Fresh From the Bench: Precedential Patent Cases From the Federal Circuit
In re CSB – CSB appeals a Board decision in an ex parte reexamination upholding an examiner’s rejection of all claims of CSB’s patent as unpatentable over the prior art. CSB argued that the Board construed the claims applying the wrong legal standard, namely the broadest reasonable interpretation standard that is normally applied during PTO examination and reexamination. The Circuit agrees with CSB that the Board should have applied the Phillips standard because the patent expired during the reexamination, and thus the patentee lost the opportunity to amend the claims. In doing so, the panel rejects the argument that BRI should be used because the claims could have been amended when they were before the examiner during the reexam.
The Circuit concludes, however, that the Board’s claim construction was correct even under the Phillips standard, and therefore affirms its rejection of all claims as unpatentable over the prior art.
Comment: In a recent presentation, PTAB Chief Judge Michael Tierney opined: “In 9 out of 10 cases, actually, [using BRI or Phillips claim construction is] not going to make a difference.” Also see SAS Inst., Inc. v. ComplementSoft, LLC, 2016 U.S. App. LEXIS 10508 (Fed. Cir. June 10, 2016), decided ten days before Cuozzo. In SAS the Circuit applied BRI in the appeal of an IPR, but in doing so cited to Phillips six different times, as well as to other cases that applied Phillips. On August 3 my colleagueNika Aldrich made a presentation to the IP Section of the Oregon State Bar in which he explained that he thought the BRI and Phillips tests are merging. See his PowerPoint.
Arendi v. Apple – The Circuit reverses an IPR determination of obviousness because the Board misapplied Circuit law on the use of common sense in an obviousness analysis. The litigation had been stayed pending IPR so defendants Apple, Google and Motorola Mobility will have to return to the district court for resolution of infringement and possible remedies.
The patent at issue is directed to a computer application designed to recognize specific words or data. The Board determined that the Pandit reference discloses each limitation of claim 1 except for performing a search for duplicate telephone numbers, names and addresses. However, the Board found it reasonable to presume, as a matter of common sense and common knowledge at the time of the invention, that Pandit would search for duplicate telephone numbers and, upon locating a duplicate entry, would display the name and/or address associated with the telephone number.
The panel notes that common sense has its proper place in the obviousness inquiry, but that there are caveats. First, common sense is typically invoked to provide a known motivation to combine, not to supply a missing claim limitation. Second, the limitation in question should be simple and the technology straightforward. Third, references to “common sense” cannot be used as a wholesale substitute for reasoned analysis and evidentiary support. The panel thus frames the issue as whether the Board accepted a conclusory assertion about general knowledge in the art without evidence on the record, particularly where it is an important limitation that is not indisputably within the common knowledge of those in the art.
The panel concludes that the Board’s presumption that adding a search for phone numbers to Pandit would be “common sense” was conclusory and unsupported by substantial evidence. Also, the missing limitation is not a “peripheral” one, and there is nothing in the record to support the Board’s conclusion that supplying the missing limitation would be obvious to one of skill in the art.
Vapor Point v. Moorehead – In a case involving cross claims for correction of inventorship under 35 U.S.C. § 256, the panel affirms, as being supported by substantial evidence, the district court’s determination that two additional inventors be added as inventors to a NanoVapor patent. The panel also holds that NanoVapor cannot now assert equitable defenses to claims that were voluntarily dismissed. Moreover, NanoVapor waived its right to pursue ownership under an obligation-to-assign theory by representing that resolution of the inventorship issue would resolve the infringement issue. Finally, the panel rules that the district court did not abuse its discretion in refusing to assess attorney fees against NanoVapor.
NanoVapor is a leader in the containment of volatile organic compounds. After working with Moorhead to help market this technology, Nathan became COO of NanoVapor and hired Matheson to help with the commercial embodiment of the technology. Moorhead filed a provisional application that is the subject of NanoVapor’s patent. NanoVapor alleged that Nathan and Matheson plotted to steal NanoVapor’s technology and destroy NanoVapor’s business when Nathan and Matheson developed the commercial embodiment of NanoVapor’s concept.
In contrast, Vapor Point alleges that the patent for which NanoVapor applied wrongfully claimed all of Nathan and Matheson’s conceptual and inventive contributions. Another NanoVapor patent, according to Vapor Point, similarly misappropriated Nathan and Matheson’s work. Vapor Point asked the district court to add Nathan and Matheson as inventors, or possibly even substitute their names for Moorhead’s. For its part, NanoVapor asked the district court to alter the inventorship of Vapor Point’s five patents to include Moorhead because “the Vapor Point patents are based on Defendant Moorhead’s conceptions in the ’310 patent.”
