by Dennis Crouch
Network-1 Techs. v. Hewlett-Packard Co. (Fed. Cir. 2020)
In this case, the E.D. Tex. jury came back with a win for the defendant — finding that HP did not infringe Network-1’s US6218930 and that the patent was invalid. Post-Verdict, the district court flipped on validity — holding that HP was estopped from raising its obviousness challenge because it had joined an (unsuccessful) IPR against the patent.
The invention here relates to logic for sending a power-supply on the same twisted-pair used for data transmission (Power over Ethernet or PoE). The basic approach is that the ethernet cable will start-off with a low-level current. If a particular access-device signals that it can handle higher power, then the server will raise the power level being sent. The patent here issued in 2001 (1999) priority and the lawsuit was originally filed in 2011.
Statutory Estoppel: The big issue in the case for the patent world is statutory estoppel. One reason why this lawsuit took so long to complete was that there were two intervening reexaminations and one inter-partes-review. HP was time-barred from bringing its own IPR, but was able to join one filed by Avaya. The instituted IPR challenged the patent claims for anticipation and obviousness based upon two prior art references Matsuno and De Nicolo. Although the PTAB granted the IPR, it eventually upheld the validity of the challenged claims.
One result of losing an IPR challenge is estoppel under 35 U.S.C. § 315(e)(2).
(2) Civil actions and other proceedings. The petitioner in an IPR … that results in a final written decision … may not assert … that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.
Id. Following the IPR final written decision, the district court eventually determined that HP was generally estopped from raising an obviousness challenge (this ruling unfortunately came post-verdict after the obviousness challenge had already been raised).
On appeal, the Federal Circuit vacated — finding that the district court too broadly applied estoppel. In reading the statute, the appellate panel concluded that “a party is only estopped from challenging claims in the final written decision based on grounds that it ‘raised or reasonably could have raised’ during the IPR.” Slip Op. In this case, HP was time-barred from brining new claims and was limited to simply joining the claims brought by Avaya. “Because a joining party cannot bring with it grounds other than those already instituted, that party is not statutorily estopped from raising other invalidity grounds.” Id.
What is a “Ground.” The USPTO has a way that it treats a “ground” in inter partes review, but how should the term really be construed? The estoppel provision applies to “any ground” raised in the IPR, but the statute does not go on to define the meaning of the term “ground.” Here, the court interpreted the term as any invalidity contention against the challenged claims in the IPR based upon the prior art that served as the basis for the IPR. The court writes:
When the Board reached a final written decision …, HP was statutorily estopped from raising invalidity grounds based on Matsuno and De Nicolo against claims 6 and 9 in a district court action. HP, however, was not estopped from raising other invalidity challenges against those claims because, as a joining party, HP could not have raised with its joinder any additional invalidity challenges.
Slip Op. Remember, the jury found the patent invalid and that verdict was rejected by the court on JMOL (JNOV). That JMOL decision has been vacated. On remand, the district court will now need to decide whether to (1) give effect to the verdict; or (2) hold a new trial on validity.
The Federal Circuit got this right according to the Statute — and it also serves as a signal to folks who are deciding whether to join a pending IPR that the estoppel consequences will be quite limited.
Claim Construction: On appeal, the Federal Circuit provides the patentee with potential shot at winning by shifting the claim claim construction. In particular, the court found error in construction of the term “main power source.” In particular, the district court construed the phrase as requiring a “DC power source” and on appeal the Federal Circuit expanded the definition:
We conclude that the correct construction of “main power source” includes both AC and DC power sources. There is no dispute that the ordinary meaning of “power source” includes both AC and DC power sources. And neither the claims nor the specification of the ’930 patent require a departure from this ordinary meaning.
Slip Op. On remand, we’ll see if a new jury changes its mind based upon this difference.
Claim Broadening: The third question on appeal involved HP’s argument that the patentee had improperly broadened claim 6 during a reexamination in a way prohibited by statute:
No proposed amended or new claim enlarging the scope of a claim of the patent will be permitted in a reexamination proceeding
35 U.S.C. § 305. A claim is “enlarg[ed]” if it covers any embodiments not covered by any original claim.
Some facts:
- Two prior district courts interpreted Claim 6’s “secondary power source” to be physically separate from the claimed “main power source.”
