BOSCH AUTOMOTIVE SERVICE SOLUTIONS, LLC, Appellant v. Joseph MATAL, Performing the Functions and Duties of the Under Secretary of Commerce for Intellectual Property and Director, U.S. Patent and Trademark Office, Intervenor
2015-1928
United States Court of Appeals, Federal Circuit.
December 22, 2017
As Amended on Rehearing In Part March 15, 2018
1027
AFFIRMED
FRANCES LYNCH, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, argued for intervenor. Also represented by THOMAS W. KRAUSE, ROBERT MCBRIDE, SCOTT WEIDENFELLER.
Before NEWMAN, CHEN, and HUGHES, Circuit Judges.
CHEN, Circuit Judge.
This appeal arises from the inter partes review (IPR) of
BACKGROUND
I. The ‘796 Patent
The ‘796 patent, titled “Remote Tire Monitoring System,” relates to a handheld
According to the ‘796 patent, different manufacturers in the RTMS field use different types of devices and/or signals for activating RTMS tire sensors, including magnets, valve core depressors, continuous wave signals, and modulated signals. Id. col. 4, l. 33-col. 6, l. 32. These manufacturers also use different methods to transmit data from the tire sensor to the receiving unit, including RF signals at particular frequencies including 315 MHz, 433 MHz, and 916 MHz. Id. col. 2, ll. 38-48. The ‘796 patent‘s claimed activation tool is intended to work with all of these known RTMS architectures; it incorporates, into a single, handheld tool, all the known, different ways to activate RTMS tire sensors as well as the different ways known to communicate with a vehicle‘s receiving unit. Id. col. 2, ll. 49-63. The ‘796 patent contends that “[i]n this manner, a technician tasked to install a new tire or to rotate tires can utilize a single tool to work with remote tire monitoring systems made by different manufacturers.” Id. col. 2, ll. 60-63. When a technician moves from working on one vehicle to another vehicle that has a different RTMS activation system, the technician can simply switch between different modes of operation using a switch on the tool. Id. col 10, l. 66-col. 11, l. 2.
The ‘796 patent recites various apparatus claims drawn to this universal activation tool and method claims for using the tool. Claim 1 is representative of the claimed apparatus:
1. A tool comprising a plurality of means for activating remote tire monitoring system tire sensors, the plurality of means selected from the group consisting of a magnet, a valve core depressor, means for generating continuous wave signals, and means for generating modulated signals, wherein the tool is capable of activating a plurality of tire sensors, each of the plurality of tire sensors utilizing a different method for activating the said tire sensor.
Id. col. 12, l. 64-col. 13, l. 4. Method claim 20 is representative of the functions the claimed tool performs, i.e., activating the sensor, receiving data from the tire sensor, and transmitting the tire sensor data to the RTMS‘s receiving unit:
20. A method, comprising the steps of: activating a remote tire monitoring system tire sensor; receiving a tire sensor signal containing data from the activated tire sensor; and transmitting some or all of the data received from the tire sensor to a remote tire monitoring system receiving unit, wherein the activating step, the receiving step, and the transmitting step are all performed by a single tool, and wherein the tool comprises a plurality of means for activating remote tire monitoring system tire sensors.
Id. col. 16, ll. 1-10 (as amended by Certificate of Correction dated Oct. 11, 2005).
II. IPR Institution and Prior Art
On May 7, 2014, the Board instituted review of claims 1, 4-15, and 20-22 of the ‘796 patent based on Autel‘s petition alleging unpatentability on multiple obvi-
A. McClelland
McClelland describes an RTMS for monitoring internal pressure of a vehicle‘s tires and transmitting tire pressure readings via RF transmission to a receiving unit located in the vehicle. The McClelland RTMS is shown in Figure 1, reproduced below:
As shown in Figure 1, each tire (T) has its own tire monitor 12 that transmits tire pressure signals to the receiving unit 14. Receiving unit 14 provides a warning to the operator of the vehicle when the indicated tire pressure of any tire is outside a predetermined range.
