About bwheelock

Education J.D., Washington University in St. Louis B.S.E. in Mechanical Engineering, Duke University

The Ultimate Reasonable Royalty Award Must be Based on the Incremental Value that the Patented Invention Adds

In Exmark Manufacturing Company Inc. v. Briggs & Stratton Power Products Group, LLC., [2016-2197](January 12, 2018) the Federal Circuit vacated summary judgment that claim 1 of U.S. Patent No. 5,987,863 is not anticipated or obvious, affirmed summary judgment that claim 1 was not indefinite, reversed the denial of a new trial on damages and several evidentiary rulings related to damages, vacated the finding of willfulness; and affirmed the denial of Briggs’ laches defense.

Regarding the denial of summary judgment of invalidity, the Federal Circuit found that the district court denied the motion because “examined four times by the PTO, and each time the PTO held the claims of the ’863 patent to be patentable.”  While facially logical, this is not legally correct, the Federal Circuit held that

a reexamination confirming patentability of a patent claim alone is not determinative of whether a genuine issue of fact precludes summary judgment of no invalidity.  Surviving a reexamination does not warrant ipso facto summary judgment that a patent is not invalid. Holding otherwise would improperly give complete deference  and preclusive effect to the PTO’s patentability determination, foreclosing challenges to patent validity in district court based on the same prior art.

This holding is supported by Federal Circuit precedent that that a district court is never bound by an examiner’s finding in an ex parte patent application proceeding.  To the extent that an ex parte reexamination is entitled to deference, it comes from the presumption of validity of an issued patent.

The Federal Circuit found that the district court’s denial of summary judgment went beyond giving substantial weight to the reexamination proceedings.  The Federal Circuit found that the district court’s summary judgment was based solely on the fact that the patentability of claim 1
was confirmed following multiple reexaminations — the district court made no other findings regarding the elements of anticipation or obviousness to determine whether a genuine issue of material fact precluded summary judgment.

The Federal Circuit said that is must be furnished with sufficient findings and reasoning to permit meaningful appellate scrutiny.  These were lacking so the Federal Circuit vacated the district court’s summary
judgment of no invalidity and remanded with instruction for the district court to consider the entire record and reach its own independent conclusion on validity.

On the issue of definiteness, Briggs complained that Briggs contends that the patent does not explain how to objectively determine whether a
baffle portion is straight enough or long enough to be “elongated and substantially straight” as required by the claim.  The Federal Circuit disagreed, holding no numerical precision is required when using such terms of degree.  All that is required is some standard for measuring the term of degree.

The Federal Circuit also found that the function of the elongated and substantially straight baffle portions provided further guidance regarding
the scope of the claim language. The Federal Circuit noted that functional language can promote definiteness because it helps bound the scope of the claims by specifying the operations that the claimed invention must undertake.

With respect to damages, Briggs complained first that Exmark improperly determined a royalty rate without properly identifying a royalty base to apportion the value of the patentee’s invention in comparison to the value of the whole, and second that at Exmark’s expert did not adequately explain how she arrived at her proposed 5% royalty rate.  The Federal disagreed that the Exmark needed to apportion the value of the baffle from the other features of the mower through the royalty base rather than the royalty rate, noting that apportionment can be achieved, by careful selection of the royalty base to reflect the value added by the patented feature; by adjustment of the royalty rate so as to discount the value of a product’s non-patented features; or by a combination thereof.  The essential requirement is that the ultimate reasonable royalty award must be based on the incremental value that the patented invention adds to the end product.

While the Federal Circuit agreed with Exmark on the apportionment question, and agreed with Briggs that Exmark’s damages expert’s opinion was inadmissible as it failed to adequately tie the expert’s proposed reasonable royalty rate to the facts of this case. Exmark’s expert concluded with little explanation the parties would have agreed to a 5% reasonable royalty rate; nowhere in her report, however, did she tie the relevant Georgia-Pacific factors to the 5% royalty rate or explain
how she calculated a 5% royalty rate using these factors.  The Federal Circuit vacated the damages award and remand for a new trial on

The Federal Circuit held that the district court abused its discretion by holding that prior art is relevant to damages only to the extent that the prior art was commercialized, stating that the fact that some prior art mowers were not commercialized does not make them immaterial to determining the extent to which the claimed subject matter provides utility and advantages over the prior art.  but affirmed the district court’s exclusion of other types of mower, and of Exmark’s delay in bringing suit.

