Acoustic Technology, Inc. v. Itron Networked Solutions, Inc.
Docket No. 2019-1061 (IPR2017-1061) (see also FC Docket Nos. 2019-1059, -1060)
MOORE, REYNA, TARANTO
February 13, 2020
Brief Summary: Appeal based on time-bar arguments not presented to the Board were waived; anticipation and obviousness conclusions affirmed.
Summary: Acoustic appealed PTAB finding the challenged claim of US 6,509,841 relating to remote monitoring of utility meters unpatentable. Acoustic argued that that merger of Petitioner Silver Spring Networks, Inc. (SSN) with “undisputably time-barred” Itron, Inc. during the IPR proceeding created a time-bar against SSN. The FC panel opinion explains that Acoustic sued Itron in March 2010 for infringement of the ‘841 patent which it licensed to Itron as part of a settlement agreement. As a result, “Itron was time-barred from seeking…IPR…as of March 26, 2011” under 35 USC § 315(b). Acoustic sued SSN for infringement of the ‘841 patent in 2016 and SSN filed the IPR petition on March 3, 2017. “Several weeks before” SSN filed the petition, the FC panel explains that SSN and Itron had begun “privately discussing ‘a potential business combination’”, that nine days after the Board instituted IPR review on Sept. 8, 2017 SSN and Itron agreed to merge which was completed on Jan. 5, 2018, while the IPR was in progress, and that “Acoustic never raised a time-bar challenge to the Board.” The FC panel held that “Acoustic waived its time-bar challenge to the IPR because it failed to present those arguments before the Board”, explaining that it “retain[s] case-by-case discretion over whether to apply waiver” (Monsanto, FC 2018; In re Watts, FC 2004) as that failure “deprives the court of the benefit of the [Board’s] informed judgment” (In re NuVasive, FC 2016; Freytag, US 1991 (to allow time-bar challenges for the first time on appeal would encourage…‘sandbagging’”); would afford Acoustic “a significant and unfair advantage” by allowing to “appeal only if the Board finds the claims obvious”)). Because the issue was not raised in front of the Board, the FC panel did not “resolve whether Itron’s pre-merger activities made it a real-party-in-interest, or whether the Board has any authority or obligation to reevaluate § 315(b) post institution.”
Acoustic also appealed the Board’s anticipation and obviousness findings. The FC panel affirmed the Board’s anticipation conclusion because expert testimony showed “a skilled artisan would reasonably understand that NetComm’s disclosure of radio wave communication was the same as CDMA” (“substantial evidence”; Koito Mfg., FC 2004) and “the same structure in Gastouniotis [meets] the ‘control’ and ‘relay’ limitations of claim 8.” The FC panel also disagreed with Acoustic that “the Board erroneously mapped Nelson onto the elements of claim 8” and its “motivation-to-combine finding is not supported by substantial evidence”. On the first argument, the FC panel found the “same electronic meter reader in Nelson” satisfies “both the ‘metering device’ and ‘relay’ limitations”. The FC panel also found the Board properly found SSN’s “arguments ‘supported by a sufficient rational underpinning’” and supported by expert testimony that was “not conclusory or otherwise defective” (In re Am. Acad. Sci., FC 2004; Unwired Planet, FC 2016). Thus, the Board’s anticipation and obviousness conclusions were affirmed.