Without much legal or factual analysis other than describing the complicated factual scenario summarized above, the panel, with Judge O’Malley concurring, affirms that decision.
In re Warsaw Orthopedic – The panel affirms the IPR invalidation of all but one of the claims directed to a spinal surgery technique, but vacates and remands the Board ruling as to one claim because the Board failed to explain its reasoning.
On appeal, Warsaw presents a number of objections to the Board’s findings as to the teachings of the prior art. As to each of those arguments, the panel concludes that there is substantial evidence to support the Board’s factual determinations. Warsaw also argues that there was no motivation shown to combine the prior art references, but the panel disagrees with that contention as well, concluding that there was no legal error and the Board provided the requisite explanation in support of its conclusions.
However, the panel concludes that it “cannot reasonably discern that the Board’s decision as to the ‘elongated portions’ limitation in claim 17 followed the proper path.” According to the Board’s opinion, “Jacobson appears to disclose anchor wires (i.e., ‘elongated portions’) that are positioned over adjacent vertebrae.” However, according to the panel, this conclusory assertion in support of its finding does not equate to the reasoned explanation needed to support its conclusion. Thus, the Circuit remands this issue to the PTAB for additional explanation.
In re CSB-System International, Inc., Fed. Cir. 2015-1832 (August 9, 2016)
CSB is the assignee of the ’953 patent, which is directed to a circuit arrangement for integrating an electronic data processing (“EDP”) system with telephone systems connected to an integrated services digital network (“ISDN”) telephone network.
A third-party requested ex parte reexamination of the patent. As part of the reexamination proceeding, the examiner construed several of the patent’s claim terms. Pertinent here, the examiner refused to depart from the plain meaning of the term “personal computer” by not, as CSB had argued, inserting a limitation which would exclude personal computers that emulate terminals. The examiner also declined to adopt CSB’s construction of the claim term “LAN server,” which sought to read in that the “LAN server” must provide shared services to other components on the LAN and to respond to requests from clients.
When a Patent Being Reexamined Has Expired, the Phillips Claim Construction Test Applies
Typically, the court explained: “Claims in issued patents are construed using the framework set forth in Phillips v. AWH Corp., which emphasizes considering the plain meaning of the claim terms themselves in light of the intrinsic record. 415 F.3d 1303 (Fed. Cir. 2005) (en banc). During reexamination proceedings of unexpired patents, however, the Board uses the “broadest reasonable interpretation consistent with the specification” standard, or BRI. The rationale for permitting this broader standard in reexaminations is that a patent owner before the PTO with an unexpired patent may amend claims to narrow their scope, negating any unfairness that may otherwise result from adopting the BRI standard. Further justification comes from the fact that constructions unhinged from the patent in which they are found are erroneous even under BRI, as the BRI claim construction exercise must always be reasonable and must consider the claims “in light of the specification and teachings in the underlying patent.” Proxyconn, 789 F.3d 1292 (Fed. Cir. 2015). Even so, when an expired patent is subject to reexamination, the traditional Phillips construction standard attaches. In re Rambus Inc., 694 F.3d 42 (Fed. Cir. 2012).
The ’953 patent expired on May 20, 2014, after the examiner issued a final rejection but before consideration by the Board. The Board’s decision acknowledged that the patent had expired, but nevertheless applied the BRI standard. The Board contended that employing BRI was proper because CSB had the opportunity to amend its patent claims while they were pending before the examiner in the reexamination, as the patent had yet to expire. We disagree with the Board’s approach: When a patent expires during a reexamination proceeding, the PTO should thereafter apply the Phillips standard for claim construction. We hold as much regardless of whether this means that the Board applies a different standard than the examiner.
It Makes No Difference that Claims Could Have Been Amended While Before the Examiner
The PTO argues that because the Board operates as a tribunal of review for the examiner’s work, the Board must scrutinize claims consistent with the standard used by the examiner in the first instance, even after a patent has expired. But, if anything, the Phillips standard would result in a more narrow claim scope and, consequently, we see little chance of the Board issuing new grounds of rejection based on a narrower claim scope. See Facebook, Inc. v. Pragmatus AV, LLC, 582 F. App’x 864 (Fed. Cir. 2014) (non-precedential) (explaining that construction of term under the BRI standard “cannot be narrower” than that under the Phillips standard). In many cases, the claim construction will be the same under the Phillips and BRI standards. See, e.g., Proxyconn (noting that the claim term under review had the same construction under the BRI and Phillips standards); Facebook (“The broadest reasonable interpretation of a claim term may be the same as or broader than the construction of a term under the Phillips standard.”).
