The Definiteness Standard for AIA Trials is Still Undecided
| June 7, 2018
Tinnus Enterprises LLC v. Telebrands Corp.
May 30, 2018
O’Malley, Wallach and Hughes. Opinion by O’Malley.
Summary:
This case is an appeal from a final decision from the PTAB in a Post-Grant Review (“PGR”) finding that the claims in U.S. Patent No. 9,051,066 are indefinite applying the In re Packard standard for definiteness. Tinnus Enterprises LLC (“Tinnus”) argued that the Nautilus standard for definiteness is the proper standard, but that the claims are definite under either standard. The CAFC declined to decide which definiteness standard is correct for a PGR at the USPTO. The CAFC instead held that the claims are definite under either standard, and thus reversed the PTAB’s decision of invalidity due to indefiniteness.
Details:
This case deals with a toy called “Bunch O Balloons” covered by U.S. Patent No. 9,051,066 and owned by Tinnus.
The key limitation of claim 1 at issue in this case is:
each elastic fastener configured to provide a connecting force that is not less than a weight of one of the containers when substantially filled with water, and to automatically seal its respective one of the plurality of containers upon detaching the container from its corresponding hollow tube, such that shaking the hollow tubes in a state in which the containers are substantially filled with water overcomes the connecting force and causes the containers to detach from the hollow tubes thereby causing the elastic fasteners to automatically seal the containers.
Definiteness Standards:
Statutory Basis for the Definiteness requirement is 35 U.S.C. § 112(b):
The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.
In re Packard:
The Packard case is a CAFC decision dated May 6, 2014 regarding the definiteness standard for pre-issuance claims in patent applications at the USPTO. “[A] claim is indefinite when it contains words or phrases whose meaning is unclear.” In re Packard, 751 F.3d 1307 at 1310, 1314 (Fed. Cir. 2014). “[C]laims are required to be cast in clear – as opposed to ambiguous, vague, indefinite – terms.” Id. at 1313.
Nautilus:
The Nautilus case is a Supreme Court Decision dated June 2, 2014 regarding the definiteness standard in a patent infringement suit brought by Biosig against Nautilus:
“[A] patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.”
Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2124 (2014).
District Court Litigation – Preliminary Injunction
On June 9, 2015, Tinnus sued Telebrands in the Eastern District of Texas alleging infringement of the ‘066 patent, and filed a Motion for Preliminary Injunction. On December 2, 2015, the District Court granted the Motion for Preliminary Injunction finding in part that Telebrands failed to raise a substantial question of validity with regard to indefiniteness of the limitation “substantially filled” using the Nautilus standard. Telebrands appealed the grant of preliminary injunction arguing, in part, that the term “substantially filled” is indefinite.
PGR
On June 22, 2015, Telebrands filed a petition for Post-Grant Review (“PGR”) arguing indefiniteness of the claim term “substantially filled.” Tinnus argued that the Nautilus standard for definiteness applies and that the patent’s claims “inform those skilled in the art about the scope of the invention with reasonable certainty.” Telebrands argued that the Packard standard for definiteness applies, but that the limitation “substantially filled” is indefinite under either standard. The PTAB applied the Packard standard to find the claims invalid as indefinite. The PTAB did not decide the obviousness issue. Telebrands Corp. v. Tinnus Enterprises, LLC, PGR2015-00018, Final Written Decision, pp. 16-19 (December 30, 2016).
The PTAB justified its use of Packard because AIA proceedings apply the broadest reasonable interpretation (“BRI”) standard for claim construction as in patent examination and reexamination, and there is an opportunity to amend the claims. The PTAB acknowledged the Supreme Court’s decision in Nautilus which provided a different standard for definiteness, but stated:
We do not understand Nautilus, however, to mandate the Board’s approach to indefiniteness in patent examination or reexamination matters or in AIA proceedings, in which the claims are interpreted under the broadest reasonable interpretation standard, and an opportunity to amend the claims is afforded.
Telebrands Corp. v. Tinnus Enterprises, LLC, at p. 17.
When applying Packard to the claims the PTAB found the term “substantially filled” to be subjectively based on desired size or volume and ambiguous due to the expandability of the container. Tinnus appealed the PTAB decision to the CAFC.
CAFC Appeal of Preliminary Injunction
Applying Nautilus and the abuse of discretion standard of review which is used for review of decisions on preliminary injunctions, the CAFC affirmed the District Court’s preliminary injunction on January 24, 2017. A key statement from that decision:
We find it difficult to believe that a person with an associate’s degree in a science or engineering discipline who had read the specification and relevant prosecution history would be unable to determine with reasonable certainty when a water balloon is “substantially filled.”
Tinnus Enterprises, LLC v. Telebrands Corp., 846 F.3d 1190, 1206 (Fed. Cir. 2017).
Also, the CAFC opinion on preliminary injunction issued after the PTAB’s PGR final written decision. The CAFC stated:
We are aware that the PTAB issued a Final Written Decision on December 30, 2016, concluding that the claims of the ’066 patent are indefinite. The PTAB’s decision is not binding on this court, and based on the record before us and the applicable standard of review, it does not persuade us that the district court abused its discretion in granting the preliminary injunction. The parties are, of course, free to ask the district court to reconsider its preliminary injunction in light of the PTAB’s Decision.
Tinnus Enterprises, LLC, 846 F.3d at 1202, n.7.
CAFC Appeal of the PTAB Decision
CAFC declined to decide which definiteness standard is correct for AIA trials at the PTAB because “substantially filled” is definite under either standard. The CAFC reviewed the claim language, specification and prosecution history. When viewed in the context of the claim language, the term “substantially filled” informs one of ordinary skill in the art of the strength of the elastic fastener recited in claim 1. This is also consistent with the specification. And the final important point is that the limitation including the term “substantially filled” was added by the Examiner in an Examiner’s amendment. The Examiner stated that the limitation “defines an upper limit of the connecting force and thus defines the elastic fastener in a way that distinguishes over the prior art.” The CAFC stated that “we presume that an examiner would not introduce an indefinite term into a claim when he/she chooses to amend the claim for the very purpose of putting the application in a condition for allowance.”
Telebrands argued that the term is indefinite because there is no way to determine when the volume of the balloon is substantially filled especially because the balloon is expandable. Telebrands refered to the expert testimony and argued that the PTAB’s finding should be reviewed for substantial evidence. The CAFC stated that the term “substantially filled” does not refer to the volume of fluid. Instead it further defines the “elastic fastener” limitation. The CAFC further stated that they do not need to defer to the PTAB’s assessment of expert testimony “when it is inconsistent, as it is here, with the intrinsic evidence.”
The CAFC noted that the USPTO intervened in this appeal supporting the use of the Packard standard for AIA trials at the PTAB instead of the Nautilus standard. However, one week prior to the hearing, the USPTO withdrew because USPTO is considering the PTAB’s approach to claim construction and the definiteness standard. The CAFC stated that they will wait for an appropriate case where the case actually turns on any inconsistency in the definiteness standards. And at that time the CAFC will also consider any rulemaking from the director on the definiteness standard.
Comments
It is still up in the air which definiteness standard is the correct standard for AIA trials in the PTAB. If claims are found indefinite in a PGR or CBM only under the Packard standard, it may be worth appealing to the CAFC to argue for application of the Nautilus standard. Also when appealing a PGR or CBM determination of indefiniteness, try to show that expert testimony is inconsistent with the intrinsic record so that the CAFC is not required to defer to the PTAB’s assessment of expert testimony.
This case may also be useful regarding Examiner’s Amendments. The CAFC stated that amendments by an Examiner to put an application in condition for allowance will be presumed to be definite.
