IP Law Daily PTAB erred in applying stringent reduction of practice standard
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Tuesday, November 15, 2016

PTAB erred in applying stringent reduction of practice standard

By Jody Coultas, J.D.

The U.S. Court of Appeals for the Federal Circuit vacated a Patent Trial and Appeal Board ruling that a patent held by Perfect Surgical Techniques, Inc. (PST) was invalid as anticipated by prior art. The Board erred in applying a heightened standard in determining whether the patent inventor exercised reasonable diligence in reducing the invention to practice during the critical period. The court also found that the Board erred in its construction of certain patent claims. PST was awarded its costs (Perfect Surgical Techniques, Inc. v. Olympus America, Inc., November 15, 2016, Moore, K.).

The Patent Trial and Appeal Board instituted inter partes review of claims 1, 4–6, 8, 9, 11, 12, 38, 41–44, 46, 47, and 49 of U.S. Patent No. 6,030,384 (the ’384 patent), finding that the claims were anticipated by Japanese Application Publication No. H10-33551 A (JP ’551). The review was initiated by Olympus America, Inc. and Olympus Medical Systems Corporation.

Patent translation. Acceptance by the Board of less than a full translated version of JP ‘551 was merely harmless error, according to the court. PST argued that Olympus failed to translate the bibliographic page containing the publication date, and thus there was insufficient evidence for the Board to determine that JP ’551 was prior art. The Board requires a party relying on a non-English document to submit "a translation of the document into English and an affidavit attesting to the accuracy of the translation." The publication date was discernable from the face of the untranslated page, and the translator’s certification further attested that JP ’551 was published on February 10, 1998. Therefore, the acceptance of the partial translation was not reversible error.

Antedating. The Board concluded that PST failed to demonstrate the inventor of the ‘384 patent continuously exercised reasonable diligence in reducing the invention to practice for the entire critical period.Pre-AIA section 102(g) allows a patent owner to antedate a reference by proving earlier conception and reasonable diligence in reducing to practice. In this case, the Board’s "continuous exercise of reasonable diligence" standard applied to the inventor was too exacting and conflicted with precedent. The proper standard is that the inventor must show there was reasonably continuous diligence. An inventor is not required to work on reducing his invention to practice every day during the critical period to show reasonable diligence. Also, an inventor and his attorney need not revise or discuss the application on a daily basis to determine that the invention was abandoned or unreasonably delayed.

Because the Board’s erroneously heightened burden of proof infected its analysis, the court reversed and remanded the Board’s decision that PST failed to antedate JP ’551. The Board also erred in finding that a long weekend amounted to a period of inactivity, and that three gaps in activity collectively demonstrated a lack of diligence during the entire critical period. On remand, the Board must determine whether all of PST’s evidence, considered as a whole and under a rule of reason, collectively corroborates the inventor’s testimony that he worked reasonably continuously within the confines of his and his patent attorney’s occupations to diligently finalize the patent application during the 81-day critical period.

Claim construction. The court vacated the Board’s decision invalidating claims 11, 38, 41–44, 46, 47, and 49 over JP ’551.The Board reasoned that the specification, which states "the jaws may be perforated or otherwise provided with passages," describes "passages as another form of perforations and does not distinguish between these terms." The Board’s finding that JP ’551 disclosed at least one "perforated" jaw because JP ‘551 referenced a passage was not supported by the evidence. The specification’s separation of the terms perforated and passages with the disjunctive phrase "or otherwise" made clear that the patentee intended that the term "perforated" was not the same as "passages." The court concluded that the term "perforated" was not coextensive with or the same as "passages."

Dissent. CircuitJudge Alvin A. Schall filed a separate opinion concurring-in-part and dissenting-in-part. Judge Schall dissented from the court’s finding on the application of the "reasonable diligence" standard, asserting that the Board applied the correct legal standard in finding that PST failed to establish that the inventor exercised reasonably continuous diligence during the critical period and that the Board’s finding on diligence was supported by substantial evidence. Judge Schall was not persuaded that the Board imposed too exacting a standard. Rather, precedent suggested that the precise formulation of the diligence test is relatively unimportant because its ultimate prescription remains the same. The issue is whether the party seeking priority can "account for the entire period during which diligence is required."

However, Judge Schall agreed that the Board’s decision should be vacated and remanded to determining whether, under the correct claim construction, the invention claimed in the ’384 patent was anticipated or rendered obvious in view of JP ’551.

The case is No. 2015-2043.

Attorneys: Robert E. Freitas, Daniel J. Weinberg, and Joshua Young (Freitas Angell & Weinberg LLP) for Perfect Surgical Techniques, Inc. Deborah E. Fishman, Katie Jeannine Lewis Scott, and Marisa Armanino Williams (Kaye Scholer LLP) for Olympus America, Inc. and Olympus Medical Systems Corporation.

Companies: Perfect Surgical Techniques, Inc.; Olympus America, Inc.; Olympus Medical Systems Corporation

MainStory: TopStory Patent FedCirNews

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