The Current Roundup

CAFC: The Board did not adequately explain its decision: On appeal, the appellant/patent owner contended that the Board’s factual findings were unsupported by substantial evidence and that the Board changed positions midstream, denying the appellant adequate notice and an opportunity to respond. The Federal Circuit vacated and remanded, holding that the Board’s decision lacked sufficient detail to determine whether substantial evidence supported the Board’s factual findings or whether the Board committed prejudicial procedural error. Rovalma, S.A., v. Böhler-Edelstahl GMBH, No. 2016-2233 (May 11, 2017) (Taranto, joined by Wallach and Stoll).

CAFC: Claims added during reexam lack written description: In an opinion finding added claims unpatentable for lack of written description, the Federal Circuit “corrected” the Board’s claim construction and cited Gentry Gallery, Inc. v. Berkline Corp., 134 F.3d 1473 (Fed. Cir. 1998) for the “unremarkable” proposition that a broad claim is invalid when the specification “clearly indicates that the invention is of a much narrower scope.” Cisco Sys., Inc. v. Cirrex Sys., LLC, No. 2016-1143, -1144 (May 10, 2017) (Chen, joined by Prost and Wallach).

CAFC: Inter partes reexam estoppel—final decision requirement: The Office is forbidden by 35 U.S.C. § 317(b) (pre-AIA) to maintain an inter partes reexamination after a “final decision” in the district court that the requester did not prove invalidity. Here, the Federal Circuit upheld the Board’s decision to maintain a reexamination because the district court’s dismissal without prejudice of the requester’s invalidity counterclaims was not a “final decision.” In re: Affinity Labs of Texas, LLC, No. 2016-1173 (May 5, 2017) (per Chen, joined by Taranto and Stoll).

District Court: Stay pending IPR institution granted: After balancing all of the factors, the Court granted a stay pending the IPR. Notably, the defendant filed its IPR petition and a Rule 12(b)(6) motion to dismiss under 35 U.S.C. § 101 early in the case and on the same day, and four days later it moved to stay pending the IPR. Although the defendant’s IPR petition challenged only a subset of the patent-in-suit’s claims, it challenged claim 1 and the majority of the patent’s claims. The Court also observed that the IPR might inform its § 101 analysis. MasterObjects, Inc. v. eBay Inc., Case No. 2:16-cv-06824-JSW, ECF No. 36 (N.D. Cal. May 5, 2017) (White).

District Court: More on the IPR estoppels: In this case, the Magistrate Judge recommended a narrow reading of Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir. 2016), limiting the exception to the IPR estoppel to grounds on which the PTAB denied institution for purely procedural reasons, such as redundancy. Biscotti Inc. v. Microsoft Corp., Case No. 2:13-cv-01015-JRG-RSP, ECF No. 191 (E.D. Tex. May 11, 2017) (Payne).

For more interpretations of Shaw and the scope of the IPR estoppel, see the Roundup entry following this one and:

May 5, 2017, Roundup, “District Court: The IPR estoppel split continues,” covering Douglas Dynamics, LLC v. Meyer Products LLC, Case No. 3:14-cv-886-JDP, ECF No. 68 (W.D. Wisc. Apr. 18, 2017) (Peterson).
February 23, 2017, Roundup, “PTAB: Shaw does not remove ‘reasonably could have raised’ from the estoppel statute,” covering Great W. Cas. Co. v. Intellectual Ventures II, LLC, IPR2016-01534, Paper No. 13 (Feb. 15, 2017) (Kim, joined by Chen and Pollock).
January 27, 2017, PTAB Roundup, “District Court: More on IPR estoppels,” covering Verinata Health, Inc., v. Ariosa Diagnostics, Inc., Case No. 3-12-cv-05501, ECF No. 319 (N.D. Cal. Jan. 19, 2017) (Illston).
January 12, 2017, PTAB Roundup, “District Court: IPR estoppel limited to grounds actually raised,” covering Intellectual Ventures v. Toshiba Corp., No. 13-453-SLR (D. Del. Dec. 19, 2016) (Robinson).