On the award of damages for willful infringement,  the Federal Circuit found that the District Court’s precluding Briggs from presenting any evidence regarding the validity of the claim or how closely the prior art tracked the claim was error.  The Federal Circuit said that to the extent that decision excluded evidence relevant to Briggs’ state of mind at the time of the accused infringement,  however, it does not comport with the standard articulated in Halo, which mandates that willfulness is an issue for the jury, not the district court.  The Federal Circuit vacated the jury’s finding of willful infringement, vacated the district court’s enhanced damages award, and remanded for the district court to determine whether a new trial on willfulness is necessary.

Finally, on this issue of laches, the Federal Circuit agreed with the district court that in light of SCA Hygiene Products Briggs cannot assert laches as a defense.


“Will Assign” ≠ “Do Assign”; Check Your Chain of Title

In Advanced Video Technologies LLC v. HTC Corporation, [2016-2309, 2016-2310, 2016-2311] (January 11, 2018) the Federal Circuit affirmed the dismissal of an action for infringement of U.S. Patent No. 5,781,788 on the ground that a co-owner of the patent was not a party to the suit.

The Federal Circuit explained that the single issue involved in the appeal was whether a co-inventor of the patent transferred her co-ownership interests in the patent under the terms of an employment agreement.

Plaintiff, Advanced Video, Advanced Video asserted that it obtained co-inventor Hsiun’s co-ownership interests in the invention through a
series of transfers:

  1. The first transfer was made before the ’788 patent application was
    filed, pursuant to a January 1992 Employment Agreement
    (“Employment Agreement”) between Ms. Hsiun and
  2. The second transfer occurred when Infochips’ “receivables,” which had been pledged as security in a financing agreement between Infochips and an entity called Lease Management Services, were seized by Lease Management when Infochips went out of business in 1993.
  3. The third transfer occurred in 1995 when Lease Management sold the Infochips assets to Mr. Woo, one of the three co-inventors.
  4. The fourth transfer occurred when Mr. Woo assigned his ownership interest in the ’788 patent to an entity called AVC Technology Inc. (“AVC”),

Hsiun’s employment agree provided that she would “hold in trust” for the company and “will assign” to the company all inventions, and quitclaimed any and all claims for infringement.  The district court concluded that these provisions did not effect a transfer of Hsiun’s ownership rights to Advanced Video.

The district court found that “will assign” invoked a promise to do
something in the future and did not effect a present assignment, and the Federal Circuit agreed.  Regarding the trust language, the Federal Circuit said even if it determined that Hsiun’s interests in the invention were immediately placed in trust, it did not follow that those interests were automatically, or ever, actually transferred out of trust in favor of
Advanced Video’s predecessor. Absent a transfer, Hsiun would continue
to hold the invention rights as a trustee.  Noting that because Advanced Video had not sought to enforce any obligation Hsiun might have under the trust, it ultimately has no standing to bring a patent infringement
action.  The Federal Circuit was similarly unimpressed with the quitclaim assignment of right to sue for infringements, noting that this cannot result in a transfer that did not in fact occur.



Software Innovations Make Non-Abstract Improvements to Computer Technology

In Finjan, Inc., v. Blue Coat Systems, Inc., [2016-2520] (January 10, 2018), the Federal Circuit affirmed subject matter eligibility of U.S. Patent No. 6,154,844; affirmed infringement of the U.S. Patent Nos. 6,154,844 and 7,418,731;  affirmed the award of damages of $ 6 million for U.S. Patent No. 7,418,731 and $1.6 million for U.S. Patent No. 7,647,633,  reversed the denial of JMOL of non-infringement of U.S. Patent No.  6,965,968 and vacated the corresponding damage award.

