Shaw Industries Group, Inc. v. Automated Creel Systems, Inc.


Docket Nos. 2015-1116, -1119

IPR2013-00132, IPR2013-00584
MOORE, REYNA (C), WALLACH
March 23, 2016

Brief Summary: Board decision that certain grounds in petition for IPR were redundant found to be within its authority and without effect on estoppel. Board decision that voluntary dismissal of suit left Shaw free to file second IPR outside one year of service found to be non-reviewable. One of the Board’s obviousness conclusions remanded as “ambiguous”; the other was affirmed.

Summary: Shaw appealed PTO final written decision in a consolidated IPR of claims 1-21 of ACS’s US 7,806,360 relating to “creels” for supplying yarn and other stranded materials for manufacturing. ACS sued Shaw in February 2012 but then voluntarily dismissed it. Within one year of service of the complaint (§ 315(b)) Shaw filed its first IPR against all 21 claims of the ‘360 patent on 15 grounds with three directed at the “interposing” claims (involving creel magazines with more than two packages of stranded material at each level) against which IPR was instituted (not including claim 4). Shaw’s second petition for IPR was against claim 4 which was instituted on different grounds. Even though it was filed more than one year after service of the intitial complaint, the Board “determined that because ACS had voluntarily dismissed the suit without prejudice, it ‘nullifie[d] the effect of the alleged service’” under § 315(b). The final consolidated decision found unpatentability was not shown by a preponderance of the evidence grounds of the first IPR (Shaw’s appeal) but was shown in the second IPR (ACS’s appeal). Shaw argued the Board improperly rejected one of its grounds of argument as “redundant” but the FC panel disagreed, seeing “the benefit in the PTO having the ability to institute IPR on only some of the claims and on only some of the proposed grounds” (Hyatt, FC 2015) even though, in this case, it “cannot say we agree with the PTO’s handling of Shaw’s petition” (“We have no authority…to review the Board’s decision to institute IPR on some but not all grounds.”) Shaw also petitioned “for a writ of mandamus instructing the PTO to reevaluate its redundancy decision” (granted under “exceptional circumstances amounting to judicial usurpation” (Cheney, US 2004)), arguing it was entitled to the writ because “it has no other means to attain the desired relief ‘since review by appeal is unavailable’” and it has a right “to have the PTO consider a reasonable number of grounds and references given the ‘estoppel rule’”. The FC panel disagreed with the estoppel argument because the denied grounds were never actually raised “during” the IPR since it was denied (“The IPR does not begin until it is instituted.” (Cuozzo, FC 2015)) The writ was therefore denied. However, the FC panel found the Board’s obviousness reasoning “ambiguous at best” and remanded that decision. It also concluded it could not review the Board’s decision the second IPR was not time-barred under § 315(b) (Achates, FC 2015, noting SCOTUS’s future review of Cuozzo may affect future holdings on this point)). And it found no error with the Board’s obviousness determination regarding claim 4. Judge Reyna’s concurring opinion addressed “deep[] concern[s] about the broader impact that the Redundancy Doctrine may have on the integrity of the patent system.”

This entry was posted in Collateral estoppel, Inter Parties Review (IPR), IPR, Obviousness. Bookmark the permalink.

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