Primer in Patent Enforcement
| May 26, 2022
NICHIA CORPORATION, v. DOCUMENT SECURITY SYSTEMS, INC.
Decided: April 26, 2022
Before DYK, REYNA, and STOLL. Opinion by REYNA
Summary
Although not precedential, this decision serves as a primer on patent enforcement and the interplay of district court actions by a patent owner, and defenses raised by an alleged infringer with a petition for inter partes review. A review of the underlying Board decision reveals eight district court cases brought by Document Security Systems, Inc., against six different entities, where three inter partes reviews were requested. There were also petitions for inter partes reviews (IPRs) of different patents owned by Document Security Systems, Inc. not involved in this appeal.
In one of the IPRs, the Board found claims 1, 6-8, 15 and 17 of USP 7,524,087 (the ‘087 patent which is the patent involved in the decision) unpatentable (Seoul Semiconductor Co. v. Document Sec. Sys., Inc., IPR2018-00522 and Everlight Elecs. Co. v. Document Sec. Sys., Inc., IPR 2018-01226 – motion for joinder with IPR 2018-00522). In another IPR, the Board declined to institute inter partes review due to the petition being filed more than one year after service of the complaint alleging infringement (Cree, Inc., v. Document Sec. Sys., Inc., IPR2018-01221).
In the present decision, the Board found claims 1 and 6-8 of the ‘087 patent unpatentable and found that claims 2-5 and 9-19 of the ‘087 patent are not unpatentable. Nichia appeals the decision upholding claims 2-5 and 9-19 while Document Security Systems appeals the holding that claims 1 and 6-8 are unpatentable. The CAFC affirmed the Board’s findings as to all claims except claims 15-19, reversing on claim 15 and remanding on dependent claims 16-19.
Background
The ‘087 patent relates to an optical device with an LED die, such as for use in a large display panel. As an example, a stadium display may include numerous small light emitting elements arranged in an array and consisting of an LED die mounted to a plastic housing. In an exemplary embodiment, LEDs are mounted in a housing and encapsulated for protection from the environment. The device contains reflector housing 20 with a sidewall 26 extending between top 22 and bottom 24, with a first pocket or cavity 30 formed on top and a second pocket 34 formed on bottom shown in Figs. 1 and 2:
The first pocket 30 may be filled with encapsulant to cover and protect the LED dies. Claim 1 is representative.
1. An optical device comprising:
a lead frame with a plurality of leads;
a reflector housing formed around the lead frame, the reflector housing having a first end face and a second end face and a peripheral sidewall extending between the first end face and the second end face, the reflector housing having a first pocket with a pocket opening in the first end face and a second pocket with a pocket opening in the second end face;
at least one LED die mounted in the first pocket of the reflector housing;
a light transmitting encapsulant disposed in the first pocket and encapsulating the at least one LED die; and
wherein a plurality of lead receiving compartments are formed in the peripheral sidewall of the reflector housing.
The Board found that claims 1 and 6-8 are unpatentable as obvious over Takenaka (teaching most of claim 1) in combination with Kyowa (teaching the remaining limitation requiring multiple lead-receiving compartments in the reflector housing sidewall). The Board further found that Nichia did not demonstrate that claims 1 and 6-14 are unpatentable over Okazaki and Kyowa because Okazaki discloses a tubular vessel instead of the claimed two pockets. The Board found that Document Security’s expert was more credible than Nichia’s expert in that one of ordinary skill would understand Okazaki as teaching a tubular vessel instead of two pockets. The Board also found that Nichia did not demonstrate that claims 9-19 are unpatentable over Takenaka in view of Kyowa because Nichia did not identify disclosure in Takenaka regarding claim 9’s plastic limitation: “A display comprising a plurality of plastic leaded chip carrier LEDs, the plastic leaded chip carrier LEDs each comprising ….” The Board determined that the underlined phrase was not part of the preamble. Lastly, the Board found that Nichia also did not identify any disclosure in Takenaka that teaches or suggests the “electrical connection limitation” in independent claim 15.
Discussion
The CAFC first notes the standard of review: the Board’s legal conclusions are reviewed de novo whereas the factual findings underlying obviousness are reviewed for substantial evidence.
Nichia’s Appeal
Nichia makes three arguments that the Board erred in finding that Nichia failed to show that claims 9-19 are unpatentable over Takenaka in view of Kyowa.
In the first argument, Nichia argued that the Board erred in the construction of the preamble of claim 9. Nichia argued that the preamble should be considered as the entirety of “A display comprising a plurality of plastic leaded chip carrier LEDs, the plastic leaded chip carrier LEDs each” comprising” (the second “comprising” being considered the transitional phrase). The Board found the preamble to be “A display.” Claim construction is an issue of law reviewed de novo. The CAFC simply found that the phrase “[a] display comprising” is a general description followed by the transition word “comprising” and then the required elements.
In the second argument, Nichia argued that the Board abused its discretion by not including information contained in claim charts regarding plastic from Takenaka. The CAFC found that Nichia failed to establish anywhere in its petition or expert declaration that Takenaka disclosed “plastic.” Nichia’s claim charts disclosed use of resin with no argument comparing plastic and resin.
In the third argument, Nichia argued that the Board abused it’s discretion in finding that Nichia did not prove claim 15 unpatentable based on Takenaka in view of Kyowa. Claim 15 is similar to claim 1 but includes the additional limitation of “at least one LED die … electrically connected to said plurality of electrically conductive leads.” Nichia argues that the Board abused its discretion by ignoring Nichia’s reference to its claim chart for claim 1. Unlike with the plastic phrase, Nichia’s petition specifically stated that Takenaka disclosed an electrical connection. Therefore, the CAFC reversed the Board’s determination regarding claim 15 and remanded with respect to dependent claims 16-19.
Document Security’s Cross-Appeal
The cross-appeal challenged the determination that claims 1 and 6-8 are unpatentable over Takenaka in view of Kyowa. Document Security made two arguments. In the first argument, Document Security argued that Takenaka meets all the limitations of the asserted patent’s disclosed method to protect the leads from external forces, and therefore there was no need to combine with Kyowa.[1] Motivation to combine is a finding of fact. The Board relied on Nichia’s expert that a person of ordinary skill in the art would have been motivated to add the compartments described in Kyowa to the LED housing sidewall of Takenaka to protect the leads from external forces. The expert testimony and Kyowa’s disclosure provide “relevant evidence as a reasonable mind” would find supports the Board’s conclusion.
In the second argument, Document Security argued that even if there was motivation to combine, the Board erred because Kyowa does not teach a required element of the claims at issue, arguing that Kyowa does not disclose or suggest reflector housing and therefore cannot teach the lead-receiving compartments limitation. What the prior art teaches is a finding of fact. The Board explained that Kyowa teaches the device is enclosed in a resin package, which is an LED housing, and the sidewall contains multiple compartments in the housing. The Board reasoned that since Takenaka teaches a housing formed of white resin having high reflectance, it would correspond to the required reflector housing. As such, the CAFC found the Board’s findings supported by substantial evidence.
Takeaways
- Any IPR petition needs to clearly tie elements of the prior art to elements of the claim(s) at issue. For example, the resin of the prior art needed to be shown to correspond to plastic of claim 9. On the other hand, Nichia’s petition clearly set forth “electrical” connection which resulted in reversal.
[1] The author notes that this seems to be strange that the patent owner was arguing that it’s claim would be taught by one prior art reference. It is suspected that the strategy was to save the claim based on the multiple compartments limitation which was taught by the secondary reference.
