Patent Case Summaries April 24, 2019

Patent Case Summaries | Week Ending April 19, 2019

A weekly summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit and the opinions designated precedential or informative by the Patent Trial and Appeal Board.


Adello Biologics LLC, et al. v. Amgen Inc., et al., No. PGR2019-00001 (PTAB Feb. 14, 2019) (designated precedential on Apr. 16, 2019). Opinion by Yang, joined by Paulraj and Lee.

The Patent Trial and Appeal Board addressed whether petitioners in a post-grant review may amend their Mandatory Notices to identify an additional real party in interest (RPI).

In this proceeding, prior to the Board’s decision whether to institute a PGR, the Petitioners filed a motion to amend their Mandatory Notices to identify an additional RPI. The Petitioners specifically sought to add the RPI without altering the petition filing date, since otherwise their petition would be time-barred. In support of the motion, the Petitioners represented that there was no intentional concealment or bad faith in inadvertently omitting the RPI. The Patent Owner opposed the motion, emphasizing that 35 U.S.C. § 322(a) requires petitioners to identify all RPIs “when they file their petition.”

The Board granted the Petitioners’ motion, noting that the Director has discretion to allow a petitioner to add a missing RPI. The Board rejected the Patent Owner’s position that the omitted RPI results in a time-bar, explaining that “neither the statute nor the rule governing RPI disclosures is designed to award a patent owner such a windfall.”

A petitioner must identify all RPIs in order “to assist members of the Board in identifying potential conflicts, and to assure proper application of the statutory estoppel provisions.” The Board determined that allowing the Petitioners in this PGR to update their Mandatory Notices while maintaining the original petition filing date “promotes the core functions of RPI disclosures and secures a ‘just, speedy, and inexpensive resolution’ of th[e] proceeding.” Furthermore, the Petitioners’ delay in identifying the missing RPI did not result in any undue prejudice against the Patent Owner.

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Proppant Express Investments, LLC, et al. v. Oren Technologies, LLC, No. IPR2017-01917 (PTAB Feb. 13, 2019) (designated precedential on Apr. 16, 2019). Opinion by Cherry, joined by Weatherly and Woods.

After the Patent Trial and Appeal Board had instituted trial in an IPR, the Petitioners sought to amend their Mandatory Notices to identify two omitted real parties in interest (RPI). The Board granted authorization to do so, and the Board also granted the Patent Owner authorization to file a motion to terminate the proceeding. In that motion, the Patent Owner argued that the amended Mandatory Notices require a new filing date for the petition, resulting in the Petitioners being time-barred.

The Board denied the Patent Owner’s motion to terminate, explaining that the Board may “accept updated mandatory notices as long as the petition would not have been time-barred under 35 U.S.C. § 315(b) if it had included the real party in interest.” Here, because none of the added RPIs would have been time-barred, the Board had the authority to accept the updated Mandatory Notices without giving the petition a new filing date.

The Board identified that other panels facing similar issues “have looked to whether there have been (1) attempts to circumvent the § 315(b) bar or estoppel rules, (2) bad faith by the petitioner, (3) prejudice to the patent owner caused by the delay, or (4) gamesmanship by the petitioner.” The Board analyzed each of these four considerations and concluded that maintaining the original filing date was “in the interest of justice” and “furthers the purpose of 35 U.S.C. § 312(a)(2) and avoids significant prejudice to Petitioner (i.e., dismissal of its Petition), without undue prejudice to Patent Owner.”

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Ventex Co. v. Columbia Sportswear North America, Inc., No. IPR2017-00651 (PTAB Jan. 24, 2019) (designated precedential on Apr. 16, 2019). Opinion by Cocks, joined by Weatherly and Marschall.

After institution of an IPR trial, the Patent Trial and Appeal Board determined that Seirus Innovative Accessories was a real party in interest (RPI) and privy of the Petitioner; that Seirus had been sued for infringement more than one year before the petition was filed; and that, as a result, the petition was time-barred under 35 U.S.C. § 315(b). Accordingly, the Board dismissed the petition, vacated its institution decision, and terminated the IPR.

The Board first addressed whether Seirus is an RPI. Quoting Federal Circuit precedent, the Board recounted that analyzing whether a non-party is an RPI “demands a flexible approach that takes into account both equitable and practical considerations, with an eye toward determining whether the non-party is a clear beneficiary that has a preexisting, established relationship with the petitioner.” Applying this standard, the Board concluded that Seirus is an RPI. Seirus and the Petitioner have a contractual relationship that incentivizes them to invalidate Patent Owner’s claims, Seirus is a “clear beneficiary” of the Petitioner’s efforts in the IPR, and the Petitioner “represents Seirus’s interests in” the IPR. The Board noted that, “[i]mportantly, [the Petitioner] seeks relief in this forum that Seirus is barred under § 315(b) from seeking for itself.”

