Hunting Titan, Inc. v. DynaEnergetics Europe GMBH, Appeal Nos. 2020-2163, -2191 (Fed. Cir. March 24, 2022)

In a notable review of the USPTO’s new Precedential Opinions Panel, the Federal Circuit discussed the circumstances under which the Patent Trial and Appeal Board should raise a ground of unpatentability against substitute proposed claims in a motion to amend that a petitioner has not advanced or insufficiently developed.  The Court ultimately rejected challenger Hunting Titan, Inc.’s argument that the Board had an affirmative duty to sua sponte raise any such grounds for unpatentability, found any argument that the Panel misapplied its own lower standard to have been forfeited on appeal, and left for another day a more thorough exploration of the issues.  

Hunting Titan had petitioned for inter partes review of U.S. Patent No. 9,581,422 (the “Patent”), which was directed to a perforating gun used in an oil wellbore to penetrate the well lining and surrounding rock formation, providing a flow path for oil into the wellbore from the surrounding rock formation.  Hunting Titan asserted numerous grounds of unpatentability based on theories of anticipation and obviousness, including allegations that the claims were anticipated by U.S. Patent No. 9,689,223 (“Schacherer”).  The Board instituted trial on all grounds and ultimately agreed with Hunting Titan, finding all of the original claims unpatentable.  The owner of the Patent, DynaEnergetics Europe GmbH, moved to amend the Patent to add proposed substitute claims.  Hunting Titan opposed the motion to amend, advancing only obviousness grounds.  Although Hunting Titan did not assert that Schacherer anticipated the proposed substitute claims, the Board determined that the original and proposed substitute claims alike were unpatentable as anticipated by Schacherer.

DynaEnergetics requested review by the Panel, which the Panel granted to address under what circumstances and at what time during an inter partes review the Board may raise a ground of unpatentability that a petitioner did not advance or insufficiently developed against substitute proposed claims in opposing a motion to amend.  The Panel concluded that only under rare circumstances should the need arise for the Board to advance such grounds, but left open the possibility for the Board to sua sponte raise them in certain circumstances, like if certain evidence of unpatentability is not raised by the petitioner but is “readily identifiable and persuasive,” such that the Board should take it up in the interest of the patent system, notwithstanding the adversarial nature of the proceedings.

Turning to the case at hand, the Panel concluded that, as a policy matter, the Board should not have raised the Schacherer anticipation ground.  Moreover, the Panel found that this case did not contain the sort of readily identifiable and persuasive evidence of anticipation in the record that would justify the Board raising its own grounds of unpatentability.  The Panel observed that Hunting Titan had never mentioned anticipation as a ground of unpatentability against the proposed substitute claims.  The Panel also rejected Hunting Titan’s assertion that its anticipation arguments against the original claims, found in its petition, were sufficient to also raise arguments regarding anticipation of the proposed substitute claims by Schacherer.  Although anticipation based on Schacherer was not raised by Hunting Titan, the Panel asked whether the Board should still have raised that ground against the proposed substitute claims.  The Panel decided that this case did not qualify as one of the rare circumstances necessitating the Board to advance a ground of unpatentability the petitioner had not advanced or sufficiently developed.  In doing so, the Panel faulted Hunting Titan for its strategic choice to oppose the motion to amend on different grounds, holding that an unsuccessful strategy alone does not reflect a failure of the adversarial process that might otherwise support the Board exercising its discretion to sua sponte raise a new ground of unpatentability.  

Hunting Titan appealed the Panel’s decision vacating the Board’s denial of DynaEnergetics’ motion to amend, and DynaEnergetics cross-appealed the Board’s decision invalidating its original claims.

The Federal Circuit first addressed DynaEnergetics’ cross-appeal, challenging the Board’s decision holding the original claims of the Patent unpatentable as anticipated by Schacherer.  The Federal Circuit quickly disposed of DynaEnergetics’ argument, finding that substantial evidence supported the Board’s determination that Schacherer anticipates all of the originally challenged claims.

