Federal Circuit Review - Issue 267
267-1. Federal Circuit Refuses to Evaluate Whether IPR Petition Named all Real Parties in Interest on Appeal, cites Cuozzo and Thryv
The United States Court of Appeal for the Federal Circuit recently affirmed the Patent Trial and Appeal Board’s (the Board) finding of obviousness for certain claims of U.S. Patent No. 9,415,130 (the ’130 patent) to ESIP Series 2, LLC (ESIP). The Court also clarified that the Supreme Court’s recent holding in Thryv, Inc v. Click-To-Call Techs., LP precludes ESIP’s argument that appellee Puzhen Life USA, LLC (Puzhen) failed to name all real parties-in-interest in its petition to institute inter partes review of the ’130 patent. See ESIP Series 2, LLC v. Puzhen Life USA, LLC, No. 2019-1659, 2020 U.S. App. LEXIS 15934 (Fed. Cir. May 19, 2020) (Before Lourie, Reyna, and Hughes, Circuit Judges) (Opinion for the Court, Reyna, Circuit Judge).
This case arises out of the inter partes review filed by Puzhen on claims 1, 3, and 17 of the ’130 patent. The ’130 patent relates to a diffuser including “a micro-cyclone for quiet, well diffused flow of ultra-fine droplets” and purports to solve long-standing problems in the art related to the diffusion of “overly large particles.” Claim 1, reproduced below, is illustrative of the invention:
1. A method for introducing a scent into breathable air, the method comprising:
providing a system comprising a reservoir, educator, and separator operably connected to one another;
providing a liquid constituting an aromatic substance selected by an operator for the scent to be introduced into the breathable air;
drawing a first portion of liquid from the reservoir by the educator passing a flow of air;
entraining the first portion of the liquid into the flow;
forming droplets of the first portion by at least one of restricting an area through which the flow passes and the entraining;
separating out a second distribution of the droplets by passing the flow through a wall between a first chamber and a second chamber, the flow path spiraling axially and circumferentially, simultaneously and continuously, through an arcuate channel formed through the wall; and
passing a first distribution of droplets out of the separator into the breathable air.
(Emphasis added).
Both during the IPR proceedings and before the Federal Circuit, ESIP argued that the cited references did not teach or suggest every element of the claims. Specifically, ESIP argued that the combination of the “arcuate channel formed through the wall” was not taught or suggested. However, the Federal Circuit found that the Board’s decision was supported by substantial evidence and affirmed the Board’s findings.
With respect to ESIP’s challenge of Puzhen’s inter partes review petition, the Federal Circuit first looked to the relevant statute. Noting that the statute requires, inter alia, “identification of all real parties in interest” as well as “identification with particularity” of each claim challenged, the Court looked to Cuozzo Speed to inform its decision. In Cuozzo Speed, the Supreme Court held that the Federal Circuit is precluded from reviewing Board decisions concerning the particularity requirement. More recently, in Thryv, the Supreme Court additionally held that the Federal Circuit is also precluded from reviewing the agency’s decision whether to apply the one-year time bar on institution of inter partes review, finding that “a contention that a petition fails . . . is a contention that the agency should have refused to institute an inter partes review,” cutting against the bar of appellate review for ordinary dispute about the application of an institution-related statute. Thryv, Inc v. Click-To-Call Techs., LP, 140 S. Ct. 1367, 1373–74 (2020); 35 U.S.C. § 314(d).
Analogizing the real parties in interest requirement to the particularity requirement, the Federal Circuit held that there was “no principled reason why preclusion of judicial review” would not extend to the real parties in interest requirement of § 312(a)(2), because ESIP’s challenge to the Board’s real parties in interest determination raises an ordinary dispute about the application of an institution-related statute which precludes review.
A party cannot appeal a potential real-party-in-interest error because the determination raises an ordinary dispute about the application of an institution-related statute which precludes its review.
267-2. Federal Circuit Vacates Finding of Invalidity Based On Lack of Enablement
The United States Court of Appeals for the Federal Circuit recently issued a ruling affirming the District Court for the Central District of California finding of noninfringement of McRO’s patent by multiple video game developers, and vacating and remanding the district court’s finding of invalidity due to lack of enablement. See McRO, Inc. v. Bandai Namco Games America Inc., No. 2019-1557, 2020 U.S. App. LEXIS 16071 (Fed. Cir. May 20, 2020). (Before Reyna, Mayer, and Taranto, Circuit Judges) (Opinion for the Court, Taranto, Circuit Judge).
McRO, Inc. (McRO) is the owner of U.S. Patent No. 6,611,278 (the ’278 patent) directed to “a method for automatically generating animations, with a three-dimensional appearance, depicting lip movements and facial expressions.” In particular, the ’278 patent discloses the method which includes a computer system receiving a time aligned phonetic transcription, applying a set of rules to the time aligned phonetic transcription, and outputting a stream or streams of morph weight sets to automatically generate animations.
In 2012, McRO sued more than a dozen video game developers (the Developers) alleging the Developers infringed three different method claims of the ’278 patent by using and selling video games that use software applications to model facial animations. In particular, the Developers use software applications that use a “bones animation” technique. The district court initially found the method claims invalid for ineligibility under 35 U.S.C. § 101; however, in 2016, the Federal Circuit reversed the district court’s finding and concluded that an algorithm for syncing anime lip-movements with various sounds is patent eligible under § 101. McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016). The Federal Circuit explained that the method claims include rules that are limiting, as they define morph weight sets as a function of the timing of phoneme sub-sequences. On remand, the district court found the Developers were entitled to summary judgment of noninfringement and invalidity. The district court found that the bones animation technique does not rely on three-dimensional vectors for its movement of vertices, and thus, the Developers do not infringe the “morph weight set” limitation. Additionally, the district court found that “at the time of the invention, a person of skill in the art would not have the tools to practice the full scope of the ‘first set of rules’ limitation,” and thus, the claimed invention was not enabled by the specification. Subsequently, McRO appealed.
