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PTAB Fails to Consider Arguments in Reply Brief

On Friday, June 1st, the Court of Appeals for the Federal Circuit issued a decision in In re: Durance striking down a decision by the Patent Trial and Appeal Board (PTAB) that affirmed a patent examiner’s obviousness rejection of a microwave vacuum-drying apparatus and associated method. The Federal Circuit panel consisting of Judges Alan Lourie, Jimmie Reyna and Raymond Chen determined that the PTAB erred in not considering arguments offered in the patent applicant’s reply brief, which were properly made in response to the examiner’s answer.

In September 2014, the examiner issued a final rejection, which rejected all 37 claims of the patent application on 35 U.S.C. § 103 for obviousness and 35 U.S.C. § 112 for not meeting the written description requirement and lack of enablement. The obviousness finding was based on two pieces of prior art: U.S. Patent No. 6442866, titled Method and Apparatus for Drying or Heat-Treating Products (“Wefers”) and issued in September 2002; and U.S. Patent Application No. 20050019209, titled Method and Device for Sterilizing Containers (“Burger”) and filed in July 2002. The examiner rejected most of the ‘895 patent applications claims after finding that Wefers disclosed every limitation of claim 1 except for the tumbling limitation, which was itself disclosed by Burger. The examiner rejected Durance’s argument that rotating the container to enhance tumbling of the organic material was not present in the Wefers and Burger combination; the examiner found that the organic material’s tumbling was an inherent function of all rotating containers. On the indefiniteness finding, the examiner found that the patent application’s specification did not meet the written description requirement under Section 112 because it did not discuss the rotational speed necessary to tumble the organic material.

After an examiner interview in December 2014, the examiner withdrew the rejection based on the Section 112 grounds but maintained the obviousness rejection based on Burger’s teaching of a transportation means rotating a container through a vacuum chamber from the inlet to the outlet. Durance appealed to the PTAB, arguing that Burger taught the application of plasma to the surface of containers and not the rotation of the containers to tumble the contents for balancing out the microwave radiation applied to the cylinders. Durance further argued that Wefers taught away from agitating products during transportation because it stressed the “gentle continual transport” needed to reduce maintenance expenses. The examiner answered this argument based on new grounds that there was no structural difference between Durance’s claimed invention and the combination of the prior art references. Although Durance argued that the examiner’s understanding of structural identity for rejection, which had never before been articulated, was extremely inaccurate as the claimed invention in the ‘895 patent application required the use of gears, not simply gravity. The PTAB sided with the examiner, finding that Durance’s arguments only addressed individual references and not the combination.

Durance appealed for rehearing by the PTAB, arguing that the Board erroneously ignored reply brief arguments related to the structural identity rejection. In not addressing arguments that the claimed structure is different than the Burger structure, the PTAB “misapprehend[ed] the law” on inherency by ignoring the argument that structural identity cannot be used to show that a method claim is inherently performed by a combination of prior art references. In denying the request for rehearing, the PTAB stated that it did not misapprehend the doctrine on inherency because it didn’t invoke that doctrine in affirming the examiner’s rejection. “In the interest of fairness,” the Board did consider Durance’s reply brief argument that the amount of material packed into the container affects whether the material would tumble, but the Board reiterated that it would not consider other reply brief arguments.

On appeal to the Federal Circuit, Durance argued that substantial evidence doesn’t support the PTAB’s finding that the combination of the prior art references taught the tumbling limitation either expressly or inherently. Durance also argued that the PTAB lacked substantial evidentiary support to show that a skilled artisan would modify Wefers to include the rotation feature disclosed by Burger.

In its discussion of the issues in the appeal, the Federal Circuit opined that “the Court is not confident in the Patent Office’s reasoning for its rejection of the Application” based upon the shifting arguments offered in the patent examiner’s rejections, as well as the PTAB’s argument on appeal that the Federal Circuit should find inherency in the first instance after the PTAB told Durance that inherency was never invoked. In analyzing 37 C.F.R. § 41.41(b), the relevant statute under which the PTAB waived Durance’s reply brief arguments, the Federal Circuit noted that the statute allows a patent owner to include responses to an examiner’s answer in a reply brief. Nothing in the statute bars the patent owner from addressing new arguments made by the examiner that were not articulated in the Final Office Action, the appellate court found.

The PTAB’s refusal to consider Durance’s reply brief arguments on structural dissimilarity between the patent application and the prior art references required vacating the agency’s decision and remanding the case back to the Board, the Federal Circuit held.

USPTO Withdraws CAFC Brief, Actively Considering PTAB Practice

Josh Malone, the inventor of Bunch-o-Balloons; and Telebrands Corporation, the power behind As Seen on TV,  have been fighting over Malone’s invention of one of the most popular new toys to hit the market in years. Using Malone’s innovation, it is possible to fill 100 water balloons in under 60 seconds. The invention works like a charm, and it flies off the shelves of big-box retailers like Costco.

Telebrands has lost patent infringement decisions repeatedly in federal district court to Malone’s company, Tinnus Enterprises. Telebrands has even lost at the United States Court of Appeals for the Federal Circuit. Indeed, every federal judge and every federal jury that has decided cases in this ongoing battle has ruled for Malone and Tinnus.

Telebrands has done better at the Patent Trial and Appeal Board. Notwithstanding Telebrands successes at the PTAB, recently the PTAB published final written decisions (here and here) upholding claims from two of Tinnus’ patents — U.S. Patent No. 9,242,749 and U.S. Patent No. 9,315,282 — the same patents that a federal jury found infringed and which lead to an award of $12.4 million in damages last November. These decisions represent a rare case where the PTAB agreed with a jury.

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Federal Circuit gives hope to patentees facing patent ineligibility challenges

The Federal Circuit recently issued an important decision in Berkheimer v. HP Inc. (Fed. Cir. Feb. 8, 2018) (Before Moore, Taranto, and Stoll, J.). Giving hope to patentees who own computer-implemented inventions, the Federal Circuit ruled that it is not always appropriate to declare the broadest independent claim to be representative, and also held that questions of fact underlie patent eligibility determinations, which makes summary judgment inappropriate in at least some cases.

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Jury finds Corel willfully infringed Microsoft Office patents

A jury from the Northern District of California recently awarded Microsoft Corporation a total of $278,000 in a patent infringement action against Corel Corporation and Corel, Inc. (collectively “Corel”). See Microsoft Corporation v. Corel Corporation et al (Case: 5:15-cv-05836-EJD). Microsoft had requested more than $1 million in damages for the infringement of patents related to Microsoft Office (i.e., the Microsoft Office patents).

Microsoft sued Corel in December 2015, asserting infringement of nine patents — 5 utility patents and four design patents. By the time the case was submitted to the jury on Friday, February 9, 2018, only six patents remained in the case…two utility patents and four design patents.

Microsoft argued that Corel willfully infringed those patents. The asserted Microsoft patents are directed to graphic user interfaces used in Microsoft products, such as Microsoft Office. Microsoft asserted that it has given its interfaces, including menus and toolbars, a distinctive look and feel, which Corel copied into the accused products, including WordPerfect X7. WordPerfect X7 even includes an option to use the product in the “Microsoft Word mode.” See Complaint para 3-5. Similarly, Quatro Pro X7 offers the option to use the product in the “Microsoft Excel mode.” See Complaint para. 6-8.

In the jury verdict form returned, the jury unanimously agreed that Corel had willfully infringed those patents. (more…)