Alert November 18, 2013

PTAB Invalidates Patent in First Final Written Decision in New Inter Partes Review Proceeding

The PTAB issued its first final written decision in the new Inter Partes Review (“IPR”) post-grant proceeding on November 13, 2013, invalidating the claims under review. In its decision, the PTAB rejected patent owner Cuozzo’s proposed construction for the term “integrally attached,” rejected Cuozzo’s attempts to swear behind two key prior art references, and invalidated the three instituted claims as obvious over two combinations of prior art. Notably, the co-pending district court litigation between the parties was not stayed, but the district court judge had delayed scheduling a Markman hearing until after the PTAB’s decision. Because only three of the patent-at-issue’s 20 claims were involved in the IPR proceeding, the district court litigation will likely continue while Cuozzo presumably appeals the PTAB’s invalidity decision to the Federal Circuit.

A little more than 11 months after instituting trial in the first-ever inter partes review (“IPR”) proceeding under the America Invents Act, the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (“PTAB”) issued its first final written decision, invalidating the three instituted claims on two grounds of unpatentability.

In September 2012, Garmin International Inc. filed an IPR petition challenging the claims of U.S. Patent No. 6,778,074, owned by Cuozzo Speed Technologies.  The patent at issue is directed to a speed limit indicator that displays the current speed of a vehicle and how it relates to the legal speed limit for the current location in which the vehicle is traveling.  Although Garmin initially alleged over 40 challenges to the claims under both 35 U.S.C. §§102 and 103 in light of seven different prior art references, the PTAB trimmed down the challenges to just two obviousness combinations of three and four references, respectively. 

The claims under review required, inter alia, “a speedometer integrally attached to [a] colored display.”  Cuozzo argued that the term “integrally attached” should be construed as “joined or combined to work as a complete unit.”  Cuozzo’s claim construction was formulated to cover Garmin’s GPS devices that displayed both the vehicle’s speed and the speed limit in a single LCD display.  The PTAB rejected Cuozzo’s construction, instead construing the term as “discrete parts physically joined together as a unit without each part losing its own separate identity.”

Garmin had not proposed its own construction for this term in its IPR petition, instead adopting Cuozzo’s construction, which Cuozzo had previously advanced in the district court litigation.  The PTAB held that Cuozzo’s proposed construction effectively converted the claim feature into an “integral display” containing both the speed of the vehicle and the speed limit, rather than a speedometer that is attached to a colored display that shows the speed limit.

The PTAB also rejected Cuozzo’s expert declaration – submitted in support of its proposed claim construction – as vague.  The PTAB found that the ’074 patent lacked specificity regarding the LCD embodiment of the invention, stating only that an LCD may be used in place of a red filter disc as the “colored display.”  The PTAB also noted that Cuozzo’s expert admitted at his deposition that the claims do not recite a speedometer and colored display implemented on the same LCD. 

The PTAB further rejected Cuozzo’s attempts to use claim constructions of terms containing the word “integrally” from unrelated district courts to support its construction, finding that the patents all had different disclosures and that Cuozzo did not show that the fields of invention or the levels of ordinary skill in the art were the same for all cases.

The PTAB then found that the three instituted claims were unpatentable over two prior art combinations.  The first combination relied on three U.S. patents: Aumayer, Evans and Wendt.  Notably, Evans and Wendt were more than 35 years old.  Evans disclosed removable colored plates that could be attached to a speedometer to indicate the speed limit and Wendt disclosed an adjustable pointer that could be turned to indicate the speed limit.  Aumayer disclosed an electronic display speedometer that could indicate the current speed limit on the display using on an on-board GPS.  The PTAB found that Aumayer disclosed every element of the instituted independent claim except for the “integrally attached” limitation.  The PTAB then found that it would have been obvious to one of ordinary skill in the art to apply the adjustable colored plate of the combined teachings of Evans and Wendt to the glass cover of Aumayer’s GPS-based speed limit indicator.

The second combination relied on Tegethoff, Awada, Evans and Wendt.  Tegethoff disclosed an electronic speedometer display that used a mark to indicate the currently permissible maximum speed, based on either user input or an external source.  Awada disclosed a GPS-based speed limit indicator that was displayed separately from the speedometer.  The PTAB again found that Tegethoff and Awada collectively disclosed every feature of the instituted independent claim except for the “integrally attached” limitation, and found that it would have been obvious to combine those references with Evans and Wendt.

The PTAB rejected Cuozzo’s argument that the prior art references taught away from the two obviousness combinations, finding no reason that the mechanical elements of Evans and Wendt  could not be combined with electronic elements of Aumayer, Tegethoff and Awada.

Finally, the PTAB rejected Cuozzo’s motion to amend the claims to require that the speedometer comprised an LCD and the colored display be the same LCD.  The PTAB found that the ’074 patent did not provide adequate written description for the amended claims, because although the specification disclosed that both the speedometer and the colored display could be LCDs, there was no disclosure of a speedometer and colored display being the same LCD, especially in light of the instituted claims’ requirement that the two elements were integrally attached to each other.

Some key takeaways from the decision:

  • The PTAB invalidated the claims under review in light of two combinations of three and four prior art references, respectively.  Obviousness arguments based upon such complex combinations are rarely successful in federal district court.  This makes the PTAB an even more attractive venue for accused infringers.
  • The PTAB spent significant time in its decision explaining why it was not persuaded by Cuozzo’s expert.  It also reviewed the expert’s deposition testimony in detail.  Prior to this decision, it was unclear how much, if at all, the PTAB would focus on expert deposition testimony in making claim construction determinations.  Practitioners will undoubtedly spend more time and effort helping experts craft their declarations, preparing for depositions and pointing out deposition testimony to the PTAB during the IPR oral hearing.
  • Cuozzo’s motion to amend the claims was flatly denied on the basis that Cuozzo failed to identify specific specification support for the proposed amendment.  This is much different from reexamination practice where claim amendments are liberally granted.
  • The PTAB’s decision barely mentions Garmin – even though it had the burden of proof.  Rather, the decision is almost entirely focused on knocking down each of Cuozzo’s arguments, putting significant pressure on patent owners. 
  • Garmin did not propose its own broadest reasonable interpretation of the term “integrally attached,” instead advancing Cuozzo’s construction from the district court litigation, which the PTAB rejected in both its decision to institute the proceeding and in its final written decision.  Because of this, Garmin’s anticipation arguments were rejected by the PTAB upon institution.
  • Neither Garmin nor Cuozzo relied on an expert to support their respective positions on invalidity, but that is now uncommon in post-grant proceedings.  Both SAP and Versata, the parties involved in the first CBM review proceeding, relied on experts.  The PTAB credited SAP’s expert over Versata’s expert in its final written decision in that proceeding.
  • Other claims of Cuozzo’s patent are still at issue in the co-pending district court litigation between the parties.  Although that litigation was not stayed pending the IPR review proceeding, the district court judge had delayed the Markman hearing in that litigation until after the PTAB’s decision.  It will be interesting to see how the district court addresses the PTAB’s decision in light of the different claim construction standard and the different claims at issue.  Notably, Garmin filed a second IPR petition requesting review of the ’074 patent based on the PTAB’s construction of the term “integrally attached” in its institution decision (which the PTAB adopted in its final written decision).  That petition has not been instituted by the PTAB yet.
  • Cuozzo can now appeal the PTAB’s decision to the Federal Circuit.