In Re: Smith International, Inc.


Docket No. 2016-2303

LOURIE, REYNA, HUGHES
September 26, 2017

Brief summary: PTAB decision affirming examiner’s rejection based on broad reading of the claim term “body” reversed since adopting “the broadest possible interpretation of a claim term, irrespective of repeated and consistent descriptions in the specification that indicate otherwise” “is not properly giving the claim term its [BRI] in light of the specification.”

Summary: Smith appealed PTAB decision affirming examiner’s rejection of certain claims of US 6,732,817 related to an oil and gas drilling tool as anticipated or obvious following ex parte reexamination requested by Baker Hughes Inc. after Smith sued for infringement. Baker Hughes also petitioned for two IPR proceedings (IPR2016-01450 and IPR2016-01451), which were both denied institution. The FC panel opinion explains that “[t]his case primarily concerns what the word ‘body’ means in the context of the ‘817 patent”, and claimed simply as “a body”. The PTAB “affirmed the examiner’s interpretation of the term ‘body’ as a broad term that may encompass other components such as ‘mandrel’ and ‘cam sleeve,’ reasoning that only the term ‘body’ is recited in the claims without further limiting features and that the specification neither defines the term ‘body’ nor prohibits the examiner’s reading of it” (“a ‘generic term such as ‘member’ or ‘element’ that by itself provides no structural specificity”, and given its broadest reasonable interpretation), “rejected Smith’s argument that” the term would be understood to be “a distinct element from other components”, and therefore the examiner’s rejections. The FC panel explained that the PTAB’s legal determinations are reviewed de novo (In re Elsner, FC 2004) for substantial evidence (that which “a reasonable mind might accept as adequate” (In re Gartside, FC 2000)), anticipation is a question of fact also reviewed for substantial evidence (REG Synthetic Fuels, FC 2016), and obviousness is a question of law based on underlying factual findings (In re Magnum Oil, FC 2016). Smith argued the PTAB’s interpretation was unreasonable, that the specification provided a “consistent description of the body” (“as an ‘outer housing’”) which is supported by the prior art, and that it “renders the term indistinguishable from ‘tool’, which is used in the specification to denote the overall drilling tool.” The FC panel agreed the PTAB’s construction was “unreasonable”, explaining that BRI “‘does not include giving claims a legall incorrect interpretation’ ‘divorced from the specification and the record evidence’” (Microsoft, FC 2015; PPC Broadband, FC 2016). “The correct inquiry” under the BRI “is an interpretation that is not inconsistent with the specification” and “corresponds with what and how the inventor describes his invention in the specification” (In re Morris, FC 1997; In re Suitco Surface, FC 2010). The FC panel explained that adopting “the broadest possible interpretation of a claim term, irrespective of repeated and consistent descriptions in the specification that indicate otherwise” “is not properly giving the claim term its [BRI] in light of the specification.” Since the affirmed rejection relied upon that improperly broad reading of “body”, the PTAB’s decision was reversed.

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NFC Technology, LLC v. Joseph Matal (USPTO)


Docket No. 2016-1808 (IPR2014-01198)

LOURIE, REYNA, STOLL
September 20, 2017

Brief summary: PTAB IPR FWD of invalidity for obviousness reversed and remanded as sufficient evidence corroborated inventor’s testimony regarding conception, and it must decide whether a prototype embodied the claimed invention.