We are also not persuaded by the PTO’s argument that BRI should apply here because the patent owner could have amended its claims while before the examiner. The policy underlying our embrace of BRI in limited circumstances does not extend to cases where a patent expires during a reexamination because the patent owner’s ability to amend is substantially diminished when this occurs regardless of the stage of the reexamination. Under the PTO’s regulations, a patentee may not amend a claim that expires during prosecution. 37 C.F.R. § 1.530(j) (“No amendment may be proposed for entry in an expired patent.”). Moreover, patents that expire during an appeal to the Board, as in this case, will not be issued with amended claims even if the patent owner amended them while before the examiner. Because it is not always clear how much time a Board appeal will take and at what point a patent owner can reopen prosecution and amend its claims, and we do not think an inquiry into whether or not a patent owner could have amended its claims, or speculation as to whether the patent owner could in the future have an opportunity to amend its claims, should resolve the question.
The Same Result Is Reached Here Applying the Phillips Standard
While we hold that the Board erred in using the BRI standard, the Board’s use of BRI did not produce a different result than the one we reach using the Phillips standard. Even under the Phillips standard, there is no basis for limiting the claims as narrowly as CSB argues.
First, contrary to CSB’s arguments, there is no support for limiting the broad claim term “personal computer” in the ’953 patent to exclude personal computers running software to emulate terminals. In the context of the ’953 patent, a personal computer is defined by its hardware and computing capability, not by the software it happens to run at a point in time. Nothing in the ’953 patent suggests that any other understanding should apply. Thus, we agree with the Board’s view of “personal computer” and decline to import the negative limitation sought by CSB. Because CSB’s arguments that Gursahaney does not teach a “personal computer” hinge on its proffered construction, we reject CSB’s argument that Gursahaney fails to teach a personal computer.
We are also not convinced by CSB’s argument that the term “LAN server” requires embellishment beyond its plain meaning. CSB argues that LAN server should be construed to expressly require purported characteristics of a LAN server, such as providing shared services to other components on the LAN and responding to requests from clients. At the same time, however, CSB describes the Board’s construction of the term as “agreed upon.” Moreover, its specific arguments relate to a comparison of the ’953 patent claims to the prior art—which is part of the anticipation analysis, reviewed for substantial evidence, not claim construction. Without a “fundamental dispute regarding the scope” of this term, construction is not necessary.
Substantial Evidence Supports the Finding that Gursahaney Discloses the Limitations at Issue
Substantial evidence supports the Board’s finding that Gursahaney discloses a LAN server. Gursahaney discloses that the “workstation components 100 are connected by a token ring local area network (LAN),” and that these workstations “access host applications running on the host 200, to provide caller-specific information to the service representative.”
Because there is substantial evidence that Gursahaney discloses the “personal computer” and “LAN server” limitations, the Board did not err in rejecting the sole independent claim of the ’953 patent, claim 1, as anticipated by Gursahaney. CSB makes no particularized argument to support patentability of the dependent claims apart from the arguments it makes for claim 1, so we also affirm these rejections.
Arendi S.A.R.L. v. Apple Inc., Fed. Cir. Case 2015-2073 (August 10, 2016)
The ’843 patent is directed to providing beneficial coordination between a first computer program displaying a document and a second computer program for searching an external information source. The patent allows a user to access and conduct a search using the second computer program while remaining in the first computer program displaying the document. A computer process analyzes first information in the document to determine if it is of a type that can be used in another program to find related second information. A search by the second computer program using at least part of the first information as a search term then looks for second information associated with the first information in the information source. Once the second information is located, the claimed invention performs an action using the second information.
For example, if a name is detected, a database can be searched for the name. If the search finds a single related contact with only one address, that address is inserted into the document. If, instead, the search finds more than one related contact or address, the search results are displayed, and the user can select an address for insertion into the document.
The Pandit Reference
The sole prior art reference on appeal is Pandit, which teaches recognizing different classes of text in a document and providing suggestions based on it. One embodiment of Pandit involves a program that recognizes a phone number as a class of text. The specification explains that, in Figure 1e, “a telephone number 16 is accented. The pull down menu named Phone #17 is highlighted and preferably identifies executable operations.” In Figure 1f, “Add to address book,” is one of several options displayed in pull-down menu 20. The key question in this appeal is whether the Board erred in finding that it would be “common sense” to a person of ordinary skill in the art to search for the telephone number that is detected in a document when the “Add to address book” option disclosed in Pandit is selected.
Arendi sued Appellees and several other technology companies alleging infringement of claims of the ’843 patent and related patents. Appellees responded by filing a petition requesting an IPR, and the Board instituted review of many but not all of the claims requested in the petition.
In its Final Written Decision, the Board stated:
Petitioner submits that Pandit discloses each limitation of illustrative claim 1 except for performing a search as specified in step (i) of the claim. Petitioner, however, submits further that in order to avoid multiple entries of the same address, it would have been obvious that the first step in adding to an address book is to search the address book to determine if an entry already exists with the entered information, and displaying any associated information that is located.
