Droplets, Inc. v. E*TRADE Bank., Appeal No. 2016-2504 (Fed. Cir. 2018)‎

In an appeal from an inter partes review, the Federal Circuit affirmed a decision by the PTAB invalidating a patent concerning interactive computer links.  The case primarily concerned whether incorporation by reference was sufficient to meet the “specific reference” requirement to properly claim priority from an earlier provisional application.

Petitioner E*TRADE filed a petition for inter partes review of Droplets’ U.S. Patent No. 8,402,115 (“the ’115 Patent”).  The ’115 Patent claimed priority to U.S. Patent No. 7,502,838 (“the ’838 Patent”).  Droplets argued that the ’115 Patent was entitled to the benefit of an earlier provisional application—Provisional Application No. 60/153,917 (“the ’917 Provisional”)—because the ’115 Patent incorporated by reference the ’838 Patent, and the ’838 Patent claimed priority to the ’917 Provisional.  The Board disagreed, holding that incorporation by reference was insufficient to satisfy the “specific reference” requirement under 35 U.S.C. § 120.

Pursuant to § 120 and 37 C.F.R. § 1.78, the Patent and Trademark Office requires the “specific reference” to include “each prior-filed application’s: (1) application number; and (2) familial relationship.”  Such reference must be included on an application data sheet or in the first sentence of the specification.

In affirming the Board’s invalidity decision, the Federal Circuit relied on Medtronic CoreValve LLC v. Edwards Lifesciences Corp., 741 F.3d 1359 (Fed. Cir. 2014).  In Medtronic, the Court held that “the ‘specific reference’ requirement in § 120 ‘mandates each [intermediate] application in the chain of priority to refer to the prior applications.’”

The Court also dismissed Droplet’s argument that the Board invalidated its patent due to a “hypertechnical violation.”  Instead, the Federal Circuit emphasized that relying on incorporation by reference to satisfy the “specific reference” requirement runs afoul of § 120’s policy “to eliminate the burden on the public to engage in long and expensive search of previous applications in order to determine the filing date of a later patent.” And “[t]o require the public to search for an unstated priority claim through incorporated materials would create uncertainty and would require the type of guesswork that the statute is meant to avoid.”  Thus, § 120 requires strict adherence because the provision “places the burden on the patent owner to provide a clear, unbroken chain of priority.”

A patent must contain a specific reference to each prior-filed application in the chain to be entitled to those applications’ earlier filing dates. Droplets’ patent did not include a specific reference to the ’917 Provisional, so the ’115 Patent cannot claim the benefit of the earlier filing date.

Separately, E*TRADE filed a cross-appeal from portions of the Board’s final written decision, even though it had won the case.  For example, E*TRADE objected to the Board’s claim construction and its analysis concerning one of the prior art references.  E*TRADE relied on 35 U.S.C. § 141(c), which provides appellate jurisdiction to any party “who is dissatisfied with the final written decision of the” PTAB.  The Federal Circuit disagreed that the language in § 141(c) meant that any point of disagreement with the Board decision was subject to appeal, instead reinforcing its “well-established rule” that it “review[s] judgments, not opinions.”  The Court explained that cross-appeals are only appropriate when “acceptance of the argument advanced would result in a reversal or modification of the judgment rather than an affirmance.”  Because the Board issued a judgment of invalidity as to all claims, there was nothing for E*TRADE to cross appeal, and its cross-appeal was therefore improper.

Opinion can be found here.


Wi-Fi One, LLC v. Broadcom Corporation, Appeal No. 2015-1944 (Fed. Cir. 2018) 

In a remand from a 2017 en banc decision, a Federal Circuit panel revisited the standard for time bars under 35 U.S.C. § 315(b) governing inter partes reviews.  In the prior panel decision, the panel held that issues concerning § 315(b) were not appealable.  That statute bars the filing of an IPR petition by “the petitioner, real party in interest, or privy of the petitioner” more than one year after service of a complaint asserting infringement.  The en banc court reversed, holding that time bar determinations concerning privies and real parties in interest are appealable.  In this remand decision, the panel held that the PTAB did not err in finding that an indemnity agreement between the IPR petitioner and litigants in a district court lawsuit did not constitute privity, and also held that the Board did not abuse its discretion in denying related discovery.  Judge Reyna issued a lengthy dissenting opinion, asserting that the PTAB was applying an incorrect legal standard, and that discovery should have been allowed.

