take the benefit of the Australian filing date.

Uniloc argued that this was legal error. While a failure to describe adequate structure in the specification to support a §112(6) claim limitation can give rise to an indefiniteness failure under §112(2), the priority analysis has historically focused on whether the priority filing contains adequate written description to satisfy §112(1). X2Y Attenuators, LLC v. Int’l Trade Comm’n, 757 F.3d 1358, 1365 (Fed. Cir. 2014). Uniloc argued that questions of §112(2) and §112(6) are not germane to the priority analysis, and therefore the PTAB had made an error of law in addressing these considerations when deciding priority for the ‘216 patent. The Federal Circuit Court of Appeals (CAFC) disagreed with Uniloc and affirmed the PTAB.

Although this decision is not precedential, the reasoning here could have important implications in many IPRs and PGRs in the future. The extent of the prior art is determined in view of a patent’s priority date. If a patent is not entitled to the benefit of its priority filing, the world of prior art is correspondingly larger. Moreover, the CAFC has recently made it easier for a claim limitation to be regarded as a means-plus-function (§112(6)) limitation. Williamson v. Citrix Online, LLC, 792 F.3d 1339, 1349 (Fed. Cir. 2015) (en banc). Therefore, a would-be challenger in IPR should pay careful attention to any limitations in the challenged patent that could be regarded as means-plus-function, and then scrutinize the priority filings to see whether the priority filings have adequate structure (and teachings listing the structure to the claimed function) to support the means-plus-function limitations in the patents to be challenged. If the supporting structure is not clearly present in the priority filing, then the challenged patent can be attacked on a wider basis of prior art.

Later Priority Date for IPR-Challenged Patent Where No Written Description in Parent

4177464_sThe Board denied an interesting attack from Patent Owner who suggested that Petitioner’s argument, that the patent-at-issue was not entitled to the priority date of its parent, was barred in inter partes review proceedings because it is based on 35 U.S.C. § 112. SAP America, Inc. v. Pi-Net International, Inc. IPR2014-00414, involving US Patent No. 8,346,894; and parent patent, US Patent No. 8,037,158.

Petitioner argued that the subject matter of the challenged claims of the ‘894 patent were not disclosed in the parent ‘158 patent in a manner sufficient to meet the requirements of 35 USC §112, first paragraph. Order at 11. As such, per Petitioner, the ‘894 claims were not entitled to the priority date of the ‘158 parent patent.  Specifically, Patent Challenger argued that negative limitations in some of the ‘894 claims were not disclosed in the ‘158 parent specification. Id.

Patent Owner’s Preliminary Response argued that the petition exceeded the scope of inter partes review (which allows only challenges under 35 USC §102 and §103) by including an analysis under §112 in the challenge.

The Board began its analysis by noting that there is a difference between arguing that a claim is unpatentable based on §112 inadequate written description grounds and arguing that a claim is not entitled to a given priority date based on §112 grounds.  Further, Patent Owner provided no arguments on the merits against Petitioner’s assertions of lack of written description in the parent ‘158 patent.  Accordingly, after dismissing inapplicable case law cited by Patent Owner because of this distinction, the Board agreed with Petitioner and found that the ‘894 challenged claims were not entitled to the priority date of the ‘158 patent because the ‘158 patent did not provide an adequate written description of the challenged claims.

Second Petition Seeking Post Grant Review is Filed

iStock_000012593731SmallFinally, the “PGR” portion of this site is starting to gain some momentum as Accord Healthcare brought the second ever Post Grant Review PetitionAccord Healthcare, Inc. v. Helsinn Healthcare S.A., et al., IPR2014-00010.  Accord challenges the validity of the patent-in-suit pursuant to 35 U.S.C. § 112(a) (lack of written description and enablement) and 35 U.S.C. § 112(b) (failure to particularly point out and distinctly claim the subject matter the inventors regard as the invention).

As the “theory” of Post Grant Review has been discussed and evaluated, § 112 grounds, like those raised in this PGR, were considered ripe opportunities for challenges in these new proceedings.  The underlying downside of such action, however, was the strong estoppel that attaches to Post Grant Review that will cripple future attempts to challenge the validity of the patent-at-issue. As compared to IPR, where the estoppel can only apply to §§ 102 and 103 grounds, based on printed publications or patents, in a PGR, the estoppel extends to all grounds of invalidity that were raised, or reasonably could have been raised.

Where a § 112 defense is a Petitioner’s best defense, though, it seems likely that such defense will be given a more thorough and competent review at the PTAB, with its stable of technically-oriented and patent-savvy judges, than it would with the typical district court judge in federal court litigation.