- In the reexamination, two dependent claims were added to to require that the two power sources be “the same physical device.”
Although claim 6 was not itself amended, the dependent claim strongly suggested that the claim should be interpreted differently. As the lawsuit progressed, Network-1 subsequently disclaimed these newly added claims and the district court gave Claim 6 its narrow interpretation.
On appeal, the Federal Circuit looked at the final result — the scope of Claim 6 has not changed. “Where the scope of claim 6 has not changed, there has not been improper claim broadening, and HP’s argument fails.”
The court went on to explain that the addition of those dependent claims would not have changed the scope of claim 6.
Thus, even were dependent claims 15 and 16 broader than unamended, independent claim 6, the remedy would not be to find claim 6 invalid as broadened, but to invalidate added claims 15 and 16 [for improper broadening].
Slip Op. This decision sits well here, but will lead to further odd results when applied to ordinary prosecution because it allows for dependent claims that are broader than the independent version.
OT but of patent interest as one of the largest-ever design patents suit damages-claims, and potentially related to some major “short seller” new items, GM due diligence in allegedly paying 2 billion for 11% of Nikola, etc. Nikola had asked for $2 billion in damages from Tesla for 3 alleged truck design patent infringements. [Also reportedly arguing some functional features legally irrelevant to design patents?] The May 23, 2018 Patently-O had noted: “Jason Cannon: Nikola Suing Tesla Over Alleged Electric Semi Truck Patent Infringement (Source: Equipment World) “
Current news reports indicate that Tesla now claims that Nikola (NKLA) stole its truck design from Rimac’s designer. That is, Tesla claims that the patents aren’t valid because Nikola failed to disclose that some of the Nikola One’s features were designed by Adriano Mudri, most known for being the Director of Design at Rimac. Tesla argues: “Adriano Mudri is the designer of the Road Runner concept truck .. entered into the 2010 Michelin Design Challenge, and was selected for display at the 2010 North American International Auto Show. ..”
This of course leads to interesting questions of why this is apparently being presented as false inventorship attrition rather that just 103 prior art, and/or an inequitable conduct defense? More jury appeal?
As a result of this decision, the estoppel for the joining party is now limited solely to the actual ground(s) considered and rejected in the IPR. This will have significant implications on IPR strategies in litigation.
From a practical standpoint, this means that a joining party is not exposed to any “real” estoppel consequences, even if the IPR petition loses. True, the joining party cannot at trial raise the actual invalidity ground(s) rejected in the IPR, but so what? Even without AIA estoppel, many defendants would never even consider presenting such a challenge to a jury. The defendant would be relying on a ground that was specifically rejected by the PTAB, and many district judges (including the E.D. Tex. judge here) would allow the jury to be informed of the PTAB decision. It goes without saying that most juries would be unlikely to want to second guess the PTAB, and many defendants would fear losing credibility with the jury for even asking them to do so. In other words, with this decision, the estoppel for a joining party only applies to invalidity ground(s) that the defendant most likely wouldn’t have wanted to present at trial anyway.
This decision will clearly encourage more IPR joinder and result in fewer separate IPR challenges. In the past with multi-defendant cases, it has been common for multiple defendants to file their own separate IPR petitions against the same patent raising different prior art and arguments, rather than joining petitions filed by other defendants. The main reason was simple–the PTAB has consistently required a joining party to serve solely in an “understudy” role in which it cannot participate in any way in the IPR unless the original filer drops out for some reason (such as settlement). That means that joining defendants (1) could have been subject to full IPR estoppel to the same extent as the original filer, but (2) had no ability to participate in the IPR. A lot of defendants were understandably leery of joining someone else’s IPR petition if it meant putting their fate in the hands of someone else over whom they had no control. But by eliminating the fear of full estoppel (2) for joining parties, it will be much more palatable for defendants to simply join someone else’s IPR petition rather than file their own separate petitions. The upshot, therefore, is that this decision will likely conserve PTAB resources and reduce the burdens on patent owners by reducing the number of separate and distinct IPR petitions filed by different accused infringers.
Re: “In the past with multi-defendant cases, it has been common for multiple defendants to file their own separate IPR petitions against the same patent.”
