Andersen Corporation v. GED Integrated Solutions, Inc.

Derivation Proceeding DER2017-00007
Petitioner Appln. No. 15/058,862; Respondent Pat. No. 9,428,953 B2
Final Written Decision (March 20, 2019)

Brief summary: In this AIA derivation proceeding, the PTAB found that “Andersen has not demonstrated’ derivation “by a preponderance of the evidence”.

Summary: Andersen requested a derivation proceeding under 35 USC § 135 regarding its ‘862 application relating to window frames, alleging that “an inventor named in the ‘953 patent derived” an invention “recited in claims 1-22 from an inventor named in Andersen’s ‘862 application.” The PTAB’s FWD explains that “[t]o prove derivation, the party asserting derivation must establish (1) prior conception of the claimed subject matter, and (2) communication of that conception to an inventor of the other party” (i.e., “who invented the subject matter at issue”) (Cooper, FC 1993; Hedgewick, CCPA 1974; “Derivation Final Rules”; Davis, CCPA 1967). “Under the AIA,” the FWD explains, “a petitioner must show the respondent, without authorization, filed an application claiming such derived invention” (35 USC § 135(a)(a); 37 CFR § 42.402(b)(2)) by a preponderance of the evidence “because Andersen filed the ‘862 application prior to issuance of the ‘953 patent” (37 CFR §§ 42.400(a); Bruning, FC 1998). And to prove conception of “an invention communicated to an inventor of the other party”, “[a]n inventor ‘must provide independent corroborating evidence in addition to his own statements and documents” (Hahn, CCPA 1981; Coleman, FC 1985 (“[c]onception must be proved by corroborating evidence”); Cumberland, FC 2017 (“must encompass all limitations of the disclosed invention”); 37 CFR § 42.201 (“patentably indistinct…evaluated one-way in the direction from the invention disclosed”); Eaton, FC 2003 (“[t]he communication must be sufficient to enable one of ordinary skill in the art to make the patented invention”); considered under the “rule of reason”). The FWD explains that “[o]ther than the numbering of claim dependencies, claims 60-81 of the ‘862 application are identical to claims 1-22 of the ‘953 patent”. Andersen argued that its inventor (Mr. Oquendo), when an Andersen subsidiary employee, communicated the claimed invention to GED employees, citing “22 different conceptions and corresponding communication[s]”. The PTAB focused on one of the claim limitations, “the ‘stop’-because it is dispositive”, about which GED submitted copy of at least one one of the ‘953 patent’s witnessed notebook pages (reproduced on pp. 36 and 61 of the FWD), which the PTAB determined from the prosecution history was determinative in the allowance of the claims. The PTAB found “no allegation that Mr. Oquendo ever told” the ‘953 inventors about the design (e.g., an “alleged communication was to Mr. McGlinchy, not Mr. Briese, a named inventor of the ‘953 patent…Andersen’s assertion that” McGlinchy “must have passed along unspecified information…is mere speculation”) and that he admitted “that he never mentioned a stop specifically”, the stop is not in Andersen’s prototype, “Andersen’s position is based on an incorrect understanding regarding the existing…design”, and “the timing of events described by the parties support’s GED’s position that the claimed invention was not derived.” Thus, the PTAB found that “Andersen has not demonstrated’ derivation “by a preponderance of the evidence”.

Posted in America Invents Act, Derivation of Invention | Leave a comment

Trading Technologies Int., Inc. (“TT”) v. IBG LLC et al. (US as intervenor)

Docket No. 2017-2257, -2621, 2018-1063

CBM Nos. 2015-00179, 2016-00051, 2016-00032
April 18, 2019

Brief summary: Board finding that TT’s patents are CBM eligible (e.g., claims are not “for technological inventions”) and patent ineligible (§ 101) affirmed.