The Board also found that Seirus is a privy of the Petitioner. The Supreme Court has provided “a non-exhaustive list for examining whether the legal relationship between two parties establishes that one is the privy of the other: ‘(1) an agreement between the parties to be bound; (2) pre-existing substantive legal relationships between the parties; (3) adequate representation by the named party; (4) the nonparty’s control of the prior litigation; (5) where the non-party acts as a proxy for the named party to relitigate the same issues; and (6) where special statutory schemes foreclose successive litigation by the non-party (e.g., bankruptcy and probate).’” Here, the Board determined that the second and fifth factors supported its conclusion that Seirus and the Petitioner are privies.

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Trading Technologies Int’l, Inc. v. IBG LLC, et al., Nos. 2017-2257, -2621, 2018-1063 (Fed. Cir. (PTAB) Apr. 18, 2019). Opinion by Moore, joined by Mayer and Linn.

On appeal from final written decisions in three CBM proceedings, the Federal Circuit affirmed the Patent Trial and Appeal Board’s conclusions that the patents at issue met the criteria to be eligible for CBM review and that the claims are ineligible under 35 U.S.C. § 101.

First, the Federal Circuit analyzed whether the patents qualified as CBM patents, making them eligible for CBM review. Under the applicable statute, a CBM patent is “a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.” The patents at issue here met this standard. The patents relate generally to a graphical user interface for electronic trading. The Federal Circuit noted that the claims are directed to a financial trading method used by a computer with “no technological invention in th[e] software for trading.” The Federal Circuit ultimately agreed with the Board that the patents “relate to the practice of a financial product, not a technological invention.”

Next, the Federal Circuit addressed whether the claims are patent-eligible under § 101, applying the two-step framework articulated in Alice. At Alice step one, the Federal Circuit agreed with the Board that the claims are directed to an abstract idea. For certain patents, the abstract idea involved “graphing (or displaying) bids and offers to assist a trader to make an order.” For another patent, the abstract idea involved “receiving user input to send a trade order.” The court explained that the fact that the claimed methods are computer-based “does not render the claims non-abstract.”

At Alice step two, the Federal Circuit considered whether the elements of each claim, both individually and as an ordered combination, transform the nature of the claim into a patent-eligible application of the abstract idea. “Step two ‘looks more precisely at what the claim elements add’ to determine if ‘they identify an inventive concept in the application of the ineligible matter to which … the claim is directed.’” The Federal Circuit affirmed the Board’s conclusions that the claims do not contain an inventive concept. Instead, they involve routine data-gathering and other steps that were “well-understood, routine, conventional activity that does not add something significantly more to the abstract idea.”

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E.I. du Pont de Nemours & Co. v. Unifrax I LLC, No. 2017-2575 (Fed. Cir. (D. Del.) Apr. 17, 2019). Opinion by Reyna, joined by Hughes. Dissenting opinion by O’Malley.

In this appeal, Unifrax argued that the district court had incorrectly construed the claim term “100% by weight” and had improperly denied Unifrax’s post-trial motions for judgment of noninfringement and invalidity as a matter of law. The Federal Circuit disagreed, ruling that the district court correctly construed the disputed claim term and that substantial evidence supported the jury’s verdict.

The patent-in-suit claims composite laminates that are incorporated into thermal-acoustic blankets installed on the interior of the fuselage in aircraft. The claimed laminates have three layers, including a refractory layer that “comprises platelets in an amount of 100% by weight … and a residual moisture content of no greater than 10 percent by weight.” Unifrax argued that the term “100% by weight” “means one hundred percent” and does not allow for any amount of organic additives. The district court ruled otherwise, concluding that the term means there is no “carrier material” in addition to the platelets, but there “may be some residual dispersant arising from incomplete drying of the platelet dispersion.”

The Federal Circuit affirmed the claim construction. According to the court, the construction is supported by the claim language, the specification, the specification of the parent patent, and the prosecution history. For instance, the claim language recites a residual moisture content in addition to the “100% by weight” platelets, supporting the conclusion that “‘100% by weight’ is relative to carrier material in the refractory layer.”

The Federal Circuit also addressed and upheld the district court’s treatment of the parent patent specification as intrinsic evidence. The parent patent has a familial relationship, was cited during prosecution, and covers common subject matter.

Finally, the Federal Circuit reviewed the jury’s infringement and no-invalidity verdict for substantial evidence. After a fact-specific analysis, the court affirmed the district court’s denial of Unifrax’s motion for judgment of noninfringement and invalidity as a matter of law.

Judge O’Malley dissented, explaining that the district court’s denial of JMOL on noninfringement was “predicated on an erroneous construction of ‘100% by weight’ that ignores the plain meaning of ‘100%’ and introduces more ambiguity than it resolves.” In her view, there is “no ambiguity” in the claim language. “There is perhaps no clearer or simpler way the patentee could have conveyed such a requirement.” Judge O’Malley also believed the majority placed too much weight on the parent patent’s specification. In particular, the majority impermissibly “import[ed] a limitation from the parent patent’s specification which was removed from the [child] patent.”

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