By Peter Reap, J.D., LL.M.
Two opinions issued by the U.S. Court of Appeals for the Federal Circuit added to the court’s prior jurisprudence involving disputes between Ford Motor Co. and Paice LLC and presented a mixed bag of reversals and affirmances as to a multitude of findings by the Patent Trial and Appeal Board that certain claims of three hybrid vehicle engine control patents held by Paice LLC and The Abell Foundation, Inc. (collectively, Paice) are invalid as obvious. In one of the opinions (the O’Malley Opinion), which was an appeal from six inter partes review proceedings in which the PTAB found certain challenged claims of U.S. Patent Nos. 7,237,634 ("’634 patent") and 8,214,097 ("’097 patent") unpatentable, the appellate court affirmed in part, vacated in part, and remanded the appeals to the Board (Paice LLC v. Ford Motor Co., February 1, 2018, O’Malley, K.). In the other opinion (the Taranto Opinion; all of the appeals were argued together), the appellate court affirmed rulings by the Board that certain claims of the ‘634 patent and U.S. Patent No. 7,104,347 are unpatentable (Paice LLC v. Ford Motor Co., February 1, 2018, Taranto, R.).
The O’Malley Opinion. Paice’s ’634 and ’097 patents, both titled "Hybrid Vehicles," are directed to a torque-based algorithm for selecting operating modes in a hybrid vehicle having an internal combustion engine and one or more battery-powered electric motors. The claims at issue generally recite methods for comparing the instantaneous torque required to propel the vehicle, which the patents refer to as "road load" ("RL"), to both a setpoint ("SP") and the engine’s maximum torque output ("MTO") to determine whether to operate the engine, the electric motor, or both.
The Board’s unpatentability determinations were based on two primary references: (1) U.S. Patent No. 5,343,970 to Severinsky ("Severinsky"), and (2) PCT Application Publication WO 00/15455 ("’455 PCT publication"). Severinsky, which issued to a co-inventor of the ’634 and ’097 patents, describes a control strategy for selecting operation modes in a hybrid vehicle. The ’455 PCT publication names the same inventors as the ’634 and ’097 patents and claims priority to applications that appear in both patents’ chain of priority. The publication is directed to similar hybrid vehicle technology.
Relevant to this appeal, the Board determined that Severinsky discloses a torque-based algorithm for determining which operating mode to select in a hybrid vehicle. The Board also interpreted the term "abnormal and transient conditions" recited in the claims of the ’634 and ’097 patents as including starting and stopping the engine. The Board agreed with Ford that Severinsky discloses the limitation as construed by the Board. Based in part on these findings, the Board held claims 91–92, 112, 125–26, 145, 252–53, 265–66, 278–79, 282, and 290–91 of the ’634 patent and claims 7, 17, 27, and 37–38 of the ’097 patent unpatentable as obvious over Severinsky in view of other prior art of record.
Also, the Board determined that the ’455 PCT publication discloses the torque-based control strategy recited in the electrical claims of the ’634 patent, and that Severinsky discloses the electrical limitations themselves. Based on these findings, the Board held claims 56–65, 68–77, 242–51, 268–77, 292–93, and 298 of the ’634 patent unpatentable as obvious over the ’455 PCT publication in view of Severinsky. Paice appealed.
First, Paice argued that the Board’s Severinsky-based findings were unsupported by substantial evidence. In particular, Paice asserted that Severinsky discloses a speed-based algorithm, not a torque-based one as required by the patent claims, and that the Board erred in its construction of "abnormal and transient conditions."
The appellate court did not agree. As the Board found, Severinsky discloses that a microprocessor may determine "the load (if any) to be provided to the engine by the motor, responsive to the load imposed by the vehicle’s propulsion requirements, so that the engine can be operated in its most fuel efficient operating range." Severinsky elsewhere states that the microprocessor "determines whether the internal combustion engine or the electric motor or both should provide torque to the wheels under various monitored operating conditions." This passage suggested that "torque to the wheels"—i.e., road load—is a criterion for determining which mode of operation to select. Finally, Severinsky states that the combustion engine is used "only in the near vicinity of its most efficient operational point," which is when the engine "produces 60–90% of its maximum torque." Ford’s expert testified that "a skilled artisan would have understood that Severinsky’s lower limit of 60% of MTO is a ‘setpoint.’" Based on that testimony, the Board concluded that Severinsky teaches that its engine operates when the road load reaches a setpoint. The Board’s finding that Severinsky uses road load torque, rather than engine output torque, was reasonable and supported by substantial evidence, the court held.
The Board also found that Severinsky discloses the "abnormal and transient conditions" limitation recited in certain claims of the ’634 and ’097 patents. The Board interpreted "abnormal and transient conditions" to capture "starting the engine and stopping the engine," including in "city traffic and reverse operation." The Federal Circuit agreed with the Board’s construction and substantial evidence supported the Board’s findings that Severinsky discloses the "abnormal and transient conditions" limitation recited in the ’634 and ’097 patent claims.
Next, Paice argued that the Board erred in finding that the ’455 PCT publication qualifies as prior art to the ’634 patent’s electrical claims. As for the Board’s findings that the ’455 PCT publication, in view of Severinsky, renders obvious the electrical claims of the ’634 patent, Paice argued that the ’455 PCT publication is not prior art to the electrical claims because they claim priority to an application, U.S. Patent Application No. 09/264,817 ("’817 application"), that predates the ’455 PCT publication. Paice asserted that the ’817 application incorporates by reference Severinsky, which itself provides the requisite written description support. The Board rejected that argument, concluding that the ’817 application does not incorporate Severinsky, and that the electrical claim limitations lack written description support in the ’817 application standing alone.
