Patent Case Summaries October 2, 2019

Patent Case Summaries | Week Ending September 27, 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.

SIPCO, LLC v. Emerson Electric Co., No. 2018-1635 (Fed. Cir. (PTAB) Sept. 25, 2019). Opinion by Chen, joined by O’Malley. Opinion concurring-in-part and dissenting-in-part by Reyna.

Emerson filed a petition requesting CBM review of a patent directed to “establishing a communication route between two points to relay information.” The Patent Trial and Appeal Board instituted the review, ultimately finding the challenged claims ineligible for patenting under 35 U.S.C. § 101 and unpatentable for obviousness under § 103. The Board also determined that the patent is eligible for CBM review, finding that it contained no technical solution to a technical problem. Specifically, claims 3 and 4 recited apparatuses “used in the practice, administration, or management of a financial product or service” rather than being a “technological invention.”

On appeal, the Federal Circuit first addressed the Board’s construction of the claim term “low-power transceiver.” The court determined that the Board’s construction “fails to give appropriate meaning to the term ‘low-power’ in ‘low-power transceiver.’” The specification explains that a “low power” transceiver is one where the user of a transmitter is “in close proximity, (e.g., several feet) to the receiver.” Thus, the court ruled, “SIPCO’s specification explicitly ties the low power transceiver to a limited transmission distance.” And because the intrinsic record “is sufficiently clear,” the Board should not have relied on extrinsic evidence (specifically, expert testimony). The Federal Circuit therefore reversed the Board’s claim construction, construing “low-power transceiver” to mean “a device that transmits and receives signals at a power level corresponding to a limited transmission range.”

The Federal Circuit next turned to whether SIPCO’s patent was subject to CBM review, which is a two-part inquiry. First, does the claimed subject matter as a whole recite “a technological feature that is novel and unobvious over the prior art,” and second, does it “solve a technical problem using a technical solution”? If both parts are satisfied, then the patent is not eligible for CBM review. Here, the Board concluded that the second part was not satisfied, without addressing the first part. Addressing the second part, the Federal Circuit held that the Board’s ruling was arbitrary and capricious “because the Board misread and mischaracterized the features of claim 1 in its analysis of dependent claims 3 and 4.” According to the court, the claims do provide a technical solution to a technical problem. The court therefore remanded for the Board to consider the first part of the test.

Judge Reyna dissented-in-part, disagreeing with the majority’s reversal of the Board’s construction of “low-power transceiver.” According to Judge Reyna, “The majority errs in two ways: (1) by importing a limitation—transmission range—into the claims from a preferred embodiment; and (2) by disregarding the Board’s factual findings [as to expert testimony] without a sufficiently clear intrinsic record.”

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Campbell Soup Co., et al. v. Gamon Plus, Inc., Nos. 2018-2029, -2030 (Fed. Cir. (PTAB) Sept. 26, 2019). Opinion by Moore joined by Prost. Dissenting opinion by Newman.

Campbell filed a petition for IPR directed to two design patents that claim an “ornamental design for a gravity feed dispenser display, as shown and described.” The Patent Trial and Appeal Board instituted on the grounds that the sole claim in each patent would have been obvious over (1) the “Linz” reference in view of the “Samways” reference, (2) Samways, or (3) Samways in view of Linz. In final written decisions, the Board held that Campbell did not establish unpatentability because neither Linz nor Samways was similar enough to the claimed designs to constitute a proper primary reference. Campbell appealed.

The Federal Circuit first noted that, “[i]n the design patent context, the ultimate inquiry under section 103 is whether the claimed design would have been obvious to a designer of ordinary skill who designs articles of the type involved.” In making that determination, the Board “must first ‘find a single reference, a something in existence, the design characteristics of which are basically the same as the claimed design.’” “If a primary reference exists, related secondary references may be used to modify it.”

Applying this framework, the Federal Circuit ruled that substantial evidence does not support the Board’s finding that Linz was not a proper primary reference, and thus reversed and remanded the Board’s determination. The Federal Circuit ruled that Linz is sufficiently similar to the claimed design to serve as a primary reference, explaining that “the ever-so-slight differences in design, in light of the overall similarities, do not properly lead to the result that Linz is not ‘a single reference that creates ‘basically the same’ visual impression’ as the claimed designs.”

Next, the Federal Circuit affirmed the Board’s finding that Samways was not a proper primary reference. “Samways has a dual dispensing area, compared to the single dispensing area of the claimed designs, and has a front label area with different dimensions that extends across both dispensing areas.” Therefore, substantial evidence supported the Board’s finding as to Samways.

In dissent, Judge Newman disagreed with the majority’s reversal as to the Linz reference. Campbell’s claimed design includes a cylindrical object, which the Board found constitutes “half of the scope of the design claim.” Linz, in contrast, does not depict any cylindrical object. Thus, Judge Newman disagreed with the majority’s interpretation of Linz: “My colleagues propose that since ‘Linz’s design is made to hold a cylindrical object in its display area,’ the Linz design must be viewed with judicial insertion of the missing cylindrical object.” Judge Newman disagreed with that approach since the “cylindrical object is a major design component” and its absence “cannot be deemed insubstantial.” Therefore, she would have affirmed the Board’s finding that Linz cannot serve as a primary reference. 

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