McClelland activates each tire monitor 12 using a signal from an exciter unit 16, comprised of a low frequency transmitter circuit 20, high frequency receiver unit 22,
B. Kranz
Kranz similarly discloses a system referred to as a reader for determining whether the tires on a vehicle have low pressure. The Kranz reader transmits a modulated frequency signal to activate and request pressure information from RF tags co-located with the tires. The RF tags process the request and transmit tire information—including pressure and an RF tag ID corresponding to a particular tire—back to the reader. Kranz discloses that, in one embodiment, the reader is a handheld unit with an integrated display.
C. Dixit
Dixit discloses a tire condition sensor unit 18 at each tire to transmit sensed tire conditions (such as temperature and pressure) and tire location information to a vehicle-based central unit. Dixit Figure 2, reproduced below, shows a handheld transmitter tool 44 for communicating with RF receiver 46 associated with each tire condition sensor unit 18.
Dixit explains that the handheld transmitter communicates with each of the different tire condition sensor units for a particular vehicle. Dixit also contemplates that the handheld transmitter “communicate[s] with tire condition sensor units within different tire condition communication systems at different vehicles.” According to Dixit, the handheld transmitter is designed to serve as a “universal tool” that can communicate information to various
D. Howell
Howell seeks to address the problem caused by the proliferation of different, incompatible radio frequency identification (RFID) tags and transponders, like those employed in RTMS systems. Howell explains that “[c]urrently, there is no common carrier modulation and data transmission system agreed between manufacturers for such transponders and the systems chosen by different manufacturers of tags and readers vary widely and are generally incompatible with one another.” As a result, “a reader made by one manufacturer for reading a particular type of tag or transponder will not normally be able to read tags or transponders manufactured by another supplier.” Given the absence of a single communication standard, Howell teaches a handheld reader for determining “the modulation system and/or data transmission system of a data storage device thereby allowing data stored by different manufacturer‘s data storage devices to be read.” In other words, Howell teaches a handheld tool designed to communicate with tags and transponders from different manufacturers.
E. Claim Construction
In its Institution Decision, the Board construed certain “means-plus-function” limitations of the challenged claims. Relevant to this appeal, the Board determined that the structures disclosed in the specification corresponding to the recited “means for activating remote tire monitoring system tire sensors” (in independent claims 1, 7, 9, 13, and 15) are: a magnet, a valve core depressor, and a frequency generating circuitry and microprocessor for generating and transmitting continuous wave signals and modulated signals. The Board also construed a “plurality of means” for activating these tire sensors (in independent claims 1, 7, 9, 11, 13, and 15) as two or more means.
III. Patent Owner‘s Response and Contingent Motion to Amend
In Bosch‘s Patent Owner Response, Bosch acknowledged that the ‘796 patent‘s disclosed and claimed “means for activating” tire sensors were all known in the prior art, but it argued there was no motivation to combine these different, known activation means into the claimed universal tool. Bosch also argued that objective indicia—including commercial success, licensing, and industry praise—support the ‘796 patent‘s nonobviousness.
Bosch simultaneously filed a Contingent Motion to Amend, wherein it proposed to amend certain claims by inserting “means for recording” and “means for selecting” limitations, in the event the Board found the original claims unpatentable. Proposed substitute claim 23, intended to replace claim 1, is representative of the proposed changes to the apparatus claims and is shown below with the newly added language underlined:
23. A tool comprising:
a plurality of means for activating remote tire monitoring system tire sensors, the plurality of means selected from the group consisting of a magnet, a valve core depressor, means for generating continuous wave signals, means for generating modulated signals, means for recording a most recent means for activating signal that was utilized to successfully activate a tire sensor, and means for selecting the recorded means for activating as the first means for activating to be used, wherein the tool is capable of activating a plurality of tire sensors, each of the plurality of tire
sensors utilizing a different method for activating the said tire sensor.
J.A. 923. Proposed substitute claim 36, intended to replace claim 20, is representative of the proposed changes to the method claims:
36. A method, comprising the steps:
activating a first remote tire monitoring system tire sensor using a one of a plurality of means for activating remote tire monitoring system tire sensors, the plurality of means selected from the group consisting of a magnet, a valve core depressor, means for generating continuous wave signals, and means for generating modulated signals;
receiving a tire sensor signal containing data from the activated first tire sensor;
recording the one of the plurality of means for activating; and
transmitting some or all of the data received from the first tire sensor to a remote tire monitoring system receiving unit, and
activating a second remote tire monitoring system tire sensor using the recorded means for activating;
wherein the activating step, the receiving step, the recording steps, and the transmitting step are all performed by a single tool, and wherein the tool comprises a plurality of means for activating remote tire monitoring system tire sensors.
