Assignor Estoppel Question in PTAB Decision to Institute Is Not Reviewable: Fed. Cir. | Practical Law

Assignor Estoppel Question in PTAB Decision to Institute Is Not Reviewable: Fed. Cir. | Practical Law

In Husky Injection Molding Sys. v. Athena Automation Ltd., the US Court of Appeals for the Federal Circuit dismissed a patent owner's appeal from the Patent Trial and Appeal Board (PTAB) for lack of jurisdiction, holding that it could not review whether assignor estoppel prevented the PTAB from instituting an inter partes review.

Assignor Estoppel Question in PTAB Decision to Institute Is Not Reviewable: Fed. Cir.

by Practical Law Intellectual Property & Technology
Published on 26 Sep 2016 • USA (National/Federal)
In Husky Injection Molding Sys. v. Athena Automation Ltd., the US Court of Appeals for the Federal Circuit dismissed a patent owner's appeal from the Patent Trial and Appeal Board (PTAB) for lack of jurisdiction, holding that it could not review whether assignor estoppel prevented the PTAB from instituting an inter partes review.
On September 23, 2016, in Husky Injection Molding Sys. Ltd. v. Athena Automation Ltd., the US Court of Appeals for the Federal Circuit dismissed Husky Injection Molding System Ltd.'s appeal from the Patent Trial and Appeal Board (PTAB) for lack of jurisdiction, finding that under 35 U.S.C. §314(d), it could not review the question of whether Athena Automation Ltd. was estopped from seeking an inter partes review (IPR) ( (Fed. Cir. Sept. 23, 2016)). The Federal Circuit also vacated the PTAB's decision on incorporation of reference and its finding of no anticipation, and remanded the relevant claims for further consideration.
This case involves US Patent No. 7,670,536 (the '536 patent), owned by Husky and directed to a molding machine having a clamp assembly with:
  • A stationary platen.
  • A movable platen.
  • Tie bars.
  • Tie bar locks that couple the tie bars to the movable platen.
  • Clamp actuators that supply a clamping force to the tie bars.
Husky's former owner and president (Schad), also a co-inventor of the '536 patent, assigned the '536 patent to Husky, and subsequently sold Husky to a private equity group. Schad then left to form Athena. In 2012, Athena filed a petition with the PTAB for IPR, challenging the patentability of all 22 claims in the '536 patent. Despite a preliminary response by Husky arguing that assignor estoppel barred Athena from filing a petition for review, the PTAB rejected that argument and instituted review, finding that:
  • The equitable doctrine, though a defense to some patent infringement claims, does not provide an exception to the statutory mandate that a person who is not the owner of a patent may file a petition to institute an IPR of the patent.
  • A comparison of the statutory mandate to the statutory text governing International Trade Commission (ITC) investigations is instructive, in that Congress provided for all legal and equitable defenses in an ITC investigation, but not in an IPR.
In its final written decision, the PTAB held that:
  • Claims 1, 4–16, 18, and 20–22 were anticipated by a reference (Arend).
  • Claims 2, 3, 17, and 19 were not anticipated by either of two references (Glaesener, Choi), and even if Glaesener incorporated Choi by reference, the reference combination still fails to teach the recited limitations in the same form and order as listed in the claims.
Athena requested and received a rehearing of the final decision, and on rehearing, the PTAB reaffirmed its finding that Athena failed to prove anticipation of claims 2, 3, 17, and 19. The PTAB reasoned that Athena failed to show that Glaesener incorporates any portion of Choi for purposes of anticipation.
On appeal, the Federal Circuit held that under 35 U.S.C. § 314(d)—which provides that the determination to institute IPR is final and nonappealable—it lacked jurisdiction to consider whether Athena was estopped from filing a petition for IPR. The court explained that precedent established a two-part inquiry for determining whether the court can review a particular challenge to the PTAB's decision to institute:
  • First, the court must determine whether the challenge is closely tied to the application and interpretation of statutes related to the PTAB's decision to initiate IPR, or if it instead implicates constitutional questions, depends on other less closely related statutes, or presents other questions of interpretation that reach, in terms of scope and impact, well beyond § 314(d). If the former, the court may not review, but if the latter, it may review.
  • Second, if, despite the challenge being grounded in a statute closely tied to that decision to institute, it is nevertheless directed to the PTAB's ultimate invalidation authority with respect to a specific patent, the court may review the challenge.
Then turning to Husky's appeal, the Federal Circuit held:
  • The question of assignor estoppel does not fall into any of the three categories in the first part of the inquiry that are reviewable because:
    • there are no constitutional concerns and no party contends there are any;
    • the question of assignor estoppel does not depend on other less closely related statues because it does not derive from statute and is an equitable doctrine, although an interpretation of 35 U.S.C. § 311 and its prescription of “a person who is not the owner of a patent may file” to either include or foreclose assignor estoppel is very closely related to any decision to initiate IPR; and
    • the impact of assignor estoppel cannot be divorced from the very precise scope of § 314, and the issue is not “well beyond this section.”
  • Despite the question's close ties to the decision to institute, the question does not relate to the PTAB's ultimate invalidation authority because:
    • assignor estoppel does not prevent a tribunal from evaluating the validity of any challenged claims generally, but simply limits the parties that may ask for such an evaluation; and
    • under the court's precedent, the question of who may petition for review falls outside of the narrow exceptions to an otherwise broad ban on reviewing decisions to institute.
On the question of anticipation and incorporation by reference, the Federal Circuit vacated and remanded the relevant claims for reconsideration, holding:
  • In determining whether a reference was incorporated into another, the court assesses whether a skilled artisan would understand the host document to describe with sufficient particularity the material to be incorporated.
  • The fact that Choi does not recite the words “pineapple” or “toothed-ring” throughout its disclosure is not relevant, because a reasonably skilled artisan would appreciate that Glaesener's reference to these terms corresponds to the disclosure in Choi, and therefore, Glaesener identifies with sufficient particularity what it incorporates from Choi.