Regarding subject matter eligibility of U.S. Patent No. 6,154,844, the Federal Circuit started at Step 1 of the Alice test, finding that the ’844 patent is directed to a method of providing computer security by scanning a downloadable and attaching the results of that scan to the downloadable itself in the form of a “security profile.”  While the Federal Circuit noted that in Intellectual Ventures I LLC v. Symantec Corp. it held that virus screening is well-known and constitutes an abstract idea, the Federal Circuit said that in the present case “the claimed method does a good deal more.”  The Federal Circuit framed the question as “whether
this behavior-based virus scan in the ’844 patent constitutes an improvement in computer functionality,” and found that it does.  The Federal Circuit said that its cases confirm that software-based innovations can make “non-abstract improvements to computer technology” and be deemed patent-eligible subject matter at
step 1.

The Federal Circuit also rejected the challenge that even if the claimed idea is new, it is still abstract, noting that the claims recite more than a mere result. Instead, the Federal Circuit found that they recite specific steps—generating a security profile that identifies suspicious code and linking it to a downloadable—that accomplish the desired result.

Regarding infringement of the ’844 and ’731 patents, the Federal Circuit found that the JMOL of non-infringement for the first time raised issues of claim construction, which it cannot do: “it is too late at the JMOL stage to argue for or adopt a new and more detailed interpretation of the claim language and test the jury verdict by that new and more detailed interpretation.” The Federal Circuit found the verdict of infringement of these patent was supported by substantial evidence.  Regarding the ‘968 the Federal Circuit agreed with the defendant that the patentee failed to introduce substantial evidence of infringement.

Regarding damages for infringement of the ’844 patent, the Federal Circuit agreed that the patentee failed to apportion damages to the infringing functionality, stating that “[w]hen the accused technology does not make up the whole of the accused product, apportionment is required.”  The Federal Circuit said that the patentee must give evidence
tending to separate or apportion the infringer’s profits and the patentee’s damages between the patented feature and the unpatented features, and such evidence must be reliable and tangible, and not conjectural or
speculative.  The patentee argued that it based the royalty on the “smallest, identifiable technical component” but the Federal Circuit held that this does not insulate them from the essential requirement that the ultimate reasonable royalty award must be based on the incremental value that the patented invention adds to the end product.  Noting that reversal of the denial of JMOL could result in a situation in which Finjan receives no compensation for Blue Coat’s infringement of the ’844 patent, the Federal Circuit remanded to the district court to determine whether Finjan has waived the right to establish reasonable royalty damages under a new theory and whether to order a new trial on damages.  This aspect of the decision caused the district judge in the middle of a trial relating to the same patent to declare a mistrial, and reschedule the infringement and damages cases.

Regarding damages for infringement of the ’731 and ’633 patents, the Federal Circuit held that the awards were supported by substantial, if conflicting, evidence.

This is a rare Step 1 victory for a software inventor, and although the decision will no doubt be cited by hopeful applicants and patent owners, it does not bring any clarity to what it means to claim an abstract idea.

Vocabulary: Infundibuliform

Today’s A.Word.A.Day from wordsmith is infundibuliform, a neat word for funnel-shaped.  The word has been used in at least two dozen patents and in the claims of five: 6,276,549, 4,747,343, 4,416,404, 4,288,982,  4,054,970.  In U.S. Patent No. 4,747,343, claim 6 is directed to the  infundibuliform shape of the end of an auger, which is described in the specification:

One can imagine circumstances where a fancy word like infundibuliform might enhance the prestige of an invention, but for most applications good old “funnel-shaped” is probably the best choice

Director’s Time-Bar Determinations under § 315(b) are not Exempt from Judicial Review

In Wi-Fi One, LLC v. Broadcom Corp., [2015-1945, 2015-1946](January 8, 2018) the Federal Circuit, en banc, held that the bar on judicial review of institution decisions in 35 U.S.C. §314(d) does not apply to timebar determinations made under § 315(b), overruling Achates
Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652, 658 (Fed. Cir. 2015).

Wi-Fi argued that the Director lacked authority to institute IPRs under
§315(b) because petitioner Broadcom was in privity the defendants that the prior owner of the patents (Ericsson) served with an infringement complaint more than a year before Broadcom filed the IPRs.  The Board nonetheless instituted the IPRs, finding that Wi-Fi Wi-Fi had not shown that Broadcom was in privity with the defendants in the prior litigation.  In its Final Written Decision, the challenged claims were found unpatentable.