Opinion can be found here.

James v. j2 Cloud Services, LLC, Appeal No. 2017-1506 (Fed. Cir. 2018)

In an appeal from a district court’s dismissal for lack of standing, the Federal Circuit reversed.  The plaintiff filed suit to assert a correction of inventorship under 35 U.S.C. § 256, asserting that he was the sole inventor of the patents at issue, though others were named.  The district court held that the plaintiff lacked standing because he had not shown that he had an ownership right in the patent.  Specifically, it held that, even if he was the sole inventor, he had assigned, or obligated himself to assign, his patent rights to his former company.  The Federal Circuit concluded that the relevant Software Development Agreement (SDA) could be construed in Mr. James’s favor, leaving him with the rights to the patents at issue, and standing to seek a correction of inventorship.  The Federal Circuit also concluded that the SDA does not support a hired-to-invent inference.

Opinion can be found here.

Voter Verified, Inc. v. Election Systems & Software, Appeal No. 2017-1930 (Fed. Cir. 2018)

In an appeal from a district court finding that claims were invalid as patent ineligible under § 101, the Federal Circuit affirmed.  The patent at issue had previously been litigated between the parties, and the district court had previously dismissed the defendant’s § 101 defense.  The Federal Circuit first held that the Supreme Court’s Alice decision was not an intervening change in the law.  Second, it held that the prior litigation did not result in issue preclusion, because the § 101 defense was neither “actually litigated” nor “a critical and necessary part of the judgment” in the prior action.  Third, visiting the merits, the Court held that the claims at issue, relating to voting, verifying votes, and submitting votes for tabulation, were patent ineligible as an abstract idea.

Opinion can be found here.

John Bean Technologies v. Morris & Associates Inc., Appeal No. 2017-1502 (Fed. Cir. 2018)

In an appeal from a district court summary judgment order dismissing a case, the Federal Circuit addressed an issue of first impression concerning the doctrine of equitable estoppel.  Specifically, the Court held that, when amendments are made during reexamination proceedings that are “both substantial and substantive,” prior acts giving rise to equitable estoppel may be negated, and the defense may no longer apply.  The Court held that, under the facts of this case, the district court erred in finding equitable estoppel.  However, the Court noted that its holding does not necessarily apply to all reexamined patents.

Opinion can be found here.

Raniere v. Microsoft Corporation, Appeal No. 2017-1400 (Fed. Cir. 2018)

In an appeal from a district court decision, the Federal Circuit affirmed an award of fees and costs to the defendants.  The Federal Circuit had previously affirmed the district court’s summary judgment decision that the plaintiff did not have standing.  In the instant appeal, the Court affirmed that costs could be awarded to defendants as a “prevailing party” where the case was dismissed on jurisdictional grounds.  The Court also held that the district court did not abuse its discretion in awarding attorneys’ fees pursuant to 35 U.S.C. § 285.

Opinion can be found here.

Apator Miitors APS v. Kamstrup A/S, Appeal No. 2017-1681 (Fed. Cir. 2018)

In an appeal from an inter partes review, the Court addressed whether the PTAB had erred in its finding that Apator failed to provide sufficient evidence of conception and reduction to practice necessary to swear behind a prior art reference.  The Court affirmed the PTAB’s decision, holding that Apator did not show sufficient evidence of conception.  In particular, an inventor’s own testimony in the absence of any evidence is insufficient to establish prior conception.

Opinion can be found here

Sumitomo Dainippon Pharma Co. v. Emcure Pharmaceuticals, Appeal No. 2017-1798 (Fed. Cir. 2018)

In an appeal from a district court Hatch-Waxman case, the Federal Circuit addressed whether the District Court correctly rejected the Appellant’s narrow claim construction that limited the claim at issue to “a racemic mixture of two enantiomers of which the structural formula is representative.”  The Court found that at a minimum the claim covered the (–) enantiomer.  Since this finding resolved the claim dispute between the parties, the Court did not examine the remainder of the District Court’s construction and affirmed its judgment.

Opinion can be found here.

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