PTAB Holds that a Pre-Filing Application for a Different Patent Is Not Prior Art Under Pre-AIA 35 U.S.C. § 102(a)
By Clayton N. Matheson, Akin Gump
In Broad-Ocean Technologies, Inc. v. Regal Beloit America, Inc., No. IPR2017-00802 (PTAB Aug. 22, 2017), Broad-Ocean sought to institute an inter partes review (IPR) of a patent owned by Regal Beloit (the “’476 patent”). Broad-Ocean and Regal are competing manufacturers of electric motors and power generation products. Regal had previously sued Broad-Ocean in the Eastern District of Missouri for infringing the ’476 patent, which covers a “Snap-Fit  Housing Assembly and Seal Method” for a combustion furnace blower.
In its IPR petition, Broad-Ocean argued that the ’476 patent is invalid as either anticipated by—or obvious over—another patent, which Broad-Ocean labeled the “Dumser” reference. Specifically, Broad-Ocean asserted that, although the issued Dumser patent was not published until June 2002, the Dumser application was published on July 30, 1997, which was 13 days before the ’476 patent was filed on August 12, 1997. Broad-Ocean argued that Dumser therefore constitutes prior art under pre-AIA 35 U.S.C. § 102(a).
In an opinion authored by Administrative Patent Judge Mitchell G. Weatherly, the PTAB rejected Broad-Ocean’s argument, holding that Broad-Ocean was “not reasonably likely to prevail with respect to at least one of the challenged claims.” The PTAB explained that, in the IPR petition, Broad-Ocean relied on disclosures contained in the issued Dumser patent, rather than disclosures from the Dumser application. The PTAB further found that Broad-Ocean had “present[ed] no evidence that [the issued] Dumser [patent] is identical to the corresponding patent application that was laid open on July 30, 1997.” The PTAB thus concluded that Broad-Ocean “failed to establish that Dumser is prior art” and, in turn, that institution of an IPR therefore was not authorized under 35 U.S.C. § 314(a).
Broad-Ocean Technologies, Inc. v. Regal Beloit America, Inc., No. IPR2017-00802 (PTAB Aug. 22, 2017)
PTAB Grants Rare Request for Rehearing and Modifies Final Written Decision
By Michael Nasser Petegorsky, Akin Gump
In an August 18, 2017, decision, the Patent Trial and Appeal Board (PTAB or the “Board”) granted a patent owner’s request for rehearing and modified a previously issued Final Written Decision to hold that the petitioner failed to show that any of the challenged claims were unpatentable.
In its petition, Duncan Parking Technologies (DPT) argued that Claims 1-5 and 7-10 of U.S. Patent No. 7,854,310 (“King ’310”) were anticipated by an earlier patent with partially overlapping inventors, U.S. Patent No. 8,595,054 (“King ’054”). The Board issued a Final Written Decision holding that DPT had not carried its burden to show that Claims 1-5, 7 and 9 of King ’310 were anticipated by King ’054, but that DPT had established that Claims 8 and 10 of King ’310 were unpatentable. In reaching different conclusions regarding these claims, the Board looked to the inventorship of the claims at issue: the parties agreed that all named inventors of King ’310 contributed to Claims 8 and 10, whereas Claims 1-5, 7 and 9 were attributed to the work of inventor David King alone. The portions of King ’054 asserted to anticipate claims 1-5, 7 and 9 were also attributed to Mr. King alone, but there was a dispute as to the inventorship of the portions of King ’054 applied against Claims 8 and 10.
In the Final Written Decision, the Board held that, because named inventor Mr. King’s own work was asserted to anticipate Claims 1-5, 7, and 9 of King ’310, earlier work was not “by another” and thus did not constitute prior art to those claims under 35 U.S.C. § 102(e). Conversely, the Board concluded that, because other named inventors had contributed to the King ’054 disclosures asserted to anticipate Claims 8 and 10, that work was “by another” and therefore constituted anticipatory prior art with respect to those claims.