Wi-Fi appealed the Final Written Decisions, asking the Federal Circuit to reverse or vacate the Board’s time-bar determinations, but a panel of the Federal Circuit found the §315(b) time-bar rulings nonappealable under Achates.  Wi-Fi petitioned for rehearing en banc, asking the Federal Circuit to consider whether Achates should be overruled, and hold that the Director’s § 315(b) time-bar determinations are subject to judicial review.

The majority started its analysis with the the “strong presumption”
favoring judicial review of administrative actions, including the Director’s IPR institution decisions.  In view of this strong presumption, the Federal Circuit said it would abdicate judicial review only when Congress provides a “clear and convincing” indication that it intends to prohibit review.  The Federal Circuit found no clear and convincing indication in the specific statutory language in the AIA, the specific legislative
history of the AIA, or the statutory scheme as a whole that demonstrates Congress’s intent to bar judicial review of § 315(b) time-bar determinations.

The Federal Circuit said that §315(b), which controls the Director’s authority to institute IPR that is unrelated to the Director’s preliminary  patentability assessment or the Director’s discretion not to initiate an IPR even if the threshold “reasonable likelihood” is present.  Because §314(a) does not mention the timer bar, the PTO’s position that the time-bar determination is unreviewable runs counter to the principle, as reflected in Cuozzo, that favors reading the statute to comport with, not depart from, familiar approaches to comparable issues.  The majority found this reading was consistent with the overall statutory scheme as understood through the lens of Cuozzo’s directive to examine the statutory scheme in terms of what is “closely related” to the § 314(a) determination.

The Federal Circuit concluded that whether a petitioner has complied with §315(b) has nothing to do with the patentability merits or discretion not to institute.  Thus, the majority said that the statutory scheme as a whole demonstrates that § 315 is not “closely related” to the institution decision addressed in § 314(a), and it therefore is not subject to §314(d)’s bar on judicial review.

Moreover the Federal Circuit observed that timely filing of a petition under § 315(b) is a condition precedent to the Director’s authority to act, and said that enforcing statutory limits on an agency’s authority to
act is precisely the type of issue that courts have historically reviewed.

The Federal Circuit said that the Supreme Court in Cuozzo instructed that the “strong presumption” favoring judicial review “may be overcome by ‘“clear and convincing”’ indications, drawn from ‘specific language,’ ‘specific legislative history,’ and ‘inferences of intent drawn from the statutory scheme as a whole,’ that Congress intended to bar review.” However, finding no such clear and convincing indications, the Federal Circuit held that the Director’s time-bar determinations under §315(b) are not exempt from judicial review, and overruled Achates’s contrary conclusion.

About “About”: “Less Than About 3%” Includes 4%

In Monsanto Technology LLC v. E.I. DuPont De Nemours & Co., [2017-1032] (January 5, 2018), the Federal Circuit affirmed the PTAB’s decision that affirmed reexamination examiner’s rejection of claims of U.S. Patent No. 7,790,953, on Soybean Seed and Oil Compositions and
Methods of Making Same as anticipated by or obvious from U.S. Patent No. 6,426,448.

Monsanto argued that misconstruing the Board misconstrued the “about 3% or less” limitation in the ’953 patent to include progeny with a linolenic acid content of 4%, but the Federal Circuit found that the PTAB “reasonably interpreted” Booth’s parent line containing 4% linolenic acid “to be within the scope of ‘about 3%,’” as recited in claim 1 step (a).  The Federal Circuit found that the claim language was not instructive, so it turned to the the remainder of the specification.  The Federal Circuit noted that Exhibit 9, which purportedly had a linolenic acid content of about 3%, which included a reference that disclosed linolenic acid contents from 2.3% to 4.1%.  Thus the Federal Circuit found that the intrinsic evidence supported finding that a person having ordinary skill in the art would reasonably consider “about 3%” to encompass a range that includes 4%, and that Monsanto’s counterarguments were “unavailing.”

