Preliminary Response that Addresses the Merits of Petition Again Fails in Grant of IPR Trials

iStock_000031747934XSmallTime and again, Patent Owner arguments on the merits in Preliminary Responses  have been smothered by expert testimony and other evidence that is allowed with a petition.  As such, as IPR practice has evolved, more and more Patent Owners are waiting until the formal Patent Owner response before presenting its arguments.  In short, and as the high number of petition grants makes clear, trying to substantively fight a petition at the preliminary response phase is not working.  In this fashion, Texas Instruments was able to get 16 challenged claims of a Unifi Scientific Batteries patent into a trial for inter partes review, in a case styled as Texas Instr., Inc. v. Unifi Scientific Batteries, LLC (IPR2013-00213), involving U.S. Pat. No. 6,791,298. Additionally, Samsung was successful in challenging 12 claims of the same Unifi patent in a case styled as Samsung Elec. Co., Ltd. v. Unifi Scientific Batteries, LLC (IPR2013-00236).

The ‘298 patent relates to “monolithically formed battery charging devices” which include at least one step-down DC to DC converter. The idea of the step down converter described by the ‘298 patent is to allow a lower output voltage relative to input voltage, which allows for a greater output current relative to the input current.

In the IPR2013-00213 proceeding, the Board started by considering claim construction issues, including by considering whether of the challenged claims was a limitation on the claims. Finding that the preamble’s recitation of “monolithic battery charger” limited the scope of the invention because it fundamentally described what the claimed apparatus was, not merely an intended use, the Board construed the preamble to have patentable weight. Next, the Board cleared up confusion over what appeared to be an omission of percentage symbols from the claims. Order at 8.  Looking to the specification for support, the Board held that the limitation of “from approximately 10 to approximately 95” would be understood by one of skill in the art to be referencing percentages.  Order at 9.  To conclude, the Board interpreted the term “monolithically formed” to mean “formed in a single integrated circuit package or wafer die.”  Order at 10.

Next, as a threshold matter, the Board dismissed Patent Owner’s argument that the Petition should be denied as incomplete because Patent Challenger contended that the “broadest reasonable construction” should be applied, but provided no explanation for what is that interpretation.  While the Board ultimately determined that specific claim constructions were required, the Board found that Patent Challenger sufficiently stated its position.  Order at 11.

Turning to the specific art cited by Patent Challenger, the Board addressed three arguments raised by Patent Owner, finding none persuasive.  First, the Board discounted the argument that one of skill in the art would not have combined the references of record because one of the references did not teach the type of converter at issue in the ‘298 patent.  Second, the Board did not agree with Patent Owner’s argument that a combination of the references would destroy the purpose of the converter.  Lastly, Patent Owner argued that the prior art taught away from a combination of the references.  Importantly, with respect to all of the above arguments, the Board indicated that Patent Owner had not pointed to sufficient and credible evidence.  Of course, the formal response, and the ability to provide expert testimony, would give Patent Owner the opportunity to provide that type of evidence.  At this stage of the proceeding, however, the evidence was sufficient for Patent Challenger to have met its burden to institute the IPR trial.

IPR2013-00236 was predictably a very similar proceeding, with the Board noting that some of the challenged claims in IPR2013-00236 overlap with those of the IPR2013-00213. The claim construction in the two proceedings was nearly identical and similar arguments were used, resulting in the Board granting the Petition as to all challenged claims. The Board in IPR2013-00213 suggested the parties be prepared to discuss whether the two proceedings should be joined, a suggestion repeated by the Board in IPR2013-00236.

With Patent Owner unable to overcome obviousness arguments heavily supported by expert testimony, Texas Instruments was able to get 16 challenged claims of the ‘298 patent into a trial for inter partes review. In a separate proceeding suggested to be joined, Samsung was able to get 12 claims of the same patent into a separate trial or inter partes review.

Attorney Argument in Preliminary Response Continues to be Trumped by Expert Evidence from Petition

DroppingChallenging two patents with a common parent application, Butamax Advanced Biofuels was able to get 28 challenged claims of one Gevo patent and 18 challenged claims of a second into separate trials for inter partes review, in cases styled as Butamax Advanced Biofuels LLC v. Gevo, Inc. (IPR2013-00214 and IPR2013-00215), involving U.S. Pat. Nos. 8,304,588 and 8,283,505.

The duo of patents both relate to a “method for recovering C3-C6 alcohols, including isobutanol, from dilute aqueous solutions, such as fermentation broths.”

The Board in both cases dealt with a handful of preliminary issues before delving into the analysis. The first issue regarded whether DuPont should have been named as a real party-in-interest by Patent Challenger. The Board rejected Patent Owner’s argument that inter partes review should be barred because of this issue, reasoning that the mere fact that DuPont and Butamax (who have board of directors’ members in common, among other tangential ties) share a common interest in the two patents does not necessarily make DuPont a real party-in-interest.  The real party-in-interest inquiry is “fact-dependent” and Patent Challenger simply had not set forth persuasive evidence of DuPont’s ability to fund or direct the proceeding.  IPR2013-00214 Order at 4.  This issue is, of course, challenging for a Patent Challenger to prove in light of the Board’s high burden to obtain “additional discovery” that would help provide the persuasive facts for this fact-dependent inquiry.