J.A. 929.
IV. Final Written Decision
In the Final Written Decision, the Board concluded that all challenged claims were unpatentable and denied Bosch‘s contingent motion to amend.
As to claims 1 and 4-14, the Board held that it would have been obvious to a person of ordinary skill in the art to incorporate McClelland‘s continuous wave activation signal and Kranz‘s modulated activation signal into a single activation tool to minimize the number of tools that a technician needs to use for collecting tire pressure data from different vehicles that use different means for activating RTMS tire sensors. The Board pointed to the universal tools taught by Dixit and Howell for motivation to create a similar universal tool that would result from combining McClelland and Kranz. The Board also held that the additional disclosure of two-way communication between the tool and receiving unit, found in claim 15, was rendered obvious by McClelland, Kranz, Dixit, and Howell in combination with additional tertiary references. Finally, the Board found method claims 20-22 both anticipated and obvious in view of McClelland‘s tool, which can use multiple activation frequencies (e.g., 125 kHz, “other frequencies,” and other “ranges of frequencies“) and, therefore, discloses a “plurality of means for activating” sensors. The Board also found Bosch‘s asserted objective indicia to be both lacking a sound evidentiary foundation and untethered from the claims of the ‘796 patent.
The Board then denied Bosch‘s contingent motion to amend. First, the Board found that the proposed apparatus claims were indefinite because the ‘796 specification fails to disclose sufficient structure corresponding to the claimed “means for recording a most recent means for activating signal that was utilized to successfully activate a tire sensor.” Second, the Board found that Bosch failed to carry its burden of proof that the proposed substitute claims would have been patentable over the prior art.
Bosch filed a timely appeal of the Board‘s decision. We have jurisdiction under
We review the Board‘s decisions under the standards set forth in the Administrative Procedure Act (APA),
I. Claims 1 and 4-15
Bosch first challenges the Board‘s determination that claims 1 and 4-15 are unpatentable as obvious. Bosch argues the Board erred in (1) finding a motivation to combine McClelland, Kranz, Howell, and Dixit;3 and (2) disregarding Bosch‘s evidence of nonobviousness.
A claim is unpatentable if the differences between the claimed subject matter and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art.
A. Motivation to Combine
Bosch argues that those skilled in the art at the time of invention lacked motivation to combine the various, known activation means for activating tire sensors into one handheld tool. We disagree.
As Bosch concedes, each of the claimed means of RTMS sensor activation was known in the prior art. For example, McClelland discloses a tool that activates RTMS tire sensors using a continuous wave signal, and Kranz discloses an activation tool using modulated signals. Dixit and Howell both recognize that different
Bosch‘s principal challenge to the Board‘s motivation to combine reasoning is that “the type of system and tool of Dixit was so objectively very different from the device of the ‘796 patent, that there would be no contemporaneous motivation nor design need to combine the teachings of Dixit with the other cited references.” Bosch‘s Opening Br. 41. Bosch contends that because Dixit‘s tool only programs the various tire sensors with information and does not trigger the sensors to respond, Dixit‘s disclosure would be irrelevant to a person of skill in the art looking to create a universal activation tool. Bosch‘s characterization of Dixit‘s tool is not incorrect, but its argument is unpersuasive.
