“Substantial risk of future infringement” provides standing for IPR appeal; non-obviousness conclusion vacated and remanded

General Electric Company v. Raytheon Technologies Corporation

Docket No. 2019-1319 (IPR2017-00428) (http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/19-1319.OPINION.12-28-2020_1707556.pdf)

LOURIE, REYNA, HUGHES

December 23, 2020

Brief Summary:  GE found to have standing due to a substantial risk of future infringement”; Board finding of no obviousness vacated and remanded (no teaching away; motivation to combine present).

Summary:  GE appealed PTAB IPR decision finding the claims of Raytheon’s US 8,695,920 relating to methods “of designing a gas turbine engine” not invalid for obviousness.  The FC panel first found that GE had standing to appeal because it “alleged facts establishing that it is currently engaged in conduct creating a substantial risk of infringement”.  Raytheon argued GE does not have standing “because it has never ‘sued or threatened to sue GE”, but the FC panel explained that to appeal an IPR final written decision “[a]n appellant need not face ‘a specific threat of infringement litigation by the patentee” and “it is generally sufficient for the appellant to show that it has engaged in, is engaging in, or will likely engage in activity that would give rise to a possible infringement suit” (Adidas, FC 2020; Grit Energy, FC 2020; JTEKT, FC 2018; Phigenix, FC 2017; AVX, FC 2019).  The FC panel also explained that in a prior dispute, GE failed to show “a substantial risk of future infringement” since it “allegations of fact…left a great deal to the imagination” (“shaky allegations”) but that “here, GE has alleged that it has conceived a…design that Raytheon would likely argue falls within the scope of” the disputed claims and remedied “the problems we identified in the prior appeal.” The PTAB found the disputed claims not to be invalid for obviousness even though “the prior art disclosed all limitations” because the primary reference (Wendus) “taught away from combination with” the secondary reference (Moxon) (e.g., “GE did not ‘provide a persuasive motivation or justification for why a person of ordinary skill in the art” would have combined the prior art disclosures.)  The FC panel found the PTAB lacked substantial evidence for its teaching away conclusion, even though it “correctly set forth the standard” (Polaris, FC 2018 (“[a] reference does not teach away ‘if it merely expresses a general preference…but does not ‘criticize, discredit, or otherwise discourage’ investigation into the invention claimed”)).  The FC panel found that while “Wendus was moving away from” the claimed design, “this is not a repudiation-or even discouragement” (e.g., “Wendus does not make a single negative statement”, “does not criticize, credit, or discourage”; In re Gurley, FC 1994 (not patentable “simply because it has been described as somewhat inferior”)).  For similar reasons, the FC panel also found the PTAB lacked substantial evidence that GE did not show a motivation to combine the prior art (e.g., “An artisan seeking to improve upon or otherwise modify the Wendus advanced engine…because of the known advantages provided by” it.) (KSR, US 2007 (“any need or problem…can provide a reason for combining elements”)).  The FC panel also found the PTAB lacked substantial evidence for finding GE did not establish obviousness for the claims “as a whole”, a requirement that prevents “a patent challenger from merely showing that all elements of the claim exist, without showin why an artisan might combine the elements” (Princeton Bioch., FC 2005; Unigene, FC 2011).  The PTAB’s decision was therefore vacated and remanded.