Written Description Lacking Where Nothing in the Specification Suggests Inventor Contemplated Claimed Invention

In Cisco Systems, Inc. v. Cirrex Systems, LLC, [2016-1143, 2016-1144](May 10, 2017), the Federal Circuit affirmed in part, and reversed in part the Board’s decision in inter partes reexamination of U.S. Patent No. 6,415,082.  Cisco appealed the patentability finding of five of the claims, and Cirrex appealed the rejection of the remainder of the claims.  The Federal Circuit found that all of the claims on appeal were unpatentable for lack of written description support.

The ‘082 patent is directed to the field of fiber optic communication signals.  At issue was the claim requirement of discrete attenuation of the various wavelengths of light, which the parties agreed must occur in the planar lightguide circuit (PLC).  However, there was not written description of how discrete attenuation could occur within the PLC, rather that attenuation of all of the wavelengths (i.e. collective attenuation).  The Federal Circuit agreed twith Cisco that the claims are directed to subject matter that is indisputably missing from the ’082 specification.

The Federal Circuit said that the ’082 specification does not meet the quid pro quo required by the written description requirement for the disputed claims because demultiplexing light to manipulate separately the intensities of individual wavelengths of light while the light is still inside the PLC is a technically difficult solution that the ’082 specification does not solve, let alone contemplate or suggest as a goal or desired result. The Federal Circuit added:

Nothing in the ’082 specification explains how individual wavelengths of light are separately manipulated while those wavelengths are still inside the PLC. Nor is there anything in the specification that suggests that the inventor contemplated that approach. To the contrary, the ’082 specification expressly describes using the PLC to separate wavelengths of light to allow the manipulation of each individual wavelength—outside the PLC—before it is rerouted back into the PLC for remultiplexing.

The Board also rejected Cirrex’s arguments that the claims requiring a diverting element were supported by adequate written description.   The Board concluded that the totality of of the disclosure did not establish that the inventors possessed an embodiment with a diverting element inside the PLC, and the Federal Circuit agreed.





Merely Because Petitioner Changes its Mind is not Enough to Stop Inter Partes Reexamination

In In Re: AT&T Intellectual Property II, L.P., [2016-1830] (May 10. 2017), the Federal Circuit affirmed the PTAB determination in inter partes reexamination, that the claims of U.S. Patent No. 7,454,071, directed to methods of compressing and transmitting digital video data, were invalid.

On appeal, AT&T argued that it was improper to institute inter partes reexamination, when the petitioner requested that its petition be denied.  The Federal Circuit found that institution was proper.  AT&T also argued that the claims were not anticipated, and the Federal Circuit concluded that the Board’s finding of anticipation is supported by substantial evidence.  Finally AT&T argued that the Examiner improperly changed the basis for the anticipation rejection.  The Federal Circuit found that AT&T had notice of the the second basis for finding anticipation, and still did not amend the claims to respond to this second basis.

Concluding that the finding of anticipation was supported by substantial
evidence, the Board affirmed.


Estoppel Under 317(b) Always Applies on a Claim by Claim Basis, Just Like the Statute Says

In In Re Affinity Labs of Texas, LLC, [2016-1092, 2016-1172] (May 5, 2017) the Federal Circuit affirmed the Board’s affirmance of a reexamination determination that all of the claims of U.S. Patent No. 7,324,833 was invalid.

The Board merged two inter partes reexaminations (one of which brought by Volkswagen) and an ex parte reexamination of U.S. Patent No. 7,324,833.Volkswagen subsequently received an adverse final judgment in a parallel district court proceeding, upholding the validity of claims 28 and 35 of Affinity’s ’833 patent. In response, Affinity petitioned the PTO to vacate the entire merged reexamination proceeding, arguing that the estoppel provision in pre-America Invents Act (AIA) 35 U.S.C. § 317(b)1 extends to all parties, not just Volkswagen, and all claims challenged in the three reexaminations, not just litigated claims 28 and 35.  The PTO
denied Affinity’s termination request, but it severed the Volkswagen reexamination from the merged proceeding and held that no rejection could be maintained in that reexamination as to the claims at issue in the district court.  The Examiner evaluated the Volkswagen reexamination separately from the merged King/Apple reexamination and ultimately issued a Right of Appeal Notice in each proceeding, rejecting numerous
claims of the ’833 patent as unpatentable, and the PTAB affirmed.

Affinity argued that the PTO erred in maintaining the reexaminations in light of the final decision that Volkswagen failed to prove invalidity of two of the patent’s claims, which were asserted in the co-pending litigation and, therefore, the Board’s decisions in the reexaminations should be reversed pursuant to the section 317(b) estoppel provision.

Affinity also argued that, assuming the reexaminations were properly maintained, the Board’s decisions are based on misreadings of the
asserted prior art and a misevaluation of Affinity’s objective indicia evidence of nonobviousness.

