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obviousness

Press Pause: De Novo Review Not Always Required for Obviousness

by Kyle Sorenson, PhD | Apr 6, 2023 | Patents

A divided panel of the US Court of Appeals for the Federal Circuit affirmed the Patent Trial & Appeal Board’s finding that certain challenged claims were nonobvious after applying the substantial evidence test to resolve a dispute regarding the scope and content of the prior art that the Board had resolved as a purely factual question. Roku, Inc. v. Universal Elec’s, Inc., Case No. 2022-1058 (Fed. Cir. Mar. 31, 2023) (Reyna, Stoll, JJ.) (Newman, J., dissenting). In her dissent, Judge Newman stated that even though the issue on appeal related to an underlying factual finding, the ultimate issue of obviousness remains a question of law that requires de novo review.

Universal Electronics owns a patent directed to a universal control engine (within a universal remote) that allows for communication between a “controlling device” (i.e., remote) and an “intended target appliance” (e.g., TV, DVD player). The universal control engine uses different communication methods “according to the optimal method of communication for each target appliance and command,” such as Consumer Electronic Control (CEC) commands or infrared (IR) commands.

The Federal Circuit majority first noted that the disposition of the appeal rested on a single, narrow factual issue: whether the prior art’s list of command codes that are formatted to be transmitted via different communication methods is the same as the list of different communication methods recited in the challenged claims.

The panel majority began by recognizing two relevant standards of review to be used when resolving an obviousness inquiry. First, the Federal Circuit noted that it reviews “underlying factual findings” for “substantial evidence.” Substantial evidence review considers whether a “reasonable fact finder could have arrived at the [Board’s] decision.” The Court specified that the underlying findings of fact relevant to an obviousness inquiry include the Graham factors, which comprise “the scope and content of the prior art,” among others. Next, the Court acknowledged that “[t]he ultimate question of obviousness is a legal question that it reviews de novo.”

The panel majority noted that both Roku and Universal persuasively argued their positions related to the scope and content of the prior art, that “the factual dispute . . . was highly contested and closely decided,” and that substantial evidence supported the Board’s finding. On that basis, the Federal Circuit affirmed the Board’s holding that Roku failed to show that the challenged claims were obvious. The Court declined to perform de novo review of the ultimate question of obviousness, reasoning that because Roku only raised factual questions on appeal (i.e., whether the prior art taught a particular claim element), the Court only needed to consider whether the Board’s determination on that issue was supported by substantial evidence.

In her dissent, Judge Newman disagreed with the majority decision to abstain from a de novo review of obviousness notwithstanding the majority’s conclusion that the underlying findings of fact were supported by substantial evidence. Judge Newman argued that both forms of review are appropriate—and required—in cases such as this. In her de novo review, Judge Newman concluded [...]

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Prior Art Coherency and Cache Incoherency: “Known-Technique” Rationale for Motivation to Combine

by Jake B. Vallen | Mar 23, 2023 | Patents

The US Court of Appeals for the Federal Circuit, addressing the issue of whether certain factual and legal conclusions relating to obviousness were supported by substantial evidence, held that the Patent Trial & Appeal Board improperly rejected evidence of “known-technique” rationale to provide a motivation to combine. Intel Corp. v. PACT XPP Schweiz AG, Case No. 22-1037 (Fed. Cir. Mar. 13, 2023) (Newman, Prost, Hughes, JJ.)

PACT owns a patent that “relates to multiprocessor systems and how processors in those systems access data.” The claimed multiprocessor system addressed cache incoherency, a problem associated with the use of multiple cache memories to store data, particularly local copies of the same data stored on multiple processors. Cache incoherency (i.e., inconsistencies among different cache processors) “may arise if one processor changes its local copy of the data and that change isn’t propagated to the other copies of that data.”

Intel petitioned for inter partes review of claims 4 and 5 of the patent, relying on two prior art references, Kabemoto and Bauman. Kabemoto and Bauman both address the problem of cache incoherency. As the Federal Circuit explained, Kabemoto maintains cache coherency “by ‘snooping’ along a shared ‘bus,’” while Bauman “us[es] a global, segmented secondary cache.”

