Ungrammatical Language Not Ambiguous in View of Specification as a Whole

In Organik Kimya AS v. Rohm and Haas Co., [2015-1983, 2015-2001] (October 11, 2017), the Federal Circuit  affirmed the PTAB decisions in IPR2014-00185 and IPR2014-00350, sustaining the patentability of the challenged claims of U.S Patent Nos. 6,020,435 and 6,252,004, respectively.

The patents are directed to processes for preparing certain emulsion polymers having improved opacity.  In the claimed processes a base swelling agent and excess monomer are introduced into an aqueous emulsion of the polymer, under conditions in which there is no
substantial polymerization.  At issue was was the meaning of “swelling agent” which the PTAB construed as not merely as being capable of permeating a shell and swelling the core of a multistage emulsion
polymer in the abstract, but specifically under the conditions of the specific process for which the agent is to be used.  Organik argued that this improperly limited the term “swelling agent” in a manner that inappropriately distinguished the prior art.

Organik argued that the specification was ambiguous in describing the swelling agent:

Suitable swelling agents include, are those which, in the presence of the multistage emulsion polymer and monomer, are capable of permeating the shell and swelling the core. Swelling agents may be aqueous or gaseous, volatile or fixed bases or combinations thereof.

and that the PTAB improperly adopted the narrower construction.  The Federal Circuit noted that the Board did not find the language ambiguous, and agreed with the Board.  Even under the broadest reasonable interpretation, the Board’s construction cannot be divorced from the specification and the record evidence, and must be consistent with the one
that those skilled in the art would reach.

The Board found that the prior art asserted by Organik lacked the swelling agent as that term was used in the claims.  Organik argued the one example in a reference, inherently showed a swelling agent, but Rohm and Haas provided experimental evidence through expert testimony  that it did not.  While Organik contested this evidence, the Board noted that Organik neither provided its own evidence, or showed how different experiments would have yielded different data.

The Federal Circuit found that Board concluded that neither Toda nor Touda discloses or suggests a “swelling agent” as required by the
’435 and ’004 Patents, and that the Board’s decisions are in accordance
with law and supported by substantial evidence in the record, and are affirmed.

The Board Misses the BRI with a Construction that was too Narrow

In Owens Corning v. Fast Felt Corp., [2016-2613] (October 11, 2017), the Federal Circuit reversed the PTAB decision that the challenged claims of U.S. Patent No. 8,137,757, which describes and claims methods for printing nail tabs or reinforcement strips on roofing or building cover material, were not obvious.

On appeal Owens Corning argued that the Board effectively treated
the “roofing or building cover material” in the claims as limited to material that either has been or would be coated or saturated with asphalt or asphalt mix, and that this limited construction was incorrect under the broadest reasonable interpretation standard.

The Federal Circuit noted that that the Board construed the claim term “roofing or building cover material” to mean “base substrate materials such as dry felt, fiberglass mat, and/or polyester mat, before coating or saturation with asphalt or asphalt mix, and asphalt coated or saturated substrates such as tar paper and saturated felt.” While the Board correctly noted that this construction “does not require an asphalt-coated substrate,” when evaluating Owens Corning’s arguments regarding
motivation to combine and reasonable expectation of success, the Board made clear its understanding of its construction, and hence of the claims, as requiring materials that would eventually be coated with asphalt even if
they had not already been coated before printing.

After reviewing the Board’s rationale, the Federal Circuit concluded that the Board simply did not address roofing or building cover materials that would never be coated in asphalt, and this was a mistake.  The Federal Circuit concluded that the correct broadest reasonable construction of “roofing or building cover material” would include materials that neither have been nor are to be coated or saturated with asphalt or asphalt mix.

The Federal Circuit found that it was not necessary or appropriate to remand the case, however.  On the evidence and arguments presented to the Board, there is only one possible evidence-supported finding: the Board’s rejection of Owens Corning’s challenge, when the correct construction is employed, is not supported by substantial evidence.  Moreover, Fastfelt did not argue for remand.  The Federal Circuit reviewed the record and concluded that the challenged claims were unpatentable for obviousness.


