Patent Case Summaries May 27, 2020

Patent Case Summaries | Week Ending May 22, 2020

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.

ESIP Series 2, LLC v. Puzhen Life USA, LLC, No. 2019-1659 (Fed. Cir. (PTAB) May 19, 2020). Opinion by Reyna, joined by Lourie and Hughes.

The Federal Circuit affirmed the Patent Trial and Appeal Board’s determination that certain patent claims were unpatentable as obvious.

ESIP owns a patent for a “system and method for combining germicidal protection and aromatic diffusion in enclosed habital spaces.” Products of this type are commonly known as vaporizers or diffusers. In an IPR final written decision, the Board found that the challenged claims were invalid as obvious. The Board also rejected ESIP’s argument that IPR should not have been instituted because Puzhen failed to identify “all real parties in interest” as required by 35 U.S.C. § 312(a)(2). The Board ruled that two non-identified parties did not qualify as real parties in interest.

On appeal, ESIP challenged four fact findings underlying the Board’s obviousness determination. The Federal Circuit analyzed all four findings in turn, ultimately concluding that each was supported by substantial evidence and, further, that the Board’s obviousness conclusion was not legally erroneous. The Federal Circuit therefore affirmed.

The Federal Circuit also affirmed the Board’s rejection of ESIP’s challenge regarding the real parties in interest. Citing the Supreme Court’s decisions in Cuozzo and Click-to-Call, the Federal Circuit found “no principled reason why preclusion of judicial review under [35 U.S.C.] § 314(d) would not extend to a Board decision concerning the ‘real parties in interest’ requirement of § 312(a)(2).” The Federal Circuit ruled that ESIP’s challenge “raises an ordinary dispute about the application of an institution-related statute, and that § 314(d) precludes our review of that determination.”

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McRO, Inc. v. Bandai Namco Games America Inc., et al., No. 2019-1557 (Fed. Cir. (C.D. Cal.) May 20, 2020). Opinion by Taranto, joined by Reyna and Mayer.

McRO sued several video game developers for infringement of a patent related to certain methods for automatically generating animations. The district court awarded the developers summary judgment of noninfringement because the accused technique for modeling facial animations did not practice the “morph weight set” limitation of the claims. The district court also awarded the developers summary judgment of invalidity, ruling that the specification fails to enable the full scope of the claims. McRO appealed.

The Federal Circuit first affirmed the district court’s judgment of noninfringement. The Federal Circuit agreed with the developers that the claim term “morph weight set” requires three-dimensional vectors. The district court correctly construed the term “vector” in the context of the entire patent, including the specification, to have a particular “narrow geometric” meaning. The Federal Circuit explained that “the existence of one broader meaning in the field is not controlling. What matters is the meaning most appropriate in the context of the particular patent.” The court ruled that “it is clear” from the intrinsic evidence that the term “vector” has “the narrower geometric meaning in this patent.” Because noninfringement was undisputed under that construction, the Federal Circuit affirmed the judgment of noninfringement.

The Federal Circuit next turned to McRO’s appeal of summary judgment of invalidity based on the specification’s failure to enable the full scope of claim 1. Because the claim was construed narrowly, excluding animation techniques called “bones animation” and the “BALDI process,” the Federal Circuit determined that the developers had “failed to identify with particularity any method of animation that falls within the scope of claim 1 and is not enabled.” The Federal Circuit then ruled: “Without bones animation and the BALDI process available as claim-covered techniques that must be enabled, the district court’s reasoning is too abstract and too conclusory to support summary judgment.” The Federal Circuit therefore vacated the judgment of invalidity for lack of enablement and remanded for further proceedings.

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Odyssey Logistics & Technology Corp. v. Iancu, No. 2019-1066 (Fed. Cir. (E.D. Va.) May 22, 2020). Opinion by Hughes, joined by Lourie and Reyna.

In this appeal, Odyssey asserted three Administrative Procedure Act challenges involving the USPTO. The first two challenges concerned procedural actions taken by the USPTO in two patent applications, while the third was a facial challenge to certain procedural rules governing practice in ex parte appeals.

In the first patent application, after several procedural disputes and appeals, the Patent Trial and Appeal Board reversed the examiner’s rejections, and the Technology Center Director requested a rehearing. Instead of responding to the rehearing request, Odyssey objected to the rehearing procedure and made certain arguments on the merits “under protest.” Before the Board issued its decision, Odyssey challenged the request for rehearing in the district court.

In the second patent application, Odyssey appealed a final rejection of all claims. Odyssey argued that the examiner’s answer included new grounds for rejection, but the Technology Center Director dismissed that assertion. Rather than filing a brief replying to the examiner’s answer, Odyssey challenged the dismissal of the petition in the district court.

Odyssey’s third challenge focused on whether amendments to the Rules of Practice in Ex Parte Appeals conform with the USPTO’s statutory authority.

Addressing all three challenges, the district court dismissed the procedural challenges for lack of subject matter jurisdiction because the USPTO had not taken final agency action, and the district court dismissed the facial challenge as barred by the applicable statute of limitations in 28 U.S.C. § 2401.

On appeal, the Federal Circuit affirmed the dismissal of all three challenges. Regarding the two procedural challenges, Odyssey was challenging actions that were not yet final before the Board; the Board could still provide Odyssey with an adequate remedy, and if not, Odyssey had remedies under 35 U.S.C. § 141 or § 145. Regarding the facial challenge, the Federal Circuit agreed with the district court that it was untimely under § 2401 because the complaint was filed outside of the six-year statute of limitations for a facial APA challenge, which runs from the date the regulations were published.

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