IP UPDATE
Exploring the latest in intellectual property law
IP UPDATE
Exploring the latest in intellectual property law
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No Due Process Violation When New Panel Hears Substantive Arguments

by | Oct 8, 2020 | ,

Affirming a Patent Trial and Appeal Board (Board) non-obviousness determination, the US Court of Appeals for the Federal Circuit found that the Board did not abuse its discretion in sanctioning a patent owner who engaged in ex parte communications by having a new panel hear the merits of the petition. Apple Inc. v. Voip-Pal.com Inc., Case Nos. 18-1456, -1457 (Fed. Cir. Sept. 25, 2020) (Reyna, J.).

Voip-Pal sued Apple for allegedly infringing two of its patents directed to routing communications between two different types of networks: public and private. Apple then petitioned for inter partes review (IPR) of several claims from both patents, arguing they were invalid as obvious. The Board ultimately found the claims were not invalid because Apple did not provide evidentiary support as to the motivation to combine multiple references.

During the IPR proceedings, Voip-Pal’s former CEO sent six letters to various parties, copying members of Congress, the President, federal judges and administrative patent judges at the Board criticizing the IPR system, complaining about the cancellation rate and requesting judgment in favor of Voip-Pal. The letters did not discuss the underlying merits of Apple’s petitions. In view of Voip-Pal’s conduct, Apple requested that the Board sanction Voip-Pal by entering adverse judgment against Voip-Pal or by vacating the final written decisions and assigning a new panel to preside over “constitutionally correct” new proceedings going forward.

For the sanctions proceeding, a new panel replaced the initial panel and determined that Voip-Pal had engaged in sanctionable conduct, and further determined that it  would preside over Apple’s petition for rehearing. The new panel found that Apple failed to show the initial panel had misapprehended or overlooked any matter, and even if the final panel were to accept Apple’s view of the prior art, it would not reach a different conclusion. Apple appealed.

On appeal, the Federal Circuit first addressed whether the appeal was moot. Before oral argument, the Court found in separate proceedings that some, but not all, of the claims at issue were invalid. Apple argued that this case mooted the entire appeal, even though the claims did not entirely overlap. Starting with the overlapping claims, the Court found that the appeal was moot in regards to these claims because Apple no longer had the potential for injury. However, the Court rejected Apple’s argument that the appeal was moot under a theory of claim preclusion in regards to the non-overlapping claims. The Court explained that any preclusive effect from the other appeal must be decided by a future court in any subsequent action brought by Voip-Pal. Thus, any discussion regarding claim preclusion would be advisory in nature and outside the scope of the Court’s Article III jurisdiction.

Turning to the merits, the Federal Circuit affirmed the Board did not violate the Administrative Procedure Act (APA) or Apple’s due process rights. The Board’s rules provide that “[t]he Board may impose a sanction” and explains that “[s]anctions include entry of one or more” of eight defined actions. Although the Board’s sanctions imposed [...]

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Challenge to PTAB’s Finding of Non-Obviousness Fails to Pay Out

by | Aug 13, 2020 | ,

Addressing whether the Patent Trial and Appeal Board (PTAB) ran afoul of the Administrative Procedure Act (APA) in finding that a dependent claim was valid despite the patent owner’s lack of validity arguments beyond those advanced for the corresponding and invalid independent claim, the US Court of Appeals for the Federal Circuit affirmed the PTAB’s ruling and found no APA violation. FanDuel, Inc. v. Interactive Games LLC, Case No. 19-1393 (Fed. Cir. July 29, 2020) (Hughes, J.) (Dyk, J. concurring in part and dissenting in part).

Interactive Games owns a patent directed to a method for allowing users to gamble remotely via a mobile device, according to certain game configurations. Specifically, the independent claim is directed to altering a user’s game outcome based on the gaming configuration associated with the location of a user’s mobile gaming device. A dependent claim adds the additional limitation of “accessing a lookup table which contains an ordered list of locations and associated game configurations.”

