United States: Back To The Bread And Butter, Unraveling, In Appeals From PTAB And A District Court, How Inventorship Affects A § 102(e) Analysis, Why The Doctrine Of Equivalents Does Not Apply, And Reversing A "Too-Narrow" Claim Construction

Decision: Duncan Parking Tech., Inc. v. IPS Group, Inc., --F.3d__, 2019 WL 386013 (Fed. Cir. Jan. 31, 2019) (LOURIE, Dyk, and Taranto)

Background: This involves two appeals: one by Duncan Parking Technologies (DPT) of IPR2016-00067 from the PTAB and the other by IPS of two district court decisions from the S.D. Cal. granting summary judgment of noninfringement. The two summary judgment decisions related to U.S. Pat. 7,854,310 and 8,595,054. The Final Written Decision of IPR2016-00067 found that claims of the '310 patent were "not unpatentable" (i.e., upheld as patentable) as not anticipated by the '054 patent under pre-AIA 35 U.S.C. § 102(e). The upshot is that IPS lives to fight another day.

King, the CEO of IPS, asserted that he conceived the idea for a credit-card enabled, solar-powered, single-space parking meter in May 2003. King consulted Schwarz, the CTO of IPS, as he worked on his idea, and hired in 2004 a design firm, D+I. Schwarz worked on how the various electrical components of the meter interconnected and operated, and Schwarz's diagram was eventually included as Fig. 8 in the '054 patent.

IPS filed a PCT on Dec. 4, 2006, naming King and Schwarz as inventors. This application issued as the '054 patent in 2013, claiming "a credit card-enabled, solar-powered, single-space parking meter device that can be used to retrofit the internal components of existing parking meters."

IPS filed another PCT on Feb. 27, 2008, naming King and three engineers from D+I as inventors (Hunter, Hall, and Jones). This application issued as the '310 patent in 2010, claiming "a credit card-enabled, solar-powered, single-space parking meter."

After being sued for patent infringement, DPT petitioned for inter partes review of claims 1–5 and 7–10 of the IPS '310 patent, arguing that the '054 patent anticipates the '310 patent under 35 U.S.C. § 102(e). In the IPR, IPS defended by arguing that the '054 patent cannot be applied as prior art against the '310 claims because the anticipating portions of the '054 patent are solely King's invention, not those "of another" under 35 U.S.C. § 102(e). DPT countered by arguing that the '054 patent is prior art because Schwarz conceived of at least a portion of the '054 patent's anticipating disclosure, concluding that the anticipating disclosure was thus "of another."

PTAB acknowledged that Schwarz created Fig. 8 but found that King was the sole inventor of the anticipating disclosure of the '054 patent. "The Board also found that, in order to account for certain claim limitations, DPT's anticipation argument relied on content of [the '054 patent], indisputably the work of King alone, that is outside of any depiction or description associated with Figure 8."

Issues: Was Schwarz a joint inventor of the anticipatory disclosure of the '054 patent, rendering that portion of the '054 patent 102(e) prior art against the '310 patent?  Were the district court's two grants of summary judgment for non-infringement by DPT sustainable?

Outcome: The appeal decision is mixed: the Federal Circuit reversed the IPR FWD holding the '310 claims 1–5 and 7–10 not unpatentable. In other words, the Federal Circuit found those claims unpatentable. On the summary judgment decisions, the Federal Circuit affirmed summary judgment of non-infringement by DPT on the '310 patent but reversed regarding the '054 patent and remanded to the district court for further proceedings consistent with the Federal Circuit's construction of the '054 patent claims.

The Federal Circuit found that the PTAB erred in concluding that the '054 patent did not anticipate the '310 patent. The Federal Circuit reiterated the test for determining "by another" for the purposes of § 102(e):

(1) determine what portions of the reference patent were relied on as prior art to anticipate the claim limitations at issue,

(2) evaluate the degree to which those portions were conceived "by another," and

(3) decide whether that other person's contribution is significant enough, when measured against the full anticipating disclosure, to render him a joint inventor of the applied portions of the reference patent.

