Contributors: Akin Gump
Strauss Hauer & Feld LLP
Failure to Identify Prior Art Disclosure of a Limiting Preamble Dooms IPR Petition
by Jonathan James Underwood & Rubén H. Muñoz
Patent Trial and Appeal Board, Inter Partes Review, Prior Art
May 27, 2021
The Patent Trial and Appeal Board denied institution of a petition for inter partes review (IPR), in part because an allegedly anticipatory prior art patent lacked an element of what the board determined was a limiting preamble.
The petition challenged a patent claiming an apparatus and a method for the automated irrigation of crops. The claimed invention recited sensors that are associated with one or more plants that were being irrigated. In the sole method claim, this sensor element was part of a lengthy preamble. The petitioner challenged the method claim as anticipated by a prior art patent, arguing that to the extent the preamble was limiting, the prior art patent disclosed the preamble. The patent owner argued that the preamble was limiting and that the prior art patent lacked the preamble.
The board agreed with the patent owner, determining first that the preamble was limiting and second that the prior art patent failed to disclose the preamble. The board explained that a preamble is limiting if it either “recites essential structure or steps” or is “necessary to give life, meaning, and vitality” to the claim. To determine whether the limiting preamble test was met, the board turned to the disclosure of the challenged patent. The board found that the challenged patent taught how having sensors associated with specific plants would allow the user to tailor the irrigation and provide numerous benefits. Thus, the board explained, the preamble was “not merely the purpose or intended use of the claimed invention.” Rather, the preamble included essential structure and steps that were needed to give life, meaning and vitality to the claim. The board explained that the body of the claim by itself was not enough “to set out the complete invention.”
The board then found that additional evidence supported its conclusion. First, during prosecution, the sensor limitation was added to the preamble, leading to the claim being allowed. As such, the limitation was specifically used to distinguish the claim from the prior art. Second, the preamble provided antecedent basis for other elements in the body of the claim, including the sensors.
On the merits, the board found that the prior art patent’s sensors were not associated with one or more particular plants. Instead, the sensors were associated with other aspects of crop growing, such as soil type or topography. Because the prior art patent lacked the sensor element, the petitioner had failed to show a reasonable likelihood of prevailing on its unpatentability challenge.
Practice Tip: A preamble, whether long or short, may be limiting if it meets certain tests. Parties disputing the patentability of a claim should pay close attention to a preamble and carefully analyze whether or not it should be construed as limiting. Even when a petitioner argues that a preamble is not limiting, the petitioner is well advised to consider including an alternative ground that assumes the preamble is limiting. The board’s decisions are clear that if a petitioner fails to identify where in the prior art a limitation is disclosed, the petitioner has failed to show a reasonable likelihood that a claim is unpatentable.
E & J. Gallo Winery v. Vineyard Investigations, IPR2021-00076, Paper 9 (PTAB May 11, 2021).
Nokia and Daimler Settle Standard-Essential Patent Licensing Dispute, Potentially Impacting Auto-Industry FRAND Licensing
by Rubén H. Muñoz, Kevin G. McBride, Brock F. Wilson & Clark Gordon
Automotive, Standard-essential patents
June 07, 2021
Akin Gump published a client alert on the settlement of their long-running and closely watched standard-essential patents (SEPs) licensing dispute. This settlement resolves multiple German lawsuits Nokia filed against Daimler asserting SEPs and Daimler’s complaint against Nokia before the European Commission. Daimler argued Nokia’s licensing activity was not FRAND because Nokia did not offer a license to Daimler’s suppliers, as has been customary in the auto industry. Some in the auto industry may view the settlement as indicating a shift away from licensing upstream suppliers and towards licensing downstream OEMs—however, due to the confidential terms of the agreement, such conclusions are only speculative at this time. To read the full alert, please click here.
▪ This settlement resolves multiple German lawsuits Nokia filed against Daimler asserting SEPs and Daimler’s complaint against Nokia before the European Commission.
▪ Daimler argued Nokia’s licensing activity was not FRAND because Nokia did not offer a license to Daimler’s suppliers, as has been customary in the auto industry.
▪ Some in the auto industry may view the settlement as indicating a shift away from licensing upstream suppliers and towards licensing downstream OEMs—however, due to the confidential terms of the agreement, such conclusions are only speculative at this time.
▪ Continental, an auto-industry supplier, is currently in litigation with Nokia over similar FRAND licensing issues in courts in the United States and before the European Commission.
On June 1, 2021, Nokia and Daimler announced the settlement of their long-running and closely watched standard-essential patents (SEPs) licensing dispute. The confidential settlement resolves all litigation between the parties and provides Daimler with a license to Nokia’s portfolio of mobile communications SEPs.
The dispute included multiple parallel German cases brought by Nokia. In addition, Daimler lodged a complaint against Nokia with the European Commission, raising various antitrust issues and requesting “clarification on how essential patents for telecommunications standards are to be licensed in the automotive industry.” The dispute made headlines in the fall of 2020, when two German regional courts enjoined sales of certain Daimler vehicles in Germany, following separate findings of infringement of two Nokia SEPs. In particular, in August of 2020, a Mannheim Regional Court found that Daimler infringed a Nokia SEP and issued a Germany-wide ban on sales of Mercedes vehicles. Then, in October of 2020, a Munich Regional Court found Daimler infringed a different Nokia SEP, also issuing a Germany-wide injunction on Mercedes sales. Neither injunction was enforced, however, because Nokia did not post the required bonds in excess of $8 billion and $2 billion, respectively.
After those decisions, in November of 2020, a Dusseldorf Regional Court stayed its case and referred a series of questions related to fair, reasonable and non-discriminatory (FRAND) and SEP licensing to the Court of Justice of the European Union (CJEU), including the question of whether European SEP owners are obligated to license suppliers before original equipment manufacturers (OEMs). The settlement, however, has mooted these questions.
Meanwhile, a dispute between Continental and Nokia remains unresolved. That dispute involves mobile communications SEP licensing issues that are similar to those just settled by Daimler and Nokia. The U.S. litigation includes a case before the Delaware Chancery Court and an appeal before the Court of Appeals for the Fifth Circuit. Continental also filed a complaint against Nokia that is pending before the European Commission. In an official statement, Continental said that “[t]echnology companies like Continental and all other [Internet of Things] companies that want to use standardized technologies are once again faced with economic and legal uncertainty and thus have no reliable basis for driving forward the digitization of Europe.”
Open Issues and Potential Impact on FRAND Licensing in Auto Industry
▪ FRAND law regarding licensing obligations as between OEMs and suppliers remains unsettled.
▪ Relatively few mobile-technology SEP licenses have occurred in the auto industry; thus, early licenses and litigation outcomes have the potential to significantly shape FRAND licensing frameworks and rates for connected-car technology.
▪ Some may interpret the Nokia-Daimler settlement as forecasting a shift towards direct licensing by OEMs, which could result in licenses that use the price of an entire vehicle—rather than the smallest saleable patent practicing unit—as the basis for royalty calculations.
▪ As FRAND law continues to evolve, the auto industry, and others, may seek to lobby lawmakers for greater uniformity and certainty in the FRAND licensing process.
If you have questions about this alert, please contact:
Rubén H. Muñoz
Kevin G. McBride
Brock F. Wilson