Monsanto further argued that the finding of anticipation was not supported by substantial evidence because the anticipation was not inherent, as the PTAB found.  The Federal Circuit disagreed, saying that inherent anticipation applies because the prior art “necessarily include the unstated limitation.”  Declarations in the record confirmed that the generation identified in the prior art would necessarily result in progeny within the scope of claim 1. Monsanto challenged the PTAB’s reliance on this “non-prior art data” and “secret data” in the declarations, but the Federal Circuit found this was appropriate, saying that Monsanto was confusing prior art with extrinsic evidence used to support what is “necessarily present” in a prior art’s teaching. Extrinsic evidence may be used to interpret the allegedly anticipating reference and to shed light on what it would have meant to a person of ordinary skill in the art. The Federal Circuit said that the declarations did not expand the
meaning of reference or serve as prior art: they demonstrate
what is inherent in the disclosure.  Second the declarations were not improper “secret data” — the were not used as prior art , but merely in support of prior art already of record.  Third, the Federal Circuit offered no rebuttal evidence to the declarations.

The Federal Circuit further affirmed the obviousness determination, noting that PTAB did not rely solely on its finding of inherent anticipation, but explained that explained that a PHOSITA would have been motivated to modify the reference to meet the requirements of the claims.


The Board Says that IPRs are Adjudicatory Proceedings — What will the Supreme Court Say?

In Ericsson Inc. v. Regents of the University of Minnesota, [IPR2017-01186, IPR2017-01197, IPR2017-01200, IPR2017-01213, IPR2017-01214, IPR2017-01219 (December 19, 2017), Chief Administrative Patent Judge Ruschke, writing for an expanded panel of the PTAB, held that 11th Amendment immunity is available to States as a defense in an inter partes review.  The 11th Amendment states;

The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

So in holding that the 11th Amendment applies, the Board is conceding that it is exercising the “Judicial power” of the United States.  This was the issue in Oil States energy Services, LLC v. Greene’s Energy Group, LLC where Petitioner struggled to establish that inter partes reviews are adjudicatory in nature.  In Ericsson, the Board conceded the point, stating “IPR is an adjudicatory proceeding of a federal agency from which state entities are immune.”

Ultimately the Board found that Minnesota waived its immunity by enforcing the patents in court.

To the extent that the Supreme Court in Oil States needs to decide whether IPR’s are adjudicatory proceedings involving judicial power, it has the USPTO’s admission in Ericsson.

Provisional Patent Rights

Provisional patent rights have nothing to do with provisional patent applications, and instead refer to the rights that the owner of a published patent application has to recover a reasonable royalty for pre-issuance infringements. 35 USC §154(d) provides that a patent includes the right to obtain a reasonable royalty from any person who, after the publication of the application infringes a claim of the published application, PROVIDED THAT: (1) the infringer had actual notice of the published patent application (35 USC §154(d)(1)(B)), and (2) the invention as claimed in the patent is substantially identical to the invention as claimed in the published patent application (35 USC §154(d)(2).  Provisional rights also apply to PCT applications, but if the PCT application was not published in English, the provisional rights only apply after the USPTO receives a translation of the publication in the English language.

Actual Notice

The statute does not explain the “actual notice” requirement.  Does it require that the patent applicant provide notice to the accused infringer, or is it sufficient that the accused infringer discovers the publication itself?  The legislative history provides some guidance:

The requirement of actual notice is critical. The mere fact that the published application is included in a commercial database where it might be found is insufficient. The published applicant must give actual notice of the published application to the accused infringer and explain what acts are regarded as giving rise to provisional rights.”

Statements on Introduced Bills and Joint Resolution, Senate, S. 1948, Cong. Rec. S14719 (Nov. 17, 1999), available at http://thomas.loc.gov.

Stephens v. Tech Int’l, Inc., 393 F.3d 1269, 1276 (Fed. Cir. 2004) suggests that §154(d) requires notice from the applicant. The Federal Circuit determined that the patent owner “operated within its rights under section 154 when it notified Tech [the defendant] of its potential infringement. The letter represented Spectrum’s adherence to section 154’s requirement that Tech be placed on notice of Spectrum’s future right to obtain royalties if a patent issued in a form substantially identical to the published ‘222 application.”