Response Arguments Do Not Have to Be Preemptively Addressed in the Petition or Institution Decision

In Idemitsu Kosan Co., Ltd. v. SFC Co. Ltd., [2016-2721](September 15, 2017), affirmed the PTAB decision that claims of U.S. Patent No. 8,334,648 were invalid for obviousness.

On appeal Idemitsu argued that the Board erred in finding that prior art taught combining the particular compounds for the purpose of creating a light emitting layer in an electroluminescent device.  The Federal Circuit found that what Idemitsu characterizes as an argument raised “too late” was simply the by-product of one party necessarily getting the last word.
Idemitsu argued that the prior art teaches away from combinations, and SFC simply countered, as it was entitled to do. The Federal Circuit found that to the extent Idemitsu suggests that the Board could not reach a counterargument because it was not preemptively addressed by the petition or institution decision, Idemitsu is plainly mistaken. The Federal Circuit noted that there is no requirement, either in the Board’s  regulations, in the APA, or as a matter of due process, for the institution decision to anticipate and set forth every legal or factual issue that might arise in the course of the trial.


Follow-on IPR Petitions are Unfair to Patent Owners and an Inefficient Use of the Process

In General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha,  IPR2016-01357,  Paper 19, (September 6, 2017), and IPR2016-01358, IPR2016-01359, IPR2016-01360, and IPR2016-01361, an expanded panel of the PTAB denied reconsideration of the Decision Denying Institution.

Petitioner filed a first set of petitions seeking inter partes review of U.S. Patent No. 9,046,820 and U.S. Patent No. 8,909,094, which were denied based upon the merits. Nine months after the filing of the first set of petitions, Petitioner filed five follow-on petitions, two against the ‘820 patent, and three against the ‘094 patent, all of which were denied pursuant to 35 U.S.C. § 314(a) and 37 C.F.R. § 42.108(a).

In exercising its discretion to deny each of the follow-on petitions, the Board considered the seven NVIDIA factors:

  1. Whether the same petitioner previously filed a petition directed to the same claims of the same patent;
  2. Whether at the time of filing of the first petition the petitioner knew of the prior art asserted in the second petition or should have known of it;
  3. Whether at the time of filing of the second petition the petitioner
    already received the patent owner’s preliminary response to the first petition or received the Board’s decision on whether to institute
    review in the first petition;
  4. The length of time that elapsed between the time the petitioner learned of the prior art asserted in the second petition and the filing of the second petition;
  5. Whether the petitioner provides adequate explanation for the time
    elapsed between the filings of multiple petitions directed to the same claims of the same patent;
  6. The finite resources of the Board; and
  7. The requirement under 35 U.S.C. § 316(a)(11) to issue a final
    determination not later than 1 year after the date on which the Director notices institution of review

Applying these factors to the follow-on petitions, the Board concluded that the circumstances did not warrant institution of inter partes reviews.  As to Factor 1, the Board noted that the same claims of the same patent were at issue in the follow-on petitions as in the denied petitions.  As to Factors 2 and 3, the follow-on petitions were all filed nine months
after the filing of the first-filed petitions, and after Patent Owner had filed its Preliminary Responses to the first-filed petitions, and after the Board had denied institution, without any meaningful explanation for the delay. With respect to Factors 4 and 5, Petitioner provided no explanation of any unexpected circumstances that prompted the new prior art searches, or for the delay in doing so.  With respect to Factor 6, the Board found that its resources would be more fairly expended on initial petitions, rather than follow-on petitions.

In addition the Board found that that Petitioner had modified its challenges in the follow-on petitions in an attempt to cure the deficiencies that the Board identified in its first-filed petitions, and that this shift tin Petitioner’s challenges was not the consequence of a position that Patent Owner surprisingly advanced or the Board surprisingly adopted.  The Board found that the filing of sequential attacks against the same claims, with the opportunity to morph positions along the way, imposes inequities on Patent Owner.