Summary: NFC appealed PTAB decision after IPR (brought by HTC) that claims 1-3 and 5 of US 6,700,551 relating to a “near-field communication device” capable of using the two existing near-field communications standards are unpatentable as obvious “Sears”. “[T]he PTAB rejected NFC’s argument that it had created a prototype embodying the claimed invention before the priority date of a cited reference, on the basis that NFC had not adequately proven that certain third-party activity inured to NFC’s benefit.” NFC bore the burden to antedate Sears and argued that the ‘551 inventor (“Charrat”) “had reduced the invention to practice” as the “M210H device” “before Sears’s priority date” at INSIDE Technologies and “presented evidence to support its contention” (Charrat’s testimony and corroborating “initial data sheet”, “excerpts from lab notebooks”, “diagrams”, details of tests conducted, and “wiring diagram”). By June 1998, NFC argued, Charrat and his team had sufficiently developed the device that they commissioned Concept Electronique (‘CE’), a chip fabrication device, to generate printed circuit board (‘PCB’) layouts for the M210H device.” The PTAB “concluded that none of the provided documents established ‘directly who conceived of the subject matter…and when that person…did so” (Cooper II, FC 2001; Genentech, FC 2000; Cooper I (FC 1998)). And it “did not decide whether INSIDE’s prototype embodied the claimed invention” and “instead, concluded that, even assuming” it did, NFC did not establish that “CE’s fabrication…inured to Charrat’s benefit.” NFC’s appeal focused on the inurement analysis, arguing that it “should not have been addressed…at all because it was not raised by the parties” and the PTAB “erred by evaluating the evidence using interference standards for determining priority of invention, rather than the 37 C.F.R. § 1.131 standard for antedating a reference”, and that it had provided sufficient corroborating evidence. The FC panel limited its analysis to the conception issue and whether Charrat’s testimony was properly corroborated (“no particular formula”, “an evaluation of all pertinent evidence must be made so that a sound determination of the credibility of the inventor’s story may be reached” (Singh, FC 2003)). And it concluded “that Charrat’s testimony relating to conception was adequately corroborated”, the PTAB’s findings being “either inconsistent with the documents themselves” or that it did “not adequately consider the portions of the documents that support corroboration” (e.g. “The Board’s discounting of the facsimile cover sheet…did not adequately consider its corroborative effect.”) The FC panel explained that, as in Loral Fairchild (FC 2001, forgiving the inventor’s inability ‘to submit documents showing production test results” from “almost 30 years ago”), “Charrat’s account is corroborated” (In re Jolley, FC 2002). It also determined that the PTAB, on remand, must determine whether “the prototype embodied the claimed invention” before reaching the inurement issue.

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

In Re: Cray Inc.


Docket No. 2017-129

LOURIE, REYNA, STOLL
September 21, 2017

Brief summary: Cray was found not to the meet the FC’s venue requirements (e.g., employee’s home office was not a “regular and established place of business”) and the writ of mandamus regarding the DC’s refusal to transfer venue was granted.

Summary: Cray petitioned for a writ of mandamus vacating the order of the DC of the Eastern District of Texas denying its motion to transfer the case to Wisconsin, which Raytheon opposed. Cray is a Washington state corporation and has its principal place of business in WA but maintains facilities in MI, WI, CA, and TX (Austin and Houston) but “does not rent or own an office or any property in the” ED TX, although it allowed employees “to work remotely from their respective homes in that district…before the underlying suit was filed.” “[H]owever,” Cray’s employee (Mr. Harless) “did not maintain Cray products at his home, nor did he maintain product literature at his home because it was available online”, and “Cray never paid Mr. Harless for the use of his home to operate its business, or publicly advertise[] or otherwise indicate[] that his home residence was a Cray place of business.” Cray moved to transfer the suit under 28 USC § 1406(a) (controlled by the meaning of § 1400(b)) in light of the Supreme Court’s TC Heartland decision (US 2017) because “it does not ‘reside’ in” the ED TX and “had neither committed acts of infringement, nor maintained a regular and established place of business” there. The DC agreed that Cray does not reside in that district but denied Cray’s motion because “Mr. Harless’s activities were factually similar to the activities performed in In re Cordis” (FC 1985). The DC also “went on ‘[f]or the benefit of’ other litigants and counsel to set out four factors for inquiries into what constitutes a regular and established place of business ‘in the modern era,’ including physical presence, defendant’s representations, benefits received, and targeted interactions with the district” but also “decline[d] to expressly apply the factors…in this particular case”, noting that if it had “the result would remain the same.” The FC panel acknowledged that, e.g., “[i]n this new era, not all corporations operate under a brick-and-mortar model” and “[b]usinesses can be conducted virtually” but also explained that it “must focus on the full and unchanged language of the statute” (§ 1400(b)), as Cordis did not consider itself obliged to do.” The FC panel concluded that the “three general requirements relevant to the inquiry” are: “(1) there must be a physical place in the district” (not “merely…a virtual space”); “(2) it must be a regular and established place of business” (“sporadic activity cannot create venue”; e.g., not a home office that can be moved at the will of the employee); and “(3) it must be the place of the defendant” (“not solely a place of the defendant’s employee”), but not necessarily excluding “a business model whereby many employees’ homes are used by the business as a place of business of the defendant”, see asterisk on p. 14). The DC’s “four-factor test” was found not to be “sufficiently tethered to [the] statutory language” of § 1400(b). Cray was found not to the meet the FC’s requirements and venue to be lacking.

