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When priority not decided at PTO patentee bears burden of showing entitlement to earlier application

April 14, 2008
Post by Blog Staff

In a decision Friday, the Federal Circuit affirmed a district court's grant of summary judgment of invalidity with respect to all asserted claims of two patents. More particularly, the court held that the claims of the patents were not entitled to the priority date of an earlier-filed application, and were therefore anticipated by intervening prior art. The original application was filed in 1997, however the court determined that written description support was not found in the application family until a 2000 CIP application. As a result, a prior product in public use in 1999 (which was the predecessor of the accused product) anticipated the asserted claims.Of particular interest, however, was the Federal Circuit's treatment of the presumption of validity on appeal. The district court held that because the issue of priority was never addressed by the USPTO, the patentee had the burden to show it was entitled to the earlier priority date. The Federal Circuit agreed, stating:

When neither the PTO nor Board has previously considered priority, there is simply no reason to presume that claims in a CIP application are entitled to the effective filing date of an earlier filed application. Since the PTO did not make a determination regarding priority, there is no finding for the district court to defer to.

Of course, the logic of this holding could easily be extended to other issues not addressed by the PTO, such as whether claims of a patent are valid over a reference not considered during prosecution. As Professor Crouch points out at Patently-O, this issue is the subject of a petition for certiorari currently before the Supreme Court in the Microsoft v. z4 Technologies case. The response to Microsoft's petition for certiorari is due May 1.More concerning PowerOasis, Inc. v. T-Mobile USA, Inc. after the jump.PowerOasis owns several patents relating to vending machines selling telecommunications access. The patents at issue, the '658 and '400 patents, have virtually identical specifications. The stated purpose of the PowerOasis patents is to provide a "vending machine" that enables a customer to connect a laptop to a telecommunications channel. The '658 and '400 patents list filing dates of November 6, 2001 and October 15, 2002, respectively. The '658 and '400 patents stem from a series of continuation and continuation-in-part (CIP) applications, with the first application in the chain (the "Original Application") filed on February 6, 1997. The timeline of applications are as follows:

  • 2/6/1997: Original Application filed
  • 9/18/1998: Continuation application filed
  • 6/15/2000: CIP filed
  • 11/6/2001: Application leading to '658 patent filed
  • 10/15/2002: Application leading to '400 patent filed

PowerOasis sued T-Mobile for patent infringement alleging that T-Mobile's wireless "HotSpot Network" infringes claims of the '658 and '400 patents. The relevant language of the claims concerned the inclusion of a "customer interface" for indicating the status of the vending machine. The parties agreed that "customer interface" was "an interface that enables information to be passed between a human user and hardware or software components of a system," but disagreed about the location of the customer interface. PowerOasis argued that the "customer interface" may occur on a customer's laptop, while T-Mobile argued that the customer interface must be located on the vending machine itself. Relying entirely on language added to the 2000 CIP application, the district court adopted PowerOasis's proposed construction that the claim term "customer interface" encompasses an interface that is located on the customer's laptop. In light of the district court's construction of "customer interface," T-Mobile filed a motion for summary judgment that the asserted claims were anticipated by the MobileStar Network. It was undisputed that prior to June 15, 1999, MobileStar Networks, Inc. developed, deployed, publicly used, and offered for sale the MobileStar Network, a high-speed wireless data network that connected users to the Internet. It was also undisputed that prior to June 15, 1999, the MobileStar Network contained all of the same features that form the basis of PowerOasis's allegation that the T-Mobile HotSpot Network infringes its patents, meaning that if the MobileStar Network was prior art, it was undisputedly anticipatory. PowerOasis responded by claiming its asserted claims should have the benefit of priority going all the way back to the filing date of the Original Application, which would antedate the MobileStar Network.On summary judgment, the district court determined that the asserted claims were not entitled to the priority date of the Original Application because the written description of the Original Application did not support the later issued claims. The district court noted that, to arrive at the broad construction it accorded the "customer interface," it relied "exclusively" on the new matter that was added to the 2000 CIP Application. Because the district court concluded that the '658 and '400 patents were not entitled to the effective filing date of the Original Application, the district court granted the motion for summary judgment of invalidity.On appeal, PowerOasis argued that the district court erred on two bases. First, it argued that the district court erroneously placed the burden of proof on PowerOasis to show that it was entitled to the priority date of the Original Application, even though patents are presumed valid. Second, it argued that the district court erred in concluding that the disclosure of the Original Application did not provide written description adequate to support the asserted claims of the '658 and '400 patents, and were therefore not entitled to the earlier priority.The Federal Circuit addressed the burden of proof issue first. The court noted the well-established rule that a patent is presumed valid, and the burden of persuasion to the contrary is and remains on the party asserting invalidity. Ralston Purina Co. v. Far-Mar-Co., Inc., 772 F.2d 1570, 1573 (Fed. Cir. 1985). However, the court concluded that when a dispute arises concerning whether a CIP patent is entitled to priority to the date of the original application and the Patent Office has not addressed the issue, the burden of proof ordinarily should rest with the party claiming priority to the date of the original application. The court distinguished Ralston on the basis that the CIP application at issue in that case was also the subject of an interference, which resulted in the inventor being awarded the benefit of his earliest application in a detailed opinion by the Board of Patent Appeals and Interferences. Thus, the district court in Ralston properly accorded deference to the Board's decision on priority. In this case, however, the issue of priority was never addressed by the PTO, as a result, there was no "finding" that should be afforded deference. As a result, once T-Mobile established by clear and convincing evidence that the MobileStar Network anticipated the asserted claims of the patents, the burden shifted to PowerOasis to come forward with evidence they were entitled to the earlier priority date. As stated by the court:

When neither the PTO nor Board has previously considered priority, there is simply no reason to presume that claims in a CIP application are entitled to the effective filing date of an earlier filed application. Since the PTO did not make a determination regarding priority, there is no finding for the district court to defer to.

Turning to the question of priority, the court also affirmed the district court. The court agreed the Original Application did not provide a written description of "customer interface" as set forth in the asserted claims, namely one that was not integrated with the vending machine. The Original Application described a vending machine with a "display" or "user interface" as part of the vending machine, rather than a vending machine with a "customer interface" located on a customer's electronic device. The 2000 CIP Application added language describing a vending machine with a user interface located remotely from the vending machine, such as on a user's laptop. Since the court could not find a single reference in the written description which suggested that PowerOasis understood its invention to include the new matter that it claimed for the first time in the CIP application, the court upheld the decision of the district court that the Original Application did not support a "customer interface" on a customer laptop. Because the asserted claims were limited to the filing date of the CIP Application, June 15, 2000, they were anticipated by the MobileStar Network.To read the full decision in PowerOasis, Inc. v. T-Mobile USA, Inc., click here.


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