FanDuel petitioned for inter partes review (IPR) of the patent as obvious based on three references. The first reference (Carter) disclosed a mobile wagering system capable of determining a gambler’s location and restricting access based on the location. Carter’s system used a database that correlated various locations with applicable access levels. Importantly, the reference generally indicated that the system may employ various components such as “memory elements, processing elements, logic elements, look-up tables, and the like.” The second reference (Walker) disclosed enabling or disabling certain features on a mobile gaming device based on a user’s location. And the third reference (the webpage) included a list of slot payouts by casino, city and state, alphabetically organized by state. FanDuel also submitted an expert declaration that the use of look-up tables was well known in the art and that it would have been an obvious design choice to store Carter’s jurisdictional information in an “ordered list” similar to the webpage.

In its Preliminary Patent Owner Response, Interactive incorporated its validity arguments for the independent claim into its arguments for the dependent claim, but did not otherwise advance any substantive arguments specific to the dependent claim. The PTAB instituted IPR for all challenged claims. Following institution, Interactive submitted a patent owner response, which again did not advance any substantive arguments specific to the dependent claim. While Interactive did submit an expert declaration, the statements made by FanDuel’s expert specific to the dependent claim were uncontested. Ultimately, the PTAB found the independent claim invalid, but found the dependent claim valid. FanDuel appealed.

FanDuel argued that the PTAB’s decision with respect to the dependent claim violated the APA because the PTAB changed its obviousness theory midstream. FanDuel alleged that no further record development was presented regarding the dependent claim after institution, and therefore a finding of validity in light of the PTAB’s decision to institute amounted to a changed position by the PTAB, to which FanDuel was entitled notice and an opportunity to respond.

The Federal Circuit disagreed and affirmed the PTAB’s decision. In finding [...]

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Federal Circuit Extends Arthrex to Ex Parte Re-Examination Proceedings

by | Jul 15, 2020 |

The US Court of Appeals for the Federal Circuit vacated and remanded a decision issued by the Patent Trial and Appeal Board (PTAB), holding that its decisions in Arthrex and VirnetX also apply to ex parte examinations at the PTAB. In re: Boloro Global Ltd., Case Nos. 19-2349, -2351, -2353 (Fed. Cir. July 7, 2020) (Dyk, J.).

The issue regarding ex parte appeals started to take shape in October 2019—in the context of an inter partes review (IPR) proceeding—when the Federal Circuit held that the appointment of administrative patent judges (APJs) at the PTAB is unconstitutional. Arthrex v. Smith & Nephew (IP Update, Vol. 22, No. 11). APJs are appointed by the secretary of commerce in consultation with the director of the US Patent and Trademark Office (PTO) pursuant to 35 USC § 6(a). In Arthrex, The Federal Circuit determined that APJs are principal officers and are not constitutionally appointed, because as principal officers they must be appointed by the president with the advice and consent of the Senate.

Having concluded that the appointment of APJs violated the Appointments Clause, the Federal Circuit held that “where the final decision was rendered by a panel of APJs who were not constitutionally appointed,” and “where the parties presented an Appointments Clause challenge on appeal,” the decision below “must be vacated and remanded.” The Court further instructed that, on remand, a new panel of APJs must be designated and a new hearing granted. The Court put a bookend on its holding, ruling that where an Appointment Clause challenge was not raised in an opening brief, the challenge was waived. So PTAB decisions that issued before Arthrex, if timely appealed and subject to an Appointment Clause challenge in the opening brief, could be vacated as unconstitutional and remanded for a new panel of APJs.

In May 2020, the Federal Circuit extended its decision in Arthrex to final decisions issued by APJs in inter partes re-examination proceedings (VirnetX v. Cisco Systems). In VirnetX, the Court discerned no differences between the duties of an APJ in an IPR proceeding as compared to an inter partes examination proceeding, because both proceedings involve third-party challenges to an issued patent and in both proceedings APJs exercise significant authority by issuing final decisions that decide the patentability of the challenged claims, and the PTO director does not have an independent way of reviewing those final determinations.

The present case arose in the context of an appeal from an examiner in ex parte prosecution. Boloro argued that APJs in ex parte appeals also exercise significant authority by virtue of the matters on which they are asked to render judgment, and carry out similar functions when they carry out their function of deciding IPRs. Boloro asserted that although ex parte appeals were not specifically addressed in Arthrex, the PTAB also has the power in ex parte appeals to disqualify counsel, to admit people pro hac vice, and to order appellants to additionally brief any matter that the PTAB considers to [...]