In its motion for rehearing, patent owner IPS Group argued that that the Board overlooked its argument concerning the inventorship of the subject matter of Claims 8 and 10 of King ’310. IPS Group argued that the portions of King ’054 applied against Claims 8 and 10 actually disclose an invention of the King ’310 inventors, which was communicated by them to the King ’045 inventors. In other words, “where claims 1-5, 7, and 9 of the ’310 patent and the involved subject matter of King ’054 were invented by the same entity, i.e., Mr. King, the same theory should be applied to claims 8 and 10, but with Mr. King replaced with the named inventors of the ’310 patent.” Therefore, just as Mr. King’s own work could not anticipate Claims 1-5, 7 and 9, the work of Mr. King and his co-inventors in King ’054 could not anticipate those same inventors’ work in King ’310.
The Board agreed, finding it undisputed that Mr. King and his co-inventors invented the substantive content that became claims 8 and 10 of King ’310, and concluding that this same inventive entity (i.e., Mr. King and his co-inventors) also invented that same subject matter in King ’054 and communicated it to the King ’045 inventors. Those disclosures in King ’054 therefore were not the work “of another” and could not constitute prior art to Claims 8 and 10 under § 102(e). Accordingly, the Board vacated portions of its previous ruling, and held that DPT had failed to carry its burden to show that any of Claims 1-5 and 7-10 were unpatentable.
Duncan Parking Technologies, Inc. v. IPS Group Inc., Case IPR2016-00067, Paper No. 37 (PTAB Oct. 22, 2015)
Eastern District of Texas Judge Holds that Statements Made to PTAB Constitute Disclaimer
By Justin J. Chi, Akin Gump
On September 9, 2017, an Eastern District of Texas magistrate judge issued a report and recommendation holding that a plaintiff was estopped from asserting its patent infringement claims because statements made in response to an inter partes review (IPR) petition constituted a disclaimer.
T-Mobile US, Inc. (“T-Mobile”) filed a lawsuit against Huawei Technologies Co. Ltd. (“Huawei”) alleging infringement of U.S. Patent No. 8,867,339 (the “’339 Patent”). The ’339 Patent generally relates to error recovery for a tunnel architecture between a radio control network and a gateway general packet radio service node (GGSN). The error recovery involves managing a “packet data protocol (PDP) context,” which is a data structure relating to a user’s cellular data connection.
In response to Huawei’s suit against T-Mobile, Nokia Solutions and Networks LLC (“Nokia”) filed an IPR petition against the ’339 Patent. Nokia alleged that the claims of the ’339 Patent were obvious in light of a combination of prior art references that involved the PDP context. In its response to Nokia’s petition, Huawei repeatedly argued that the combination of prior art references on which Nokia relied did not make the claims of the ’339 Patent obvious. Specifically, Huawei took the position that the prior art combination did not preserve the PDP context as claimed in the ’339 Patent and instead marked the PDP context as invalid. The Patent Trial and Appeal Board (PTAB) instituted the IPR and rejected Huawei’s argument.
In its district court suit, Huawei generally accused T-Mobile’s 3G network of infringing the ’339 Patent by complying with a 3GPP standard. There was no dispute that the relevant 3GPP standard required the GGSN to mark the PDP context as invalid in response to an error. T-Mobile moved for partial summary judgment based on Huawei’s statements in response to Nokia’s IPR petition differentiating the prior art combination that marked the PDP context invalid in response to an error. In a report and recommendation, Magistrate Judge Roy S. Payne stated that Huawei’s statements to the PTAB constituted a clear disclaimer. The court therefore held that Huawei was precluded from alleging that the ’339 Patent covered a network, such as T-Mobile’s 3G network, in which a GGSN marks the PDP context invalid in response to an error. The court recommended granting T-Mobile’s motion because there was no evidence from which a reasonable jury could find that T-Mobile’s 3G network infringed the claims of the ’339 Patent.
Huawei Technologies Co. Ltd. v. T-Mobile US, Inc., No. 2-16-cv-00052 (E.D. Tex., September 9, 2017, Report and Recommendation) (Payne, R. S.)
PTAB Wants an Explanation for Your Follow-On Petitions
By Michael Francis Reeder II, Akin Gump
In cases where petitioners want a “second bite at the IPR apple,” the Patent Trial and Appeal Board (PTAB) has issued an informative decision stating that it wants an explanation for the delay between the original and follow-on petitions. In General Plastic v. Canon, where the petitioner submitted follow-on petitions, but did not include an explanation about why the prior art could not have been found earlier and why the follow-on petitions could not have been submitted sooner, the PTAB denied institution and a request for rehearing for the follow-on petitions.