On rehearing the expanded Board rejected the arguments raised by petitioner.   The expanded board agreed that there is no per se rule precluding the filing of follow-on petitions, and noted that it has consistently considered a number of factors.  The Board recognized that an objective of the AIA is to provide an effective and efficient alternative to district court litigation, but also recognized the potential for abuse of the review process by repeated attacks on patents.  The Board said that multiple, staggered petitions challenging the same patent and same claims raise the potential for abuse. The absence of any restrictions on follow-on petitions would allow petitioners the opportunity to strategically stage their prior art and arguments in multiple petitions, using our decisions as a roadmap, until a ground is found that results in the grant of review.  This is unfair to patent owners and is an inefficient use of the inter partes review process and other postgrant review processes.

The Board recognized that there may be circumstances where multiple petitions by the same petitioner against the same claims of a patent should be permitted, said that the factors it uses represents a formulation of relevant considerations, and while there may be additional factors, the identified factors are a good baseline.  The Board reiterated that institution is committed the this discretion of the Commission, acting through the Board.  Reweighing the factors on rehearing, the Board found that six of the seven factors weigh against institution.




Federal Circuit’s Amicus Brief in Oil States

Although the Federal Circuit already passed on the constitutionality of inter partes reviews, considering some of its recent decisions, it appears that the Federal Circuit questions the competence of the PTAB to conduct adjudicative proceedings.

In Nidec Motor Corporation discussed here, Judges Dyk and Wallach questioned the Patent Office’s court packing to achieve a desired outcome.  A few days later in Ultratec discussed here, the Federal Circuit questioned the Patent Office’s conduct of a proceeding, stating that a “reasonable adjudicator” would have wanted to review this evidence, and implying that the Patent Office was not a reasonable adjudicator.

Even if it turns out to be constitutional for the USPTO to conduct IPR and PGR proceedings, it appears that at least the Federal Circuit has lost confidence that they should.  Is it sending a signal to the Supreme Court?

“A Reasonable Adjudicator Would have Wanted to Review this Evidence.”

In Ultratec, Inc. v. Captioncall, LLC., [2016-1706, 2016-1707, 2016-1708, 2016-1709, 2016-1710, 2016-1712, 2016-1713, 2016-1715, 2016-2366] (August 28, 2017), the Federal Circuit vacated and remanded Board decisions invalidating Ultratec’s patents relating to systems for assisting deaf or hard-of-hearing users to make phone calls, in a group of IPRs, finding that the Board failed to consider material evidence and failed to explain its decisions to exclude the evidence.

Caption call submitted the testimony of an expert, Benedict Occhiogrosso, in the IPR’s.  Ultratec attempted to introduce conflicting trial testimony Occhiogrosso.  Ultratec moved to supplement the record with the conflicting Occhiogrosso trial testimony, but because Ultratec did not first request authorization to file the motion, the Board expunged the motion from the record.

Within a week of the jury trial in which Occhiogrosso testified, Ultratec requested authorization to file a motion to submit portions of Mr. Occhiogrosso’s trial testimony to the Board. Ultratec alleged that Mr. Occhiogrosso’s trial testimony addressing a prior art reference was inconsistent with his IPR declarations.  The Board held a conference call to consider Ultratec’s request for authorization to file a motion to supplement the IPR record with Mr. Occhiogrosso’s trial testimony, but did not review the testimony when deciding whether it could be admitted. The Board denied the request, promising a written order that was never provided.

After refusing to admit Occhiogrosso’s trial testimony, the  oard issued final written decisions, holding that every challenged claim was either anticipated or would have been obvious, relying heavily on the Board’s belief that Occhiogrosso was a credible witness, citing his declaration more than thirty times, at least once as to each of the eight patents.

Under the PTO’s regulations, a party seeking to submit supplemental information more than one month after the date an IPR is instituted must request authorization to file a motion to submit the information.  37 C.F.R. § 42.123(b). The request to submit new
information must show: (1) why the supplemental information reasonably could not have been obtained earlier, and (2) that consideration of the supplemental information would be in the interests of justice.  The PTO considers the interests of justice as slightly higher than good cause:

Good cause and interests-of-justice are closely related standards, but the interests-of-justice standard is slightly higher than good cause.  While a good cause standard requires a party to show a specific factual reason to justify the needed discovery, under the interests-of-justice standard, the Board would look at all relevant factors.  Specifically, to show good cause, a party would be required to make a particular and specific demonstration of fact. Under the interests-of-justice standard, the moving party would also be required to show that it was fully diligent in seeking discovery and that there is no undue prejudice to the non-moving party.

