Second Inter Partes Review Final Written Decision – Second Patent Goes Down

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plan CIn a case most notable for a decision restricting a patent owner’s ability to amend claims in inter partes review proceedings, the Board issued its second ever Final Written Decision, rendering all claims at issue in the IPR unpatentable and denying Patent Owner’s Motion to Amend Claims in Idle Free Sys., Inc. v. Bergstrom, Inc., IPR2012-00027.  The proceeding involved US Patent No. 7,591,303, directed to vehicle air conditioning systems; namely, operating the system at one capacity when the engine is running, and a second capacity when the engine is not running.

Points of interest in this second Final Written Decision include: 1) The last chapter (before the PTAB, anyway) of the ubiquitous Idle Free decision relating to motions to amend; 2) the Board’s analysis of the one key claim term at issue in the IPR; and 3) consideration of the credibility and admissibility of expert testimony in view of a breach of the IPR deposition rules.

1.  Motion to Amend

The most anticipated portion of this decision, given the significance of this case to motion to amend practice, is the Board’s ruling in denying Patent Owner’s Motion to Amend.  In its renewed Motion to Amend, after having been provided guidance by the Board regarding the requirements of a proper motion to amend, Patent Owner offered three proposed substitute claims.  The Board’s analysis regarding the motion is instructive:

First, the Board considered whether the substitute claims broadened the scope of the original claims.  Order at 28. Because the substitute claims merely added features to the claims for which they substitute, the substitute claims were deemed not to broaden the original patent claims.

Second, the Board considered whether the amendments had written description support.  Order at 28.  Preliminarily, the Board found that “[t]he evidence presented by [Patent Owner] is sufficient, if unrebutted, to show written description support…”  Order at 29.  Petitioner opposed the amendments, arguing, via testimony from its expert, that the disclosure did not support the proposed amendments, but the Board discounted this testimony, finding that it did not adequately explain why the amendments lacked written description support.

Third, the Board considered patentability over the prior art.  Order at 31.  The Board agreed with Patent Owner that one of the new amendments was not disclosed in any of the three references that were used to render the original claims unpatentable.  The Board went on to say, however, that distinguishing the proposed substitute claims only from the prior art references applied to the original patent claims, is insufficient.  Order at 33.  As the Board explained “the proposed substitute claims will be added directly to the patent, without examination, if the patent owner’s motion to amend claims is granted.”  Id.  As such, patent owners bear the burden of demonstrating patentability over the prior art in general.  To that end, Patent Owner was required to set forth what it knows about the level of ordinary skill in the art, and what was previously known, “regarding each feature it relies and focuses on.”  Id.  Merely stating that a reference constitutes the “closest prior art” is insufficient, without discussing the level of ordinary skill in the art and what was previously known.  Order at 34.  Patent Owner failed to provide such information, including, for instance, a representation that, to its knowledge, it was the first to have the subject amendment.  Order at 35. Or, if it was not the first, then what would have been known to one of skill in the art regarding that amendment and why the amended claims are patentable in view of such knowledge.  In short, it was important to the Board to know whether the amendments pre-existed and, if so, how they worked – even if the technology was known in a different field.  For example, in the context of this case, such a showing would include how air conditioning systems worked in non-vehicle systems.  Without such information, the Board was unable to grant the proposed amended claims.

Given the Board’s (perhaps necessary) rolling guidance on motions to amend, how many current motions meet all the requirements imposed by the Board that were not detailed in the IPR regulations?  We’ll see…

2.  Claim Construction Analysis and Anticipation Finding

Turning to the substance of the Petition, the Board denied Patent Owner’s argument that “engine off” in the claims requires that all electronic circuits that automatically start the engine must also be off.  The Board held that the claims do not require “vehicle electronics off”; but, rather, merely that the engine is off.  The Board cited to specification excerpts to support its findings.  Order at 7. As such, the Board construed “engine off” as “engine not running.”

Regarding the substantive grounds of unpatentability proposed by Petitioner, the Board found persuasive Petitioner’s prior art and expert evidence, such that Petitioner was deemed to have met its burden of proving, by a preponderance of the evidence, the unpatentability of the subject claims.

More specifically, the prior art of record disclosed an “engine off” state, whereby the air conditioning system worked at a reduced capacity as compared to an “engine on” state.  Because the electronics were not on, however, Bergstrom argued that the art did not meet the limitations of the ’303 patent claims.  The Board, however, denied that claim construction and found, therefore, that the art of record anticipated the subject claims.  Relatedly, the Board found that the subject claims were rendered obvious by a separate combination of prior art references.  In short, the substance of the argument regarding patentability was fairly straightforward, especially in light of the Board’s claim construction.

3.  Breach of IPR Deposition Rules

As a last interesting component of the Board’s decision, the Board admonished Petitioner in the opinion because counsel for Petitioner had a discussion with Petitioner’s expert during a deposition break, in violation of Office Patent Trial Practice Guide, 77 Fed Reg 48,756, 48,772 (Aug 14, 2012).  Despite this fact, the Board declined to discredit the testimony of Petitioner’s expert, primarily because the witness testified that he and counsel only spoke in generalities, regarding how to answer questions in the deposition.  Despite the fact that the expert did change one of his answers in the deposition, the Board noted that Patent Owner did not articulate how the one changed answer affects any issue of contention.  Order at 25. Instead, the Board stated that it took the conversation into consideration in generally assessing the experts credibility.  For the same reasons, the Board denied Patent Owner’s Motion to Exclude the expert’s testimony, based on the same grounds.  Order at 38.

In the end, the Board’s decision marked a second victory for Petitioners in inter partes review proceedings. The claims at issue were determined to be unpatentable over the prior art and, because Patent Owner did not show how the substitute claims were patentable over the prior art, its Motion to Amend was denied.

 

Topics:  Claim Construction, Inter Partes Review Proceedings, Patent Infringement, Patent Litigation, Patents

Published In: Civil Procedure Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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