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Federal Circuit clarifies burdens of proof when priority to earlier application is contested
November 11, 2008

In a recent decision, the Federal Circuit affirmed a district court's determination that the asserted claims of a patent were not entitled to the effective filing date of the earliest application in a chain of four applications, and that as a result the claims were anticipated by intervening prior art. The court explained its recent decision in PowerOasis, where the court seemed to put the burden of proof on the patentee when the issue was entitlement to an earlier effective priority date. Rejecting this interpretation, the court stated:

Carefully read, however, PowerOasis says nothing more than, and should be understood to say, that once a challenger (the alleged infringer) has introduced sufficient evidence to put at issue whether there is prior art alleged to anticipate the claims being asserted, prior art that is dated earlier than the apparent effective date of the asserted patent claim, the patentee has the burden of going forward with evidence and argument to the contrary. As we noted earlier, it is a long-standing rule of patent law that, because an issued patent is by statute presumed valid, a challenger has the burden of persuasion to show by clear and convincing evidence that the contrary is true. That ultimate burden never shifts, however much the burden of going forward may jump from one party to another as the issues in the case are raised and developed.

This should eliminate much of the speculation and commentary regarding the burden of proof on validity issues that had appeared after the PowerOasis decision.

Technology Licensing Corporation (TLC) owns several patents relating to the separation of synchronization signals from video signals. The patents came from a chain of applications:

  • February 28, 1992: original application filed
  • December 13, 1993: continuation application filed, issued January 23, 1996
  • June 22, 1995: CIP application filed
  • December 4, 1995: CIP application filed, issued May 19, 1998

These two patents are the patents-in-suit. The first relates to a sync separator with two separate clamping operations; the second a sync separator able to recover sync signals from both NTSC and HDTV signals. In the second CIP that led to the second patent, new matter was added to the description, and the patent includes claims directed to a single clamp, rather than two clamps as in the first patent. This new matter is key to the priority issue in the case. As described by the court (internal citations omitted):

Cooper added new matter to the written description in June 1995 when he filed the '661 CIP application and again in December 1995 when he filed the CIP application that led to the '250 patent. The '250 patent contains claims that involve only a single clamp, including claim 33:

33. The method of recovering sync from a video type signal including the steps of:
(a) coupling said video type signal through a capacitor or other circuit thereby establishing a level shifted signal having a sync portion;
(b) comparing said level shifted signal to a first known reference to provide a compared signal;
(c) selectively adding a current to said level shifted signal wherein the amount and/or polarity of said current is responsive to said compared signal and the D.C. level of said level shifted signal is changed in response to said current;
(d) comparing said level shifted signal to a second known reference to provide a second compared signal, which second compared signal is a logic level representation of said sync portion.When Cooper added claim 33 to the '250 patent application by amendment in December 1996, he stated that "Claim 33 element [(a)] corresponds to [capacitor] C3 of figure 2, or alternatively to [capacitor] 1603, or [resistors] 1604 and 1605 of Figure 16." What this means as a technical matter is that the "capacitor" specified in step (a) necessarily corresponds to one of the two capacitors he identified—either to capacitor C3 in Figure 2 or to capacitor 1603 in Figure 16. This leaves resistors 1604 and 1605 in Figure 16 to correspond with the "other circuit" specified in step (a). Figure 16 was part of the new matter added when the CIP was filed in 1995. Exactly where the written description support for the phrase “other circuit” is to be found is a major point of contention in the case.

TLC sued Videotek for infringement of these two patents. Videotek then filed a third-party action against Gennum, its chip supplier. Specifically, TLC asserted one family of chips infringed the claims of the second patent (the "one clamp" patent), and two families infringed the first patent (the "two clamp" patent). The district court held the first family of chips did not infringe, but that the second family did infringe the "one clamp" patent. The question became whether the claims of that patent were valid. The key prior art was two sync separator chips described in data sheets published in May 1993 and November 1993. It was undisputed that these chips met all the limitations of the asserted claims, so the question was what effective filing date the asserted claims were entitled to. TLC argued for February 28, 1992 (when the original application was filed), Gennum argued adequate support was not present until the CIP filings in 1995. The district court held the claims were only entitled to a 1995 priority date, and were thus invalid as anticipated by the prior art chips. TLC appealed.