The Federal Circuit said that the ercord affords but one reasonable conclusion: Ultratec satisfied both of § 42.123(b)’s requirements for allowing Ultratec to file a motion to
admit Mr. Occhiogrosso’s trial testimony. First, the evidence could not have been obtained earlier. Ultratec emailed the Board requesting authorization to file a motion to supplement the record the week after the jury trial concluded. This is not evidence that could have been located earlier through a more diligent or exhaustive search; it did not exist during the IPR discovery period.

The Federal Circuit said that the fact that Ultratec could have, but did not, depose and obtain inconsistent testimony from Mr. Occhiogrosso during the IPR itself is not a basis for concluding otherwise. Ultratec argues that during cross examination at trial in front of the jury Mr. Occhiogrosso offered testimony that is inconsistent with his IPR testimony. That inconsistent testimony did not exist sooner and thus could not have been proffered to the Board sooner.

The Federal Circuit said that:

The Board offers no reasoned basis why it would not be in the interest of justice to consider sworn inconsistent testimony on the identical issue. Ultratec sought to offer
recent sworn testimony of the same expert addressing the same patents, references, and limitations at issue in the IPRs.  A reasonable adjudicator would have wanted to
review this evidence.

The Federal Circuit noted that conflicting testimony by Mr. Occhiogrosso would be highly relevant to both the Board’s analysis of the specific issues on which he gave inconsistent testimony and to the Board’s overall view of his credibility. His testimony was critical to the Board’s fact findings, and under such circumstances, no reasonable fact finder would refuse to consider evidence of inconsistent sworn testimony.  The Federal Circuit further noted that admitting and reviewing Mr. Occhiogrosso’s trial testimony would have placed minimal additional burden on the Board.

A number of problems with the Board’s procedures contributed to its errors in this case. First, the Board lacked the information necessary to make a reasoned decision.  Second, the Board’s procedures allowed it to make significant evidentiary decisions without providing an explanation or a reasoned basis for its decisions.  Third, the Board’s procedures impede meaningful appellate review of the agency decision-making.

The Federal Circuit noted a significant difference between court proceedings and proceedings before the Board:

In district court litigation, a party dissatisfied with a ruling excluding evidence is allowed to make an offer of proof to preserve error. Fed. R. Evid. 103. Parties in IPRs are not
given similar protections.

The Federal Circuit concluded that the Board abused its discretion when it refused to admit and consider Mr. Occhiogrosso’s trial testimony and when it refused to explain its decision.


In NIDEC Motor Corp. v. Zhongshan Broad Ocean Motor Co. Ltd., [2016-2321] (August 22, 2017), the Federal Circuit affirmed the Board’s determination that claims 1–3, 8, 9, 12, 16, and 19 of U.S. Patent No. 7,626,349 are invalid as anticipated or obvious.

The Board instituted review on the ground of obviousness over Bessler and Kocybik, but declined to institute review on the ground of anticipation
by Hideji, because Broad Ocean had failed to provide an affidavit attesting to the accuracy of the submitted translation of Hideji as required by 37 C.F.R. § 42.63(b).

Broad Ocean filed a second petition again asserting that the challenged claims are anticipated by Hideji, including the required affidavit, and requesting that the Board join the Second Petition with Broad Ocean’s already-instituted IPR involving the First Petition.  The Board again declined to institute review, this time on the grounds that the Petition was time-barred.

Broad Ocean requested a rehearing of the panel’s decision, which was granted by an expanded panel of five Administrative Patent Judges.  The expanded administrative panel set aside the original panel’s decision and
concluded that § 315(c) permits the joinder with the original IPR.

On appeal the parties agreed that, if the Federal Circuit affirmed as to obviousness, it need not address Nidec’s challenges to the procedural aspects of the Board’s joinder decision and its holding concerning anticipation by Hideji.  Because the Federal Circuit affirmed as to invalidity for obviousness, it did not have to reach the Board’s joinder decision.