We find it reasonable to presume, as a matter of common sense and at the time of the invention, that the subroutine in Pandit would search for duplicate telephone numbers and, upon locating a duplicate entry, both the first information and associated (or second) information, such as the name and/or address associated with the telephone number, would be displayed to the user.
Although the Board recognized that “a human being entering a contact into a paper address book would not be expected to search for duplicate telephone number entries,” it, nevertheless, found that “it would have been obvious to the ordinary artisan to utilize a computerized search for duplicate telephone entries when entering a telephone number in an electronic address book database as taught by Pandit.”
The Board further explained that the obviousness inquiry “not only permits, but requires consideration of common knowledge and common sense.” The Board stated that the conclusion of obviousness follows from the apparent benefit provided by the retrieval of preexisting information to a user. The Board found, in any event, that in this case, “a claimed structural feature is not missing from the applied prior art.”
Was “Common Sense” Improperly Used by the Board to Supply the Missing Limitation?
The single question at issue here is whether the Board misused “common sense” to conclude that it would have been obvious to supply a missing limitation in the Pandit prior art reference to arrive at the claimed invention. It is true that common sense and common knowledge have their proper place in the obviousness inquiry. We stated in Perfect Web Techs., Inc. v. InfoUSA, Inc., 587 F.3d 1324 (Fed. Cir. 2009) that “common sense has long been recognized to inform the analysis of obviousness if explained with sufficient reasoning.” And we stated in Randall Mfg. v. Rea, 733 F.3d 1355 (Fed. Cir. 2013): “in KSR, the Supreme Court criticized a rigid approach to determining obviousness based on the disclosures of individual prior art references, with little recourse to the knowledge, creativity, and common sense that an ordinarily skilled artisan would have brought to bear when considering combinations or modifications.” So, we do consider common sense, common wisdom, and common knowledge in analyzing obviousness.
But there are at least three caveats to note in applying “common sense” in an obviousness analysis. First, common sense is typically invoked to provide a known motivation to combine, not to supply a missing claim limitation. Second, in Perfect Web, the only case Appellees identify in which common sense was invoked to supply a limitation that was admittedly missing from the prior art, the limitation in question was unusually simple and the technology particularly straightforward. Third, our cases repeatedly warn that references to “common sense”—whether to supply a motivation to combine or a missing limitation—cannot be used as a wholesale substitute for reasoned analysis and evidentiary support, especially when dealing with a limitation missing from the prior art references specified.
Keeping these principles in mind, we now examine whether there was substantial evidence supporting the Board’s finding that common sense would lead one to search for the telephone number in Pandit. As in Hear-Wear, and unlike Perfect Web, the disputed search of step (i) is central to representative claim 1. As discussed above, both parties describe the patented technology as directed to searching for information related to text in a document and performing an action using the information found by the search. In the words of Hear-Wear, this is not a case about “peripheral” limitations or about the Board substituting documentary evidence of a motivation to combine with its expertise about common motivations in that field of technology. Instead, it is about whether the Board accepted “a conclusory assertion from a third party about general knowledge in the art without evidence on the record, particularly where it is an important limitation that is not evidently and indisputably within the common knowledge of those skilled in the art.” Thus, we must approach the question of “common sense” in this case with the fact that the search is an important limitation in mind.
We agree with Appellees that the broader notion of searching for data in a database is supported by substantial evidence, including Appellees’ citations to the testimony of Dr. Menasce and Dr. Levy, as well as Pandit itself. But Appellees have failed to show why it is proper to extrapolate from this general background knowledge of searches in a database to add a search for a telephone number to the Pandit reference. Specifically, Appellees have failed to show why it would be common sense for the “Add to address book” function to operate by first “searching for entries with the same telephone number.”
The “use of common sense does not require a ‘specific hint or suggestion in a particular reference,’ only a reasoned explanation that avoids conclusory generalizations.” Perfect Web. But conclusory statements and unspecific expert testimony regarding searches in general are precisely what the Board relied upon in drawing its conclusion that it would have been “common sense” to search a database for a telephone number to be added. In so doing, the Board ignored Arendi’s arguments regarding the differences between searching for duplicate entries with a telephone number versus with a name or address. And these errors were particularly problematic considering the fact that a key limitation of the ’843 patent was missing from the prior art reference in dispute.
Because the Board’s presumption that adding a search for phone numbers to Pandit would be “common sense” was conclusory and unsupported by substantial evidence, the missing limitation is not a “peripheral” one, and there is nothing in the record to support the Board’s conclusion that supplying the missing limitation would be obvious to one of skill in the art, we reverse the Board’s finding of unpatentability.