Yes, but there is more to the control issue. I.e., different law firms for different defendants naturally think [and/or want their clients to think] that their firm can do a better job filing and litigating their own IPR on their own billings than the others. Or, have different opinions as to which combination of prior art would be the most effective. This is where objective and cost-conscious in-house patent attorneys can play a valuable role if they have any say in the matter.
You’re right, Paul, some defendants will likely continue to file their own separate IPR petitions for a variety of reasons, e.g., they have better prior art. But there’s now a consequence to a separate-filing decision that no longer attaches to joinder petitions, i.e., full blown AIA estoppel. That will no doubt tip the decisional scales against separate filings, perhaps not for everyone, but for a good number of defendants in these cases.
As a result of this decision, the estoppel for the joining party is now limited solely to the actual ground(s) considered and rejected in the IPR. This will have significant implications on IPR strategies in litigation.
From a practical standpoint, this means that a joining party is effectively not exposed to any estoppel consequences, even if the IPR petition goes down in flames. True, the joining party cannot at trial raise the actual invalidity ground(s) rejected in the IPR, but so what? Even without AIA estoppel, many defendants would never even consider presenting such a challenge to a jury. The defendant would be relying on a ground that was specifically rejected by the PTAB, and many district judges (including the E.D. Tex. judge here) would allow the jury to be informed of the PTAB decision. It goes without saying that a jury would be exceedingly unlikely to want to second guess the PTAB, and many defendants would fear losing credibility with the jury for even asking them to do so. In other words, with this decision, the estoppel for a joining party only applies to invalidity ground(s) that the defendant most likely wouldn’t have wanted to present at trial anyway.
This decision will clearly encourage more IPR joinder and result in fewer separate IPR challenges. In the past with multi-defendant cases, it has been common for multiple defendants to file their own separate IPR petitions against the same patent raising different prior art and arguments, rather than joining petitions filed by other defendants. The main reason was simple–the PTAB has consistently required a joining party to serve solely in an “understudy” role in which it cannot participate in any way in the IPR unless the original filer drops out for some reason (such as settlement). That means that joining defendants (1) could have been subject to full IPR estoppel to the same extent as the original filer, but (2) had no ability to participate in the IPR. A lot of defendants were understandably leery of joining someone else’s IPR petition if it meant putting their fate in the hands of someone else over whom they had no control. By eliminating the fear of full estoppel (2) for joining parties, it will be much more palatable for defendants to simply join someone else’s IPR petition rather than file their own separate petitions. The upshot, therefore, is that this decision will likely conserve PTAB resources and reduce the burdens on patent owners by reducing the number of separate and distinct IPR petitions filed by different accused infringers.
link to ipwatchdog.com
OT, but I think this is a big deal and probably something to watch.
Listening to a Constitutional series podcast this morning (one can not get enough of the Foundation of this country), an alarm was being sounded on the denigration of a fundamental principle of Separation of Powers.
In particular, Separation of Powers has seen serious erosion when law writing occurs outside of the Legislative Branch.
Directly on point to Night Writer’s post, there the writing of law is occurring in the Executive Branch.
That is right anon that the judicial and executive branches have gone way out of bounds. And it is interesting that few people relate that to Ginsburg when so much of what she did was fabricate rights that are not in the Constitution. She would say that she just knew what the best thing to do was ’cause, ’cause.
Ginsburg is one of the group of justices with Warren that undermined the rule of law to such a degree as it is unrecognizable as existing in this country.
And note that does not mean that I don’t agree with the policies just who and how they should be changed. Having judges legislate is why we are so far out on a weak branch right now.
One of the things about this too is that you can see this in that the news services are trying to lionize her as great person as if she is Plato or a great philosopher and they focus on personality traits and personal traits.
So it is like a sovereign that they are admiring. Not the application of law. Not the actual legal doctrines.
Frankly, the reaction to Ginsburg illustrates that we are now a third-world country. People in the government now make more than the private industry except for the top 1-5% of people. Every government official is corrupt. Just look at how much a person was worth before going into office and how much they are worth after leaving office or being in office for 5 years.
Ginsburg epitomizes all that is wrong with this country. Rather than applying the law she thought how can I bend the laws to suit what I want. And her legacy is a series of decisions that are only tenuously tied to the Constitution so that another court can easily throw them all out.