As to the content of the notice, the legislative history indicates that the notice should “explain what acts are regarded as giving rise to provisional rights.”

It is generally assumed that this notice is similar to the notice requirement of 35 U.S.C. §287(a).  Based on §287(a) cases, the actual notice must identify the patent application serial number and the activity that is within the scope of the claims, and should include a proposal to abate the activity.

Substantially Identical

35 U.S.C. §154(d)(2) conditions recovery of a reasonable royalty on the infringed claim in the published application being substantially identical to a claim in the issued patent.  In Pandora Jewelry, LLC v. Chamilia, LLC, 2008 U.S. Dist. LEXIS 61064 (D. Md., August 8, 2008), the court addressed the “substantially identical” requirement of §154(d) and concluded that it was the same as that found in §252.  The court said:

Under § 252, amended patent claims are “substantially identical” to the original claims “if they are without substantive change.” Laitram Corp. v. NEC Corp., 163 F.3d 1342, 1346 (Fed. Cir. 1998) (internal quotations omitted). “[I]n determining whether substantive changes have been made, [a court] must discern whether the scope of the claims are identical, not merely whether different words are used.” Id. (citing Slimfold Mfg. Co. v. Kinkead Indus., 810 F.2d 1113, 1115 (Fed. Cir. 1987)). Although not a per se rule, “it is difficult to conceive of many situations in which the scope of a rejected claim that became allowable when amended is not substantively changed by the amendment.” Id. at 1348. Where a substantive change has been made to a claim, the allegedly harmed party has no provisional rights to assert.”

Pandora’s published patent application claimed a reversibly attached band. During prosecution, however, the applicant amended that element to be a “fixedly attached band.” According to the district court in this was done “in order to overcome the PTO’s rejection based on the prior art.” This amendment caused the court to conclude that Pandora had substantively amended the scope of the claim.  The court found no provisional patent rights because “Pandora substantively altered the scope of the claim when it amended the patent to require a permanently fixed band. Because the issued patent is not substantially identical to the published patent application, Pandora has no provisional rights to assert.”

In Classen Immunotherapies, Inc. v. Shinogi, Inc., Civil Action No. RWT-13-921 (D. Md, 1914) the Court found that Classen’s allegations under §154(d) must also be dismissed because the published applications for the ‘069 and ‘639 patents were not substantially identical to the patents that ultimately issued:

When a published patent application’s claims are amended such that their scope is changed, the patent is no longer “substantially identical” to its application. See Icon Outdoors, LLC v. Core Res., Inc., Civil Action No. RDB-11-2967, 2013 WL 2476392, at *14-15 (D. Md. June 7, 2013) (holding that a change from “waterproof or windproof” to “waterproof and windproof” in a claim describing the material of “the upper portion of [a] hunting garment” was a “substantive change” precluding the application of § 154(d)). “Although not a per se rule, ‘it is difficult to conceive of many situations in which the scope of a rejected claim that became allowable when amended is not substantively changed by the amendment.’” Pandora Jewelry, LLC v. Chamilia, LLC, Civil No. CCB-06-600, 2008 WL 3307156, at *9 (D. Md. Aug. 8, 2008) (quoting Laitram Corp. v. NEC Corp., 163 F.3d 1342, 1348 (Fed. Cir. 1998)).

Thus, the applications for the ‘069 and ‘639 patents are not “substantially identical” to the patents issued, and §154(d) simply does not apply.

Calculating the Reasonable Royalty

In Parker-Hannifin Corp. v. Champion Labs., 2008 U.S. Dist. LEXIS 61108 (N.D. Ohio 2008), Champion admitted that its oil filter infringed Parker’s Patent No. 6,983,851 and further admitted that it owed a “reasonable royalty” to the patentee for pre-issuance sales based on the provisional rights of 35 U.S.C. 154(d). Because of these admissions, the court was left only to consider the amount of reasonable royalty. The court found the reasonable royalty to be $2.00 per unit by applying the Georgia Pacific factors and to a hypothetical negotiation, awarding a total of $203,524 on these provisional rights.  However the Court did not address how the hypothetical negotiation is altered based on the fact that the right infringed was only provisional.



