Shaw Industries Group, Inc. v. Automated Creel Systems, Inc.
817 F.3d 1293
Fed. Cir.2016Background
- ACS owns U.S. Patent No. 7,806,360 (creel magazines supplying stranded material); claims fall into two groups: “non-interposing” (two packages per level) and “interposing” (more than two packages per level).
- Shaw sued ACS in district court in Feb 2012; ACS voluntarily dismissed the suit without prejudice. Within one year Shaw filed IPR petitions challenging all claims and advanced multiple grounds, including a Payne-based anticipation ground directed to the interposing claims.
- The PTAB instituted on some grounds but denied institution on the Payne-based ground as “redundant,” proceeding on combinations of other references; Shaw challenged the Board’s redundancy handling and later appealed the Board’s final written decision rejecting invalidity of the interposing claims on the instituted grounds.
- The Board found the interposing claims not unpatentable on the instituted obviousness grounds (Munnekehoff or Barmag in view of Ligón), but found some non-interposing claims unpatentable; the Board’s treatment of a disputed disclosure (“tube Q”) was ambiguous.
- Shaw sought mandamus to force PTAB to institute the Payne-based ground; the PTO argued estoppel would not attach to uninstituted grounds. ACS cross-appealed the Board’s treatment of §315(b) (one-year time bar) for the second petition after dismissal without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction to review PTAB’s decision to treat some proposed grounds as “redundant” (i.e., denial of particular grounds) | Shaw: final decision may be reviewed to challenge PTAB’s authority and correctness in deeming grounds redundant | PTO: institution decisions (and denial of particular grounds under §42.108) are committed to agency and nonappealable under §314(d) | Court: No jurisdiction to review institution/denial of grounds under §314(d); PTAB’s exclusion of Payne-based ground nonreviewable here |
| Mandamus to require PTAB to institute the Payne-based ground | Shaw: mandamus should issue because appeal is unavailable and estoppel might bar future use of Payne; PTAB abused discretion by denying the ground without reasoned findings | PTO: denied ground never became part of IPR so §315(e) estoppel does not apply; mandamus not warranted | Court: Denied mandamus; held §315(e) estoppel does not apply to uninstituted grounds and mandamus requirements not met |
| Merits — obviousness of interposing claims (Munnekehoff/Barmag + Ligón) and PTAB’s factual findings (including treatment of tube Q) | Shaw: Ligón’s teaching (tube Q) supplies the missing limitation and Munnekehoff does disclose corresponding structure; expert testimony supports combining references without undue redesign | ACS/PTO: PTAB reasonably found adding the second package as proposed would cause tangling and require redesign; expert reliance on tube Q was unsupported as taught for that use | Court: Review of obviousness is de novo, facts for substantial-evidence review; because PTAB’s language about tube Q is ambiguous, the court vacated in part and remanded for clarification/factual findings |
| §315(b) one-year time bar and effect of voluntary dismissal without prejudice | ACS: second petition was time-barred if earlier service counts; asks court to review PTAB’s interpretation treating dismissal as nullifying service | Shaw/PTO: dismissal without prejudice leaves parties as if suit never brought; PTAB’s interpretation is reasonable | Court: Lacks jurisdiction under precedent (Achates) to review institution-time-bar determination; on the merits PTAB’s conclusion that dismissal nullified service and that claim 4 was unpatentable was supported by substantial evidence; affirmed as to claim 4 |
Key Cases Cited
- Cuozzo Speed Techs., LLC v. Lee, 793 F.3d 1268 (Fed. Cir. 2015) (establishes that PTAB institution decisions are generally nonappealable under §314(d))
- Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015) (held challenges to PTAB’s §315(b) time-bar institution decision are not reviewable)
- Cheney v. U.S. Dist. Court for D.C., 542 U.S. 367 (U.S. 2004) (standards for issuing writ of mandamus)
- In re Gartside, 203 F.3d 1305 (Fed. Cir. 2000) (standard: obviousness reviewed de novo; factual findings for substantial evidence)
- Burlington Truck Lines v. United States, 371 U.S. 156 (U.S. 1962) (agencies must provide reasoned explanations; post-hoc rationalizations are improper)