“So it is like a sovereign that they are admiring.”
I have seen homages that literally portray her with a crown.
I will point out though, that it is not The departed Justice Ginsburg alone (by any stretch of the imagination) that suffered (or continues to suffer) under this degradation of Separation of Powers, and — as I have locked horns specifically with the likes of Dave Boundy on this — we as attorneys operate on an ethical requirement to NOT place the Supreme Court above the Constitution.
This does mean speaking out against the Court when they err at a Constitutional level, as they have done multiple times with patent law.
I have seen FAR too many people sit on their ethical duty and retreat behind a “they are Supreme” and their pronouncements thus untouchable wall (of ignorance).
Dave is the only one (ever) to actually provide a State Bar’s attorney oath, and it was the Commonwealth of Massachusetts that might (just might) provide an argument that one is not so ethically required to act as I have put forth.
No other person and no other State oath has volunteered to engage in that disalogue.
I do agree with women’s right of choice, gay marriage, etc.
But I think the problem is just like with Alice that the Scotus just made things up as if they were legislators rather than putting back to the legislators.
It is like gun laws. We need to amend the Constitution if we want to restrict guns and we should face these issues rather than relying on who is on the Scotus for what rights we have or don’t have.
As I have stated many times: the ends do not justify the means.
The Great Experiment of the US Sovereign is built upon the balance and power of the Separation of Powers.
We stumble along with a certain ebb and flow of being in line with those principles and off the path and in the weeds from those principles.
The best that we can hope for is inte11ectual honesty as to whether or not we ARE in line or we are on a frolic from those principles.
It is a discipline of the mind to recognize the danger of the “Ends justify the Means” trap and to make excuses with a “well I believe THAT Ends is OK, or that THESE Means really don’t matter this time.
Of course, as commentators on a legal patent blog, this ‘moralizing’ comes into play in discussions from a legal perspective and doubly so when it is patent law that is the subject of the illicit Ends justify the Means syndrome.
So while we all may recognize what are and what are not desirable Ends, we must not celebrate ANY reaching of those Ends that sacrifices the principles of the Great Experiment.
Far, far too many people — especially attorneys who should recognize by their training the dangers of such — are too easily swayed by the Ends and turn a blind eye to the Means.
This also is reflected in my “Sir Thomas More” posts. It is simply a losing proposition to the embrace the expediency of “tearing down all the laws to get to the devil.”
> And it is interesting that few people relate that to Ginsburg when so much of what she did was fabricate rights that are not in the Constitution
Yes, we should go back to the days when:
1. Women were not allowed to have an abortion, even when it meant certain death for her.
2. Women were not allowed to hold a mortgage or have a credit card or have other things without her husband’s permission.
3. Birth control was illegal.
4. Women were not allowed to vote.
5. African Americans could be murdered without consequences to the murderer. (We still have that.)
6. African Americans could be owned as property.
You privileged rich guys are on the wrong side of history. (Tell me how you worked your way up from nothing to become rich and powerful, and that anyone can do it if they work hard enough.)
Read Will Durant’s The Lessons of History. It’s all about the Water Works. They’re broken. Either fix it or make a violent revolution inevitable.
And finally, the military will decide who the Commander in Chief is and therefore, whose orders to take. They have all taken an oath to preserve, protect, and defend the Constitution. Hopefully they will honor their oath and make the right decision.
Whomever the Commander in Chief is, is by definition, the President.
No one you are providing us with a false choice.
What many educated people think is that the Scotus has become legislators and the real legislators has used this to abrogate their duties to the country.
And the fact is that many of the things you list are from judicial activists on the other side of RBG.
Many people think the way out of this mess is to amend the Constitution and many people say that an Equal Rights Amendment as an example would be highly likely to pass now.
Nice fear mongering and playing into the narrative of good vs. bad rather than applying the law vs. judicial activism.
The problem with your yapping is that you get what you want as long as your judges are there. Amend the Constitution and the justices don’t make too much difference as long as they apply the law. You don’t need the fabrication of rights that don’t exist in English Common Law or the Constitution.
