Procedural Matters
- CAFC holds amended complaint does not prevent interlocutory order from merging with court's final judgment
- CAFC approves PTAB's handling of active party that is not meaningfully engaged
Estoppel effect of IPR decisions
- How the death of Chevron might impact patents (posted 07/04/24)
- S.Ct. told Fed. Cir treats patent owners unfairly (posted 11/15/19)

Procedural Matters

CAFC holds amended complaint does not prevent interlocutory order from merging with court's final judgment

In Koss Corp. v. Bose Corp., the Federal Circuit held that filing a (second) amended complaint does not nullify an interlocutory order, which therefore merges with a court's final judgment.

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CAFC approves PTAB's handling of active party that is not meaningfully engaged

In Cywee Group Ltd. v. ZTE (USA), Inc. ¹⁾, the Federal Circuit affirmed PTAB rulings invalidating claims of CyWee’s motion-sensing patents as obvious over prior art. The court approved the Board’s broadest reasonable interpretation of “outputting said updated orientation,” holding it encompassed both absolute and relative orientation data, and rejected CyWee’s attempt to narrow scope at the appeal stage . The panel also confirmed that well-supported combinations of prior art references can render claims obvious despite some unpredictability, and it upheld the Board’s treatment of evidence and expert testimony.

Where an active party to an IPR patent challenge no longer meaningfully engages in the IPR proceeding by not filing an opposition brief to a motion to amend, a passive party can file an opposition brief to a motion to amend, even where the passive party agreed to assume the primary role only if the active party ceases to participate in the IPR.

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Estoppel effect of IPR decisions

In SoftView LLC v. Apple Inc. ²⁾, the Federal Circuit confirmed for the first time that the Patent and Trademark Office validly promulgated 37 C.F.R. § 42.73(d)(3)(i) under its express statutory rulemaking power in 35 U.S.C. § 316(a)(4), and clarified how far that regulation’s estoppel effect reaches. The court held that § 42.73(d)(3)(i), which bars a patentee from “obtaining” claims not patentably distinct from claims canceled in an inter partes review, fits within the PTO’s authority to “govern inter partes review and the relationship of such review to other PTO proceedings,” even though it goes beyond common-law collateral estoppel by focusing on similarity to canceled claims rather than prior art. At the same time, the panel limited the rule’s scope: “obtaining” does not cover simply maintaining previously issued claims. The Board may use § 42.73(d)(3)(i) to reject newly presented or amended claims in ex parte or inter partes reexamination that merely combine limitations from canceled claims, but may not use it to wipe out already-issued claims on estoppel alone.

37 C.F.R. § 42.73(d)(3)(i) is authorized by 35 U.S.C. § 316(a)(4), and the PTO therefore did not exceed its rulemaking authority in promulgating it.
Not patentably distinct is equivalent to substantially the same and goes beyond common law by calling for a comparison between the claims an applicant is obtaining and the finally refused or canceled claim.
The Board can employ principles of obviousness under KSR in determining whether a claim is patentably distinct from a prior canceled claim under 37 C.F.R. § 42.73(d)(3)(i).

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37 C.F.R. § 42.73(d)(3): A patent applicant or owner is precluded from taking action inconsistent with the adverse judgment, including obtaining in any patent: (i) A claim that is not patentably distinct from a finally refused or canceled claim.

Holdings:

Background: “37 C.F.R. § 42.73(d)(3) . . . prohibits a patent owner from 'taking action inconsistent with the adverse judgment' in various proceedings, including IPR proceedings. [. . .] In particular, the regulation prohibits a patent owner from 'obtaining in any patent: (i) A claim that is not patentably distinct from a finally refused or canceled claim.'
- “In the inter partes reexaminations [of the '353 patent in which 18 claims were found invalid in a 2014 IPR decision] the examiner found the overwhelming majority of claims unpatentable over the prior art. . . . On appeal, the Board reversed the examiner's obviousness rejections on the ground that there was 'insufficient articulated reasoning.' The Board, however, entered a new ground of rejection as to all pending claims based on 37 C.F.R. § 42.73(d)(3)(i). Going claim by claim, the Board found that each claim was either essentially the same as a canceled claim or merely a combination of limitations that had previously been invalidated. [. . .] For that reason, the Board held that the claims were not 'patentably distinct' from those that had been invalidated in the IPR proceeding and were therefore invalid under section 42.73(d)(3)(i) of the PTO's regulations.
”[T]he terms 'not patentably distinct' and 'substantially the same' are equivalent. [. . .] In holding that the claims before it were not materially different from the canceled claims in any way that would affect patentability, the Board's approach merely considered whether the resolution of an issue in a previous case bards the relitigation of that issue in a subsequent case. That is the same question addressed under the common law rule. [. . .] Section 42.73(d)(3)(i) goes beyond the common law rule by calling for a comparison between the claims an applicant is 'obtaining' and the 'finally refused or canceled claim.' Whether the Board's action is lawful thus depends on whether the PTO had statutory authority to issue the regulation.”
“35 U.S.C. § 316(a)(4) . . . authorizes the Director to prescribe regulations 'establishing and governing inter partes review under this chapter and the relationship of such review to other proceedings under this title.' [This section] refers broadly to regulations 'governing inter partes review and the relationship of such review to other proceedings' before the PTO, and it provides a separate source of rulemaking authority for the PTO to issue such regulations. Thus, . . . section 316(a)(4) is not limited to authorizing the PTO to issue procedural rules. [. . .] Section 42.73(d)(3) . . . is clearly directed to 'governing inter partes review' and the 'relationship of such review to other proceedings' before the PTO. [. . .] Preventing a patent owner or applicant from acting inconsistently with the outcome of an IPR proceeding ensures that the decisions in those proceedings have practical effect. Preventing such inconsistent action is therefore closely tied to the statutory grant of authority to issue regulations 'governing inter partes review.'”
“Although we agree that the PTO was authorized to promulgate section 42.73(d)(3)(i), we disagree with the Board's application of that regulation to previously issued claims. By its terms, the regulation applies to 'obtaining' a claim–not maintaining an existing claim. For that reason, we vacate the Board's decision as to the 'issued claims' on appeal but affirm its application of the regulation to the 'amended claims.'”
“There are 107 amended claims at issue in this case. SoftView does not raise specific arguments with respect to whether particular amended claims are patentably distinct from the canceled claims. Our review is therefore limited to the Board's general methodology, which we uphold. [. . .] Even if we were to agree with SoftView's positions, SoftView's failure to tie its claim construction arguments to specific claims prevents us from determining whether the Board's constructions could impact the conclusion.”