Summary: TT appealed Board findings that each of US 7,533,056; 7,212,999; and 7,904,374 are eligible for covered business method (CBM) review and ineligible under § 101, and that the ‘056 claims are invalid for obviousness. The FC panel explained that under § 18(a)(1)(E) of the AIA a patent eligible for CBM review do not include those “for technological inventions” and that the Board must “consider…‘whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art’ and whether it ‘solves a technical problem using a technical solution’” (SightSound, FC 2015 (reviewed “under the arbitrary and capricious” and “substantial evidence” standards)). The FC panel reviewed claims 1 of the ‘999 and ‘056 patents (relied on by the Board) and concluded that CBM was appropriate (e.g., “These claims are directed to a financial trading method used by a computer. We see no technological invention in this software method for trading…the patents relate to the practice of a financial product, not a technological invention…This invention made the trader faster and more efficient, not the computer.”) The FC panel did not consider TT’s argument that Versata (FC 2015) “set aside the novelty and nonobviousness language of the regulation” since the FC panel agreed “with the Board that the considered claims do not solve a technical problem using a technical solution” (Apple, FC 2016). The FC panel also found “no meaningful difference between the ‘374 claims and the ‘999 and ‘056 claims”, and agreed “with the Board that claim 1 does not solve the alleged problem of missing an intended price” (“Even if the specification recites an embodiment that solves this problem, as TT alleges, claim 1 does not.”) The FC panel reviewed the Board’s patent eligibility (§ 101) “conclusions de novo” under the Alice framework (Alice, US 2014) and its factual findings for substantial evidence”. Regarding the ‘099 patent, the FC panel explained that “[t]he fact that this is a ‘computer-based method’ does not render the claims non-abstract” under Alice’s step one (e.g., claims “recite a purportedly new arrangement of generic information that assists traders in processing information more quickly”; Interval Licensing, FC 2018; unlike Core Wireless, FC 2018), and do not include an inventive concept under Alice’s step two (e.g., “selecting and moving an icon is a well-understood, routine, conventional activity”; “elements of each claim” considered “individually” or “as an ordered combination” to “look[] more precisely at what the claim elements add” (SAP Am., FC 2018)). The FC panel also agreed with the Board that the ‘056 claims were not “meaningful[ly] differen[t]” from the ‘099 claims (e.g., “simply displaying all the bids and offers in the aggregate, including the user’s bids and offers, is not enough”). The FC panel also agreed with the Board that ‘374 claim 1 “is directed to the abstract idea of receiving a user input to send a trade order” and “does not solve any purported technical problem”. It also wrote that “[e]ligibility depends on what is claimed, not all that is disclosed in the specification” (Data Engine, FC 2018). The FC panel also declined to address TT’s constitutional challenges as TT only provided “conclusory assertion with no analysis” which is “insufficient to preserve the issue for appeal” (Great Am. Ins. Co., FC 2013; Smith Kline, FC 2006). The FC panel therefore affirmed the Board’s ineligibility decisions, and did not address the ‘056 obviousness decision.

Posted in Patentability, Software | Leave a comment

U.S. Water Services, Inc., Roy Johnson v. Novozymes A/S et al.

Docket No. 2015-1950, -1967

December 15, 2016

Update (April 19, 2019 (non-precedential)): On remand of this decision (“US Water I”), the jury found no inherent anticipation and awarded damages of about $7.5 million. But the DC partially granted JMOL in favor of Novozymes and found the Asserted Claims invalid as inherently anticipated. FC panel reversed and remanded because, e.g., “[t]here is…substantial evidence to support the jury finding that [the prior art] only discloses the possibility of reducing phytic acid concentration below detection levels, which is not legally sufficient to demonstrate inherent anticipation” and “Novozymes, therefore, did not meet its burden at trial of showing by clear and convincing evidence that Example 1 would always eliminate phytic acid deposits under the conditions required by the Asserted Claims” (Core Wireless, FC 2018)).

Brief Summary: DC grant of SJ for invalidity (inherent anticipation) reversed; grant of SJ of no inequitable conduct affirmed.