Anyway, you sound like one of the World Wrestling Foundation cheering people with one good side and one bad side and with all the fans losing their rights.
Plus the history of this country is to amend the Constitution for big changes.
Having fights to get your justice on the Scotus is not a stable situation and is not the will of the people but the will of nine justices.
NOIP,
What part of your parade of horribles are rights outside of the Constitution,
Do you believe that the Ends justify the Means?
Do you believe that law should be thrown away to “go after the Devil?”
Do you believe in entirely disregarding history and the foundation of the Rule of Law for this country?
As Night Writer has pointed out, your post is nothing more than a fallacy of false choice, elevating what may well otherwise be excellent ends with a “it does not matter” in regards to the means.
You could not be further from the truth when it comes to the Rule of Law.
Yes, defining by actual PTO rulemaking seems preferable for something as inherently vague as the standards for when an IPR petition can be denied on “discretionary” grounds.
But the actual impact will be limited to the very few “rocket docket” districts with actual [not imaginary] trial dates nearly as fast as IPRs and also having judges that do not grant any stays for getting cases off their docket without having trials in declared IPRs.
Sounds like a bunch of “well, we don’t like those means” type of response, Paul.
No, I’m assuming, as usual, that the intended readers of comments on this blog are more interested in practical realities than slices of personal pie in the sky.
No, I think that in this instance, you are the one aiming for that “slice of personal pie in the sky,” and I am the one pointing out that you are doing so.
Boy, oh boy; these (unconstitutional “judges”) IPRs certainly save everyone lots and lots of time and $$$.
Why, just look at all the court trials that have been avoided.
You know; just as Congress intended.
This decision… will lead to… odd results when applied to ordinary prosecution because it allows for dependent claims that are broader than the independent version.
I cannot agree with this. This decision does not suspend the operation of §112(d). No one had occasion here to raise a §112(d) challenge, so the court does not wade into that issue. If, however, a patent applicant should—in future—push through a dependent claim that is broader along some dimension than its independent claim, it will be that patentee’s hard luck when the dependent claim later fails under §112(d).
Greg, yes, while §112(d) should prevent parent claim broadening by dependent claims, here apparently the parent claim itself was not limited to having two seperate power supplies, and adding dependent claims requiring that the two power sources be “the same physical device” would not have been considered a §112(d) violation in the reexamination because it reads like a claim narrowing limitation.
But if the specification had no disclosure of the two power sources ever being “the same physical device” should that not be a “new matter” rejection for an ADDED claim?
If having them be the “same device” is within the scope of the independent claim, but they didn’t have possession of it, then its a 112 possession issue that could invalidate the independent claim. (New matter arises in litigation as a possession issue).
This is a good example of the difference between enablement and possession.
That’s always been left a muddled topic (to me), ksksksks.
Can you not possess that which you have enabled?
If you have enabled something, how is it that you do not possess it?
With the courts super-empowering the Person Having Ordinary Skill In The Art (in their leading edge-of-sword use for obviousness), how then does one deal with the necessary trailing edge-of-sword that actual enablement is severely ‘cheapened,’ nearly to the point that mere possession DOES entail enablement?
At the risk of mingling different topics, over on the Hricik side of the blog, there is a thread with people struggling with the notion of inventions by Artificial Intelligence, with an insertion at a certain point of the notion of ‘awareness.’ At what point in the court’s elevation of the powers of PHOSITA (for one purpose) does the innate ‘awareness’ influence another purpose of PHOSITA?
This type of ‘connection’ is also simply not limited to the notion presented above, and in fact is part and parcel of the larger issue of ‘functional language’ and the design choice of software versus hardware in the computing arts. “A processor configured to” IS a type of claim that directly feeds on the power of PHOSITA. Such a claim is NOT “pure functional claiming, even as those set against such claims wish otherwise. Rather this type of claim falls squarely in the Prof. Crouch coined phrase of Vast Middle Ground — especially so in consideration of the immediately presented point of the power of PHOSITA.
This also is merely the factual reflection of innovation’s presence in the Kondratiev Fifth Wave.
Again, those not liking this reality of innovation clamor against that reality, but that reality persists nonetheless, and the actions taken to weaken patents in view of that reality cannot be constrained to only one aspect of innovation and thus ripple their ill effects to all of innovation.
anon, Imagine that I claim:
“A car having four tires.”
