A Decision Not to Institute a Trial at the PTAB Does Not Carry Much Weight in Federal Court

By Tom Engellenner
Two recent cases show that simply avoiding a post-grant review proceeding at the U.S. Patent Office’s Patent Trial and Appeal Board (PTAB) not only does not preclude a defendant in underlying patent infringement litigation in a federal district court from raising the same invalidity arguments again, it also may not even influence the court’s claim construction. Moreover, the patent owner may not be allowed to make reference to its prior success in avoiding an administrative trial at the Patent Office as well.

Although 35 U.S.C. § 315(e)(2) provides an estoppel binding on a petitioner (or any party in privity with the petitioner) from raising the same issue in federal court patent infringement litigation if they lose in a PTAB final written decision, it is increasingly clear that a PTAB decision not to institute a trial is not likely to carry much weigh in federal court.

In Adidas AG v. Under Armour Inc. et al, C.A. No. 14-130, slip op. (D. Del. Dec. 15, 2015), the District Court of Delaware denied a defendants’ motion to modify the court’s claim construction order based on a PTAB decision denying institution of an inter partes review (IPR). The patent at issue covers “location aware” fitness trackers, which Addidas has alleged are infringed by Under Armour’s fitness and exercise monitoring systems. Even though Under Armour didn’t get a trial initiated on the Addidas patent at the PTAB, it did like the way the board construed the claims and urged Judge Sleet of the Delaware federal district court to adopt the same construction.

The Delaware District Court declined to change its construction of the term “with respect to a route path.”  Judge Sleet noted in a footnote that the “PTAB’s choice not to institute an IPR is not the type of adjudication that leads to issue preclusion.” The order further noted that the PTAB had not reached a final decision on the claim construction and consequently, the Court “is not bound by a preliminary claim construction used by the PTAB for the limited purpose of denying an IPR request.” Continue reading “A Decision Not to Institute a Trial at the PTAB Does Not Carry Much Weight in Federal Court”

Fed. Circuit Affirms PTAB’S CBM Decision Based on a Ground Not Raised By Petitioner

By Reza Mollaaghababa
In SightSound Technologies, LLC v. Apple, Inc. (CBM2013-00020), the Court of Appeals for the Federal Circuit (the patent appellate court) recently affirmed the decision of Patent Trial and Appeal Board (PTAB) to invalidate certain claims of SightSound’s patents 5,191,573 and 5,966,440 in a covered business method (CBM) proceeding based on an obviousness ground that was not expressly raised by the petitioner (Apple).

The ‘573 and ‘440 patents relate to methods for electronic sale and distribution of digital audio and video signals. Each of the relevant claims required forming a connection, through telecommunications lines, between a party’s first memory and a second party’s second memory, selling the desired digital signals for a fee through the telecommunications lines, transmitting the desired signal from the first memory to the second memory through the telecommunications lines, and storing the transmitted signal in the second memory.

In instituting the review of the challenged claims, PTAB found that the patents qualified for CBM review because they involved an activity that was “financial in nature,” namely, the electronic movement of money between financially distinct entities. The PTAB further found that the challenged claims did not include inventive technological features that would have otherwise excluded them from CBM review. The PTAB instituted the review not only based on anticipation grounds advanced by Apple but also based on an obviousness ground that was not specifically alleged by Apple, though the evidence upon which the PTAB relied for the obviousness ground was included in Apple’s petition. This evidence involved a series of disclosures relating to a computer system developed by CompuSonics in 1980’s. The Board reasoned that its reliance on this evidence was proper because while Apple’s petitions did no explicitly assert obviousness based on those disclosures, they nonetheless supported such a ground based on Apple’s detailed explanation of the CompuSonics references. Continue reading “Fed. Circuit Affirms PTAB’S CBM Decision Based on a Ground Not Raised By Petitioner”