Summary: U.S. Water (USW) appealed DC grant of SJ to Novozymes based on invalidity of its US 8,415,137 and 8,609,399 relating to methods for producing ethanol from milled grain (“methods of reducing fouling through the use of phytase”) as inherently anticipated. Novozymes appealed DC finding of no inequitable conduct. The DC found that the first seven elements of the claims were disclosed by Veit and Antrim and “determined that ‘the critical issue’ was whether Veit or Antrim inherently disclosed ‘adding phytase for the purpose of reducing deposits.’” It concluded it was inherently disclosed because “deposit reduction [was] a natural result of the methods” disclosed by the prior art but noted that “Veit and Antrim do not expressly identify the benefit that [USW’s] patents identify” but “nevertheless inherently disclose that benefit.” USW argued grant of SJ was improper because the DC “acknowledged the existence of a genuine dispute as to a material fact.” The FC panel opinion explained that “[i]nherency…may not be established by probabilities or possibilities” (“The mere fact that a certain thing may result from a given set of circumstances is not sufficient.” Cont’l Can, FC 1991) It concluded the DC erred in deeming irrelevant the fact that “U.S. Water…adduced evidence[, including expert testimony,]…that practicing Veit and Antrim will not always results in deposit reduction”, noting that the DC “recognized this was conflicting evidence that went to the core of an inherenty anticipation analysis, but concluded this evidence did not preclude” SJ and “improperly made credibility determinations and weight conflicting evidence” which are “jury functions” (Anderson, US 1986). Thus, the grant of SJ based on invalidity for inherent anticipation was reversed. Novozymes argued the DC erred in granting SJ of no inequitable conduct (Therasense, FC 2011; Ferring, FC 2006; Ohio Willow Wood, FC 2016 (“withholding or misrepresentation” that “would have prevented a patent claim from issuing” (materiality) and “specific intent to mislead”)). It argued that during prosecution of related US 8,039,244 USW argued its amendment “overcame Veit, where ‘phytase is added before fermentation’” but “[a]round the same time” made “seemingly contradictory statements” (according to the presiding judge in that hearing) during litigation with another party. The application leading to the ‘137 patent was then amended to “broadly require[] ‘adding phytase to an ethanol processing fluid in the plant’” (and “identified the differences with claim 1 of the ‘244 patent), and “this purported distinction” was later identified by a third party which was noted in the file history by the examiner. The DC concluded “Novozymes falls short of establishing the but-for materiality” of the litigation-related information and that the differences in the ‘244 and ‘137 claims “would have been amply clear to the examiner” and “th[e] third party submission provides one more reason”. The FC panel found “no genuine dispute about this material fact” and that is therefore did not need to address intent (“U.S. Water did not withhold or misrepresent information to the USPTO.”)

Posted in Anticipation (35 USC 102), Inherency | Leave a comment

ATI Technologies ULC v. Andrei Iancu (USPTO)

Docket No. 2016-2222, -2406, -2608 (IPR2015-00325, -00326, -00330)

April 11, 2019

Brief summary: PTAB finding of invalidity due to ATI’s lack of diligence before filing its patent applications reversed (e.g., “[t]he PTAB identified no delays” or “gaps in activity”).

Summary: ATI appealed three final IPR decisions (filed by LG Electronics) of ATI’s US 7,742,053; 6,897,871; and 7,327,369 relating to “how a computer-graphics three-dimensional image is generated and presented on a two-dimensional screen” (“Unifier Shader Patents” (“USPs”)), finding “all but one of the challenged claims unpatentable as anticipated or obvious” (only ‘871 claim 20 was held patentable). The USPs were invalidated after the PTAB held that ATI had not established actual reduction to practice” or “diligence to constructive reduction to practice, for all three patents” to disqualify the alleged prior art. For the ‘053 patent, the FC explained that “[t]he dates of conception and constructive reduction to practice are not disputed on appeal” but that “the PTAB held that diligence and actual reduction to practice had not been shown”. The ’871 and ‘369 patents share a common specification and priority date (Nov. 20, 2003), and the PTAB held similarly as it did for the ‘053 patent. The FC panel explained that “Rule 131 is called the ‘swearing back’ or ‘swearing behind’ provision” (MPEP § 715; only available for AIA applications to overcome 102(g) rejections (interference)) and that “the applicant bears the burden of proof to establish either: (1) prior reduction to practice; or (2) prior conception ‘coupled with due diligence’” and “requires documentary support” (In re Steed, FC 2015). Further, the FC panel explained, “[a] patent owner need not prove the inventor continuously exercised reasonable diligence throughout the critical period” but “must show there was reasonably continuous diligence” (i.e., “periods of inactivity…do not automatically vanquish a patent owner’s claim of reasonable diligence”, “inventor’s testimony…must be corroborated by evidence”, “evidence is considered ‘as a whole’ under a rule of reason” (Perfect Surg. Techs., FC 2016)). The PTAB concluded ATI had not shown proper proof of diligence because ATI’s inventor (Laurent Lefebvre) “redesigned R400” (the name for ATI’s project) “after the conception date, to include an optional feature” (“a ‘second chip design’”) “that is not recited in the claims at issue” without an explanation of which activities applied to the original or modified design, and that “ATI fails to provide a reasonable way for us to determine whether unexplained lapses have not occurred.” The FC panel noted that “[t]he PTAB identified no delays” or “gaps in activity” and “does not explain or identify” the “unclaimed features” (Power Integrations, FC 2015 (the Board must ‘fully and particularly set out that bases” for its decision); “we are directed to no view of the evidence that could support a conclusion that ATI set aside the development”; “PTAB did not provide full analysis for the ‘871 and ‘369 patents, and referred to the reasoning in the ‘053 opinion”). In addition, the FC panel explained, “[d]iligence is not negated if the inventor works on improvements and evaluates alternatives while developing an invention” and there is no rule “that evidence of diligence must be excluded if there is any possibility that it could be construed in support of an invention beyond the reach of the count” (In re Jolley, FC 2002). Thus, the PTAB’s decision was reversed.