Dixit, like McClelland and Kranz, relates to handheld RTMS tools. Thus, it is from the same field of endeavor as McClelland, Kranz, and the ‘796 patent and is “reasonably pertinent to the particular problem with which the inventor is involved.” In re Bigio, 381 F.3d 1320, 1325 (Fed. Cir. 2004). That Dixit does not disclose a universal RTMS activation tool (which would make Dixit an anticipatory reference) or provide an express motivation to combine different means for activating RTMS sensors does not render its teachings irrelevant. See EWP Corp. v. Reliance Universal Inc., 755 F.2d 898, 907 (Fed. Cir. 1985) (“A reference must be considered for everything it teaches by way of technology and is not limited to the particular invention it is describing and attempting to protect.“) (emphasis in original). Dixit discloses the proliferation of different RTMS tire sensors during the relevant time and teaches the benefit of using one “generic or universal tool” to “communicate with tire condition sensor units within different tire condition communication systems at different vehicles.” J.A. 651. The Board properly recognized that “[e]ven though Dixit itself addressed the issue of only transmitting a data signal to a transponder for storage in an associated memory, as opposed to transmitting and receiving a response signal, ... the general problem of disparate RTMS communication components and protocols was known and defined in the prior art.” J.A. 26. Thus, substantial evidence supports the Board‘s finding that Dixit teaches the advantage of having a universal tool in the RTMS environment that can communicate with tire sensors in different RTMS systems. That finding is relevant to the obviousness inquiry because, when combined with the known problem of incompatible RTMS transmission protocols, it provides a rational underpinning for the skilled artisan‘s combination of multiple activation means into a single tool.
B. Objective Indicia
Bosch next argues that the Board failed to properly credit Bosch‘s objective indicia of nonobviousness. According to Bosch, it presented persuasive evidence of commercial success, licensing, and industry praise that establishes the patentability of the ‘796 patent claims. “Evidence of [objective indicia] is only relevant to the obviousness inquiry ‘if there is a nexus between the claimed invention and the [objective indicia].‘” In re Affinity Labs of Tex., LLC, 856 F.3d 883, 901 (Fed. Cir. 2017)
i. Commercial Success
Bosch relied on two pieces of evidence to establish commercial success: (i) the declaration of Mr. Patrick Pierce, Bosch‘s director of marketing and diagnostic product management; and (ii) claim charts comparing commercially sold reset tools to the claims of the ‘796 patent.
We agree with the Board that the Pierce declaration lacks a proper evidentiary foundation. Mr. Pierce states in his declaration that Bosch makes several models of reset tools and asserts, without explanation, that he “understand[s] that all of Bosch‘s reset tools are covered by the ‘796 Patent.” J.A. 592. Mr. Pierce also states that Bosch licensed the ‘796 patent to two other companies, Bartec and ATEQ, in addition to selling its own reset tools and that “Bosch had achieved by 2011, through sales of its own products and licensed products, 89 percent of the United States market.” J.A. 594. As the Board recognized, however, the Pierce declaration lacks any explanation or analysis to support his asserted “understand[ing]” that these commercial reset tools are covered by, or coextensive with, the claims of the ‘796 patent. The Board permissibly concluded that this conclusory testimony lacks foundation. See, e.g., In re Cree, Inc., 818 F.3d 694, 703-04 (Fed. Cir. 2016) (agreeing with the Board that an expert declaration that merely repeats, in conclusory fashion, that the success of the product is due to the claimed invention is insufficient to establish a nexus).
We also agree with the Board that Bosch‘s second piece of support, the claim charts, is flawed. In comparing claim 1 to one of Bosch‘s reset tools, the chart apparently relies on a “Quick Start Guide” for Bosch‘s Part No. 3833 as evidentiary support for the features of a particular Bosch reset tool. The Board properly recognized, however, that the cited Quick Start Guide was not filed as an exhibit nor was there any other testimony or evidence corroborating the contents of the Quick Start guide. Thus, the Board concluded that the claim chart both violates the rule against hearsay and lacks foundation. Moreover, the Board noted that Bosch submitted no evidence comparing Bosch‘s other allegedly successful reset tools to the claims. The Board also found that Bosch‘s remaining claim charts, which sought to compare Bartec‘s AirAware 21240 and ATEQ‘s VT 55 products to claim 1 similarly violate the rule against hearsay and lack foundation. We review such evidentiary rulings under the abuse of discretion standard. REG Synthetic Fuels, LLC v. Neste Oil Oyj, 841 F.3d 954, 958 (Fed. Cir. 2016) (reviewing Board‘s hearsay finding in IPR proceeding under abuse of discretion). Having reviewed these claim charts, and finding them lacking in foundation, we see no error in the Board‘s decision not to credit them.