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Mylan Laboratories Limited v. Aventis Pharma S.A.

Case No. IPR2016-00712 (U.S. Pat. No. 8,927,592 B2)
Final Written Decision
September 21, 2017

Brief summary: FWD concludes Mylan showed the ‘592 claims are invalid for obviousness.

Summary: The ‘592 patent is one of three patents listed on the FDA Orange Book for Aventis’ Jevtana® (cabazitaxel) approved for treatment of prostate cancer. The PTO previously denied institution of IPR against US 5,847,170 (IPR2016-00627) which expires in 2021. The other listed patent is US 7,241,907, and litigation regarding the all three patents is pending in NJ. This FWD relates to Mylan’s IPR alleging claims 1-5 and 7-30 of the ‘592 patent are invalid for obviousness over four combinations of prior art references (Winquist and the TROPIC listing (both disclosing “the same ongoing phase III clinical trial”) with Attard and Beardsley, Didier, Mita, or Tannock, respectively). The PTAB construed “A method for treating a patient” and “A method of increasing the survival of a patient” as non-limiting preamble language (statements of use (Bristol-Myers, FC 2001)). After reviewing the prosecution history, the PTAB explained the independent ‘592 claims “are limited to the step(s) of: administering a 20-25 mg/m2 dose…in combination with a corticoid…to a docetaxel-refractory prostate cancer…or mCRPC patient” and that, “[a]s indicated by the patent applicant’s final claim language”, these steps “are performed without regard to whether the claimed method results in a clinically effective treatment” (Bristol-Myers, FC 2001; “in contrast to In re Cyclobenzprine and Amgen, the ‘592 patent does not recite a comparable ‘therapeutically effective’ limitation”). It also explained that it considered the obviousness issue under KSR (US 2007 (the Graham factors) and Proctor & Gamble (FC 2009) (motivation to combine and reasonable expectation of success). It found that Mylan “established by a preponderance of the evidence that Winquist and the TROPIC listing disclose all of the method steps” and “that a POSA would have had good reason to combine the teachings…and would have read the two references together” (which “Patent Owner implicitly acknowledge[d]”). “The fundamental dispute” turned on the “reasonable expectation of ‘success’ in achieving the claimed method” which the PTAB explained “devolves into a claim construction dispute.” Here, since the claims do not recite a “therapeutically effective amount”, Mylan did not need to “establish a POA reasonably would have expected successful phase III clinical trial results, FDA approval…, or an actual increase in patient survival, to demonstrate obviousness” but only a “reasonable expectation of success in developing the claimed invention” (Allergan, FC 2013) which it determined was shown (based in large part on expert testimony). It also reviewed Aventis’ evidence of secondary considerations (Prometheus, FC 2015), which is the Patent Owner’s burden and must have a nexus to the claims In re Huai-Hung Kao, FC 2011), and found that evidence not to “outweigh Petitioner’s strong evidence of obviousness” (“This is not a case where isolated claim limitations are disclosed individually in different prior art references and the claimed combination itself provides the nexus to the merits of the invention” (WBIP, FC 2016)). Aventis’ contingent motion to amend the claims was denied (“Patent Owner bears the burden of proving patentability of each proposed substitute claim.” 37 CFR § 42.20(c)); Nike, FC 2016)).

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

Intellectual Ventures I LLC, et al. v. Motorola Mobility LLC et al.


Docket No. 2016-1795

NEWMAN (C/D), DYK, TARANTO
September 13, 2017

Brief summary: DC denial of JMOL to Motorola affirmed with respect to invalidity but reversed as to direct infringement under 35 USC § 271(a) (e.g., “the end user must be using all portions of the claimed invention”).