Posted in Conception and Reduction to Practice, Diligence, Inter Parties Review (IPR), IPR | Leave a comment

Omega Patents, LLC v. CalAmp Corp.

Docket No. 2018-1309

April 8, 2019

Brief summary: DC decision finding infringement of ‘727 claim 1 affirmed; others reversed and remanded for state of mind analysis and to determine whether there were predicate acts of infringement; willfulness finding remanded.

Summary: CalAmp (CA) appealed DC decision that Omega’s US 6,346,876; 6,756,885; 7,671,727; and 8,032,278 relating to remote control systems for vehicle functions were infringed and not invalid, and award of about $15 million in compensatory damages, willful infringement, attorney’s fees and royalties. The FC panel first considered CalAmp’s argument that the DC’s “claim constructions affected the jury’s verdict or invalidity” because certain prior art was not considered. CalAmp was found to have preserved that issue after the Markman hearing but was found not have “identified [it] at any time thereafter”, and therefore found not to have preserved the issue for appeal (Becton, FC 1990; FRCP 46). The FC panel reviewed the DC’s denial of CalAmp’s judgment of a matter of law (JMOL) on various infringement issues de novo (In re: Copaxone (FC 2018) (where DC relies on intrinsic claim construction evidence, review is de novo); Avid Tech., FC 2016 (error must be remanded unless “non prejudicial, i.e., was harmless”)). Regarding ‘727 claim 11, the FC panel agreed with the jury’s finding of infringement (“admittedly a close issue”). Regarding the ‘876 and ‘885 patent claims, the FC panel explained that it “assume[s] that a systems claims is infringed by the sale of the system” and then “[t]he question…is whether ‘all of the elements of the claim…[are] present in the accused system[s] allegedly sold by CalAmp” (Netword, FC 2001; Centillion, FC 2011). And the FC panel concluded that the ‘876 and ‘885 patent system claims require a “receiver” to receive “signals from a ‘transmitter’ on the cell tower”, “[b]ut CalAmp is not alleged to provide the cell tower” (“not all the required claim elements”), and was therefore found to be entitled to JMOL of no direct infringement. On induced infringement of the ‘876 and ‘885 patent system claims, the FC panel explained that “liability for inducement must be predicated on direct infringement” (Limelight, US 2014; Enplas, FC 2018) and “Omega’s theory here is that CalAmp’s customers directly infringe the systems claims.” The FC panel affirmed the jury’s verdict as to all of the ‘876 claims except claim 12, and remanded that claim and the ‘885 claims “for a new trial on the issue of whether there were predicate acts of direct infringement.” CalAmp also argued it was entitled to a new trial because the written questions submitted to the jury regarding inducement were erroneous, and the FC panel agreed since the DC erroneously excluded evidence as to “CalAmp’s state of mind” which “substantially prejudiced CalAmp’s ability to present its defense” (Enplas, FC 2018 (must show “alleged infringer knowingly induced infringement and possessed specific intent to encourage another’s infringement”; “CalAmp’s state of mind as to the validity of the asserted patents at the time of infringement is irrelevant as to the issue of inducement.”)). The FC panel also concluded “a new trial is required on direct infringement” of the ‘278 device claims by CalAmp for the same reasons as ‘876 claim 12 and the ‘885 claims. The FC panel reviewed the compensatory damages award based on total sales as to ‘727 claim 11, since infringement was only affirmed “as to a subset of CalAmp’s products”. The FC panel vacated the jury’s finding of willfulness, and the associated awards of enhanced damages and attorney’s fees, as it “cannot determined which patent(s) or claim(s) the jury found to be willfully infringed”. It did find that the DC’s “exclusion of [CalAmp’s expert] testimony relating to CalAmp’s state of mind prior to the alleged acts of infringement was an abuse of discretion” and that the DC erred in preventing entry of “opinion-of-counsel evidence” (“remains relevant to the infringer’s state of mind post-Halo”; Broadcom, FC 2008; Bettcher, FC 2011; Exmark, FC 2018; Polara Eng’g, FC 2018).

