Federal Circuit Review - May 2022

Knobbe Martens

Knobbe Martens

Somebody’s Wrong:  PTAB Must Resolve Conflicting Factual Testimony During IPR

In Google LLC v. IPA Technologies Inc., Appeal No. 21-1179, the Federal Circuit held that, for purposes of determining whether a reference was prior art, the Board has an obligation to resolve fundamental testimonial conflicts.

Google petitioned for inter partes review of two of IPA Technologies’ patents. Google argued that the IPA patents would have been obvious over Martin, an academic paper that included both the inventors and non-inventor Douglas Moran as authors.  During prosecution, the examiner identified Martin as prior art and issued a rejection under 35 USC 102(a). In response, the Applicant submitted inventor declarations asserting that Dr. Moran was not a co-inventor of the claimed subject matter otherwise disclosed in Martin.  The examiner withdrew rejections because the invention was not “by others,” and thus outside the scope of section 102(a). Google’s petition nevertheless relied on Martin, and Google attempted to establish Martin as prior art based on Dr. Moran’s contribution to inventorship reflected in Martin.   After a trial, the Board concluded that Google had not provided sufficient support to explain how Dr. Moran’s contributions to the Martin reference established that he was part of the inventive entity, and entered final written decisions holding the challenged claims not unpatentable.

Google appealed. On appeal, the Federal Circuit observed that the parties agreed that the Board’s holding was based on insufficient corroboration of Dr. Moran’s inventorship.  The court explained that co-authorship on a paper does not presumptively make the co-author a co-inventor, but that co-authorship is still “significant corroborating evidence that a co-author contributed to the invention.”  As such, the Federal Circuit concluded Dr. Moran’s testimony was sufficiently corroborated by his being named as a co-author, as well as his role in a related project and his being named on a related patent.  Because sufficient evidence of corroboration existed, the court concluded that the Board erred by not addressing the inventorship issue on the merits.  The Federal Circuit also observed that it was not a “tenable position“ for the Board to find both Dr. Moran’s and the inventors’ conflicting testimony credible. The Federal Circuit remanded for the Board to resolve this “highly relevant evidentiary conflict and make appropriate findings of fact.”  Finally, the court rejected IPA’s argument that the Board’s decision could be affirmed because, even if Dr. Moran was an inventor, he could be added to the patent, which would remove Martin as prior art.  Because IPA Technologies had not sought correction of the inventorship of the patents, the Federal Circuit held IPA’s argument unavailing.  The Board vacated and remanded for further proceedings. 

Negative Claim Construction Found Inadequate

In Sound View Innovations, LLC v. Hulu, LLC, Appeal No. 21-1998, the Federal Circuit held that it was improper to find a claim limitation was missing without affirmatively construing the limitation and instead relying on its relation to a term not shown to have a sufficiently uniform meaning in the art.

Sound View Innovations, LLC (“Sound View”) sued Hulu, LLC alleging infringement of a patent claim related to streaming multimedia.  The district court construed the claim to require a “buffer.”  On summary judgement, to satisfy the “buffer” requirement, Sound View pointed to components that the accused system labeled as “caches.”  The district court noted that the asserted patent also used the term “caches” to identify components, and that the patent describes those components as distinct from “buffers.”  The district court therefore held that the accused components labeled as “caches” could not be the required “buffers” and granted summary judgement of non-infringement.  Sound View appealed.

The Federal Circuit reversed the non-infringement determination.  It noted that, to the extent the district court construed the term “buffer,” all it did was declare what it must exclude (a “cache”).  The Federal Circuit acknowledged there is no per se rule against negative constructions.  But it held the district court’s negative construction in this case did not enable a comparison between the required “buffer” and the accused product.  The Court noted there had been no determination that the term “cache” has a sufficiently uniform meaning in the art.  Absent such a determination, it reasoned, a conclusion that the asserted patent distinguishes “caches” from “buffers” does not preclude a finding that accused components labeled as “caches” practice the required “buffers.”  Further, the Federal Circuit held an affirmative construction of “buffer” was needed for the additional reason that the asserted patent does not appear to use the terms “buffer” and “cache” in a mutually exclusive manner.  The Court therefore vacated the entry of summary judgment of non-infringement and remanded.

Commissioner’s Exercise of Vacant Director’s Duties Does Not Violate Appointments Clause

Arthrex, Inc. v. Smith & Nephew, Inc., Appeal No. 18-2140, the Federal Circuit held that during vacancies of the Director and Deputy Director of the U.S. Patent and Trademark Office, the Commissioner of Patents may exercise the Director’s authority to decide rehearing of inter partes review decisions without violating the Appointments Clause of the Constitution.

Smith & Nephew, Inc. and ArthroCare Corp. petitioned for inter partes review of Arthrex, Inc.’s patent, arguing that certain claims of the patent are anticipated by prior art.  The Board instituted inter partes review and ultimately found in favor of the petitioners.  Arthrex appealed, arguing in part that the Board lacked constitutional authority to issue final decisions.  Specifically, Arthrex contended that Administrative Patent Judges (“APJs”) are not nominated by the President and confirmed by the Senate as the Appointments Clause of the Constitution requires for principal officers.  The Federal Circuit agreed, holding that the appropriate remedy was to (1) sever the statutory limitations on the removal of APJs and (2) remand for rehearing by a new panel of APJs.  Though the Supreme Court agreed that APJs could not issue a final decision binding the executive branch, it vacated and remanded the matter.  In doing so, the court ordered an alternative remedy: to (1) exempt the Director of the U.S. Patent and Trademark Office from 35 U.S.C. § 6(c), which precludes anyone but the Board from granting rehearing of a Board decision, and (2) remand the case to the Acting Director to determine whether to rehear the case.  On remand, Arthrex sought rehearing by the Director.  However, as both the offices of the Director and Deputy Director were vacant, the Commissioner for Patents was charged with addressing Arthrex’s request, pursuant to an agency order.  The Commissioner denied rehearing and ruled that the Board’s decision was final.  Arthrex appealed.

In the instant appeal, Arthrex asserted it did not receive the remedy that the Supreme Court ordered and that the Commissioner’s exercise of the Director’s authority violated the Appointments Clause.  The Federal Circuit acknowledged that, because the Commissioner is not a presidentially appointed, Senate-confirmed (“PAS”) officer, the Commissioner ordinarily may not issue a final decision binding the executive branch.  However, the court proceeded to explain that, per United States v. Eaton, 169 U.S. 331 (1898), an inferior officer may temporarily perform the duties of an absent PAS officer on an acting basis.  In upholding the applicability of Eaton, the Court further explained that, as was the case in Eaton, the Commissioner’s time performing the Director’s duties was limited even though the agency order did not specify the Commissioner’s tenure; for the Commissioner would hold the role only so long as the offices of the Director and Deputy Director remained vacant.  In light of the foregoing, the Federal Circuit concluded that the Commissioner’s exercise of the Director’s authority did not violate the Appointments Clause.

Arthrex also averred that the Federal Vacancies Reform Act (“FVRA”) prevented the Commissioner from ruling on the rehearing request.  The Federal Circuit rejected this argument as well, as the FVRA only limits who may temporarily perform the non-delegable duties of a PAS officer; the Director’s authority to decide rehearing requests is a delegable one.

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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