Summary and takeaways

How the death of Chevron might impact patents (posted 07/04/24)

In Loper Bright Enterprises v. Raimondo, the Supreme Court held that “courts may not defer to an agency interpretation of the law simply because a statute is ambiguous.” However, the decision carved out prior cases that relied on the Chevron framework stating that “the holdings of those cases that specific agency actions are lawful . . . are still subject subject to statutory stare decisis.” A challenger must provide a “special justification” to overrule Chevron-era cases.

With the death of Chevron, the “Skidmore ³⁾ Deference Test” is now back. This rule states that a court is not compelled to follow an agency's interpretation of a statute but would determine the amount of deference to give the agency depending on “the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.

How will this impact the patent system?

The ITC's opinions and interpretations of Section 337 will no longer be entitled to Chevron deference. Therefore, new statutory challenges against induced infringement of products that do not infringe at the time of importation and method claims will increase at the ITC.
- For example, in Suprema, Inc. v. Int'l trade Comm'n ⁴⁾, the Federal Circuit upheld under Chevron the ITC's interpretation that Section 337 includes articles that do not infringe at the time of importation, but which are used thereafter to directly infringe at the inducement of the seller. It is unclear whether the “special justification” to overcome stare decisis of past Chevron decisions will protect this doctrine going forward.
The PTAB Consolidated Trial Practice Guide (Nov. 2019), PTAB Precedential Opinion Panel (“POP”) decisions and Informative Decisions, and Director Memorandums are not entitled to Chevron deference.

S.Ct. told Fed. Cir treats patent owners unfairly (posted 11/15/19)

In Chestnut Hill Sound Inc., v. Apple Inc. Chestnut Hill has invoked Equal Protection and Due Process clauses of the Constitution in its petition to the Supreme Court for writ of certiorari to block one-line summary affirmances altogether or at least mandate parity for patent owner and petitioner appellants. The petition argues:

”[t]he Federal Circuit is writing reasoned opinions for losing Petitioner-Appellants at a significantly higher rate than it writes reasoned opinions for losing Patent Owner-Appllants. Specifically, a losing Patent Owner Appellant is more than three times as likely to receive a Rule 36 summary affirmation than a losing Petitioner-Appellant. This is . . . to the detriment of the Patent Owner-Appellants, and it simply seems unfair.“

Update (11/19/19): In a related matter, Straight Path IP Group LLC v. Apple Inc. et al., the Supreme Court denied ⁵⁾ SPIP Litigation Group's petition to find that its Due Process rights were infringed by the Federal Circuit's tendancy to issue single-line orders under Rule 36. In this case, the Fed. Cir. summarily affirmed Judge Alsup's 2017 decision that Apple and Cisco did not infringe SPIP's patents.

News summary (paywall)

¹⁾

Fed. Cir. Apr. 12, 2024

²⁾

Fed. Cir. July 26, 2024

³⁾

Skidmore v. Swift & Co., 323 US 134 (1944)

⁴⁾

796 F.3d 1338 (Fed. Cir. 2015)

⁵⁾

Order List, Nov. 18, 2019

Table of Contents

Procedural Matters

CAFC holds amended complaint does not prevent interlocutory order from merging with court's final judgment

CAFC approves PTAB's handling of active party that is not meaningfully engaged

Estoppel effect of IPR decisions

How the death of Chevron might impact patents (posted 07/04/24)

S.Ct. told Fed. Cir treats patent owners unfairly (posted 11/15/19)

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