Posted in Attorney's Fees, Claim Construction, Damages, Inducement to Infringe, Infringement, Willfullness | Leave a comment

Incyte Corp. v. Concert Pharm. Inc.

IPR2017-01256 (U.S. Pat. No. 9,249,149 B2)
PTAB Final Written Decision
April 8, 2019

Brief summary: PTAB IPR decision found Concert’s ‘149 patent claims to a deuterated ruxolitinib relating to its CTP-543 product in development invalid for obviousness.

Summary: Concert’s ‘149 patent relates to its JAK kinase inhibitor CTP-543 currently in development, claiming “[a] compound of Formula A” in Markush format and reciting “specific deuteration patterns of ruxolitinib. Incyte markets non-deuterated ruxolitinib as Jakafi(TM), which is not covered by the ‘149 patent (it is noted that in 2018 the PTAB refused to institute Concert’s request for Post-Grant Review (PGR) of Incyte’s U.S. Pat. No. 9,662,335 relating to dueterated ruxolitinib (PGR2017-00034)). In this IPR, Incyte alleged invalidity for obviousness (§ 103) in view of two different combinations of three references (Rodgers (Incyte’s US 7,598,257 B2, listed on the FDA’s Orange Book for Jakafi(TM)), Shilling, and Concert Backgrounder (“CB”; a web page generally describing Concert’s deuteration product plans); and Jakafi Label, Shilling, and Concert Backgrounder). The PTAB first found that Incyte had “demonstrated that the Concert Backgrounder was ‘sufficiently accessible to the public interested in the art’ so as to allow a determination that the reference is a printed publication” (Blue Calypso, FC 2016; SRI, FC 2008). For its obviousness analysis, the PTAB considered “whether a chemist of ordinary skill would have selected the asserted prior art compounds as lead compounds, or starting points, for further development efforts” and then “whether there was a reason to modify a lead compound to make the claimed compound with a reasonable expectation of success” (Otsuka, FC 2012 (“the possesstion of promising useful properties in a lead compound that motivates a chemist to make structurally similar compounds”); Altana Pharm., FC 2009 (“a lead compound is ‘a natural choice for further development efforts’”)). The PTAB “determine[d] that the preponderance of the evidence supports finding that a person of ordinary skill in the art would have chosen ruxolitinib as a lead compound” (e.g., “Rodgers and Shilling demonstrate ‘useful properties’ of ruxolitinib”), that “Rodgers, Shilling and the [CB] would have provided a person of ordinary skill in the art a reason to deuterate Rodgers’s ruxolitinib compounds at their metabolic ‘hot spots’, as identified by Shilling, in the manner taught by the [CB] to achieve the potential benefits that the [CB] disclosed, e.g., improved safety, tolerability, and efficacy” (e.g., “the preponderance of the evidence supports Petitioner’s assertion that a motivation to make deuterated ruxolitinib compounds and compositions exists based upon the structural similarity between those claimed compounds and the prior art compounds”), and that there was a reasonable expectation of “successfully making the claimed invention in light of the prior art” (Amgen, FC 2009). The PTAB was unpersuaded by Concert’s arguments regarding possible side effects and that “[d]euteration is relatively expensive and highly unpredictable” (Millenium, FC 2017 (“fear of disturbing the chemical properties whereby [the compound] function[ed] effectively”); DePuy, FC 2009). The PTAB was also unpersuaded by Concert’s evidence of unexpected results since “results asserted to demonstrate an ‘increased time in the therapeutic window’ and an ‘increased clinical response time at a given dose’ for CTP-543 as compared to ruxolitinib are not of a ‘kind’ so as to support a finding of nonobviousness” (Galderma, FC 2013 (“[u]nexpected results that are probative of nonobviousness are those that are ‘different in kind and not merely in degree from the results of the prior art’”)), as well as its long-felt need arguments regarding treatment of alopecia areata (AA) (e.g., “Patent Owner’s assertion that CTP-543 has satisfied a long-felt but unmet need for treating [AA] is unsupported”, “potential” or “likelihood” is not enough). The PTAB therefore found the challenged claims to be invalid for obviousness. It is noted that Concert has announced its intention to appeal this decision to the Federal Circuit.