The Board upheld the patentability of the challenged claims, concluding that “Intel failed to prove the obviousness of each limitation of [independent] claim 4,” from which claim 5 depended. Intel had contended that a person of ordinary skill in the art would combine Kabemoto and Bauman to teach all limitations in claim 4 by “replac[ing] Kabemoto’s secondary caches” with “Bauman’s segmented global [secondary cache],” which is a separate cache. PACT did not dispute that the combination of Kabemoto and Bauman taught each limitation of claim 4 but argued that Intel failed to demonstrate a motivation to combine Kabemoto and Bauman.

The Board nevertheless found that Intel failed to demonstrate that the prior art disclosed the segment-to-segment limitation and concluded that Intel failed to show that a person of ordinary skill in the art would have been motivated to combine the teachings of Kabemoto and Bauman. Intel appealed.

The Federal Circuit first addressed Intel’s contention “that substantial evidence d[id] not support the Board’s determination that the prior art fails to disclose the segment-by-segment limitation” of claim 4. The Court found that “Bauman’s Figure 6 teaches—if not plainly illustrates—the segment-to-segment limitation of the claims interconnect system” and reversed the Board’s contrary conclusion.

Next, the Federal Circuit addressed Intel’s contention that the Board’s determination that there was no motivation to combine Kabemoto and Bauman was not supported by substantial evidence. On this issue, the Court reasoned that under KSR, it was “enough for Intel to show that there was a known problem of cache incoherency in the art, that Bauman’s secondary cache helped address that issue, and that combining the teachings of Kabemoto and Bauman wasn’t beyond the skill of an ordinary artisan.” As the Court put it, “[n]othing more is required to show a motivation to combine under KSR.”

Explaining [...]

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You Can’t Skirt around Obviousness by Arguing Expectation of Success Must Be Absolute

by Alexandra Cavazos, PhD | Feb 16, 2023 | Patents

Affirming an obviousness decision by the Patent Trial & Appeal Board (Board), the US Court of Appeals for the Federal Circuit explained that the expectation of success need only be reasonable and not absolute. Transtex Inc. v. Vidal, Case No. 20-1140 (Fed. Cir. Feb. 3, 2023) (Prost, Reyna JJ.) (Schall, J. dissenting).

Transtex makes aerodynamic trailer skirts, which improve fuel efficiency by reducing air drag. Transtex sued WABCO in the US District Court for the Eastern District of Michigan, alleging that WABCO’s trailer skirts infringed several Transtex patents. WABCO responded by filing two inter partes review (IPR) petitions, one of which was against a patent with claims directed to “resilient” trailer skirts and the “resilient” struts used to attach them to a trailer.

WABCO argued that the challenged claims of the patent were obvious over a combination of the Layfield and Rinard references. WABCO submitted expert declarations stating that a person of ordinary skill in the art would have recognized that Layfield’s rigid struts could benefit from being constructed of resilient, more flexible material. Accordingly, a skilled artisan would have been motivated to look to other, similar types of trailer components that are also flexible—like that disclosed in Rinard—to improve upon Layfield’s rigid struts. WABCO successfully relied on much of the same expert testimony to argue that a skilled artisan would also have enjoyed a reasonable expectation of success in combining the more rigid struts of Layfield with the compressible materials taught in Rinard because Rinard taught the utility of having compressible “air scoops” at the tail end of a trailer, which would compress downwards when the trailer contacted a loading dock.

The Board agreed with WABCO and found the challenged claims obvious. According to the Board, Layfield taught all of the claim limitations except for a “resilient strut” that could flex both toward the center of the trailer and away from the center of the trailer and then regain its shape while Rinard taught the benefits of using compressible air scoops made out of a resilient material as part of a trailer skirt system. The Board also concluded that a skilled artisan would have been motivated to combine Layfield with Rinard and would have had a reasonable expectation of success, given the predictable nature of the field. Transtex appealed.