Summary: A jury found Motorola infringed claim 41 of IV’s US 7,810,144 relating to “electronic transfer of computer files directly between two or more computers” and claims 1, 10, 11 and 13 of US 7,120,462 relating to “a laptop computer formed by docking a smartphone into a ‘shell’ having a larger display and keyboard”, and no invalidity, Motorola appealed the DC’s denial of its motion for JMOL (reviewed de novo, Finjan, FC 2010). Motorola argued ‘144 claim 41 was invalid for lack of written description (a question of fact reviewed for substantial evidence following a jury trial (Ariad, FC 2010), except where it turns on claim construction based solely on intrinsic evidence, however, it is a legal question subject to de novo review (Atl. Res., FC 2011)). Motorola argued “the specification…excludes ‘long-term’ or ‘permanent’ storage” but “the scope of claim 41 covers” the same, “in violation of the written description requirement.” However, the FC panel agreed with the DC “that under the proper claim construction” construed “in view of the specification” (since the claims “neither plainly include[] or exclude[] long-term or permanent storage” (Columbia Univ., FC 2016 quoting Philips, FC 2005), claim 41 does not cover “long-term or permanent storage” C.R. Bard, FC 1998 (“[I]t is incorrect to construe the claims contrary to the specification, and then to hold the claims invalid because they are contrary to the specification.”) The FC panel also explained that the doctrine of claim differentiation “does not serve the broaden claims beyong their meaning in light of the specification” (Toro, FC 1999). Motorola also argued ‘144 claim 41 is invalide for obviousness (reviewed de novo, except for subsidiary factual determinations made by the jury-including the scope and content of the prior art-are reviewed for substantial evidence (Kinetic Concepts, FC 2012)). But the FC panel agreed with the jury, concluding the prior art did not disclose the “irrespective of user action” limitation (e.g., “the jury was free to disbelieve [Motorola’s] expert and credit [IV’s] expert” (i4i, FC 2010)). The next question was direct infringement under 35 USC § 271(a). The FC panel explained that under NTP (FC 2005) and Centillion (FC 2011), “to prove an infringing ‘use’ of a system under § 2871(a), a patentee must demonstrate ‘use’-that is, ‘control’ and ‘benefit’-of the claimed system by an accused direct infringer” and “what must be ‘used’ is each element…the end user must be using all portions of the claimed invention.” Thus, “it follows that, to use a system, a person must control (even if indirectly) and benefit from each claimed component.” The FC panel found IV’s arguments of “indirect benefit” to Motorola’s customers unconvincing and concluded JMOL should have been granted to Motorola on this point. The FC panel also concluded substantial evidence supported the finding that that there was no motivation to combine the art cited against the ‘462 patent. Judge Newman wrote that the disputed claims should have been found invalid for obviousness.

Posted in Claim Construction, Claim Differentiation, Infringement, Obviousness | Leave a comment

Waymo LLC v. Uber Technologies, Inc./Ottomoto/Otto Trucking (Defendants), Anthony Levandowski (Intervenor)


Docket No. 2017-2130

NEWMAN, WALLACH, STOLL
September 13, 2017

Brief summary: DC denial of Uber’s motion to compel arbitration of litigation with Waymo affirmed.

Summary: Uber appealed DC denial of its motion to compel arbitration of litigation with Waymo. Uber did not have an arbitration agreement with Waymo, but Levandowski has one in his employment agreements with Waymo, which Uber argued is grounds to compel arbitration between Uber and Waymo. The FC panel explained that CA “courts have, in a few situations, compelled arbitration against an entity that was not a party to an arbitration agreement” through equitable estoppel “when necessary ‘to prevent a party from using the terms or obligations of an agreement as the basis for claims against a non-signatory, while at the same time refusing to arbitrate with the non-signatory under another clause of the same agreement” (Goldman, Cal. Ct. App. 2009; Arthur Andersen, US 2009 (“A non-signatory may compel arbitration where the ‘relevant state contract law allows him to enforce the agreement.’”)) The DC relied Kramer (9th Cir. 2013, which relied on Goldman) which “explained that reliance of a contract” (“raising claims that are intimately founded in or intertwined with that agreement”) “containing an arbitration requirement is the key element in the equitable estoppel inquiry.” The FC panel explained that it first looks to the complaint which it found “not [to] rely on or use any terms or obligations of the [Waymo-Levandowski employment] agreements as a foundation for [its] claims.” Uber argued “that Waymo must necessarily rely on its agreements with Levandowski in order to make out its trade secret claim” but “Waymo stresses that its complain does not rely” on those agreements, with the references thereto being only “to show that Waymo h as taken reasonable measures to safeguard its trade secrets.” But the FC panel disagreed, finding the DC correctly concluded CA courts (Kramer) require “Plaintiffs’ claims themselves [to] intimately rely on the existence of” the agreement in question, “not merely reference them.” Waymo also disclaimed reliance on the employment agreement to the DC “provided Uber does not open the door by reference to these agreements or the lack thereof of those agreements”, the reliance on which Uber argued was error by the DC. The FC panel found that “[s]uch a conditional representation does not demonstrate reliance” on the agreements, and found the DC did not err on this point. The FC panel also found that “Uber’s contentions as to the second Kramer/Goldman circumstance, concerted misconduct, are subject to the same deficiencies” discussed above and since “Waymo states that it is not asserting…that Uber…conspired with Levandowski to breach” the agreements. The FC panel also reviewed Uptown Drug (CA 2013), Metalclad (CA 2013), Turtle Ridge (CA 2006), Torbit (CA 2013 (“[a] close analogy”)), and CardioNet (MA 2017) and found no error with the DC’s “balance of precedent”. It noted that “[t]he general rule is that a contract only applies to the parties of the contract”, and affirmed the DC decision.