Judges Dyk and Wallach wrote separate to express their concerns as to the United States Patent and Trademark Office’s position on joinder and expanded panels.  Although the panel did not decide the  propriety of joinder, the judges had “serious questions” as to the Board’s (and the Director’s) interpretation of the relevant statutes and current practices.  Judges Dyk and Wallach think it unlikely that Congress intended that petitioners could employ the joinder provision to circumvent the time bar
by adding time-barred issues to an otherwise timely proceeding.

Of greater note is Judges Dyk and Wallach’s concern about the PTO’s practice of expanding administrative panels to decide requests for rehearing.  Broad Ocean requested rehearing and further requested that the rehearing be decided by an expanded panel.  While Judges Dyk and Wallach recognized the importance of achieving uniformity in PTO decisions, they questioned whether the practice of expanding panels
where the PTO is dissatisfied with a panel’s earlier decision is the appropriate mechanism of achieving the desired uniformity.

It is difficult to image a practice more offensive to fair adjudication then adding judges to a panel to achieve a desired outcome.  It is outrageous to make parties participate in an adjudication where the outcome is predetermined by court packing.


The Board can Rely on a Party’s Arguments in an IPR, as Long as it Explains Why

In Outdry Technologies Corp. v. Geox S.P.A., [2016-1769] (June 16, 2017), the Federal Circuit affirmed the Board’s determination that claims 1–15 of U.S. Patent No. 6,855,171 would have been obvious over a combination of prior art.

The ‘171 patents claims methods of waterproofing leather, particularly for the manufacture of shoes, clothes, or leather accessories by lining the interior surface of the leather with a semipermeable membrane.  The Board found that one reference showed all of the elements of the claimed method except for the size and density of the adhesive dots, and that the other references taught the size and density of the adhesive dots.

The Federal Circuit agreed with the Board’s construction of “directly pressing” as to mean “applying pressure without any intervening
materials or layers other than the recited adhesive.”  The Federal Circuit also discounted the “process for waterproofing leather” language of the claim, because it was in the preamble and was “simply a statement of intended use, not a separate claim limitation.”

The Federal Circuit rejected the patent owner’s argument that the Board failed to provide adequate motivation to combine the references.  After reviewing cases (Rovalma, Van Os, Arendi, Cutsforth, NuVasive, and Icon Health) where the Board did fail to provide adequate motivation, the Federal Circuit found that the Boards decision did not suffer from similar deficiencies.  The Federal Circuit said that the Board clearly articulated Petitioner’s arguments for why a person of ordinary skill in the art would have been motivated to modify the process of adhering dots to create waterproof and breathable leather with the secondary references disclosed glue patterns.  The Federal Circuit concluded that the Board engaged in reasoned decision making and sufficiently articulated its analysis in its opinion to permit review.

The Federal Circuit found that the Board’s reliance on petitioner’s arguments did not undermine its otherwise adequate explanation for finding a motivation to combine. The Federal Circuit noted that the Board did not reject the patent owner’s positions without clarity as to why it found petitioner’s arguments persuasive. It did not merely incorporate petitioner’s petition by reference, leaving uncertainty as to which positions the Board was adopting as its own. Nor was it other unclear what evidence the Board may or may not have relied
on to find a motivation to combine. The Federal Circuit said that the Board is “permitted to credit a party’s argument as part of its reasoned explanation of its factual findings”; it simply must “explain why it accepts the prevailing argument.”


General Statements in Petition and Institution Decision Did Not Give Patent Owner Fair Notice of the Grounds of Invalidity in the Final Written Decision

In Emerachem Holdings, LLC v. Volkswagen Group of America, Inc., [2016-1984] (June 15, 2017), the Federal Circuit affirmed the Board’s decision that claims 1–2, 4–14, and 17–19 of U.S. Patent No. 5,599,758 were obvious, and vacated and remand as to claims 3, 16, and 20.

The ‘558 patent claims methods for regenerating a catalyst/absorber that has absorbed and oxidized nitrates and nitrites from the combustion gases of an engine.  The regeneration can be carried out in situ, without
removing and replacing the catalyst with a fresh, unreacted one.

The patent owner attempted to remove a reference under 102(e), with the declaration of the inventor, but the Board found the evidence insufficient.  The Federal Circuit agreed, noting that corroboration is always required of an inventor’s testimony about invention, although the level of corroboration depends upon the circumstances.