35 U.S.C. §154(d) Provisional Rights.—

(1) In general.— In addition to other rights provided by this section, a patent shall include the right to obtain a reasonable royalty from any person who, during the period beginning on the date of publication of the application for such patent under section 122(b), or in the case of an international application filed under the treaty defined in section 351(a) designating the United States under Article 21(2)(a) of such treaty, the date of publication of the application, and ending on the date the patent is issued—

(A)(i) makes, uses, offers for sale, or sells in the United States the invention as claimed in the published patent application or imports such an invention into the United States; or

(ii) if the invention as claimed in the published patent application is a process, uses, offers for sale, or sells in the United States or imports into the United States products made by that process as claimed in the published patent application; and

(B) had actual notice of the published patent application and, in a case in which the right arising under this paragraph is based upon an international application designating the United States that is published in a language other than English, had a translation of the international application into the English language.

(2) Right based on substantially identical inventions.— The right under paragraph (1) to obtain a reasonable royalty shall not be available under this subsection unless the invention as claimed in the patent is substantially identical to the invention as claimed in the published patent application.

(3) Time limitation on obtaining a reasonable royalty.— The right under paragraph (1) to obtain a reasonable royalty shall be available only in an action brought not later than 6 years after the patent is issued. The right under paragraph (1) to obtain a reasonable royalty shall not be affected by the duration of the period described in paragraph (1).

(4) Requirements for international applications.—

(A) Effective date.— The right under paragraph (1) to obtain a reasonable royalty based upon the publication under the treaty defined in section 351(a) of an international application designating the United States shall commence on the date of publication under the treaty of the international application, or, if the publication under the treaty of the international application is in a language other than English, on the date on which the Patent and Trademark Office receives a translation of the publication in the English language.

(B) Copies.— The Director may require the applicant to provide a copy of the international application and a translation thereof.

Anticipation Analysis Indisputably Allows for Some Flexibility; Substantial Evidence Still Supports Finding of No Anticipation

In Microsoft Corp v. Biscotti, Inc., [2016-2080, 2016-2082, 2016-2083] (December 28, 2017), the Federal Circuit affirmed the Board’s determination in the IPR’s that Microsoft failed to show by a  preponderance of the evidence that the challenged claims of U.S. Patent No. 8,144,182 were anticipated or obvious.

The challenged patent related to “tools and techniques for providing video calling solutions” and relates to real-time video conferencing where two or more users communicate, over a network, in a conference that includes video and audio of each participant.

Microsoft appeared to challenge the standard of review of anticipation, so the Federal Circuit began by reiterating that anticipation is a question of fact subject to substantial evidence review.  Noting that the Board correctly articulated the anticipation standard, the Federal Cricuit considered whether the Board properly applied that standard. ,   anticipate the claimed invention, a prior art reference must disclose all elements of the claim within the four corners of the document, and it
must disclose those elements arranged as in the claim, the Federal Circuit.  Noting that the Board may have used wording such as  “identically” more liberally than it should have because an anticipation analysis indisputably allows for some flexibility, the Federal Circuit found that the Board’s analysis did not suffer from a misapplication of the anticipation standard.  The Federal Circuit found that the Board therefore did not require word-for-word similarity or perfection, and explicitly considered whether a POSA would “at once envisage” the combination of the claimed invention given the disconnected teachings of the reference.

However even though the Board articulated the correct standard, and applied the correct standard, this did not mean that the Board’s analysis was correct.  Microsoft argued that the Board read the prior art too narrowly, limiting certain disclosures to particular embodiments, and not applying them to all disclosed embodiments.  The Federal Circuit said although Microsoft’s arguments were not unreasonable, it does not review this question de novo; anticipation is a question of fact, reviewed for substantial evidence.  In light of this deference, the Federal Circuit affirmed the Board’s decision.

The Federal Circuit found that Microsoft’s brief on appeal with respect to one claim was more detailed and contained substantial new arguments regarding anticipation, and rejected them because they were not presented in the Petition.