Patent Case Summaries - September 2022 #2
Sep 15, 2022
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A weekly summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit and the opinions designated precedential or informative by the Patent Trial and Appeal Board. NXP USA, Inc. v. Impinj, Inc., IPR2021-01556 (PTAB Sept. 7, 2022) (precedential). Opinion by Vidal. The Patent Trial and Appeal Board exercised its discretion to deny institution of NXP’s IPR petition under 35 U.S.C. § 314(a) in view of the Board’s precedential Fintiv decision. NXP sought rehearing challenging the Board’s analysis of Fintiv factor 4, which concerns “overlap between issues raised in the petition and in the parallel proceeding.” NXP argued that the Board misapprehended or overlooked the fact that the patent at issue may not be part of a scheduled trial in the parallel district court proceeding. NXP also submitted a stipulation agreeing that, if the IPR is instituted, it would not pursue in the district court any grounds based on the prior art references relied on in the IPR. The Board denied rehearing. Director Vidal sua sponte initiated review “to address the limited question of whether the Board may reconsider a decision to deny institution based on a stipulation filed after the institution decision is made.” The Director held “that the Board correctly determined that a stipulation, offered by a petitioner for the first time after a decision denying institution, is not a proper basis for granting rehearing of the decision on institution.” She stated that “the only appropriate time for a petitioner to offer a stipulation related to the Fintiv factor 4 analysis is prior to the Board’s decision of whether to institute review.” A contrary rule, where a petitioner could “wait and see if the Board denies institution under Fintiv, and then offer such a stipulation for the first time on rehearing,” would “open the door to gamesmanship.”
Hyatt v. United States Patent and Trademark Office, No. 21-2324 (Fed. Cir. (E.D. Va.) Sept. 8, 2022). Opinion by Prost, joined by Moore and Hughes. Mr. Hyatt filed a patent application in May 1995, just prior to the effective date of the Uruguay Round Agreements Act, which altered the law on patent terms by making the terms 20 years from the effective filing date instead of 17 years from the grant date. To govern such “transitional” applications, the PTO promulgated Rule 129 which provides that, “(1) In an application … that has been pending for at least three years as of June 8, 1995 …, no requirement for restriction … shall be made or maintained in the application after June 8, 1995, except where … (ii) The examiner has not made a requirement for restriction in the present or parent application prior to April 8, 1995, due to actions by the applicant ….”
In 2013, the Examiner assigned to Mr. Hyatt’s transitional application instructed him to select a limited number of claims for examination. Mr. Hyatt complied by selecting eight claims out of the approximately 200 in the application. In 2015, the Examiner issued a non-final rejection of the selected claims, and Mr. Hyatt then responded by submitting significant claim amendments. The Examiner issued a restriction requirement on the basis that the amendments shifted seven of the eight selected claims to a different species of computer systems and processes. In response, Mr. Hyatt filed a district court complaint alleging that the PTO’s restriction requirement violated the Administrative Procedure Act since restriction requirements are generally not permitted for transitional applications. The district court granted summary judgment in favor of the PTO, ruling that Mr. Hyatt “failed to disclose claims to a separate invention and attempted to file them many years after 1995,” and “withholding these claims is an action by the applicant that falls within Rule 129(b)(1)(ii)’s applicant-action exception to the general rule prohibiting restriction requirements on transitional applications.” Mr. Hyatt appealed. The Federal Circuit affirmed. The court first rejected Mr. Hyatt’s argument that his “inaction” cannot constitute an “action” for purposes of Rule 129(b)(1)(ii). The Federal Circuit explained that whether Mr. Hyatt’s “actions are characterized as a failure to disclose or an act of withholding an entirely new species, it was that conduct of Mr. Hyatt that prevented the Examiner from entering a restriction requirement.”
The Federal Circuit also rejected Mr. Hyatt’s argument that applying the applicant-action exception would conflict with Rule 129(a) and Rule 129(b)(2). The court explained that Rule 129(a) does not speak to restriction requirements and does not limit application of the applicant-action exception. Regarding Rule 129(b)(2), the court explained that it specifically provides room for the applicant-action exception. Arendi S.A.R.L. v. LG Electronics Inc., et al., No. 21-1967 (Fed. Cir. (D. Del.) Sept. 7, 2022). Opinion by Prost, joined by Chen and Stoll. Arendi sued LG for patent infringement (Arendi I). During the course of the litigation, the district court struck part of Arendi’s infringement expert reports as beyond the scope of Arendi’s infringement contentions. Arendi then filed a second patent infringement suit against LG in the same court and involving the same patent (Arendi II). The district court granted LG’s motion to dismiss the Arendi II complaint under the duplicative-litigation doctrine, determining that in both cases the same products were accused of infringing the same patent. Arendi appealed, arguing that there is no overlap in the accused products in Arendi I and Arendi II. Arendi relied on the fact that the district court had struck certain sections of its expert reports in Arendi I, and thus certain products accused in Arendi II were no longer at issue. The Federal Circuit rejected this argument, noting that just because the products were no longer at issue did not mean that they were not accused. Specifically, the Federal Circuit explained that the district court granted the motion to strike because Arendi failed to fulfill its discovery obligations with respect to the products, not because Arendi failed to sufficiently accuse the products. Accordingly, the Federal Circuit affirmed the dismissal of the Arendi II complaint.