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Paice LLC v. Ford Motor Co.

Clear, Full Incorporation by Reference Controls, Even in Presence of Separate Limiting Language

Paice LLC v. Ford Motor Co., 2018 WL 651366 (Fed. Cir. Feb. 1, 2018) (Lourie, O’MALLEY, Taranto) (PTAB) (2 of 5 stars)

Fed Cir part-affirms, part-vacates IPR determination of unpatentability. Paice’s claims related to an algorithm for selecting operating modes in a hybrid automobile. As to the PTAB’s findings that a key piece of prior art disclosed two critical limitations of Paice’s claims, the opinion discusses the record in detail and concludes that substantial evidence supported the Boards determination. It rejects Paice’s characterization of a key reference, noting that Paice’s patent itself characterized the reference in different terms. Per PharmaStem Therapeutics, 491 F.3d 1342 (Fed. Cir. 2007), a patentee is bound by admissions in the specification regarding prior art. The Board did not err in determining the broadest reasonable interpretation of “abnormal and transient conditions.” Such terminology was not used in Paice’s patent, but was used in a parent patent, and the opinion describes how that parent’s usage was compatible with the Board’s treatment. The opinion rejects Paice’s argument that there was any disclaimer in the patent under review undermining the Board’s interpretation. The opinion also rejects Paice’s argument that the reference failed to teach the limitation.

The opinion also rejects Paice’s argument that the Board failed to adequately explain its rationale, as required by Chenery, 318 U.S. 80 (1943), and NuVasive, 842 F.3d 1376 (Fed. Cir. 2016). Particularly in view of the lengthy record surrounding Paice’s claims, the Board’s decision sufficiently described its rationale, including by use of approving citations to Ford’s briefing.

The Board erred, however, in finding certain “electrical” claims obvious. This was because the Board erred in determining that the electrical claims lacked written description support in Paice’s priority document. The opinion agrees with Paice that the priority document incorporated by reference a separate disclosure that might supply the necessary description. Per Advanced Display Systems, 212 F.3d 1272 (Fed. Cir. 2000), express incorporation by reference makes the referenced material a part of the patent, as if it had been expressly set forth. The opinion rejects the Board’s reasoning that the patent’s incorporation was limited to those disclosures in the reference that were not different from those in the patent description itself. The opinion describes how, while the patent incorporated the entire reference, only certain portions of the incorporated reference actually related to the claimed invention. “The applicability of a document’s disclosed features and the incorporation of the document itself are distinct features, and one does not imply the other.” Op. at 22 (citing Modine Mfg., 75 F.3d 1545 (Fed. Cir. 1996)). The opinion further cites Harari, 656 F.3d 1331 (Fed. Cir. 2011), as requiring that a patent’s broad language of incorporation be given effect even in the presence of a subsequent, more limited incorporation. The opinion also rejects Ford’s citations to Callaway Golf, 576 F.3d 1331 (Fed. Cir. 2009), and Husky Injection Molding Systems, 838 F.3d 1236 (Fed. Cir. 2016), as inapposite, as those cases involved more limited incorporating language than in Paice’s patent. Because the Board had rejected Paice’s incorporation arguments, it had not considered whether the incorporated document could provide the necessary description to support the electrical claims. On remand, the Board should address this issue.

KEYWORDS: INTER PARTES REVIEW; INCORPORATION BY REFERENCE; PRIORITY; WRITTEN DESCRIPTION; ANTICIPATION; OBVIOUSNESS