The Federal Circuit held that the anticipating disclosure of the '054 patent is "by another" for the purposes of § 102(e): "[t]he '310 patent claims are clear on their face that they require electronic connections and components disclosed by Figure 8 in the '054 patent"; "Schwarz conceived much of the '054 patent's electrical system, including designing the diagram showing how all the electronic components are connected"; and "Schwarz's contribution to the invention defined by the '310 patent claims, as disclosed in the '054 patent, was significant in light of the invention as a whole." The anticipatory embodiment was the joint invention of both King and Schwarz. 

On the district court summary judgment decisions, the Federal Circuit, reviewing de novo the grant of summary judgment, agreed with the district court's construction of the '310 patent claims and its application of that construction to the alleged infringing product. The Federal Circuit reviewed only independent claims 1 and 9 of the '310 patent, relying, inter alia, on Wahpeton for the timeless proposition that once noninfringement is found of the independent claims, the alleged infringer cannot infringe the dependent claims, which after all, by operation of law, contain all the limitations of an independent claim. 

IPS urged that the district court erred because the alleged infringing product infringed either literally or under the doctrine of equivalents.  Regarding claim construction of the '310 patent, DPT defended the lower court's decision regarding claim construction, particularly focusing on the terms, "cover panel" and "attached."  The Federal Circuit agreed with DPT, sustaining the finding of no literal infringement.  

Regarding the question of the doctrine of equivalents with respect to the '310 patent, the Federal Circuit, in a tour de force that went all the way back to the venerable Supreme Court decision in Graver Tank, issued in 1950, found that the allegedly infringing device did not work in the same way as the claimed invention.  The Federal Circuit also noted that application of the doctrine of equivalents would "essentially read out" and "essentially void" at least one claim limitation, incorrectly "vitiating a claim limitation." That would extend the doctrine of equivalents too broadly, according to the Federal Circuit.

The story was different for the district court's claim construction of the '054 patent claims. IPS argued that the district court had construed too narrowly the claim term "receivable within."  IPS aptly argued that the district court's claim construction rendered the preferred embodiment outside the scope of the claims.  There was also an argument over what "within" means. 

Relying on the en banc Phillips case, the Federal Circuit reasoned that claim terms must be given their ordinary meanings "when read in the context of the specification and prosecution history."  A patentee is normally entitled to the full scope of its claim language, unless a claimed term is defined differently in the specification or the patentee "disavows the full scope of the claimed term during prosecution." Finding neither and noting, per Vitronics, that "a claim construction that excludes the preferred embodiment is highly disfavored," the Federal Circuit concluded that the district court's construction was erroneous, vacated, and remanded for proceedings consistent with the Federal Circuit's claim construction.  This leaves IPS alive to fight another day.

Prosecution Takeaways:

  • This case provides an example of how inventorship issues may arise in AIA post-grant proceedings, even under pre-AIA law, and remain very important in the United States. To be sure, pre-AIA 35 U.S.C. 102, and specifically, as here, § 102 (e), remains applicable for thousands of patents and will so remain for at least 15 more years. Joint inventorship can be complicated, and good record-keeping, whether electronic or paper, remains key. This case is also a timely reminder that for joint inventorship, a co-inventor does not need to contribute to all the limitations in any one claim.

  • For patent application drafters, it is important to seek to get inventorship correct before a patent issues. That may be easier said than done as multiple parties working on an invention may complicate this inquiry. Also, inventorship may need to be revisited if claims are amended during prosecution. It is important to keep in mind the following wisdom on the question of joint inventorship: "The exact parameters of what constitutes joint inventorship are quite difficult to define. It is one of the muddiest concepts in the muddy metaphysics of the patent law." Mueller Brass Co. v. Reading Industries, Inc., 352 F. Supp. 1357, 1372 (E.D.Pa. 1972).

  • Notice also from Duncan Parking that commonplace words like "within" and "attached," can have important and perhaps even unintended consequences. S. patent law is a thinking person's profession.  When drafting and prosecuting, be a patnostradamus and try to envision how such common words will be construed.  You might even decide to be more precise to obtain claims that will be literally infringed. 

  • And by analogy to Duncan Parking and Wahpeton, make sure that each independent claim recites clearly ONLY that which is required: unnecessary limitations may inadvertently narrow patent rights, not only for independent claims, but for all claims dependent thereon.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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