ii. Licensing
Bosch presented evidence that two companies—ATEQ and Bartec—licensed the ‘796 patent as part of agreements to settle litigation. We have explained, howev-
Here, both of the licenses relied on by Bosch were admittedly entered into for the express purpose of settling litigation. There is no evidence in the record that these agreements arose out of a recognition and acceptance of the merits of the claimed invention, rather than solely to avoid the costs of defending against further litigation. Given the lack of evidence that these licenses were entered into out of respect for the ‘796 patent, it was reasonable for the Board to assign less credit to the licensing evidence. See Iron Grip, 392 F.3d at 1324 (noting that licenses “may constitute evidence of nonobviousness; however, only little weight can be attributed to such evidence if the patentee does not demonstrate a nexus between the merits of the invention and the licenses of record” (quoting In re GPAC Inc., 57 F.3d 1573, 1580 (Fed. Cir. 1995))).
iii. Industry Praise
Finally, Bosch asserts that its RTMS tool garnered industry praise and awards, demonstrating its nonobviousness. In particular, Bosch submitted evidence that its 3834 and 3834EZ tools received two “Top 20 Tool” awards from an industry magazine. As with Bosch‘s other objective indicia arguments, the Board found that Bosch did not tie these tools to the claims of the ‘796 patent. We agree. Just as with Bosch‘s evidence of commercial success, Bosch presented no evidence to establish that the tools receiving these awards fall within the claimed subject matter of the ‘796 patent.
iv. Conclusion on Obviousness
Based on our review of the entirety of the record, we conclude that the Board did not err in its obviousness determination and that substantial evidence supports its factual findings underpinning its conclusions. We therefore affirm the Board‘s decision that claims 1 and 4-15 are unpatentable as obvious.
II. Claims 20-22
Bosch next argues that the Board erred in finding claims 20-22 unpatentable as anticipated because McClelland does not disclose the requisite plurality of means for activating sensors. According to Bosch, McClelland contemplates using only one means for activating the sensors—a 125 kHz signal. And it contends McClelland‘s assertion that “other frequencies or ranges of frequencies may be suitable” is insufficient to support a finding of anticipation because that phrase does not describe the invention at the level of complete detail found in the claims.
We disagree. The ‘796 patent states that “each different frequency of [continuous wave] signal generated [by the tool] constitutes a different means for activating RTMS tire sensors.” ‘796 patent col. 5, ll. 27-30. Although McClelland explains that the preferred embodiment transmits a 125 kHz continuous wave signal, it also contemplates that exciter unit 16 can also transmit at “other frequencies,” and, in particular, transmit signals using “ranges of frequencies.” J.A. 626. We therefore find that substantial evidence supports the Board‘s finding that McClelland discloses
III. Motion to Amend
Because we affirm the Board‘s decision that the original claims are unpatentable, we next address Bosch‘s argument that the Board erred in denying its contingent motion to amend. We review that denial under the APA,
A. Proposed Substitute Claims 23-35
Proposed substitute claims 23-35 all include the added means-plus-function limitation of “means for recording a most recent means for activating signal that was utilized to successfully activate a tire sensor.” The Board concluded that this means-plus-function limitation could not be construed and thus was indefinite because the portions of the figures and written description on which Bosch relied for the disclosure of an algorithm for performing the recited function lacked sufficient disclosure.6
Paragraph 6 of
Compliance of a means-plus-function claim with the definiteness requirement of
We have previously held that a party challenging patent validity on indefiniteness grounds carries the burden of proof. See, e.g., Chicago Bd. Options Exch., Inc. v. Int‘l Sec. Exch., LLC, 748 F.3d 1134, 1141 (Fed. Cir. 2014). In Aqua Products, Inc. v. Matal, this Court recently ruled that the patent owner does not bear the burden of proof on the patentability of its proposed amended claims. 872 F.3d 1290 (Fed. Cir. 2017). Rather, the petitioner bears the burden of proving that the proposed amended claims are unpatentable by a preponderance of the evidence.
