Federal Circuit Patent Watch: Federal Circuit disapproves PTAB assertion that IPR panel should raise unpatentability grounds sua sponte only in “rare circumstances”

Federal Circuit Patent Watch: Federal Circuit disapproves PTAB assertion that IPR panel should raise unpatentability grounds sua sponte only in “rare circumstances”

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Precedential Federal Circuit Opinions

1.  BASF PLANT SCIENCE, LP. v. COMMONWEALTH SCIENTIFIC[OPINION]  (2020-1415, 2020-1416, 2020-1919, 2020-1920, 3/15/2022) (NEWMAN, TARANTO, and CHEN) 

Taranto, J.  The Court considered a variety of appeals and cross appeals in a case involving six patents concerning “the engineering of plants, particularly canola, to produce specified oils not native to the plants.” First, the Court affirmed the district court’s decision that venue was proper as to a third-party counterclaim defendant, holding that the patent venue protections of 28 U.S.C § 1400(b) do not apply to third-party counterclaim defendants. Second, the Court held that the asserted patents’ genus claims were invalid for lack of an adequate written description but held that the remaining species claims were sufficiently described. Third, the Court affirmed the jury’s verdict that five patents were not co-owned by defendant BASF but reversed the contrary verdict as to the sixth patent. Finally, on the remedy issues, the Court affirmed the district court’s refusal to submit willfulness to the jury and its decision on an evidentiary issue concerning past damages, but remanded “for reconsideration of the remedy, while leaving the current remedy in place pending such reconsideration.”

Judge Newman dissented in part.

2.  DYFAN, LLC v. TARGET CORPORATION [OPINION]  (2021-1725, 03/24/2022) (LOURIE, DYK, and STOLL) 

Stoll, J.  The Court reversed a district court’s determination that patent claims were invalid as indefinite under 35 U.S.C. § 112 ¶ 2. The district court had concluded that certain claim limitations using the terms “code” and “application” were in means-plus-function form under § 112 ¶ 6 and that the claims were indefinite because the specification did not disclose sufficient structure corresponding to the recited functions. The Court disagreed, concluding that the claim terms did recite sufficient structure and that they should not be given a means-plus-function construction: “Unlike in the mechanical arts, the specific structure of software code and applications is partly defined by its function.… In determining whether software limitations like those at issue here recite sufficient structure, we can look beyond the initial ‘code’ or “application” term to the functional language to see if a person of ordinary skill would have understood the claim limitation as a whole to connote sufficiently definite structure.” Because the Court concluded “that the disputed claim limitations are not drafted in means-plus-function format, the Court reverse[d] the district court’s judgment of invalidity and remand[ed] for further proceedings.”  

3.  HUNTING TITAN, INC. v. DYNAENERGETICS EUROPE GMBH [OPINION]  (2020-2163, 2020-2191, 3/24/2022) (PROST, REYNA, and HUGHES) 

Hughes, J.  The Court affirmed a PTAB Precedential Opinion Panel decision vacating a PTAB panel’s denial of a motion to amend on the ground that the proposed amended claims were invalid as anticipated by the prior art. The petitioner had challenged the proposed amended claims as obvious in view of the prior art, but the original PTAB panel determined that the proposed amended claims were anticipated by one of the cited prior art references. The Precedential Opinion Panel, however, concluded that, while a panel may find proposed amended claims unpatentable on grounds not raised by the petitioner, the panel should not have done so in this case, because a panel should raise unpatentability grounds sua sponte only in “rare circumstances.” The Court affirmed the decision on the narrow ground that the petitioner had not challenged the Panel’s determination that there was not sufficient “readily identifiable evidence” of anticipation. The Court noted, however, that it was not affirming a more general rule about when the PTAB should consider unpatentability grounds sua sponte: “[W]e do find problematic the Panel’s reasoning behind its decision to confine the Board’s discretion to sua sponte raise patentability issues to only rare circumstances. For example, while the adversarial system proves useful in IPR proceedings to bring forth evidence the agency might not have otherwise discovered, the Panel’s substantial reliance on the adversarial system as the basis for confining its patentability determination for new claims overlooks the basic purpose of IPR proceedings: to reexamine an earlier agency decision and ensure ‘that patent monopolies are kept within their legitimate scope.’”

Judge Prost concurred.

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