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Waymo LLC v. Uber Technologies, Inc./Ottomoto (Defendants), Anthony Levandowski (intervenor), and Lyft, Inc. et al. (Movants)


Docket No. 2017-2235, -2253

NEWMAN, WALLACH, STOLL
September 13, 2017

Brief summary: Mr. Levandowski’s petition for writ of mandamus was denied because, e.g., he could not show protection under attorney-client privilege or the work-product doctrine.

Summary: Waymo sued Uber et al., “alleging, inter alia, claims of patent infringement and violations of federal and state trade secret laws” including that “it former employee, Mr. Levandowski, improperly downloaded thousands of documents related to Waymo’s driverless technology and then left Waymo to found Ottomotto, which Uber subsequently acquired.” Before completing the acquisition, counsel for Uber and Ottomotto (but not counsel for Levandowski) retained Stroz to investigate Ottomotto employees formerly employed by Waymo (including Mr. Levandowski), which generated a report that is the subject of the discovery dispute appealed here. Intervenor Anthony Levandowski petitioned for mandamus after the DC’s denial of relief from a Magistrate Judge’s orders finding the Stroz report was not protected by attorney-client privilege or under the work-product doctrine. The FC first found that he had “other adequate means to attain the relief he desires” such a post-judgment appeal, and therefore did not meet “Cheney’s first prerequisite” of a writ of mandamus (Cheney, US 2004). It also found it “apparent that Mr. Levandowski cannot invoke attorney-client privilege or work-product protection” and that his “unsupported assertion” that he “would be unable to ‘cleanse the trial of all taint from the improper disclosure’” “is insufficient” (Birdsong, 9th Cir. 2009). The FC panel also found Levandowski could not satisfy Cheney’s second prerequisite (“the petitioner must satisfy the burden of showing that his right to issuance of the writ is clear and indisputable”) because the DC properly determined the common interest or joint defense rule allowing “attorneys for different clients pursuing a common legal strategy to communicate with each other” (In re Pac. Pictures, 9th Cir. 2012) did not apply since, e.g., Levandowski could did not “demonstrate the elements of privilege” and the “pursuit of common legal claims”. The FC panel also concluded the DC correctly found the work-product doctrine protecting documents prepared for litigation or “because of” litigation (i.e., “not prepared exclusively for litigation”) did not apply, including under the common interest doctrine. The Magistrate Judge determined that “under the circumstances of our case, [Uber and Mr.] Levandowski…had adverse rather than common interests…and…Uber therefore waived any work-product [protection]” when it disclosed the report to “adversaries Otto[motto and Mr.] Levandowski”, and so “it must disclose the same work product to Waymo.” The FC panel concluded that Mr. Levandownski did “not establish[] that he is entitled to work-product protection” since only Uber and Ottomotto, but not Levandowski, “hire[d] Stroz as his representative”. The FC panel also concluded the DC properly determined Mr. Levandowski could not rely on the Fifth Amendment (“[n]o person…shall be compelled in any criminal case to be a witness against himself” that “adheres basically to the person, not to information that may incriminate him” (Couch, US 1973)) since, e.g., he was not “compelled to personally produce the Stroz report.” And the FC panel also found the third Cheney prerequisite (“the issuing court…must be satisfied that the writ is appropriate under the circumstances”) inapplicable since the first two Cheney prerequisites were not satisfied. Finally, the FC panel concluded the Perlman doctrine (“a discovery order directed at a disinterested third party is treated as an immediately appealable order”) did not apply because this is a civil case, “Mr. Levandowski may be able to appeal following final judgment”, and he is “closely affiliated with all parties to this litigation.” Thus, his petition for a writ of mandamus was denied.

Posted in Appeal, Discovery, Privilege | Leave a comment