The Board erred in its incorporation ruling, the appellate court determined. The ’817 application expressly incorporates Severinsky. It states that Severinsky "is," without qualification, incorporated into the ’817 application "by this reference"—i.e., the reference contained in the sentence. In reaching its contrary conclusion, the Board emphasized the differences between the inventions of the ’817 application and Severinsky. But such differences are present in every case in which one patent purports to incorporate another, because, in every case, the host patent purports to improve upon that which it incorporates, the court reasoned.
To prevail on its argument that the ’455 PCT publication is not prior art to the electrical claims, Paice must show that the ’817 application, with Severinsky incorporated therein, provides sufficient written description support for those claims. And, although the Board analyzed the ’817 application to determine whether it provides such support, the Board did not analyze Severinsky for that purpose. Thus, the court remanded the appeals for the Board to determine in the first instance whether the ’817 application, with Severinsky incorporated therein, supplies the requisite written description support for the ’634 patent’s electrical claims. In other words, the Board must consider Severinsky for that purpose on remand. Finally, with respect to certain electrical claims that recite a low electrical current, if, on remand, the Board concludes that Severinsky fails to provide the requisite written description support for the low current claims, the Board should reconsider its finding that the ’817 application, on its face, does not provide such support.
The Taranto Opinion. In this opinion, the court dealt with Paice’s appeal from PTAB findings that various claims of the ‘634 and ‘347 patents are unpatentable. Here, the relevant claims require two comparisons—of the vehicle’s road load to a setpoint, and of the vehicle’s road load to the gas engine’s maximum torque output—for the decision whether to operate the electric motor, the gas engine, or both.
In the final written decisions in seven inter partes reviews, the Board determined that the following claims—claims 2–4, 6–13, 15, 17, 19, 23, 25, 27–30, 32, 66–67, 79, 94, 96, 106–08, 113, 128, 140–41, 146, 173, 229, 231, 238–41, 252–56, 259, 261–62, 267, 281–82, 285, and 287–88 of the ’634 patent; and claims 3–5, 14, 16, 19–20, 22, 25–30, 32, and 39–41 of the ’347 patent—are unpatentable for obviousness over U.S. Patent No. 5,789,882 (Ibaraki), either alone or in combination with other references. The Board’s decision in IPR2015-00722, on appeal here in 17-1263, was representative, the court noted. Paice challenged those Board decisions as not supported by substantial evidence.
Paice’s main argument was that the Board’s finding that Ibaraki discloses torque-based comparisons is not supported by substantial evidence. The Federal Circuit was not persuaded. As the Board correctly found, Ibaraki describes a hybrid vehicle with "a drive control apparatus" (controller) that, like the microprocessor in the ’634 and ’347 patents, "includes drive source selecting means" for selecting the engine, motor, or both. The Board found that Ibaraki teaches reliance on both power and torque; it thus rejected Paice’s contention that one teaching excludes the other. This conclusion by the Board was reasonable on this record, the Federal Circuit opined.
The Board relied on Ibaraki and the knowledge of a person of skill in the art, as explained by Dr. Davis, to find that power is directly related to torque, that Ibaraki’s controller determines the required drive power based on the current vehicle drive torque and speed, and that Ibaraki teaches selection decisions dependent on torque (though not only on torque)—specifically, on torque levels at a given speed. The Board had a sufficient basis for rejecting Paice’s reading of Ibaraki as not teaching torque-based comparisons, the court held. The Board also had a sufficient basis for rejecting a related contention made by Paice—that, even if Ibaraki shows torque-based comparisons, it does not show comparing the vehicle’s required torque to the engine’s "maximum torque output" and using both propulsion sources when the required torque exceeds that level, as required by the patent claims.
Paice also challenged the Board’s finding that Ibaraki discloses the claim requirement of a setpoint that is "substantially less" than the engine’s maximum torque output—the engine alone operating when the required torque is between those figures. The Board found that this limitation was shown in Ibaraki, relying on the explanation of Dr. Davis that it would be "clear" to a person of skill, based upon a "simple visual inspection" of Figure 11, "that setpoint SP [along curve B1] is substantially less than point C1 [along curve C]," and therefore substantially less than the maximum torque output (which, for reasons already noted, is at or above curve C).
Paice argued that Dr. Davis’s reliance on visual inspection of Figure 11 was improper under Hockerson-Halberstadt, Inc. v. Avia Group International, Inc., in which the Federal Circuit explained "that patent drawings do not define the precise proportions of the elements and may not be relied on to show particular sizes if the specification is completely silent on the issue." 222 F.3d 951, 956 (Fed. Cir. 2000). But this case was not controlled by Hockerson-Halberstadt, according to the Federal Circuit. Unlike the drawing at issue there, Figure 11 of Ibaraki provides some scale information—which expert evidence reasonably found telling on the point at issue. In any event, the visual inspection of the curves was not the sole support for the Board’s finding. Therefore, the court affirmed the final written decisions of the Board.
Attorneys: Ruffin B. Cordell (Fish & Richardson, PC) for Paice LLC and The Abell Foundation, Inc. Matthew J. Moore (Latham & Watkins LLP) and Frank A. Angileri (Brooks Kushman PC) for Ford Motor Co.
Companies: Paice LLC; The Abell Foundation, Inc.; Ford Motor Co.
MainStory: TopStory FedCirNews
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