The Federal Circuit affirmed, finding that substantial evidence in the form of expert testimony supported the Board’s finding that although Layfield taught a more rigid strut instead of a resilient strut as claimed, a skilled artisan would have been motivated to combine Layfield’s strut with the resilient materials disclosed in Rinard and would have enjoyed a reasonable expectation of success when doing so. The Court concluded that this was a case where the evidence of motivation to combine, which “everyone agrees meets the substantial evidence threshold,” significantly overlapped with the evidence relating to a reasonable expectation of success, so it was correct to conclude that a skilled artisan would have reasonably expected the resiliency benefit that motivated them to combine [...]

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KSR Does Not Extend to Design Patents (Yet)

by Courtney Seams | Feb 9, 2023 | Patents

Addressing the standard for obviousness of design patents, the US Court of Appeals for the Federal Circuit, in a per curiam opinion, upheld the Patent Trial & Appeal Board’s finding that a challenged design patent was not obvious over the pre-KSR design patent obviousness test or anticipated. LKQ Corporation v. GM Global Technology Operations, Case No. 21-2348 (Fed. Cir. Jan. 20, 2023) (per curiam) (Lourie, J., concurring) (Stark, J., concurring).

GM owns a design patent for the fender of a vehicle. LKQ Corp. previously held a license to the patent from GM, but negotiations to renew the license failed. Because LKQ continued to manufacture the fender after the expiration of the license, GM sent LKQ notice that it was infringing the patent. In response, LKQ petitioned for an inter partes review against GM, alleging that the patent was obvious and/or anticipated.

The Board found that LKQ had not presented enough evidence to prove that the patent was obvious or anticipated. For purposes of evaluating the obviousness of the design over prior art, the Board defined ordinary observers as “retail consumers who purchase replacement fenders and commercial replacement part buyers.” The Board concluded that, from the perspective of the ordinary observer, there were multiple differences between the patented design and the key reference, a prior art design patent. LKQ appealed.

LKQ argued that the Board erred in finding that there was no anticipation and in applying the obviousness tests of In re Rosen (C.C.P.A. 1982) and Durling v. Spectrum Furniture (Fed. Cir. 1996) because the Supreme Court of the United States overruled those tests in KSR International v. Telflex (2007).

The Federal Circuit upheld the Board’s definition of the ordinary observer. The Court found that retail purchasers of the entire vehicle would not be included in the ordinary observer group because purchasers of the product embodying the design are interested in the part itself, not the vehicle as a whole. The Court went on to uphold the Board’s application of the ordinary observer obviousness test, agreeing that the patented design created different overall impressions from the prior art for purposes of both obviousness and anticipation.

The Federal Circuit then addressed whether KSR overruled the Durling and Rosen tests for obviousness of design patents. The Court found that LKQ properly preserved the argument for appeal by asserting it in its opening brief to the Board. The Court then found that it was unclear whether the Supreme Court overruled Durling and Rosen, and therefore the Court was bound to apply the existing law. In applying the Durling and Rosen tests, the Court found that LKQ had failed to identify “the correct visual impression created by the patented design as a whole” because the prior art patent lacked certain key design features of the patented design. Thus, the Court affirmed the Board’s finding that the patent was not obvious.

Judge Lourie provided an additional opinion and addressed LKQ’s argument that KSR overruled Rosen. Lourie stated that because KSR did not involve design patents, which [...]

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Absent Expressed Rationale of Obviousness, Federal Circuit Calls for Do-Over

by Anisa Noorassa | Jan 19, 2023 | Patents

The US Court of Appeals for the Federal Circuit reversed a ruling by the Patent Trial & Appeal Board (Board) where, on appeal, the US Patent & Trademark Office’s (PTO) rationale for sustaining the Board’s obviousness rejection did not reflect “the reasoning or findings the Board actually invoked.” In Re Google, LLC, Case No. 22-1012 (Fed. Cir. Jan. 9, 2023) (Moore, C.J., Lourie, Prost, JJ.)