The Federal Circuit next addressed Hunting Titan’s appeal challenging the Panel’s decision to vacate the Board’s denial of the motion to amend.  Hunting Titan argued that the Board had an obligation to sua sponte identify patentability issues for a proposed substitute claim based on the prior art of record, and that the Panel committed legal error by vacating the Board’s decision.  The Federal Circuit disagreed, finding that no Federal Circuit precedent established that the Board has an affirmative duty, without limitation or exception, to sua sponte raise patentability challenges to a proposed substitute claim.  Addressing the Panel’s exception for circumstances where certain evidence of unpatentability had not been raised by the petitioner but was “readily identifiable and persuasive,” the Federal Circuit concluded that Hunting Titan failed to argue that the Panel misapplied the exception and thus forfeited it on appeal.

Consequently, the Federal Circuit affirmed the Panel’s decision granting the motion to amend, but only on narrow grounds.  The Federal Circuit emphasized that it was not determining the patentability of the proposed substitute claims, nor deciding whether the Panel abused its discretion in determining that the Schacherer anticipation ground was not readily identifiable and persuasive such that the Board should have sua sponte raised this ground of unpatentability.  Additionally, the Federal Circuit noted it was not opining on the other limitations that the Panel placed on the Board’s ability to advance patentability issues not raised by a petitioner, nor whether those limitations are consistent with 35 U.S.C. § 318.  Finally, the Federal Circuit emphasized that it did not decide whether the Board has an independent obligation to determine patentability of proposed substitute claims.

Judge Prost wrote a concurring opinion, agreeing that Hunting Titan had forfeited the argument but explaining that, whatever the “readily identifiable and persuasive” standard means, the Panel should have let the Board do what it did here: evaluate whether the prior-art reference that anticipated the original claims also anticipated the new claims.  According to Judge Prost, such an evaluation could hardly be deemed overzealous or creative on the Board’s part.  Judge Prost also noted she was concerned by the prospect of applying the “readily identifiable and persuasive” constraint to unopposed motions to amend.

The opinion can be found here.

By Mario E. Delegato

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Dyfan, LLC v. Target Corporation, Appeal No. 2021-1725 (Fed. Cir. March 24, 2022)

The Federal Circuit reversed a district court judgment of indefiniteness, based on the lower court’s determination that certain patent claim limitations were subject to “means-plus-function” construction under 35 U.S.C. § 112 ¶ 6 and because the specification failed to recite sufficiently definite structure to perform the recited functions.  The patents at issue were directed to systems for providing location-based content to mobile devices, and the district court found that “code” and “application,” as well as the term “system,” were means-plus-function terms as used in the claims.  Because the specification did not recite, inter alia, any specific algorithm for the claimed computer-implemented functions, the district court found the claims to be indefinite under § 112 ¶ 2.

The Federal Circuit disagreed, pointing to its recent decision in Zeroclick, LLC v. Apple Inc., 891 F.3d 1003 (Fed. Cir. 2018), as finding that claim terms, like “program” and “user interface code,” reference classes of convention, known to persons of ordinary skill in the pertinent art, that have specific structures partly defined by their functions as recited in the claims (e.g., “configured to…”).  This conclusion was further reinforced in this case by unrebutted expert testimony proffered by patent owner Dyfan.  Similarly, the Court found that the district court had recited structural elements of the claimed “systems” (e.g., a building and communications unit) and that defendant Target had not rebutted by a preponderance of the evidence the presumption that § 112 ¶ 6 does not apply in the absence of the word “means.”  Having concluded that § 112 ¶ 6 in fact did not apply, the Court explained that it need not reach the question of whether the specification recited sufficiently definite structure, reversed the judgment of invalidity, and remanded for further proceedings.

The opinion can be found here.

By Jason A. Wrubleski

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