On appeal, the Federal Circuit agreed the effective filing date of the claims was 1995, and that the claims were therefore anticipated. One of the issues before the district court was the proper allocation of the burden of proof. The Federal Circuit clarified that the ultimate burden of showing invalidity is always on the party challenging the validity of the patent. As set forth by the court (internal citations omitted):

Here, TLC, the plaintiff in the suit, has the initial burden of going forward with evidence to support its allegation that Gennum infringes claim 33. Gennum, having the ultimate burden of proving its defense of invalidity based on anticipating prior art, then has the burden of going forward with evidence that there is such anticipating prior art, which in Gennum’s view means art that is prior to the 1995 application date of the '250 patent.
At that point TLC has the burden of going forward with evidence either that the prior art does not actually anticipate, or, as was attempted in this case, that it is not prior art because the asserted claim is entitled to the benefit of a filing date prior to the alleged prior art. This requires TLC to show not only the existence of the earlier application, but why the written description in the earlier application supports the claim. In the context of the allegedly anticipating Elantec prior art, that means producing sufficient evidence and argument to show that an ancestor to the '250 patent, with a filing date prior to the Elantec date, contains a written description that supports all the limitations of claim 33, the claim being asserted.

Assuming then that TLC’s evidence and argument in support of the earlier filing date is now before the court, the burden of going forward again shifts to the proponent of the invalidity defense, Gennum, to convince the court that TLC is not entitled to the benefit of the earlier filing date. "Convince" is the operative word, because if the court is not persuaded by clear and convincing evidence that Gennum is correct, Gennum has failed to carry its ultimate burden of persuasion, and its defense of invalidity, based on anticipation by the Elantec art, fails.

Gennum argued the Federal Circuit's recent decision in PowerOasis placed the burden of persuasion on the patentee when entitlement to an earlier effective priority date is at issue. The Federal Circuit disagreed, and interpreted the court's holding in PowerOasis narrowly (internal citations omitted):

In PowerOasis, the alleged infringer, T-Mobile, argued that the claims asserted against it by the patentee, PowerOasis, were anticipated by the MobileStar Network, a system that was in public use more than one year before the date of the CIP application from which the asserted claims arose. Since PowerOasis conceded that the MobileStar Network included all the limitations of the asserted claims, PowerOasis countered T-Mobile’s position by arguing that the claims were entitled to the benefit of the filing date of an earlier application. As in this case, the issue then before the trial court was whether the earlier written description provided sufficient support for the asserted claims. The judgment of the trial court was that PowerOasis was not entitled to the benefit of the earlier filing date.

In affirming the trial court’s judgment, this court's opinion noted that the trial court "held that PowerOasis had the burden of proving that it is entitled to claim priority to the filing date of the Original application." In our affirmance, however, we stated that once T-Mobile satisfied its initial burden of production by coming forward with evidence that the MobileStar Network was anticipatory prior art, "the burden was on PowerOasis to come forward with evidence to the contrary." We then concluded that the "district court therefore correctly placed the burden on PowerOasis to come forward with evidence to prove entitlement to claim priority to an earlier filing date."

Nevertheless, Gennum is not alone in reading PowerOasis to have modified the traditional burdens rule so that the patentee has the burden of persuasion to prove it was entitled to the earlier filing date. Carefully read, however, PowerOasis says nothing more than, and should be understood to say, that once a challenger (the alleged infringer) has introduced sufficient evidence to put at issue whether there is prior art alleged to anticipate the claims being asserted, prior art that is dated earlier than the apparent effective date of the asserted patent claim, the patentee has the burden of going forward with evidence and argument to the contrary. As we noted earlier, it is a long-standing rule of patent law that, because an issued patent is by statute presumed valid, a challenger has the burden of persuasion to show by clear and convincing evidence that the contrary is true. That ultimate burden never shifts, however much the burden of going forward may jump from one party to another as the issues in the case are raised and developed. Correctly understood, PowerOasis is fully consistent with this understanding; until such time as these rules are abrogated by statute, by this court sitting en banc, or by the Supreme Court, the opinion in PowerOasis could not be otherwise.

In applying these principles to the facts, the court held the district court, while ambiguous in its description, did not improperly allocate the burden of proof, and held the claims were not entitled to the earlier priority date.

TLC raised an additional argument for reversing the district court. Between the district court's decision and the disposition of the appeal, TLC successfully obtained reissue of the patent with the original claims intact, in light of the same prior art. TLC argued the Federal Circuit should accord the USPTO's determination on priority proper deference, and also reverse the district court for this reason. The Federal Circuit, however, was unconvinced. The court stated that in this type of circumstance, "judicial efficiency and the policy of repose counsels against our re-weighing of the evidence to add an additional deference-thumb to the scale, or, even more disruptive, our asking the trial court to reopen the entire invalidity question to reweigh the intangible worth of additional deference." The court wanted to avoid holding the judicial process "hostage" by the timing of administrative review, so absent a stay pending administrative action or "extenuating circumstances not here present, the case must be decided on the record the litigants present for appeal."

With that backdrop, the court also affirmed the district court's decision regarding the effective priority date, and as a result, affirmed the finding of anticipation.

To read the full decision in Tech. Licensing Corp. v. Videotek, Inc., click here.

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