IP Law Daily PTAB decision that assignor estoppel does not bar inter partes review is not reviewable
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Friday, September 23, 2016

PTAB decision that assignor estoppel does not bar inter partes review is not reviewable

By Jody Coultas, J.D.

A Patent Trial and Appeal Board decision holding that assignor estoppel may not bar an assignor or his or her privies from petitioning for inter partes review was not judicially reviewable, the U.S. Court of Appeals for the Federal Circuit has decided. The court lacked jurisdiction under 35 U.S.C. §314 to review the Board’s decision to institute inter partes review of a molding machine patent owned by Husky Injection Molding Systems, despite Husky’s claim that assignor estoppel barred the Board from considering Athena Automation Ltd.’s petition. On a cross appeal filed by Athena, the Federal Circuit vacated the Board’s decision that four challenged claims were not anticipated (Husky Injection Molding Systems Ltd. v. Athena Automation Ltd., September 23, 2016, Lourie, .).

U.S. Patent 7,670,536 (the ’536 patent) discloses a molding machine having a clamp assembly comprising a stationary platen, a movable platen, tie bars, tie bar locks that couple the tie bars to the movable platen, and clamp actuators that supply a clamping force to the tie bars.

A co-inventor of the ’536 patent and owner and president of Husky assigned the patent to Husky before selling Husky to a private equity group, and leaving to form Athena. Athena filed a petition for inter partes review of the ‘536 patent.

The Patent Trial and Appeal Board found that several claims (1, 4–16, 18, and 20–22) of the ’536 patent were anticipated, while claims 2, 3, 17, and 19 were not anticipated. Both parties appealed.

Husky’s appeal. The court dismissed Husky’s appeal for lack of jurisdiction based on a lack of authority to review the Board’s decision on assignor estoppel. Husky challenged the Board’s determination during the institution phase that assignor estoppel cannot bar an assignor or his or her privies from petitioning forinter partes review. Assignor estoppel prevents an assignee from later arguing that what was assigned lacked value.

Section 314(d) of the America Invents Act provides that decision on instituting inter partes review are nonappealable. The Supreme Court left open the possibility that § 314(d) allows for review of appeals that (1) implicate constitutional questions, (2) depend on other less closely related statutes, or (3) that present other questions of interpretation that reach well beyond Section 314. Husky’s argument that the third exception applied in this case was rejected. Before instituting review, the Board considers whether there is a likelihood of success on the patentability grounds. Because assignor estoppel bars an assignor from challenging the patentability of the patent earlier assigned, assignor estoppel cannot be divorced from the scope of Section 314 and is, thus, beyond review.

The court also found that the question did not relate to the Board’s ultimate invalidation authority. The Board’s invalidation authority derives from the patent challenged and the type of the review requested; it is not a question of who petitions for review. A bar preventing particular petitioners from challenging a patent does not impact the Board’s invalidation authority. Ultimately, any question concerning assignor estoppel implicates who may petition for review, and that issue falls outside of the narrow exceptions to the otherwise broad ban on our review of the decision whether to institute.

Athena appeal. Athena asserted that various claims of the ’536 patent were anticipated either by U.S. Patent Application 2004/0208950 (Glaesener) in combination with its incorporation by reference of U.S. Patent 5,753,153 (Choi). The Board found that Athena failed to explain what Glaesener incorporates from Choi, much less how Choi’s clamping device would secure the components of Glaesener’s molding machine.

The court vacated the Board’s finding of no anticipation with respect to claims 2, 3, 17, and 19, and remanded the case for further consideration. Athena argued on appeal that the Board’s determination that the prior art Glaesener did not incorporate the prior art Choi by reference, and thereby the Board’s finding that claims 2, 3, 17, and 19 are not unpatentable as anticipated. The court agreed with Athena that a skilled artisan would understand with sufficient particularity what the "pineapple and toothed-ring mechanism" language referred to in Choi. Also, the court agreed that the second statement effects a broad incorporation that cannot be negated by the use of a more precise incorporation statement elsewhere.

Dissenting opinion. CircuitJudge Plagerdissented from the majority opinion regarding its lack of jurisdiction to review the determination by the Board regarding whether assignor estoppel precluded it from instituting inter partes review. Judge Plager suggested that the majority’s view may contribute to the confusion regarding which matters the Federal Circuit can review on appeal from a final decision by the Board. Given the long tradition of judicial review of administrative decision-making, it is anomalous to say that the application of a rule like the assignor estoppel doctrine to proceedings before the Board, a unit of an administrative agency, is exclusively for the agency to decide. Rather, the doctrine is in the nature of a common law doctrine, and not itself based on statute. Because the majority refused to undertake the proper review of the Board’s decision, Judge Plager respectfully dissented.

The cases are Nos. 2015-1726 and 2015-1727.

Attorneys: Matthew L. Cutler (Harness, Dickey & Pierce, PLC) for Husky Injection Molding Systems Ltd. Marshall John Schmitt (Michael Best & Friedrich, LLP) for Athena Automation Ltd. Joseph Matal, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, for Michelle K. Lee.

Companies: Husky Injection Molding Systems Ltd.; Athena Automation Ltd.

MainStory: TopStory Patent FedCirNews

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