Vapor Point LLC v. Elliott Moorhead, Fed. Cir. Case 2015-1801, -2003 (August 10, 2016)
Vapor Point sued Moorhead, NanoVapor Fuels Group, and Bryant Hickman (collectively “NanoVapor”), seeking to have Nathan and Matheson recognized as joint inventors under 35 U.S.C. § 256 on NanoVapor’s ’310 and ’862 patents. NanoVapor responded by suing Vapor Point, seeking to have Moorhead recognized as a joint inventor on Vapor Point’s ’816, ’337, ’585, ’604, and ’763 patents and for declaratory relief regarding inventorship of NanoVapor’s ’310 and ’862 patents. After an evidentiary hearing, the district court granted Vapor Point’s motion for correction of inventorship and denied each of NanoVapor’s motions. Vapor Point moved for exceptional case status and attorneys’ fees. The district court issued a final judgment correcting inventorship, dismissing the action with prejudice, and denying Vapor Point’s motion for exceptional case status and attorneys’ fees.
NanoVapor appeals the district court’s order on inventorship and its dismissal of the case. Vapor Point cross appeals the same order to the extent it holds that the case is not exceptional and that an award of attorneys’ fees is not warranted. We find that the district court did not err in dismissing the case after determining inventorship, especially in light of NanoVapor’s concession that a determination of inventorship would resolve the case. We further find that the district court did not abuse its discretion in denying Vapor Point’s motion for exceptional case status and attorneys’ fees. Therefore, we affirm.
NanoVapor is an industry leader in the field of volatile organic compounds (“VOCs”) containment, including a process called Vapor Suppression System developed by Moorhead that aims to control or eliminate combustible and toxic gases in fuel storage and transfer operations. After working with Moorhead to help market this technology, Nathan became Chief Operating Officer of NanoVapor in 2007.
NanoVapor hired Matheson to help with the commercial embodiment of the technology being developed. Moorhead filed a provisional patent application on December 22, 2006, claiming the vapor suppression system that is the subject of NanoVapor’s ’310 patent, which claims priority to this application. The parties disagree over whether Nathan was aware at the time of the progress of the patent application.
NanoVapor alleged that Nathan and Matheson plotted to steal NanoVapor’s technology and destroy NanoVapor’s business when Nathan and Matheson developed the commercial embodiment of NanoVapor’s patent-pending concept. According to NanoVapor, an outside group conducted due diligence testing that exceeded expectations, after which Nathan and Matheson decided to steal the technology and associated trade secrets. NanoVapor asserts that Nathan and Matheson each requested a 20% stake in NanoVapor, which NanoVapor rejected.
In contrast, Vapor Point alleges that the ’310 patent NanoVapor filed for on December 18, 2007 wrongfully incorporated, disclosed, and claimed all of Nathan and Matheson’s conceptual and inventive contributions. The ’862 patent, according to Vapor Point, similarly misappropriated Nathan and Matheson’s work. Nathan and Matheson allege that they are the true inventors of the technology disclosed in the ’310 patent “because Defendant Moorhead brought on Nathan and Matheson to help him reengineer the system and bring it to market but that Moorhead wrongfully filed for the ’310 patent without consent, notice, or compensation to Nathan or Matheson.” Based on the allegations, Vapor Point asked that the district court correct inventorship of the ’310 and ’862 patents to add their names to both, or possibly even substitute their names for Moorhead’s on both. For its part, NanoVapor asked the district court to alter the inventorship of Vapor Point’s five patents to include Moorhead because “the Vapor Point patents are based on Defendant Moorhead’s conceptions in the ’310 patent.”
In addition to its requests to correct the inventorship of NanoVapor’s patents, Vapor Point also asserted a number of state law claims against NanoVapor: common law fraud, fraud by nondisclosure, unjust enrichment, tortious interference, misappropriation of trade secrets, and the Texas Theft Liability Act. NanoVapor, in turn, asserted a number of affirmative defenses to the claims in Vapor Point’s First Amended Complaint, including that “Vapor Point cannot prevail because Vapor Point has an obligation to assign any invention to NanoVapor.” In its counterclaim NanoVapor also asserted infringement of the ’310 patent and eight state law claims: misappropriation of trade secrets, the Texas Theft Liability Act, fraud, breach of fiduciary duty, tortious interference with business relationships, tortious interference with prospective business relationships, breach of contract, and unjust enrichment.
On June 25, 2014, the court issued an order denying NanoVapor’s motion for an evidentiary hearing on inventorship. The court reasoned that, “by requesting findings of fact and conclusions of law relating only to inventorship under 35 U.S.C. § 256, both parties are essentially requesting that this Court bifurcate the inventorship claims from the state law and infringement claims and make an early determination on the inventorship issues.” Because “the state law causes of action share a common factual core with the inventorship claims and judicial determination of the inventorship issues at that time would deprive the parties of their right to a jury trial,” the district court denied the parties’ request for an evidentiary hearing.