Google’s patent application covers a method of filtering search results to display age-appropriate results using a “content rating score” in combination with a predetermined threshold value to determine which results will be presented. The application discloses several ways that the threshold value can be calculated, including using the length of the search query as a proxy for the age of the user, with longer queries being associated with older users and leading to a lower threshold score (allowing more mature content to be shown).

The application received a final rejection from the examiner, who asserted that the claims would have been obvious under 35 U.S.C. § 103 based on two prior art references, Parthasarathy and Rose. Parthasarathy disclosed a method to determine a content score to use for ranking results, while Rose disclosed a method to assign result importance based on query length. The examiner argued that it would be obvious to combine Rose and Parthasarathy to achieve the claimed method that recited a “predetermined threshold value” based on the number of words in a query. The examiner acknowledged that Parthasarathy did not disclose a threshold based on a number of words but found that Rose did, citing Rose’s modified relevance-ranking algorithm. He reasoned that it would have been obvious to combine Rose and Parthasarathy to achieve the claimed threshold because “analyzing a query for determining the query length and using the query length as a threshold is very well known in the art and doing so would further provide for assigning weight to a long or a short query for retrieving documents.” Google appealed the examiner’s decision to the Board, which affirmed the examiner’s rejection and adopted the examiner’s findings. Google appealed to the Federal Circuit.

On appeal, the PTO argued that because there were only two ways a person of ordinary skill in the art could modify Parthasarathy’s threshold to incorporate Rose, either of the modifications would have been obvious. However, the Federal Circuit found that this argument was not supported by the Board’s decision. The Court explained that while the Board did conclude that modifying Parthasarathy’s threshold to take into account the length of the query would have been obvious, the Board did not provide any detail as to how that would be achieved. In the absence of specific fact-based findings by the Board, the Court explained that it could not adopt the PTO’s argument, which rested on facts not found in the Board’s decision. A ruling relying on these facts would have resulted in a violation of basic administrative law principles since a court may only uphold an agency action on [...]

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ANDA Filing Alone Insufficient for Induced Infringement of Method Patent

by Tessa Kroll | Jan 5, 2023 | Patents

The US Court of Appeals for the Federal Circuit upheld a district court’s findings of invalidity and noninfringement in a Hatch-Waxman case involving two sets of method patents directed to modulating dosages of pirfenidone, a drug used to treat idiopathic pulmonary fibrosis (IPF). The Court found that the first set of patents were obvious over the prior art and standard medical practice, while the second set were not directly infringed in light of actual physician prescription practice. Genentech, Inc. v. Sandoz Inc., Case No. 22-1595 (Fed. Cir. Dec. 22, 2022) (Newman, Lourie, Prost, JJ.) (Newman, J., dissenting).

Sandoz submitted two abbreviated new drug applications (ANDAs) for approval to market a generic version of pirfenidone, which Genentech sells under the brand name Esbriet®. Genentech sued Sandoz under the Hatch-Waxman Act, asserting that Sandoz’s generic version would induce infringement of two sets of patents: one directed to modifying dosages of pirfenidone in patients with abnormal liver biomarkers (LFT patents), and the other directed to avoiding adverse interactions in patients also taking fluvoxamine (DDI patents).

The LFT patents are directed to methods of administering pirfenidone to a patient who has exhibited Grade 2 abnormalities in liver function biomarkers alanine transaminase (ALT) and/or aspartate transaminase (AST) in response to pirfenidone. The LFT patents generally recite the following administration options:

Temporarily reducing the dose before returning to the full dose
Maintaining the full dose
Reducing the dose
Temporarily discontinuing pirfenidone before returning to the full dose
Temporarily discontinuing pirfenidone before returning to a reduced dose.

Sandoz’s proposed label included a “Dosage Modification due to Elevated Liver Enzymes” section, which stated that if a patient exhibits grade 2 elevations of ALT and/or AST, “[t]he full daily dosage may be maintained, if clinically appropriate, or reduced or interrupted (e.g., until liver chemistry tests are within normal limits) with subsequent re-titration to the full dosage as tolerated.” Genentech argued that these instructions constituted induced infringement of the LFT patents. The district court disagreed and held that the LFT patents were obvious over the prior art and standard medical practice and that the defendant would not induce infringement because the labels “merely described” the infringing uses but did not recommend them.

