Dynamic Drinkware, LLC v. National Graphics, Inc. (Fed. Cir. 2015)

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It is well accepted that in order to establish that a patent is entitled to claim priority to a previously filed provisional application, it must be shown that the claims of the patent have written description support in the provisional.  Indeed, this is what 35 U.S.C. § 119(e)(1) requires:

An application for patent filed under section 111 (a) or section 363 for an invention disclosed in the manner provided by section 112 (a) (other than the requirement to disclose the best mode) in a provisional application filed under section 111 (b), by an inventor or inventors named in the provisional application, shall have the same effect, as to such invention, as though filed on the date of the provisional application filed under section 111 (b) . . . .

It has also been a commonly held belief that for a potentially invalidating prior art reference to be entitled to the filing date of a provisional application, the provisional application itself must contain the same invalidating disclosure.  In other words, it has been believed that if a provisional application contains an invalidating disclosure, any patent claiming priority and containing the same (although not necessarily verbatim) disclosure as that provisional would be prior art as of the provisional filing date.  However, last month, in Dynamic Drinkware, LLC v. National Graphics, Inc., the Federal Circuit explained that we were all doing it wrong.  Instead, just as with any other analysis ascertaining valid priority claims to provisional applications, it is the claims of the relevant patent that are important.  Or, as the Federal Circuit put it "[a] provisional application's effectiveness as prior art depends on its written description support for the claims of the issued patent of which it was a provisional."  Of course, this can create the odd situation (as explained below) where a provisional application contains no disclosure whatsoever related to the patent whose validity is being challenged, but it nevertheless can be used to establish an earlier priority date -- provided the disclosure does support the claims of the invalidating patent reference.

This case arose in the context of an IPR appeal from the Patent Trial and Appeal Board ("Board").  The technology was not particularly important for the issues addressed, but National Graphics' patent (U.S. Patent No. 6,635,196) was directed to making molded plastic articles bearing "lenticular" images.  Lenticular imaging is described on National Graphics website.  Dynamic Drinkware filed an IPR petition asserting that U.S. Patent No. 7,153,555 ("the Raymond patent") anticipated this patent.  The Board ultimately concluded that Dynamic had not meet its burden of establishing by a preponderance of the evidence that two of the claims of the '196 patent were anticipated under § 102(e)(2) because, in part, it did not prove that the Raymond patent was entitled to the provisional application filing date to which it claimed priority ("the Raymond provisional").  Importantly, the Board found it significant that Dynamic only compared a claim of the '196 patent to the Raymond provisional rather than comparing the portions of the Raymond patent relied upon to invalidate the '196 patent to the Raymond provisional.  Then, because the '196 patent claims were found to be reduced to practice between the filing dates of the Raymond provisional and the Raymond patent, the Board concluded that it was not invalidating prior art.

The Federal Circuit first dealt with the issue of who had the burden of establishing either that the Raymond patent was entitled to the prior date of the Raymond provisional, or that the Raymond patent was not entitled to the earlier priority date.  Unsurprisingly, the burden of persuasion in establishing the invalidity of the '196 patent never shifted from the petitioner, Dynamic.  Instead, the relevant issue was the burden of production.  In this case, Dynamic initially asserted that the Raymond patent anticipated certain claims of the '196 patent.  This shifted the burden of production to the patent owner.  National had two options for meeting this burden; either argue that the Raymond patent did not anticipate, or, what National did, that it reduced to practice before the Raymond patent.  Once again, the production burden shifted, this time to Dynamic to prove that the potentially invalidating Raymond patent was entitled to the Raymond provisional filing date.  It did not meet this burden, and therefore did not meet the ultimate burden of proof.

The Federal Circuit pointed out that Dynamic was basically arguing that a patent is presumptively entitled to the priority date of its provisional application.  This cannot be the case because the Patent Office does not routinely examine priority claims made in a patent application.  Only when it is necessary to make such a determination will the patent office do so, such as when an applicant attempts to overcome a prior art reference or in an interference setting.  See M.P.E.P. § 211.05(I)(A).  Therefore, the Federal Circuit concluded, such a presumption is incorrect.

For its part, in arguing this appeal, National argued that Dynamic had waived the argument of the provisional filing date because it was not made in the original petition.  However, the Court pointed out that Dynamic did not need to raise such an argument in the first place, because the Raymond patent was considered to be prior art to the '196 patent until Dynamic established an earlier reduction to practice date.  It was only when the burden of production shifted that Dynamic was required to come forward with the provisional priority date argument.

Finally, as referenced above, Dynamic's argument failed because it improperly made its priority claim to the Raymond patent.  The Court emphasized that "the relevance of the Raymond provisional application date here is not to give the Raymond patent any earlier priority over a competing application or patent, but to serve third party Dynamic's goal of creating earlier prior art against the '196 patent."  Therefore, because Dynamic did not compare the claims of the Raymond patent to the Raymond provisional, it could not prove that the patent was entitled to priority date.

It goes without saying that as a practical consideration, any claim of priority to a provisional should focus of the claims of the patent for which priority is sought.  Of course, it might also be advisable to show where in the provisional the disclosure can be found that is relevant to the patent for which invalidation is sought.  The problem is that a scenario can be envisioned in which a provisional application contains disclosure "A," but a subsequent non-provisional application is filed adding disclosure "B."  This "B" disclosure could be identical to the claims of another patent with an earlier filing date than the non-provisional application.  The prior conventional wisdom was that this non-provisional application (or subsequent patent) could not invalidate this other patent, even if the provisional filing date was earlier, because the provisional did not contain the invalidating "B" disclosure.  According to Dynamic Drinkware, however, if this non-provisional application (or any resulting patent) only contained claims that were supported by disclosure "A," it would nevertheless be anticipatory with regard to the "B" disclosure.  While the potential for mischief on the part of patent applicants is probably minimal, because there is still a one-year deadline for claiming priority to the provisional, it will be interesting to see how this new way of analyzing priority claims will play out.

Dynamic Drinkware, LLC v. National Graphics, Inc. (Fed. Cir. 2015)
Panel: Circuit Judges Lourie, Bryson, and O'Malley
Opinion by Circuit Judge Lourie

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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