NanoVapor then filed a notice with the district court dismissing its state law claims “with prejudice to refiling.” In that notice, NanoVapor asserted that, “[i]n response to [NanoVapor] non-suiting their state law claims, Vapor Point has agreed to nonsuit” its state law claims. “After Vapor Point’s concurrent nonsuit of the state law claims only claims related to inventorship and infringement will remain before the Court.” In so doing, NanoVapor explicitly “requested the Court to decide the inventorship issues as there is no right to a jury trial on contested fact issues related to inventorship.” Accordingly, the district court dismissed all of the state law claims pled by either Vapor Point or NanoVapor, with prejudice.
Section 256 authorizes judicial resolution of co-inventorship contests. Consistent with § 256, the court held a four-day evidentiary hearing to determine inventorship of the patents-in-suit. After the hearing, the court issued an order denying NanoVapor’s claims of inventorship and granting Vapor Point’s to the extent Nathan and Matheson sought to be added to the ’310 and ’862 patents as additional inventors.
In that decision, the court addressed the “four key concepts in the ’310 and ’862 patents”: (1) using biodiesel as a vapor capture medium; (2) removing VOCs from a vessel containing fuel vapors and introducing them into a vapor capture medium (such as biodiesel); (3) using a particulatizer to create micro-sized VOC particles for treatment; and (4) using diffusion plates to distribute micro-sized particles across the vapor capture medium. The court found that Nathan contributed to the conception of the first three of these four key concepts and that Matheson contributed to third and fourth concepts. The district court denied NanoVapor’s claim that Moorhead should be a named inventor on Vapor Point’s patents.
Following the district court’s resolution of the inventorship issues, NanoVapor moved for a new trial “solely addressing the Court’s closing of the case without allowing a trial on the affirmative defenses,” including any obligation to assign. In Vapor Point’s response, it argued that NanoVapor’s motion for a new trial on the affirmative defense of an obligation to assign was improper.
Vapor Point initially asserted a claim for correction of inventorship under § 256 along with its various state law tort claims. Because the latter were dismissed with prejudice, only the federal claim under § 256 remained. Since “an obligation to assign is not an affirmative defense to a cause of action to correct inventorship,” and because only the inventorship claims remained, Vapor Point argued that the equitable affirmative defense of an obligation to assign also should be dismissed with prejudice. Because NanoVapor did not join Nathan and Matheson—now deemed to be two of the inventors of the patents-in-suit—in the infringement claims against Vapor Point, Vapor Point argued that NanoVapor “did not have standing to pursue [its] claim for infringement of the ’310 patent, eliminating any claim against Vapor Point.” The district court agreed with Vapor Point and dismissed the case. Vapor Point moved for a determination that the case was exceptional, entitling it to attorneys’ fees. The district court, without discussion, denied these motions in its final order.
NanoVapor now appeals, arguing, inter alia, that the district court erred in its determination of inventorship and erred when it dismissed the case without deciding whether Nathan and Matheson had an obligation to assign their inventorship interests to NanoVapor. Vapor Point appeals the district court’s denial of attorneys’ fees and its decision that the case is not exceptional.
A. Inventorship Order
NanoVapor argues, inter alia, that the district court’s determinations on inventorship were not supported by clear and convincing evidence. For the most part, we disagree. Given the evidence adduced, we find that the district court was correct to conclude that both Nathan and Matheson should be listed as inventors on the ’310 patent, which is the only patent asserted in NanoVapor’s infringement claim. All inventors, even those who contribute to only one claim or one aspect of one claim of a patent, must be listed on that patent. The district court’s findings that Nathan contributed to three of the four key aspects of the invention are supported by substantial evidence. And, substantial evidence supports the district court’s conclusion that Matheson contributed to the conception of the use of diffusion plates, as recited in claims 11 and 12 of the ’310 patent. While we agree with NanoVapor that the district court erred in finding that Matheson contributed to the conception of the use of a particulatizer to create micro-sized VOC particles for treatment and the use of diffusion plates to distribute micro-sized particles across the vapor capture medium, that error does not change the validity of the ultimate judgment because Matheson was still properly found to be an inventor of the diffusion plates.
These findings are sufficient to support the district court’s inventorship judgment. Co-inventors need not “physically work together or at the same time,” “make the same type or amount of contribution,” or “make a contribution to the subject matter of every claim of the patent.” 35 U.S.C. § 116. Inventorship is determined on a claim-by-claim basis. Because we find that the district court’s conclusions are supported by substantial evidence for both Nathan and Matheson—for at least one of the claim elements—we affirm the district court’s inventorship determinations with respect to the ’310 patent.
