The Patent Office can Overrule the Federal Circuit on Patent Invalidity

Tuesday, March 6, 2018

Last week, the Federal Circuit affirmed a U.S. Patent and Trademark Office determination that patent claims are invalid despite its earlier decision upholding the validity of the same claims. Knowles Electronics LLC v. Cirrus Logic, Inc., No. 2016-2010 (Fed. Cir. Mar. 1, 2018).

The Earlier Case

In the earlier case, the Federal Circuit ruled the International Trade Commission correctly interpreted “package” – a claim term from U.S. Patent No. 6,781,231 – to mean “a self-contained unit that has two levels of connection, to the device and to a circuit (or other system).” Consequently, “[i]f there is only one connection level, then there is no package.”

The Federal Circuit further agreed that the ‘231 patent’s “package” wasn’t in the prior art. On June 3, 2011, the Federal Circuit upheld the ITC’s determination that an importer of an accused product infringed the ‘231 patent in violation of the Tariff Act, 19 U.S.C. § 1337.

The Later Case

While the first case was pending, a petitioner asked the Patent Office to reconsider granting the ‘231 patent. Specifically, the petitioner filed a petition for inter partes reexamination with the Patent Office, requiring the Patent Office take a second look at the ‘231 patent’s validity. According to petitioner, a prior art patent to van Halteren anticipated the ‘231 patent’s claims.

In response, the patent owner asserted that van Halteren did not disclose a “package.” This was so, the patent owner argued, because van Halteren’s assembly didn’t suggest a second-level connection, let alone a second-level connection via through-hole mounting or surface mounting.

As an initial matter, the Patent Office pointed out it wasn’t required to adopt “the narrow interpretation of ‘package’ that the Federal Circuit adopted.” To that end, “precedent makes clear that the USPTO is not bound in reexamination proceedings by claim constructions produced by a court.”

Next, the Patent Office applied a “broadest-reasonable-interpretation” standard to “package.” According to the Patent Office, “a chip package need not possess a second-level connection to a printed circuit board that is made specifically by either through-hole mounting or surface mounting.” In fact, industry definitions suggest “a package need not necessarily include any second-level connection at all.” Accordingly, the Patent Office concluded van Halteren disclosed a “package” under the term’s broadest reasonable interpretation, and that the ‘231 patent claims were invalid.

The Federal Circuit affirmed. A Federal Circuit majority read the Patent Office’s decision not as adopting a construction of “package” to mean without any second-level connection. Rather, the majority understood the Patent Office holding that a “package” didn’t require a surface or through-hole mount. As such, the majority found no inconsistency with its earlier holding, and concluded the Patent Office “properly construed the claim term ‘package’” in its invalidity determination.

In dissent, Judge Newman pointed out that while the Federal Circuit had previously held the Patent Office wasn’t bound by a district court’s claim construction, it had never before found its own claim constructions were not preclusive vis-à-vis the Patent Office. Moreover, the earlier Federal Circuit decision should have precluded the Patent Office from finding the ‘231 patent claims invalid, whether the Patent Office’s claim construction was inconsistent with the earlier decision or not.

Finally, Judge Newman noted that the purpose of post-grant proceedings under the America Invents Act is to provide more efficient and less costly determinations of certain patent validity issues than what is otherwise available through courts. That purpose is negated, however, by Patent Office litigation of the same issues already addressed in a final judicial decision.

What this means to our clients

This latest Federal Circuit decision underscores again that our clients should strongly consider attacking a patent’s validity in the Patent Office rather than in courts. This is true whether the patent is encountered through a charge of infringement, or simply as a potential impediment to making and selling a product.

After all, patent claim terms are given their broadest reasonable interpretation in Patent Office post-grant proceedings. In addition, a patent claim need only be proven unpatentable by a preponderance of the evidence. In court proceedings, however, a patent challenger must prove a claim is invalid by clear and convincing evidence.

George Schooff

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