In this case, the Board impermissibly assigned the burden of proof on the issue of indefiniteness to Bosch. See J.A. 46, 49 (“[W]e determine that Bosch has not met its burden ....“). For that reason, we vacate the Board‘s denial of Bosch‘s contingent motion to amend with respect to proposed claims 23-35 and remand for the Board to evaluate the patentability of those proposed amended claims consistent with our direction in Aqua Products. See Aqua Products, 872 F.3d at 1311 (“[W]here the challenger ceases to participate in the IPR and the Board proceeds to final judgment, it is the Board that must justify any finding of unpatentability by reference to the evidence of record in the IPR.“) (O‘Malley, J.) (emphasis in original).
B. Proposed Substitute Claims 36-38
The Board also impermissibly assigned the burden of proof to Bosch as to proposed claims 36-38. In its final decision, the Board concluded that it was “unpersuaded that Bosch has demonstrated that the proposed substitute claims are patentable” over the prior art. J.A. 51. Citing its “informative” decision in Idle Free Systems, Inc. v. Bergstrom, Inc., No. IPR2012-00027, 2013 WL 594769 (P.T.A.B. June 11, 2013), the Board stated that “[t]he patent owner bears the burden of proof in demonstrating patentability of the proposed substitute claims over the prior art in general, and, thus, entitlement to add these claims to its patent.” Id. For the same reasons as stated above, we vacate the Board‘s denial of Bosch‘s contingent motion to amend with respect to proposed claims 36-38 and remand for the Board to evaluate the patentability of those proposed amended claims consistent with our direction in Aqua Products. See Aqua Products, 872 F.3d at 1311 (“[W]here the challenger ceases to participate in the IPR and the Board proceeds to final judgment, it is the Board that must justify any finding of unpatentability by reference to the evidence of record in the IPR.“) (O‘Malley, J.) (emphasis in original).
CONCLUSION
For the foregoing reasons, we affirm the Board‘s decision that claims 1, 4-15,
AFFIRMED-IN-PART, VACATED-IN-PART, AND REMANDED
COSTS
No costs.
PATRICIA A. CARSON, Kirkland & Ellis LLP, New York, NY, filed a response to the petition for defendant-appellee. Also represented by SAUNAK DESAI, AARON D. RESETARITS, DAVID N. DRAPER; JOHN C. O‘QUINN, Washington, DC; PETER B. SILVERMAN, Merus US, Inc., Cambridge, MA.
KEVIN EDWARD NOONAN, McDonnell, Boehnen, Hulbert & Berghoff, LLP, Chicago, IL, for amicus curiae Seven Chicago Patent Lawyers. Also represented by JEFFREY PALMER ARMSTRONG, AARON VINCENT GIN, JAMES LEE LOVSIN, JEREMY E. NOE, ANDREW W. WILLIAMS, DONALD LOUIS ZUHN, JR.
RICHARD ABBOTT SAMP, Washington Legal Foundation, Washington, DC, for amicus curiae Washington Legal Foundation.
EDWARD DAVID MANZO, Husch Blackwell LLP, Chicago, IL, for amicus curiae Intellectual Property Law Association of Chicago. Also represented by ROBERT H. RESIS, Banner & Witcoff, Ltd., Chicago, IL.
MELISSA A. BRAND, Biotechnology Innovation Organization, Washington, DC, for amicus curiae Biotechnology Innovation Organization. Also represented by HANS-JORG SAUER; BRIAN PAUL BARRETT, Eli Lilly and Company, Indianapolis, IN.
AARON RUSSELL FISCHER, Patterson Belknap Webb & Tyler LLP, New York, NY, for amicus curiae New York Intellectual Property Law Association. Also represented by ANNEMARIE HASSETT, NYU School of Law, New York, NY; ROBERT JOSEPH RANDO, The Rando Law Firm, P.C., Syosset, NY.
MICHAEL EDWARD MCCABE, JR., McCabe Law LLC, Potomac, MD, for amici curiae David Hricik, Michael Edward McCabe, Jr.
Before PROST, Chief Judge, NEWMAN, LOURIE, DYK, MOORE, O‘MALLEY, REYNA, WALLACH, TARANTO, CHEN, HUGHES, and STOLL, Circuit Judges.