The DDI patents are directed to methods for avoiding adverse interactions between pirfenidone and fluvoxamine and generally involve the steps of discontinuing fluvoxamine or modifying the dose of pirfenidone and continuing fluvoxamine. Sandoz’s proposed label warned of the adverse interactions between pirfenidone and fluvoxamine and stated that fluvoxamine should be discontinued prior to administering pirfenidone or the dose of pirfenidone should be reduced. Genentech similarly argued that these instructions constituted induced infringement of its DDI patents, but the district court held that there was insufficient evidence for infringement because Genentech had not shown that a patient would actually be prescribed both pirfenidone and fluvoxamine in practice.

Genentech appealed the district court’s holdings with respect to both the LFT and DDI patents.

LFT Patents

The Federal Circuit first observed that “varying doses in response to the occurrence [...]

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Tag, You’re It: Sanctions Award Must Reflect Violative Conduct

by Lillian Spetrino | Dec 22, 2022 | Patents

The US Court of Appeals for the Federal Circuit determined that an accused infringer was entitled to a new trial relating to validity issues but still faced sanctions for its continuous disregard of its discovery obligations. ADASA Inc. v. Avery Dennison Corp., Case No. 22-1092 (Fed. Cir. Dec. 16, 2022) (Moore, Hughes, Stark, JJ.)

ADASA owns a patent relating to methods and systems for commissioning radio-frequency identification (RFID) transponders. ADASA sued Avery Dennison for patent infringement, alleging that its manufacture and sale of certain RFID tags infringed ADASA’s patent. Both parties sought summary judgment following discovery. Avery Dennison asserted that the patent was ineligible for patent protection under 35 U.S.C. § 101, and ADASA argued that the asserted claims were not anticipated or obvious based on the book RFID for Dummies. The district court granted ADASA’s motion on validity and denied Avery Dennison’s motion for patent ineligibility. Prior to trial, ADASA moved in limine to exclude Avery Dennison’s damages expert’s testimony related to certain licenses, and the district court granted the motion.

At trial, ADASA entered licenses into evidence as part of its damages case and alleged that they reflected lump-sum agreements to practice the asserted patent. The district court declined to include a jury instruction on lump-sum damages and a lump-sum option on the verdict form, observing that Avery Dennison’s expert had not offered a lump-sum damages opinion and concluding that the licenses alone were insufficient for the jury to award lump-sum damages. The jury returned an infringement verdict and awarded ADASA a running royalty of $0.0045 per infringing RFID tag, which resulted in an award of $26.6 million.

In its post-trial motions, Avery Dennison moved for a new trial, arguing it was reversible error for the district court to exclude its damages expert’s testimony and to decline to provide a jury instruction for a lump-sum damages award. Before the district court ruled on its motion, Avery Dennison revealed to ADASA that it had discovered additional previously undisclosed RFID tags in its databases. A subsequent investigation determined that the number of undisclosed tags was more than two billion. Avery Dennison agreed to pay an additional $9.5 million in damages, which corresponded to the royalty rate determined by the jury. ADASA subsequently moved for sanctions. The district court award $20 million in sanctions after finding that Avery Dennison had engaged in protracted discovery failures and a continuous disregard for the seriousness of the litigation and its expected obligations. The sanctions award corresponded to a $0.0025 per-tag rate applied to both the adjudicated and late-disclosed tags. Avery Dennison appealed.

Avery Dennison challenged the district court’s summary judgment rulings, its denial of a new trial and its imposition of sanctions. The Federal Circuit affirmed the district court’s patent eligibility determination, finding that the patent “is directed to a specific, hardware-based RFID serial number data structure designed to enable technological improvements to the commissioning process,” which “is not a mere mental process,” and concluded that the claim was directed to patent-eligible subject matter.

[...]

