Patent Case Summaries March 30, 2022

Patent Case Summaries | Week Ending March 25, 2022

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.

Hunting Titan, Inc. v. DynaEnergetics Europe GmbH, Nos. 2020-2163, -2191 (Fed. Cir. (PTAB) Mar. 24, 2022). Opinion by Hughes, joined by Reyna. Concurring opinion by Prost.

Hunting Titan filed an IPR petition challenging the claims of a patent owned by DynaEnergetics directed to a perforating gun used in an oil wellbore. The Patent Trial and Appeal Board found the claims anticipated in view of the “Schacherer” patent. During the proceeding, DynaEnergetics moved to amend the patent to add proposed substitute claims. Hunting Titan opposed the motion on obviousness grounds. Although Hunting Titan did not assert that Schacherer anticipated the proposed substitute claims, the Board found anticipation and thus denied the motion to amend.

DynaEnergetics requested rehearing and Precedential Opinion Panel review. The Panel granted rehearing, vacated the Board’s decision, and granted the motion to amend to add the proposed substitute claims. Hunting Titan then appealed the vacatur, and DynaEnergetics cross-appealed the Board’s decision finding the original claims anticipated by Schacherer.

The Federal Circuit affirmed on both grounds. First, the court affirmed the finding that the original claims were unpatentable as anticipated by Schacherer. Substantial evidence supported the Board’s determination.

The Federal Circuit then turned to Hunting Titan’s argument that, although Hunting Titan did not oppose the motion to amend on grounds of anticipation, the Board was permitted to find anticipation on its own because “the Board had an obligation to sua sponte identify patentability issues for a proposed substitute claim based on the prior art of record.” The Federal Circuit disagreed.

The Federal Circuit explained that its precedent states that “the Board may sua sponte identify a patentability issue for a proposed substitute claim based on the prior art of record.” That precedent, however, “left unanswered the circumstances in which the Board should advance such a ground of unpatentability in relation to substitute claims.” Here, the Panel answered that question by confining the circumstances in which the Board should sua sponte raise patentability issues.

While the Panel’s decision confining those circumstances “was not itself erroneous,” the Federal Circuit found “problematic” the Panel’s decision to confine the Board’s discretion “to only rare circumstances.” For example, the Panel’s analysis “overlook[ed] the basic purpose of IPR proceedings: to reexamine an earlier agency decision and ensure that patent monopolies are kept within their legitimate scope.”

The Panel had recognized that there may be situations where evidence of unpatentability has not been raised “but is readily identifiable and persuasive such that the Board should take it up in the interest of supporting the integrity of the patent system.” Here, the Panel determined that the ground of anticipation by Schacherer was not “readily identifiable and persuasive.” On appeal, Hunting Titan “failed to argue that the Panel misapplied the readily identifiable evidence exception,” thus forfeiting the argument. The Federal Circuit thus affirmed “only on this narrow ground” of forfeiture, leaving for another day a host of questions about the Board’s approach.

Judge Prost filed a concurring opinion explaining “why, had [Hunting Titan’s] challenge been preserved, it likely would have succeeded—and why I’m troubled by how the PTO is handling this issue, including with a recently enacted regulation.”

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Dyfan, LLC v. Target Corp., No. 2021-1725 (Fed. Cir. (W.D. Tex.) Mar. 24, 2022). Opinion by Stoll, joined by Lourie and Dyk.

Dyfan sued Target for infringement of two patents directed to improved systems for delivering messages to users based on their locations. The asserted claims include “code” and “application[s]” that are configured to perform certain actions, and a “system” configured so that certain actions occur.

During claim construction, Target argued that the claims were invalid as indefinite because they include limitations in means-plus-function format and because the specification does not disclose sufficient structure corresponding to the recited functions. The district court agreed and entered judgment of invalidity.

On appeal, the Federal Circuit reversed, holding that both the “code”/“application” limitations and the “system” limitations were not in means-plus-function format.

Regarding the “code”/“application” limitations, the Federal Circuit held that the district court correctly started with the presumption that means-plus-function format does not apply because “means” does not appear in the limitations. “But the district court erred by ignoring key evidence—unrebutted deposition testimony from Target’s own expert, Dr. Goldberg—regarding how a person of ordinary skill would have understood the ‘code’/‘application’ limitations.” Dr. Goldberg testified that “application” and “code” are both terms of art that connote structure. The functions could be implemented using “off-the-shelf” code or applications. Thus, the limitations were not in means-plus-function format.

Regarding the “system” limitations, the Federal Circuit explained that the district court did not properly apply the presumption that § 112 ¶ 6 does not apply because the limitations do not recite “means.” Also, the court ruled that while “in a vacuum, the term ‘system’ may well be a nonce term,” here “the claim language itself defines the ‘system’ to include specified structure.” Thus, the “system” limitations likewise were not in means-plus-function format.

Because neither term is in means-plus-function format, the Federal Circuit reversed the judgment of invalidity and remanded.

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