PTAB: No estoppel for art in employee’s possession: In a final written decision, the Board denied the patent owner’s motion to terminate under 35 U.S.C. § 315(e)(1). The Board did not directly address the Shaw exception, but relied on the plain language of the statute and the legislative history to conclude that the “reasonably could have raised” language covers prior art that was not in the petition but “which a skilled searcher conducting a diligent search reasonably could have been expected to discover.” On the facts of this case, the Board concluded that the petitioner could not have reasonably raised grounds relying on certain prior-art brochures even though the brochures were in an employee’s possession all along. The Board did not require the petitioner “to have immediate recollection…regarding every bit of information, evidence, documents or other corporate materials that they may have been aware of at some point in time.” The estoppel therefore did not apply because the petitioner did not find the brochures before filing its first petition despite diligent prior-art searches by skilled searchers and thirty employee interviews. In the end, however, the Board found for the patent owner on the merits. Johns Manville Corp. v. Knauf Insulation, Inc., IPR2016-00130, Paper No. 35 (PTAB May 8, 2017) (Daniels, joined by Kalan, Worth).

PTAB: Secondary considerations the primary reason for PO’s win: Although the Board found that all of the limitations were taught by the prior art and that a skilled artisan would have made the proposed modifications, the Board upheld the patentability of all of the challenged claims in its final written decision. The Board found that the petitioner demonstrated that its product has a nexus with the challenged claims, and provided “very strong” evidence of industry praise and of long-felt need and “moderately strong” evidence of commercial success and copying. Varian Medical Systems, Inc. v. William Beaumont Hospital., IPR2016-00162, Paper 69 (May 4, 2017) (Kim, joined by Deshpande and Clements).

PTAB: Prior-art burden shifting: In determining that a petitioner did not demonstrate that its asserted references were prior art under § 102(b), the Board found that the petitioner met its initial burden of production by explaining why the challenged patent claim did not have written description support in a parent application (and therefore was not entitled to the benefit of the parent’s earlier priority date). The patent owner, however, successfully rebutted the petitioner’s contentions by showing where the claim was supported in the parent. Next, the Board concluded that the references were also not § 102(a) art, because the teachings were not “by another.” The petitioner met its initial burden of production because the references’ listed authors included people who were not also named as inventors of the challenged patent. The patent owner successfully rebutted the petitioner’s contentions, however, by showing that the relied-upon subject matter in the articles was not the work of the non-inventive co-authors. Varian Medical Systems, Inc. v. William Beaumont Hospital, IPR2016-00160, Paper 82 (May 4, 2017) (Clements, joined by Kim, Deshpande).

PTAB: CBM ineligibility: After allowing the parties to present additional briefing on the Unwired Planet and Secure Axcess cases, the Board denied institution as ineligible for CBM review. The Board found that the claims—while broad enough to cover internet banking—were directed to protecting computers from malware, not a financial product or service. Google Inc., v. Alfonso Cioffi et al., CBM2017-00010, Paper 9 (May 2, 2017) (McNamara, joined by Lee and Kaiser).

PTAB News: The PTAB announced its upcoming PTAB Boardside Chat – Webcast on “PTAB E2E: Latest Modifications in an Agile Development World.” The webcast is scheduled for Tuesday, July 11, 2017 at noon Eastern.

*Contributors: Jonathan Strang (ed.), Thomas Donovan, Kevin McNish, Fahd Patel, Steven Peters, Todd Siegel, Dan Smith, Kenneth Weatherwax, Ben Evans, John Holley, Arvind Jairam, Thomas King, Thomas Pasternak, Rebecca Rabenstein, Diva Ranade, Surenda (Kumar) Ravula, David Roadcap, and Jocelyn Yu. These case summaries are factual in nature and do not reflect the opinions of the contributors, their law firms, or the PTAB Bar Association. Individual contributors do not draft or otherwise have any substantive input into summaries of any case in which the contributor (or his or her firm) was involved.