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Reliance on Common Sense Permitted in Obviousness Analysis

by | Jul 9, 2020 | ,

The US Court of Appeals for the Federal Circuit affirmed a final written decision from the Patent Trial and Appeal Board (PTAB) finding patent claims directed to aircraft lavatories obvious based on prior art because a skilled artisan would have used common sense to incorporate a missing limitation into the prior art. B/E Aerospace, Inc. v. C&D Zodiac, Inc., Case Nos. 19-1935, -1936 (Fed. Cir. June 26, 2020) (Reyna, J.).

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“Seams” Like Activity Giving Rise to Infringement Risk Supports Appellate Jurisdiction

by | Jul 8, 2020 | ,

Adding to its body of jurisprudence on standing to challenge an adverse final written opinion in inter partes review (IPR) proceedings, the US Court of Appeals for the Federal Circuit found a petitioner had constitutional standing to appeal where it showed it engaged in activity that would give rise to a possible infringement suit. Adidas AG v. Nike, Inc., Case Nos. 19-1787; -1788 (Fed. Cir. June 25, 2020) (Newman, J.).

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“Non-Limiting” Prior Art Claims Support Obviousness After Standing Is Established

by | May 14, 2020 |

Addressing the issue of Article III standing and obviousness in an appeal of an inter partes review (IPR) decision, the US Court of Appeals for the Federal Circuit found that the petitioner had standing to appeal because past activities created a controversy between the parties. Grit Energy Solutions, LLC v. Oren Techs., LLC, Case No. 19-1063 (Fed. Cir. Apr. 30, 2020) (Prost, CJ) (Newman, J., concurring in part, dissenting in part).

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Emmy Award to the Rescue – Secondary Considerations Overcome Prior Art

by | Apr 30, 2020 |

The Patent Trial and Appeal Board (Board), in a decision designated as precedential, found that a Patent Owner’s substitute claims were patentable in view of evidence of secondary considerations even though the prior art weighed in favor of obviousness. Lectronics, Inc. v. Zaxcom, Inc., Case No. IPR2018-01129 (PTAB Jan. 24, 2020) (Deshpande, APJ.) (designated precedential on Apr. 14, 2020).

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Prima Facie Obviousness Established Where Claimed pH Range Overlaps with Prior Art Range for Similar Compounds

by | Apr 23, 2020 |

The US Court of Appeals for the Federal Circuit reversed a district court’s summary judgment that found a patent was not obvious because the claimed pH range would not have been obvious-to-try despite overlapping ranges between the claimed pH range and the pH range for similar prior art compounds. Valeant Pharms. Intl. v. Mylan Pharms. Inc., Case No. 18-2097 (Fed. Cir. Apr. 8, 2020) (Lourie, J.).

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Lights Turned Out on Validity Finding

by | Apr 23, 2020 |

Finding that the Patent Trial and Appeal Board’s (PTAB) anticipation and obviousness decisions resulted from an erroneous interpretation of the claim language and a misunderstanding of case law, the US Court of Appeals for the Federal Circuit vacated the PTAB’s decision and remanded for further consideration. Technical Consumer Products v. Lighting Science Group Corp., Case No. 19-1361 (Fed. Cir. Apr. 8, 2020) (Stoll, J.).

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Stated Purpose More Decisive than Definition in Construing Claims

by | Mar 25, 2020 |

The US Court of Appeals for the Federal Circuit reversed a Patent Trial and Appeal Board (PTAB) obviousness decision, finding the decision was infected by an erroneous claim construction that failed to consider the purpose of the claimed invention. Kaken Pharmaceutical Co., LTD v. Iancu, Case No. 18-2232 (Fed. Cir. Mar. 13 2020)(Taranto, J.).

Kaken owns a patent claiming a method for topically treating fungal infections in nails. Fungal infections of the nail plate and nail bed are notoriously difficult to treat because topical treatments cannot penetrate the thick keratin in the nail plate. The patent describes an effective topical treatment with an antifungal, KP-103, having good permeability, retention capacity and activity in the nail plate. The patent specification notes that topical treatments known in the prior art were largely ineffective at penetrating the nail plate and treating onychomycosis.

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