Then in prosecution, to overcome prior art, I amend to:
“A car having four tires, each inflated to between 35-40 psi.”
There was no disclosure of 35-40 psi limitation in the original disclosure. However, one of ordinary skill would very easily be able to inflate a tire to 35-40 psi, so there is no enablement issue. This would be challenged in litigation as possession issue, not enablement. (it should also be rejected in prosecution under whatever CFR covers new matter, but if it gets through, you cant use a CFR in litigation to invalidate claims).
As far as machine learning/AI stuff, to me the question is not whether you can claim something invented by the AI, but whether you can claim the AI itself, given that the AI is a black box. Can you claim: “A machine configured to invent a model that distinguishes between poisonous spiders and non-poisonous spiders.” (or the process equivalent: “A process comprising training a machine to develop a model that recognizes poisonous spiders from non-poisonous spiders.” The process is of course the same as any other AI process: feeding images labeled as poisonous and images labeled as non-poisonous, and letting the black box AI discover whatever differences there are. I see tons of these claims going through now, and there will be a lot of litigation on them in the future.
Can you claim: “A machine configured to invent a model that distinguishes between poisonous spiders and non-poisonous spiders.”
I do not think that I am revealing the answer to an esoteric mystery when I tell you that the answer is “no.” We in the antibody arts learned as much to our chagrin in Amgen v. Sanofi. The molecular biologists learned even earlier in Ariad. I have seen this movie before, and I know how it will end, even without waiting for the precedential opinion to arrive in 2031.
Technically speaking ksksksks, your hypo is a ‘new matter’ item and neither a ‘possession’ or ‘enablement’ item, and thus does not alleviate the point that I presented.
As a possible counter (to avoid the ‘new matter’ issue), let’s change your hypo slightly and provide that tires with inflation were generally noted in the specification, but that while the specific range was not enunciated, it falls into a type of ‘boilerplate’ general caveat.
Then you are placed squarely back into the conundrum that I have provided, and your answer is NOT on point.
As to your view of AN AI question, I think that you avoid the meat of the issue that is being chased there with your different (but still interesting) question.
I have seen AI applications that DO claim “the AI itself” – leastwise various improvements in the processing of AI, and I might posit that your hypo in this regards suffers from a bit of aiming to have a failure, as opposed to aiming just how such a ‘claim the AI itself” would actually be presented.
As such, your hypo is just not all that interesting, and falls into a type of hypo such as “I claim water, wherein the water happens to be made by X” – and wherein the actually unclaimed (directly) ‘X’ may or may not be inventive in and of itself. Such is bit of misdirection and obfuscation on an available much more clear issue that could be explored.
How convenient: (deliberately) miss your bar date to file an IPR, but gain from that by joining another’s IPR, and thus avoid estoppel when you argue your case in court, if such proves necessary because the IPR was unsuccessful.
I guess certain parties think it’s a great thing that US law gives patent challengers numerous bites at the apple.
+1
+1
Thanks for this write-up clarification of this holding that a losing IPR joinder-party has a more limited estoppel from an IPR or reexam than the Petitioner. But should even a petitioner have been fully estopped in the D.C. here? Because this decision says “HP argued that each of the asserted claims was rendered obvious by both public use of “the Fisher system,” which was a PoE system developed by David Fisher, and by the patents and printed publications referred to as “the Fisher patents,”3 Woodmas,4 and Chang.5 See J.A. 78.” Estoppel of a petitioner could apply to the latter but the former is not a patent or publication and cannot be raised in either an IPR or reexamination and thus estoppel does not apply to it.
This decision sits well here, but will lead to further odd results when applied to ordinary prosecution because it allows for dependent claims that are broader than the independent version.
I think the difference is that in Network-1 (and ArcelorMittal discussed in this decision), the dependent claims were added to attempt to undo a narrow claim construction, not eliminate expressly recited claim elements in the independent claim.
During prosecution, under the “broadest reasonable interpretation” standard, the independent claim will likely be construed to be at least as broad as the dependent claims. If the dependent claims are “broader” because they attempt to eliminate claim elements, they ought to be rejected on 112 grounds.
Comments are closed.