With regards to the appeal of the judgement of noninfringement, the Federal Circuit ultimately agreed with the Developers that the term “morph weight set” requires three-dimensional vectors, and thus found that it was not an improper for the district court to rule that a “vector” must have “3-D magnitude and direction computed by pure subtraction/addition between the neutral and target models, with one vector corresponding to each set of two vertices.” The Federal Circuit explained that proper claim construction takes into consideration both the context of the particular claim in which the disputed term appears, but also the context of the entire patent. See Phillips v. AWH Corp., 415 F.3d 1303, 1313-1316 (Fed. Cir. 2005). Here, the specification provides an express definition that a “delta set” requires “a one-to-one correspondence between the vertices of the neutral model and the vertices of each morph target, with a ‘vector’ connecting these corresponding vertices in three-dimensional space.” (emphasis added). Additionally, the Federal Circuit noted that an equation provided in the specification confirmed the interpretation that “morph weight set” requires three-dimensional vectors.
McRO attempted to argue that the ordinary meaning of “vector” is broader and should be construed to mean merely an ordered list of numbers. The Federal Circuit explained that this generalized definition is an accepted broad definition of “vector” but that “the existence of one broader meaning in the field is not controlling.” Instead, the context of the particular patent provides the strongest evidence of meaning, and here, the patent specification dictates that a narrower geometric meaning that requires the three-dimensional vectors is appropriate. Accordingly, because the parties agreed that under this narrow interpretation of “morph weight set” the Developers do not infringe, the Federal Circuit affirmed the district court’s finding of noninfringement.
With regards to McRO’s appeal of the judgement of invalidity, the Federal Circuit ultimately agreed with McRO that the Developers failed to adequately prove that the specification did not enable the scope of Claim 1’s “first set of rules” limitation. Under 35 U.S.C. § 112, a specification must “contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains . . . to make and use the same.” 35 U.S.C. § 112(a). However, Section 112 requires enablement of “only the claimed invention.” Union Carbide Chemicals & Plastics Tech. Corp. v. Shell Oil Co., 308 F.3d 1167, 1186 (Fed. Cir. 2002). Thus, to determine enablement, the scope of the claims must be determined, and then the question becomes whether undue experimentation is necessary to make and use the full scope of embodiments of the invention as claimed. See id.
The Developers identified two techniques, the bones animation and the BALDI technique, that were allegedly not enabled in the specification. In support, the Developers relied on previous court cases in which courts had invalidated patents due to lack of enablement after identifying infringing products or processes that are not enabled. However, the Federal Circuit noted that the previous cases in which products or processes were deemed not enabled are different than the claims at issue here. Here, the claims involve an “abstract assertion of breadth, without concrete identification of matter that is not enabled but is or may be within the claim scope.” In particular, Claim 1 requires “obtaining a first set of rules that defines a morph weight set stream as a function of phoneme sequence and times associated with said phoneme sequence.” This claim limitation requires two operations. The first operation regards “a set of rules that determine what the output morph weight set stream will be when any sequence o[f] phonemes and their associated times is encountered.” The Federal Circuit concluded that this characteristic of the claimed invention did not need to be taught in specification, as “a patent need not teach, and preferably omits, what is well known in the art.” Spectra-Physics, Inc. v. Coherent, Inc., 827 F.2d 1524, 1534 (Fed. Cir. 1987). Here, it was well known that animators knew how to match mouth positions to phonemes. The second operation regards “a set of rules that tells the system how to automatically output the chosen mouth shapes in a format that can create an animation – as a continuous stream of morph weight sets that can transform a neutral model.” Because this operation is a novel aspect of the claimed invention, the specification must reasonably teach how to make and use it. See Auto. Techs. Int’l, Inc. v. BMW of North America, 501 F.3d 1274, 1284 (Fed. Cir. 2007). The Developers relied on expert testimony to explain that “a person of skill in the art would not have had the tools to practice the full scope of the ‘first set of rules’ limitation.” However, the Federal Circuit noted that because of the narrow construction of Claim 1, and particularly the term “morph weight sets,” the bone animation technique and the BALDI system are not even within the scope of claim 1, and thus, are not required to be enabled by the specification under § 112. The Federal Circuit concluded that “[w]ithout bones animation and the BALDI process available as claim-covered techniques that must be enabled, the district court’s reasoning is too abstract and too conclusory to support summary judgment.” Because there is at least some expert testimony to support enablement, it was improper for the district court to conclude summary judgment of nonenablement for the Developers.
Accordingly, the Federal Circuit vacated the district court’s finding that the Developers were entitled to summary judgment that the ’278 patent is invalid due to lack of enablement and remanded the case for further proceedings. The Federal Circuit further noted that the district court should consider the Developers’ offer to withdraw the invalidity counterclaims.
Aspects of an invention that are known in the art do not need to be fully described in the specification. However, novel aspects of an invention must be enabled, and the specification must reasonably teach how to make and use any novel aspect of the invention. Additionally, only the claimed invention must be enabled under 35 U.S.C. § 112.