By Jody Coultas, J.D.
A holding by the Patent Trial and Appeal Board that certain claims of Mentor Graphics Corporation’s patent were invalid as anticipated was upheld by the U.S. Court of Appeals for the Federal Circuit (Synopsys, Inc. v. Mentor Graphics Corporation, February 10, 2016, Dyk, T.). The court also affirmed the Board’s practice of conducting reviews of only some challenged claims during inter partes review.
Mentor’s U.S. Patent No. 6,240,376 (the ’376 patent) relates to a method of testing involving a software or hardware simulation of the chip. The method allows a chip designer to trace errors discovered during testing back to the original source code that a designer uses to program the chip so that these errors can be corrected. Synopsys, Inc. filed a petition for inter partes review of claims 1–15 and claims 20–33 of the ‘376 patent, alleging that these claims were anticipated or would have been obvious in light of various prior art references.
The Board held that claims 5, 8, and 9 were invalid as anticipated, but declined to find that claims 1 and 28 were anticipated. The Board denied the petition with respect to claims 10, 12–15, 20–27, and 30–33, finding that there was no reasonable likelihood of invalidity. Both parties appealed.
At the outset, the court noted there was no statutory requirement that the Board’s final decision address every claim raised in a petition for inter partes review. The America Invents Act only requires the Board to address claims as to which review was granted. Also, the statute strongly implies that the initiation decision be made on a claim-by-claim basis and that the Board can pick and choose among the claims in the decision to institute, according to the court.
In a separate suit, Synopsis filed a claim against the U.S. Patent and Trademark Office (USPTO) under the Administrative Procedure Act seeking to invalidate the USPTO’s regulation that allows the Board to institute inter partes review on “all or some of the challenged claims.” The suit also challenged the practice of issuing final decisions on fewer than all of the claims raised in a petition. The suit was dismissed as moot based on the holding above.
Anticipation. The Board found that the prior art reference U.S. Patent No. 6,132,109 (Gregory) disclosed everything in claims 1 and 28 except for “instrumentation signals” that are “indicative of an execution status of the at least one statement.” Synopsys argued that the Board erred in finding the claims were not anticipated, and that the Board applied the wrong legal standard by requiring explicit disclosure in Gregory of the “execution status” element of the claims. However, the Board did not require explicit disclosure in Gregory. Also, the court found no error in the Board’s reliance on Mentor’s expert to resolve the factual dispute that that the “tempout” signal of Figure 9 in Gregory was not an “instrumentation signal” “indicative of an execution status.” There was sufficient evidence to support the Board’s decision, according to the court.
Statute of limitations. Mentor argued that Synopsys’s acquisition of an entity who had been sued by Mentor alleging infringement of this patent more than one year earlier barred Synopsys from petitioning for inter partes review. However, the USPTO has held that decisions concerning the § 315(b) time bar, including determinations of the real party in interest and rulings on discovery related to such determinations, cannot be appealed.
Burden of patentability. The Board found that Mentor “ha[d] not met its burden to show that independent claim 35 or claims 40 and 41, which depend from claim 35, would not have been obvious to a person of ordinary skill in the art based on the disclosure of Gregory.” Mentor also argued that the Board impermissibly placed the burden of proving patentability of the proposed claims on Mentor when it denied Mentor’s contingent motion to substitute claims 35, 40, and 41 for claims 5, 8, and 9. The court has previously held that the Board may properly place the burden of proving patentability of substitute claims on the patentee for the prior art of record. There was no error in placing the burden of demonstrating patentability of substitute claims on the patentee over Gregory, which was the only piece of prior art for the inter partes review.
Dissent. Judge Newman dissenting opinion suggests that the court’s rulings was contrary to the America Invents Act (AIA), and abrogated the careful balance of the new adjudicatory system. The judge’s principal concerns were as follows
- The absence of finality negates the AIA’s purpose of providing an alternative and efficient forum for resolving patent validity issues. Instead, the present practice of partial decision by the Board leads to duplicative proceedings in the Board and the district courts.
- The court misapplied the AIA provision that the decision whether to “institute” these post-grant proceedings is not appealable.
- The court also supported the USPTO’s elimination of the statutory designation of different decision-makers for the institution phase and the trial phase.
- The support of the USPTO’s stingy implementation of the statutory authorization for claim amendment was in err. The opportunity to amend is an important part of the balance struck in the AIA. The easier standards and lighter burdens for invalidation in AIA proceedings, including the PTAB’s use of the broadest claim interpretation instead of the correct claim interpretation, up-end the delicate balance crafted by Congress. Amendment issues are present in this case.
The cases are Nos. 2014-1516, 2014-1530, and 2015-1183.
Attorneys: Eric Shumsky (Orrick, Herrington & Sutcliffe LLP) for Synopsys, Inc. Mark E. Miller (O’Melveny & Myers LLP for Mentor Graphics Corporation.
Companies: Synopsys, Inc.; Mentor Graphics Corporation
MainStory: TopStory Patent FedCirNews
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