Because the plain language of pre-AIA section 317(b) precludes Affinity’s
estoppel argument and because the Board found no error in the Board Decision upholding the Examiner’s findings of unpatentability as to all claims at issue, the Federal Circuit affirmed.

Affinity argued that the decision not to terminate all three reexaminations frustrated section 317(b)’s underlying policy goal of preventing duplicative, harassing actions. The Federal Circuit concluded that a
straightforward reading of the plain language of section 317(b) precludes Affinity’s overly broad conception of the estoppel provision, and found no grounds to reverse the Board’s final decisions based on section 317(b).

The Federal Circuit observed that Section 317(b) bars a party from using the inter partes reexamination process after a final decision has been
entered against that party in a civil action. The Federal Circuit noted that (1) it applies to the party in the civil action that loses its validity attack against “any patent claim” as well as the party’s privies; (2) it applies to validity issues raised in the civil action or that could have been raised in
that action; (3) unlike section 317(a), it speaks in terms of any “patent claim,” as opposed to the “patent;” (4) it prohibits the losing party and its privies from requesting an inter partes reexamination “of any such patent claim;” and (5) “on the basis of such issues,” it prohibits the PTO from “maintain[ing]” any inter partes reexamination requested by the losing party.  The Federal Circuit disagreed with Affinity’s proposed interpretation that the estoppel provision applied differently to maintaining a pending reexamination versus requesting a new reexamination.  The Federal Circuit held that section 317(b) was plainly limited the scope of estoppel in all circumstances to only those claims actually challenged and for which the requesting party received an adverse final decision in the district court proceeding.  The Federal Circuit further found no basis in the statute for Affinity’s argument that the final decision in the Volkswagen litigation should have preclusive effect on the reexaminations requested by third parties.

The Federal Circuit concluded that substantial evidence supports the Board’s unpatentability findings as to all challenged claims in the merged third party reexaminations, and because the claims at issue in the
Volkswagen reexamination comprised only a subset of the claims in the merged third party reexamination, it declined to address the alternative grounds of unpatentability at issue in the Volkswagen reexamination appeal.

Semicolons Strongly Indicate Each Step is Separate and Distinct; Confuse Most Non-Patent Lawyers

In In re Affinity Labs of Texas, LLC, [2016-1173] (May 5, 2017), the Federal Circuit affirmed the Board’s decision that §317(b) did not bar the reexamination, and that the reexamined claims were in valid.

Affinity sued Apple for infringement of U.S. Patent No. 7,440,772, and Apple requested reexamination of the ‘772 Patent.  Apple and Affinity settled the lawsuit and filed a joint stipulation of dismissal.  Apple also filed a notice of non-participation in the reexamination, and Affinity petitioned to terminate the reexamination under 35 U.S.C. § 317(b), whihc prohibits the USPTO from maintaining an inter partes reexamination after the party who requested the reexamination has received a final decision against it in a civil action.  The USPTO denied Affinity’s petition because because the district court’s dismissal,
without prejudice did not meet section 317(b)’s required condition for terminating the reexamination.  The reexamination resulted in invalidation of all of the claims, which was affirmed by the PTAB.

The claims  the claim included a dual download feature, inter alia, requiring:

in response to receiving the request, making a first version of the piece of selectable content available for downloading to the wireless user device and a second version of the piece of selectable content available for downloading to a personal computer of the user, wherein the first version has the specific format and the second version has a different format playable by the personal computer;
sending the first version of the piece of selectable content to the wireless user device; and
sending the second version of the piece of selectable content to the personal computer.

Affinity argued that the two sending steps must occur automatically, without intervening steps, after the “in response to” language.  The Federal Circuit disagreed, noting that each of the five steps of method claim 4 —including the three steps of the dual download feature— are offset by semicolons. The Federal Circuit said: “This punctuation choice strongly indicates that each step is separate and distinct.” It would, therefore, be reasonable to conclude the fourth and fifth steps—the sending steps—are not tied to the “making . . . available” step and
not performed “in response to” the same request found in
the “making . . . available” step, as Affinity argued.  The Federal Circuit also found that while portions of specification were consistent with automatically downloading, they certain did not require it, and in fact some embodiments did not have automatic downloads.  The Federal Circuit thus affirmed the broad claim construction by the Board, and the invalidation of those broad claims.

Because the Federal Circuit agreed that the estoppel provision of § 317(b) did not prohibit the PTO from maintaining the reexamination
of the ’772 Patent’s claims, and the Board’s construction of the claims was consistent with the broadest reasonable interpretation, the Federal Circuit affirmed the Board’s decision.


The Federal Circuit Holds that a Public, Non-Disclosing Sale is Prior Art; But Do the 102(b)(1) Exceptions Apply?

In Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., [2016-1284, 2016-1787] (May 1, 2017), the Federal Circuit reversed the district court’s determination that U.S. Patent Nos.  7,947,724, 7,947,725, 7,960,424, and 8,598,219, were not anticipated, finding that the patents-in-suit were subject to an invalidating contract for sale prior to the critical date, and the AIA did not change the statutory meaning of “on sale.”  The product covered by the patents was subject to a Supply and Purchase Agreement, contingent on FDA approval of the formulation, the terms of which were public except for the price and the specific dosage formulation covered by the agreement.