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Bad Connection: Claim Construction Argument without Explanation Given No Weight

by Cecilia Choy, PhD | Dec 22, 2022 | Patents

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board (Board) obviousness decision after finding that the patent owner failed to explain how its cited extrinsic evidence supported its proposed claim construction. Uniloc 2017 LLC v. Netflix, Inc., Case No. 21-2085 (Fed. Cir. Dec. 15, 2022) (Dyk, Taranto, Hughes, JJ.) (nonprecedential).

Uniloc owns a patent directed to a “more efficient” method for encoding videos by only coding at the pixel level when necessary and, where possible, reusing code for macroblocks in the background area. Netflix petitioned for inter partes review of several claims in Uniloc’s patent. The Board ultimately found the claims unpatentable as obvious. Uniloc appealed.

Uniloc argued that the Board erred in its claim construction of a limitation that required “dividing the stationary background region and the object region from an inputted video in a macroblock-by-macroblock basis by using a difference between the previous frame and the current frame.” The dispute before the Federal Circuit was whether the “macroblock-by-macroblock basis” required that the act of dividing be done macroblock-by-macroblock, as urged by Uniloc, or whether the dividing resulted in separate macroblock-based regions, as urged by Netflix and found by the Board. The Court concluded that Netflix and the Board were correct.

The Federal Circuit first addressed the intrinsic record, finding that it was ambiguous as to the meaning of “macroblock-by-macroblock basis.” Although the claim language supported either interpretation, Uniloc’s argument would require the Court to read language into the claim that was “simply not there.” The specification did not clarify the claim construction issue either. Although Uniloc pointed to one example where the dividing step occurred one macroblock at a time, the Court stated that it did not limit claim language to examples used in the specification. Lastly, the Court explained that the portions of the specification describing the purpose of the invention and avoiding problems in the prior art also failed to clarify the meaning of the macroblock-by-macroblock basis. Because the purpose was merely to make coding more efficient and avoid dividing at the pixel level, either interpretation could apply.

Relatedly, the Federal Circuit rejected Netflix’s argument that Uniloc forfeited the arguments on appeal related to the portions of the specification explaining the purpose of the claimed invention and how it purportedly solved problems in the prior art. The Court explained that the forfeiture doctrine does not “preclude a party from proffering additional or new supporting arguments, based on evidence record, for its claim construction.” Here, Uniloc “merely cited additional support in the specification to support the same argument it had always made” related to the macroblock-by-macroblock basis.

The Federal Circuit next addressed the extrinsic evidence and agreed with the Board’s decision that a “macroblock-by-macroblock basis” required dividing results in separate macroblock-based regions. Uniloc’s only extrinsic evidence was a dictionary definition of “basis,” and Uniloc offered no additional expert evidence to explain technological facts or usage in the field that would support its interpretation. In contrast, Netflix provided expert testimony and [...]

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Construing the Construction: Federal Circuit Chips Away at IPR Win

by Thomas DaMario | Nov 29, 2022 | Patents

Addressing claim construction issues in inter partes review (IPR) proceedings before the Patent Trial & Appeal Board (Board), the US Court of Appeals for the Federal Circuit affirmed an obviousness finding as to some claims but reversed and remanded an obviousness finding as to another claim because of a claim construction error. VLSI Technology LLC v. Intel Corporation, Case Nos. 21-1826, -1827, -1828 (Fed. Cir. Nov. 15, 2022) (Chen, Bryson, Hughes, JJ.)

VLSI owns a patent directed to a technique for alleviating the problems of defects caused by stress applied to bond pads of an integrated circuit. Bond pads are a portion of an integrated circuit that sit above interconnected circuit layers and are used to attach the chip to another electronic component, such as a computer or motherboard. When a chip is attached to another electronic component, forces are exerted on the chip’s bond pad, which can result in damage to the interconnect layers. The patent discloses improvements to the structures of an integrated circuit that reduce the potential for damage to the interconnect layers when the chip is attached to another electronic component while also permitting each of the layers underlying the pad to be functionally independent in the circuit.

VLSI filed suit against Intel alleging infringement of the patent. During claim construction, the district court construed the claim term “force region” to mean a “region within the integrated circuit in which forces are exerted on the interconnect structure when a die attach is performed.” Before the district court’s construction but after the suit was filed, Intel filed petitions for IPR of the patent and advocated in its petitions for the same construction of “force region” that the district court ultimately adopted.