The patent owner was more successful in its argument under the APA that it was denied adequate Notice and Opportunity to Respond. Petitioner’s provided detailed claim charts, but only cited to a single reference for dependent claims 3, 16, and 20, and the Board’s institution decision only cited the same one reference as to these claims.  However the final written decision relied upon a different reference.

The Federal Circuit stated that in a formal adjudication, like an IPR, the APA imposes particular procedural requirements on the USPTO.  In particular, the agency must timely inform the patent owner of the matters of fact and law asserted, and give all interested parties the opportunity to submit and consider facts and arguments, and allow a party “to
submit rebuttal evidence as may be required for a full and true disclosure of the facts. 5 U.S.C. §§ 554(b)–(c), 556(d).

The Federal Circuit found that the Board denied patent owner its procedural rights guaranteed by the APA by relying on a new reference for its disclosure of limitations in dependent claims 3, 16, and 20.  The Federal Circuit rejected petitioner’s arguments that the patent owner had adequate notice of the reference from general comments about obviousness in the Petition.  The Federal Circuit also rejected petitioner’s arguments that the patent owner had adequate notice from general statements in the Institution Decision.  The Federal Circuit said that given the specificity with which the petition’s claim chart and the Institution Decision’s list of claims expressly identified particular references’ disclosures for some claims and not for others, it cannot be the case that the general statements relied upon provided sufficient notice that Stiles could be applied to all claims.

The Federal Circuit distinguished Cuozzo, because the institution decision gave the patentee notice of the prior art combination that
the final decision relied upon, even though the petition did not. In the current case, neither the petition nor the Institution Decision put the patentee on notice of the reference that would be used to reject claims 3, 16, and 20.  The Federal Circuit also distinguished Genzyme because  the patent owner had the opportunity to address the relied upon by the Board.

The Federal Circuit explained that it was not holding that the Board is constricted in its final written decision to citing only the portions of a reference cited in its Institution Decision — “word-for-word parity between the institution and final written decisions” is not required.  The questions was not whether the Board cited a different passage of a reference than what it specifically cited in the Institution Decision, rather the question was whether the Board provided adequate notice and opportunity to respond to the reference being used to reject claims 3, 16, and 20, given the specificity with which the Board itemized the
challenged claims with specific grounds for rejection in the Institution Decision. On this question, the Federal Circuit said that the Board did not.

“Means” Does Not Always Mean “Means Plus Function”

In Skky, Inc. v. Mindgeek, S.A.R.L., [2016-2018] (June 7, 2017), the Federal Circuit affirmed the PTAB decision in IPR2014-01236 that all of the challenged claims in  U.S. Patent 7,548,875 were invalid for obviousness.

The ‘875 patent relates to a method of delivering audio and/or visual files to a wireless device.  The prosecution lasted almost seven years, and the claims were only allowed after they were amended to recite a “wireless device means.”  The Board determined that “wireless device means” was not a means plus function element, but even if it was it did not require a device with multiple processors.

The Federal Circuit said that in determining whether a claim term invokes § 112 ¶ 6, the essential inquiry is not merely the presence or absence of the word “means” but whether the words of the claim are understood by persons of ordinary skill in the art to have a sufficiently definite meaning as the name for structure.  It is sufficient if the claim term is used in common parlance or by persons of skill in the pertinent art to designate structure, even if the term covers a broad class of structures and even if the term identifies the structures by their function.

The Federal Circuit agreed that We agree with MindGeek that “wireless device means” does not invoke § 112 ¶ 6 because it recites sufficient structure.  Although the term uses the word “means” and so triggers a presumption, the full term recites structure, not functionality. The claims do not recite a function or functions for the wireless device means to perform, and “wireless device” is “used in common parlance . . . to designate structure. The Federal Circuit further found that “wireless device means” did not require multiple processors, noting that at least one disclosed embodiment was exclusively software, and thus it would be improper to construe  “wireless device means” to require multiple processors.

The Federal Circuit found that substantial evidence supported the Board’s claim construction, and its resulting finding of obviousness.