Posted in Inter Parties Review (IPR), IPR, Obviousness | Leave a comment

TEK Global, et al. v. Sealant Systems Int., Inc. et al.

Docket No. 2017-2507

March 29, 2019

Brief summary: DC finding of infringement, damages, and grant of PI affirmed; SSI granted a new trial on invalidity (on remand, DC improperly foreclosed SSI from presenting new obviousness theories).

Summary: SSI appealed DC finding of infringement of TEK’s US 7,789,110 directed to “[a] kit for inflating and repairing inflatable articles” (e.g., vehicle tires using a small compressor and a container of sealing liquid). SSI specifically appealed the DC’s orders regarding claim construction and its denial of SSI’s motion for a new trial and JMOL on invalidity, infringement, and damages, as well as its grant of a permanent injunction (PI). In earlier decisions, the DC construed “additional hose cooperating with said inflatable article” (DC decision “SSI I”) and the FC reversed as to construction of the “cooperating with” limitation (FC 2015, “SSI II”). In the FC SSI II opinion, the DC was found to have “clearly erred in finding Bridgestone disclosed the element of an ‘additional hose…cooperating with’ the tire” and remanded the case back to the DC to allow SSI to make its case for invalidity in light of the FC’s claim construction. The magistrate judge concluded that the FC had already rejected the obviousness arguments under the new construction, after which the jury found infringement and no invalidity, awarding TEK about $2.5 million in lost profits and about $250,000 in reasonable royalties. In this appeal, SSI argued TEK’s claims were invalid and can therefore not be infringed (Medtronic, FC 1983). The FC found that on remand the DC improperly foreclosed SSI from presenting obviousness theories that were not presented in SSI I or SSI II, and therefore “that a partial new trial on validity is appropriate here (see FN1 regarding evidence from a non-institution decision being “properly limited to the context of pre-issuance examination”) (Microsoft, US 2011). The FC panel also considered SSI’s argument that “conduits containing the container” and “container connecting conduit” are means-plus-function limitations (§ 112, para. 6; Diebold, FC 2018 (not applicable with ““sufficiently definite meaning as the name for structure”; without “means”, there is a rebuttable presumption that §112, para. 6 does not apply), and found those limitations are not (e.g., “dependent claim 27 recites ‘at least one of said conduits…comprises a hose’”, specification “clearly contemplates a conduit having physical structure”, “applicant’s intent” to avoid means-plus-function shown in prosecution history (TIP, FC 2008; Markman, FC 1995); supported by extrinsic evidence such as a dictionary definition (Greenberg, FC 1996)). The FC panel also found the DC did not abuse its discretion in instructing the jury not to “compare SSI’s Accused Product to TEK’s product” but “to the claims of the ‘110 Patent” in determining infringement (Catalina, FC 2002; Adams Resp., FC 2010 (“when a commercial product meets all the claim limitations, then a comparison [of the accused product] to that [commercial] product may support a finding of infringement”)). And the FC panel found the DC did not abuse its discretion in deciding damages and granting the PI (e.g., “the market appears to have been limited to two suppliers” (State Indus., FC 1989); “jury could reasonably infer manufacturing capacity from TEK’s prior activities” (Yarway, FC 1985); “it was enough for TEK to show that a significant reason consumers bought its device was the presence of the patented features”, “sunset provision mitigates any negative effects on end users” (Broadcom, FC 2013)).

Posted in Damages, Infringement, Lost Profits, Means-plus-function, Royalties | Leave a comment