VLSI did not contest Intel’s construction, but it later became apparent that the two parties disagreed over the meaning of “die attach,” which formed part of the construction. Intel argued that the term “die attach” refers to any method of attaching a chip to another electronic component, including a method known as wire bonding, which was taught by a prior art reference included in Intel’s petitions. VLSI argued that the term refers to a method of attachment known as “flip chip” bonding and does not include wire bonding. In the Board’s final written decisions, it did not address the term “die attach,” but found that “force region” was not limited to flip chip bonding and subsequently found the challenged claims invalid as obvious. The Board also construed a second disputed term “used for electrical interconnection not directly connected to the bond pad,” which is recited in only one claim of the patent, in favor of Intel, and subsequently found that claim unpatentable. VLSI appealed.

On appeal, VLSI raised a number of procedural and substantive challenges to the Board’s construction of the two disputed terms. VLSI argued that the Board failed to acknowledge and give appropriate weight to the district court’s construction of “force region.” The Federal Circuit dismissed this argument, as there was ample evidence in [...]

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Delayed Disclaimer: Patent Owner Arguments Made during IPR Not a Claim Limiting Disclaimer in That Proceeding

by Aashish Kapadia | Nov 29, 2022 | Patents

Repeating a conclusion from an earlier non-precedential opinion in VirnetX, the US Court of Appeals for the Federal Circuit held that the Patent Trial & Appeal Board (Board) need not accept a patent owner’s arguments as a disclaimer in the very same inter partes review (IPR) proceeding in which those arguments are made. CUPP Computing AS v. Trend Micro Inc., Case Nos. 2020-2262, 2020-2263, 2020-2264, at *11 (Fed. Cir. Nov. 16, 2022) (Dyk, Taranto, Stark, JJ.)

CUPP Computing is the owner of three related patents each entitled “systems and methods for providing security services during power management mode.” After CUPP sued Trend Micro for patent infringement, Trend Micro filed petitions for IPR against all three patents, asserting that several claims of CUPP’s patents were obvious over two prior art references. The Board instituted all three IPR and found all challenged claims unpatentable as obvious. CUPP appealed.

The Federal Circuit affirmed the Board’s conclusions. The principal issue concerned CUPP’s argument that the Board erred in claim construction. In CUPP’s view, all of the evidence required the claimed “security system processor” be remote from a “mobile device processor.” The Court rejected CUPP’s arguments. Starting with the claims, the Court found that they simply required that the two processors be different. Although some claims required the security system to send a wake signal to or communicate with the mobile device, that language did not support CUPP’s remoteness construction. As the Court explained, just as an individual can send a note to oneself via email, a unit of the mobile device can send signals to and communicate with the same device. Indeed, some of the claims teach communication via an internal port of the mobile device, which was consistent with a preferred embodiment disclosed in the specification in which the two processors could be within the same mobile device.

The Federal Circuit then addressed CUPP’s disclaimer arguments. The Court agreed with the Board that CUPP’s statements made during the original prosecution were far from clear and unmistakable, being susceptible to several reasonable interpretations that are contrary to CUPP’s construction. The Court also agreed with the Board that CUPP’s arguments during the Trend Micro IPRs do not qualify as a disclaimer for purposes of claim construction. While a disclaimer made during an IPR proceeding is binding in subsequent proceedings, the “Board is not required to accept a patent owner’s arguments as disclaimer when deciding the merits of those arguments.”

As the Federal Circuit explained, expanding the application of disclaimers to the proceedings in which they are made—as CUPP proposed—is rife with problems. IPR proceedings are more similar to district court litigation than they are to initial examination, and it is well established that disclaimers in litigation are not binding in the proceeding in which they are made. Further, CUPP’s proposal would effectively render IPR claim amendments unnecessary, as patent owners would be free to change the scope of their claims retrospectively without regard to the protections provided by the IPR claim amendment process, such as [...]

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