Patent Case Summaries June 19, 2019

Patent Case Summaries | Week Ending June 14, 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.


Samsung Electronics Co., et al. v. Elm 3DS Innovations, LLC, Nos. 2017-2474, -2475, -2476, -2478, -2479, -2480, -2482, -2483, 2018-1050, -1079, -1080, -1081, -1082 (Fed. Cir. (PTAB) Jun. 12, 2019). Opinion by Moore, joined by Reyna and Chen.

The Federal Circuit affirmed the Patent Trial and Appeal Board’s finding of nonobviousness based on a lack of a reasonable expectation of success in combining prior art references. The Federal Circuit also addressed the construction of the claim limitation “substantially flexible,” but the court did not reach the Board’s separate findings that the prior art does not teach that limitation or that a person of ordinary skill in the art would have lacked a motivation to combine.

Addressing the Board’s construction of the terms “substantially flexible” semiconductor substrate and “substantially flexible” circuit layer, the Federal Circuit rejected the parties’ proposals because they did not adequately account for certain portions of the prosecution history. The prosecution history included “clear and unambiguous” statements that, when considered in view of the Board’s findings based on expert testimony, yielded the proper constructions: “a semiconductor substrate that is thinned to 50 µm and subsequently polished or smoothed such that it is largely able to bend without breaking,” and “a circuit layer that is largely able to bend without breaking and contains a substantially flexible semiconductor substrate and a sufficiently low tensile stress dielectric material.”

Regarding obviousness, the Federal Circuit held that substantial evidence supports the Board’s finding that Petitioners did not adequately explain how the fabrication process of one prior art reference would have been changed to use the dielectric material of another reference. The Federal Circuit explained that “selecting a dielectric and a method of forming that dielectric is more complicated than Petitioners suggest.” For instance, the Patent Owner’s expert had identified eighteen factors to be considered when selecting a dielectric and method of formation, and he stated that most of these factors were unknown with respect to the dielectric material disclosed in the cited reference. The Federal Circuit also held that substantial evidence supports the Board’s finding that—considering the complexity of semiconductor fabrication—Petitioners’ explanation was lacking with respect to a reasonable expectation of success in combining the prior art references.

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Power Integrations, Inc. v. Semiconductor Components Industries, LLC, No. 2018-1607 (Fed. Cir. (PTAB) Jun. 13, 2019). Opinion by Prost, joined by Reyna and Stoll.

Addressing an issue of first impression, the Federal Circuit held that analyzing whether an IPR is time-barred under 35 U.S.C. § 315(b) requires considering privity and real party in interest (RPI) relationships arising after filing of an IPR petition but before institution.

ON Semiconductor petitioned for IPR at a time when it had a merger pending with Fairchild Semiconductor Corp. and Fairchild (Taiwan) Corporation. The merger closed several months after ON filed the petition, but prior to institution of the IPR. Also, ON filed the petition more than one year after Fairchild had been served with a complaint alleging infringement of the patent, making Fairchild a time-barred party. The patent owner argued that ON is likewise time-barred because ON and Fairchild were in privity, ON was acting as Fairchild’s proxy, and Fairchild was an RPI. The Board rejected these arguments, concluding that ON was not time-barred. The Board then proceeded to find the challenged patent claims unpatentable as obvious. The patent owner appealed.

In the appeal, ON argued that privity and RPI relationships for purposes of the § 315(b) time-bar should be assessed only at filing, while the patent owner argued that relationships arising after filing but before institution should also be considered. The Federal Circuit agreed with the patent owner, explaining that “the best reading of § 315(b) requires consideration of privity and RPI relationships arising after filing but before institution.” The Federal Circuit reasoned: “The statute specifically precludes institution, not filing. When the Board finds that an IPR is barred under § 315(b), it denies institution. It does not reject the petitioner’s filing. The focus of § 315(b) is on institution.” The Federal Circuit also explained that this interpretation is consistent with the court’s prior cases, common law preclusion principles, and the statute’s purpose.

Applying its interpretation of § 315(b), the Federal Circuit held that the IPR was time-barred because Fairchild was an RPI at the time the IPR was instituted, even though it was not an RPI at the time the petition was filed. The court therefore vacated the Board’s final written decision and remanded with instructions to dismiss the IPR.

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Regents of the University of Minnesota v. LSI Corp., et al., Nos. 2018-1559, -1560, -1561, -1562, -1563, -1564, -1565 (Fed. Cir. (PTAB) Jun. 14, 2019). Opinion by Dyk, joined by Wallach and Hughes. Additional views by Dyk, Wallach, and Hughes.

The Federal Circuit held that “state sovereign immunity does not apply to IPR proceedings.”

LSI and Ericsson petitioned for IPR of certain patents assigned to The Regents of the University of Minnesota (UMN). UMN moved to dismiss based on state sovereign immunity. The Patent Trial and Appeal Board agreed with UMN that state sovereign immunity applies, but the Board concluded that UMN had waived its immunity by filing infringement suits against LSI and Ericsson’s customers in district court.

On appeal, the Federal Circuit recounted the history of IPR proceedings and the background for state sovereign immunity. The Federal Circuit then explained its recent decision in Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., 896 F.3d 1322 (Fed. Cir. 2018), where the court held that tribal sovereign immunity does not apply to IPR proceedings. The Federal Circuit in Saint Regis had “recognized ‘many parallels’ between tribal and state sovereign immunity but left ‘for another day the question of whether there is any reason to treat state sovereign immunity differently.’” After analyzing the reserved issue, the Federal Circuit concluded that “state and tribal sovereign immunity do not differ in a way that is material to the question of whether IPR proceedings are subject to state sovereign immunity.” Therefore, the court held that state sovereign immunity does not apply to IPR proceedings.

The Federal Circuit panel (Judges Dyk, Wallach, and Hughes) also issued a separate opinion providing additional views. The opinion began by noting that, “[w]hile the opinion for the court does not reach the issue, in our view state sovereign immunity also does not apply to IPR proceedings because they are in substance the type of in rem proceedings to which state sovereign immunity does not apply.” “Just as with a bankruptcy proceeding to discharge a debt,” the panel explained, “IPR is an in rem proceeding that is not premised on obtaining jurisdiction over a state or its officers. The Board’s jurisdiction is premised on the res (i.e., the patent).”

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