The PTAB considers seven factors under 35 U.S.C. § 314(a), as outlined in its 2016 Nvidia decision, in determining whether to allow follow-on petitions, including:
- Whether, at the time of the filing of the original petition, the petitioner knew or should have known of the prior art asserted in the second petition
- Whether, at the time of the filing of the second petition, the petitioner already received the patent owner’s preliminary response to the first petition or received the PTAB’s decision on whether to institute review in the first petition
- Whether the petitioner provides adequate explanation for the time elapsed between the filings of multiple petitions.
These factors center on the issue that a petitioner can benefit from receiving and having the opportunity to study the patent owner’s response and the prior decision denying institution to use as a roadmap to find an argument that results in a grant of review.
The PTAB appears to have seized on the following fact: the petitioner waited until after the PTAB had denied institution of the original petitions on the merits before submitting the follow-on petitions. In fact, the petitioner did not initiate the new prior art search for the follow-on petitions until after the PTAB’s decision denying institution of the original petitions was issued. The PTAB’s decision stated that “we are concerned by the shifts in the prior art asserted and the related arguments in the follow-on petitions.”
Instead of arguing why the prior art used in the follow-on petitions could not have been found earlier, the petitioner argued that the PTAB should not have considered the Nvidia factors under 35 U.S.C. § 314(a) at all. The Petitioner further argued that the PTAB should have considered only 35 U.S.C. § 325(d), which focuses on whether “the same or substantially the same prior art or arguments [were previously] presented to the Office.” The petitioner argued that § 325(d) was the only relevant statute to consider when determining whether to institute a follow-on petition. The PTAB disagreed, finding no statutory language or legislative history that was intended to limit the discretion whether to institute under § 314(a).
General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper No. 19 (PTAB Sept. 6, 2017).
The PTAB Holds That Testimony Concerning Customer Statements and Their State of Mind Constitutes Hearsay
By Caitlin E. Olwell, Akin Gump
On September 22, 2017, the United States Patent Trial and Appeal Board (PTAB) issued a final written decision regarding claims directed to a switching regulator comprising a power switch and a control circuit. The PTAB found all challenged claims obvious under 35 U.S.C. § 103 based on the combination of two prior art references. In so doing, the PTAB ruled on motions to exclude filed by both petitioner and patent owner. While the parties’ motions were denied or dismissed as moot for several exhibits, the PTAB excluded portions of declaration testimony as hearsay under Rule 402 of the Federal Rules of Evidence.
Exhibit 2032 was a declaration from Mr. Matthews, patent owner’s vice president of product development. Petitioner argued that, in several portions of Mr. Matthew’s declaration, he referred to either statements by customers or the state of mind of customers, and those statements were offered for the truth of the matter asserted. In particular, petitioner argued that Mr. Matthews’ testimony referred to customer statements about features of switch mode power supplies that customers desired or to the state of mind of customers in deciding whether to switch to products sold by patent owner’s competitors. In addition, petitioner argued that portions of Mr. Matthews’ declaration referred to prior testimony of other witnesses in prior litigations.
In response, patent owner averred that Mr. Matthews’ testimony with respect to customers was not being offered for the truth of the matter asserted. Rather, the fact that a customer informed Mr. Matthews what features he/she found important was relevant evidence of customer demand regardless of whether the statement was true. Furthermore, patent owner argued that customer statements regarding their mental state fell under a hearsay exception – Rule 803(3) of the Federal Rules of Evidence (i.e., “then-existing mental, emotional or physical condition” exception). Patent owner also argued that Mr. Matthews’ reference to prior testimony of witnesses in prior litigations was not hearsay because he did not quote that testimony.
The PTAB disagreed with patent owner. In particular, the PTAB found Mr. Matthews’ testimony regarding what customers told him to be the “epitome of hearsay” – they prove what customers’ said or believed to be important about products. This was true even for the portions of Mr. Matthews’ declaration where he quoted his own testimony from a previous litigation. Additionally, Mr. Matthews’ reliance on statements of others, outside of the inter partes review proceeding for the truth of what they assert, was found to be hearsay. Therefore, the PTAB granted petitioner’s request to exclude the identified portions of Exhibit 2032.
On Semiconductor Corporation, Semiconductor Components Industries, LLC v. Power Integrations, Inc., IPR2016-00809, Paper No. 67 (PTAB Sept. 22, 2017).
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