As to the ’724, ’725, and ’424 patents, the district court found that pre-AIA law applied under § 102(b) and that the Supply and Purchase Agreement was a contract for a future sale of a commercial product embodying the
0.25 mg dose and therefore constituted a sale under (old) §102(b). But, the district court found that the claimed invention was not reduced to practice before the critical date, and therefore was not ready for patenting
under the second prong of Pfaff.

As to the ’219 patent governed by the AIA, the court held that the AIA changed the meaning of the on-sale bar and § 102(a)(1) now “requires a public sale or offer for sale of the claimed invention.” The district court concluded that, to be “public” under the AIA, a sale must publicly disclose the details of the invention, and thus the Supply and Purchase Agreement did not constitute a public sale or commercial offer for sale because, although it disclosed the sale agreement and substance of the transaction, it failed to publicly disclose the 0.25 mg dose. The district court also found that the invention was not ready for patenting before the critical date.

On the issue of the post-AIA meaning of “on sale,” the Federal Circuit acknowledged the arguments that the statutory language “otherwise available to the public” and various statements by individual members of Congress, meant that “on sale” in post-AIA 102 does not include non-disclosing sales.  After first noting that “floor statements are typically not reliable,” the Federal Circuit distinguished these statements as directed to non-disclosing public uses, not non-disclosing offers for sale.  The Federal Circuit noted that the comments did not identify any sale cases that would be overturned by the amendments, and noted that even if they were intended to overrule prior secret sale cases, the comments still did not apply because the case before it involved a public but non-disclosing sale.

The Federal Circuit said that requiring disclosure as a condition of the on-sale bar would work a “foundational change” in the theory of the statutory on-sale bar.  The Federal Circuit noted that both the Supreme and its own precedent had rejected the requirement that the sale be disclosing:

[O]ur prior cases have applied the on-sale bar even when there is no delivery, when delivery is set after the critical date, or, even when, upon delivery, members of the public could not ascertain the claimed invention.

The Federal Circuit found no indication in the floor statements that these
members intended to overrule these cases, and in fact the Federal Circuit found the statements to be consistent.  The Federal Circuit found no floor statements suggesting that the sale or offer documents must themselves publicly disclose the details of the claimed invention before the critical
date, and said that if Congress intended to work such a sweeping change to our on-sale bar jurisprudence and wished to repeal these prior cases legislatively, it would do so by clear language.

The Federal Circuit concluded that “after the AIA, if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale.”  Thus the Supply and Purchase Agreement constituted a sale of the claimed invention before the critical
date, and therefore both the pre-AIA and AIA on-sale bars apply.

Finally, the Federal Circuit found the invention was ready for patenting, so that the pre-filing sales did, in fact, invalidate the four patents in suit.

The Federal Circuit’s construction makes some sense, relying on the addition of a clause, and some remarks of a few Congressmen does not seem a proper way to over rule a century of cases surrounding the meaning of “on sale.”  However, the overall structure of the statute raises a further question — assuming that the Federal Circuit is correct, does the statute provided any any grace period for non-disclosing sales?  In the rearrangement of Section 102 by the AIA, the grace period was separated into its own section (§102(b)(1)), and by its express terms, only applies to disclosures:

(b)(1) Disclosures made 1 year or less before the effective filing date of the claimed invention.—A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if—

(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or

(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.

It would seem either a non-disclosing offer for sale or sale is a disclosure, which does not make linguistic sense, or a non-disclosing offer for sale or sale is an absolute bar to patentability because there is no exception for non-disclosures. which does not make practical sense.  The result would be that a public non-disclosing sale is an immediate bar to patentability, but a public disclosing sale is not.

It is possible that the §102(b)(1) exception could be found to apply by treating the disclosure of the offer for sale or sale as a disclosure that triggers the exception, but such an interpretation strains the language of the statutory exceptions, which refer to “subject matter.”  It also raises further questions, such as: Does the public disclosure of a non-disclosing offer for sale or sale, count as a disclosure that bars third parties from filing on the undisclosed subject matter?  Does the public siclosure of a non-disclosing offer for sale or sale count as a §102(b)(1)(B) disclosure that would remove subsequent third party disclosures of the subject matter as prior art?

If a public, non-disclosing offer for sale, is in fact a disclosure, it would seem that this would provide a peculiar incentive for inventors to make a public but non-disclosing offer for sale of an invention immediately, the subject matter of which would be prior art to all subsequent third parties under 102(a), and would remove the prior art effect of subsequent third party disclosures under 102(b)(1)(B), all without actually disclosing what was invented.

The definitions of what is and what is not patentable, and what is and what is not prior art, are fundamental to a patent system.  It is disappointing that something optimistically titled the America Invents Act could not have been better thought out.