The Board then rejected Patent Owner’s argument that inter partes review should be barred because the references relied upon and the arguments utilized were previously considered by the Examiner. In discounting Patent Owner’s argument, the Board simply stated that Patent Challenger’s arguments had merit. IPR2013-00214 Order at 5.

To conclude the preliminary matters, the Board rejected Patent Owner’s argument that expert testimony should be discredited because it was provided by an expert with a business relationship with DuPont (an alleged unnamed real party-in-interest), citing the expert’s qualifications and persuasive testimony. IPR2013-00214 Order at 6.

The Board’s analysis of the merits of the petitions contained a few interesting points.  For example, in the 214 proceeding, the Board deemed the preambles of the challenged claims limiting, especially given that a portion of the preamble provided antecedent basis support for certain of the dependent claims. IPR2013-00214 Order at 9.

In the 215 proceeding, the Board considered Patent Owner’s argument that, by modifying one prior art reference’s disclosed process by including as step from another reference, the fundamental principles of operation of the process would be changed.  Thus, per Patent Owner, the proposed modification would render the prior art invention inoperable.  IPR2013-00214 Order at 11.  The Board discounted this argument based on the rational that Patent Owner’s “argument improperly is based on what each reference teaches separately, and not on the teachings of the combined references.”  Id.  More specifically, the Board relied on the Federal Circuit’s decision in In re Keller, 642 F.2d 413, 425 (CCPA 1981) to not require “bodily incorporation” of a secondary reference into a primary reference.

This decision shows why there is a growing trend in IPR practice to waive the Patent Owner Preliminary Response or, at the least, to not focus on the merits of, for example, an obviousness analysis.  Time and again in the Board’s decision, it discounted the attorney argument of Patent Owner and referred, instead, to the declaration testimony of Patent Challenger’s expert.  Clearly, expert evidence, if properly presented, is provided great weight, as compared to mere attorney argument (and no expert testimony is, of course, allowed in such a Preliminary Response).  As such, Patent Owners are reconsidering the forecast of arguments that could be made in the formal response to the petition, when expert testimony may be provided, given that the Board is not giving much weight to those arguments in the Preliminary Response.

24 for 25: Inter Partes Review Trial Instituted in View of Waived Patent Owner Preliminary Response

iStock_000016813098XSmallIn only the second decision to initiate an IPR trial on ALL proposed grounds, the Board granted a petition filed by Research in Motion in the IPR styled Research In Motion Corp. v. Mobilemedia Ideas LLC (IPR2013-00016), involving US Patent No. 6,441,828. The trial involves a smaller than average number of claims and grounds, as the decision was granted for all 5 challenged claims based on all 10 challenged grounds.

The subject matter of the ‘828 patent involves an apparatus (e.g., an electronic picture frame) for displaying a digital image in a normal direction regardless of whether the apparatus is placed with the shorter or longer side down.

The Board spent a considerable amount of the decision discussing claim construction, starting with a finding that the preamble of the only independent claim (Claim 6) is not limiting because it did not add any further limitation that is not already present in the body of the claim. Order at 6.  Further, the Board found that the preamble of Claim 6 only recited an intended use for the claimed apparatus (“for displaying image data read from a recording medium.”).  Id.

The Board then proceeded to address the Patent Challenger’s means-plus-function claim limitation positions, noting that because the Patent Owner did not file a patent owner preliminary response, the Board did not have the benefit of ascertaining the Patent Owner’s position on the claim construction of the means-plus-function limitations. Order at 7. The Board stated that the Patent Owner would have an opportunity to present its construction in the patent owner response and was clear to remark that the claim construction positions it was taking in its Order were made solely to determine whether to institute the trial.  The Board then went on to identify specific structure for each of the means-plus-function limitations, often agreeing with the Patent Challenger’s position.

The Board proceeded to analyze each of the Patent Challenger’s anticipation and obviousness grounds, finding a reasonable likelihood of prevailing in each instance. The Board again made subtle references to the waiver of the patent owner preliminary response in stating more than once that the Patent Challenger’s explanations of its invalidity contentions were “unrebutted.” Order at 22, 25.

In the end, it was a total success for Patent Challenger at this stage of the proceeding. Patent Challenger’s strategy of focusing on a small number of grounds was successful, as it avoided the quandary many other Patent Challengers have faced – the Board denying cumulative or duplicative grounds. Although it was not apparent how crucial the waiver of the patent owner preliminary response was in this decision, the Board’s repeated emphasis of “unrebutted” challenge grounds indicates that patent owners should strongly consider the advantage of rebutting a Patent Challenger’s argument at an early stage of the proceeding to give the Board the opportunity to potentially narrow the trial.

Eighth Inter Partes Review Trial Instituted

The Order issued in the second of four inter partes review trials involving Intellectual Ventures and Xilinx, styled as Intellectual Ventures Management, LLC v. Xilinx, Inc. (IPR2012-00019), relating to U.S. Patent No. 8,062,968, closely parallels the decision instituting a trial in IPR2012-00018, involving the same parties.  Again, all challenged claims were included in the trial, based on six of the 18 proposed grounds for invalidity.  The remaining 12 grounds were analyzed, but deemed to not have met the reasonable likelihood standard, so were denied.

In general, the rationale for instituting the trial was very similar to the rationale articulated in the previous Order, including the same claim construction issues and largely the same discussion of the challenged claims vis-a-vis the prior art.  As such, we do not repeat that analysis here, and merely refer you to our prior report.

In the end, however, its 8-for-8 for patent challengers to date.

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.