B. Obligation to Assign
NanoVapor next claims that the district court erred when it dismissed the action without first determining whether Nathan and Matheson had an obligation to assign their invention to NanoVapor. The district court found that it need not resolve whether there was an obligation to assign the patents because “all parties understood that the evidentiary hearing would resolve the issue of inventorship and would be dispositive of the remaining infringement claim in the case.” In other words, the district court found that NanoVapor had waived its right to ask the court to decide the assignment question. We agree. The district court did not err in dismissing the infringement claim with prejudice because “all parties understood that the evidentiary hearing would resolve the issue of inventorship and would be dispositive of the remaining infringement claim in the case.”
The Panel Affirms the Denial of Attorney Fees
Vapor Point cross-appeals the determination that it is not entitled to attorneys’ fees and the case is not exceptional. While we would have preferred a written explanation for its decision, upon review of the record, we do not find that the denial of Vapor Point’s motion was an abuse of the court’s discretion.
The district court’s ultimate determination on inventorship is supported by substantial evidence. NanoVapor cannot now assert equitable defenses to claims that were voluntarily dismissed. Moreover, NanoVapor waived its right to pursue ownership under an obligation to assign theory by explicitly representing that resolution of the inventorship issue would resolve the infringement issue. For the reasons discussed above, and because we find each of NanoVapor’s additional arguments unpersuasive, we affirm.
Judge O’Malley’s Concurring Opinion
I agree that the district court’s conclusions on inventorship are, as detailed in the majority opinion, supported by substantial evidence. I also agree that, by the stipulated dismissal of all state law claims and through its representations to the district court, NanoVapor’s counsel waived its right to an additional hearing on whether it has the right to assert ownership over the patent interests of Nathan and Matheson. I write separately, however, because I believe that, even if we did not find waiver, 35 U.S.C. § 261 requires NanoVapor to demonstrate that any assignment of patent rights was executed in writing, which it undeniably cannot do. NanoVapor’s admission that no writing exists should render unnecessary its request for an evidentiary hearing to determine if Nathan and Matheson had an obligation to assign their interests in the ’310 patent to NanoVapor. Without an assignment in writing, Nathan and Matheson could not give NanoVapor legal title to the patents sufficient to maintain standing in a patent infringement suit for money damages. To the extent Teets v. Chromalloy Gas Turbine Corp., 83 F.3d 403 (Fed. Cir. 1996) and its progeny are to the contrary, this court should consider overruling that precedent when presented with the question in a case where the issue is determinative of the outcome.
In re Warsaw Orthopedic, Inc., Fed. Cir. 2015-1050, -1058 (August 9, 2016)
The ’997 patent relates to spinal surgery that inserts an artificial implant between two adjacent vertebrae from a patient’s side. In particular, the ’997 patent discloses “instrumentation and methods of performing surgical procedures on the human thoracic and lumbar spine along the lateral aspect (i.e., side) of the spine” to correct thoracic and lumbar disc disease and spinal deformities where concomitant fusion is desired. The lateral approach to spinal surgery disclosed by the ’997 patent seeks to avoid complications that may arise when the surgery is performed anteriorly or posteriorly (i.e., from the front or back of a patient).
The ’997 patent contains four independent claims—including claims 1 and 17—and twenty-six dependent claims. Independent claims 1 and 17 follow a similar structure: they recite a method that begins with an incision in the patient’s side, followed by steps of advancing specific instruments into the surgical path and inserting an implant between the vertebrae to be fused.
Substantial Evidence Supports the PTAB’s Findings as to Brantigan and the Motivation to Combine Prior Art References
Warsaw challenges the PTAB’s factual findings regarding the teachings of Brantigan as well as its finding of a motivation to combine Brantigan with Leu and Jacobson. Warsaw alleges that “Brantigan does not disclose an implant with any dimension spanning ‘substantially the full transverse width’ of a vertebra” as recited in claims 1 and 17 of the ’997 patent, such that the PTAB erred in finding claims 1 and 17 obvious in light of Brantigan. Warsaw’s argument assumes that the limitation “substantially the full transverse width” in claims 1 and 17 means that the length of the patented implant must extend beyond a vertebra’s endplate to include the apophyseal ring. The PTAB did not agree with that and neither do we.
Warsaw next contends “the PTAB’s conclusion that Brantigan teaches an implant sized to span substantially the full transverse width of adjacent vertebrae depends on its fundamental misunderstanding of the statement that the Brantigan implant is ‘generally shaped and sized to conform with the disc space’” between the adjacent vertebrae. That “an implant is designed to fit the disc space” between the adjacent vertebrae, Warsaw contends, “does not reveal what all of its dimensions are.” We disagree and conclude that substantial evidence supports the PTAB’s finding that Brantigan teaches an implant that spans substantially the full width of a vertebra, as recited in claims 1 and 17 of the ’997 patent.
Warsaw also argues that the PTAB erred because “Brantigan does not disclose an implant with a ‘length’ substantially the full transverse width of a vertebra.” Warsaw’s argument misunderstands the PTAB’s findings, which concluded that the lateral insertion aspect would have been obvious in view of Jacobson, not Brantigan. Warsaw does not separately contest the PTAB’s findings as to Jacobson. In any event, the record belies Warsaw’s argument that the Brantigan implants were not designed for lateral implantation.
Warsaw further alleges that “Brantigan does not disclose implants with a length—or any dimension—‘greater than the depth of the disc space,’” as claims 1 and 17 of the ’997 patent recite. However, in its response to NuVasive’s petition, Warsaw did not raise this argument. Accordingly, Warsaw has waived this argument.
Warsaw also argues that “Brantigan’s disclosure of implants that can be rotated or reversed teaches away from the ’997 patent.” The PTAB concluded that, regardless of whether the Brantigan implants may be rotated or reversed, “Brantigan discloses that the implant is ‘sized to conform with the disc space,’ which one of ordinary skill in the art would have understood to mean sized to occupy substantially the full transverse widths of the vertebral bodies for reasons previously stated.” We may not reweigh this evidence on appeal.
Substantial Evidence Supports the PTAB as to the Motivation to Combine References
As part of the obviousness inquiry, we consider “whether a [PHOSITA] would have been motivated to combine the prior art to achieve the claimed invention and whether there would have been a reasonable expectation of success in doing so.” The answers to these questions require producing factual findings that we review for substantial evidence. Warsaw alleges that the entire affirmative portion of the [PTAB’s] analysis regarding motivation to combine is insufficient as a matter of law because it reflects a belief that one of ordinary skill in the art could combine Jacobson, Leu, and Brantigan, not that one would have been motivated to do so. According to Warsaw, the PTAB did not supply the necessary explanation or evidence for combining Jacobson, Leu, and Brantigan because it could not.
We disagree with Warsaw that the PTAB’s analysis suffers from legal error or that the PTAB failed to supply the requisite explanation in support of its conclusions. In its analysis, the PTAB determined that a PHOSITA “would have” been motivated to combine Jacobson, Leu, and Brantigan, and provided a reasoned explanation for reaching that conclusion. The true nature of Warsaw’s arguments reflects a collateral attack on the teachings of the prior art references, based on aspects of the references that it finds more persuasive than did the PTAB. Those arguments contest the weight the PTAB afforded to the record evidence, but we may not reweigh facts already considered by the PTAB.
The PTAB Did Not Adequately Explain How Jacobson Discloses “Elongated Portions”
Claim 17 requires the positioning of a surgical instrument with elongated portions so that at least part of one elongated portion is over one of the two adjacent vertebrae and at least part of another elongated portion is over the other of the two adjacent vertebrae. Warsaw contends that no substantial evidence supports the PTAB’s conclusion that Jacobson discloses a surgical instrument with elongated portions positioned over adjacent vertebrae, as recited by claim 17.
Warsaw raises several arguments that it did not present to the PTAB. In responding to this narrow argument, the PTAB found that Warsaw did “not provide sufficient evidence of specific differences between the ‘elongated portion’ being ‘positioned over’ adjacent vertebrae, as recited in claim 17, and the ‘anchor wires’ [disclosed in Jacobson] that are also ‘positioned over’ adjacent vertebrae.” Based on the limited argument before it, we cannot say that the PTAB erred in rejecting Warsaw’s argument. If all of the arguments made on appeal had been made to the agency and the record made to support them, the agency may well have reached a different conclusion; however, we may not entertain new arguments and reverse the agency on the basis of them.
Nevertheless, the PTAB maintains the independent obligation to make the necessary findings and to provide an administrative record showing the evidence on which the findings are based, accompanied by the agency’s reasoning in reaching its conclusions. As for its reasoning, the PTAB must articulate “logical and rational” reasons for its decisions.
We cannot reasonably discern that the PTAB’s decision as to the “elongated portions” limitation in claim 17 followed the proper path. The PTAB’s affirmative narrative in support of its finding that Jacobson discloses the subject limitation in claim 17 consists of a single sentence: “Jacobson appears to disclose anchor wires (i.e., ‘elongated portions’) that are positioned over adjacent vertebrae.” The PTAB’s conclusory assertion that Figure 5 of Jacobson “appears to” support its finding does not equate to the reasoned explanation needed to support its conclusion. Thus, we remand this issue to the PTAB for additional explanation.
- Peter HeuserShareholder
- Micah StolowitzShareholder