A modified one way street sign indicating Second Chance

This blog previously referenced Athena Automation Ltd. v. Husky Injection Molding Systems Ltd., IPR2013-00290 as an example of the Board granting a request for rehearing, but ultimately confirming its original decision.  On appeal, the Federal Circuit vacated the Board’s decision on the particular issues raised by the Petitioner in the request for rehearing, suggesting that if at first you don’t succeed, try again at the Federal Circuit.  Husky Injection Molding Systems Ltd. v. Athena Automation Ltd., 2015-1726, 2015-1727 (Fed. Cir. Sep. 23, 2016). (As we will discuss separately, on the Patent Owner’s cross-appeal, the Federal Circuit determined that it lacked authority to review the PTAB’s refusal to extend the equitable doctrine of assignor estoppel to PTAB proceedings.)

In its final written decision, the PTAB determined that the Petitioner failed to meet its burden of proving that various challenged claims were unpatentable under 35 U.S.C. § 102(b) over two patent publications.  Petitioner argued that two publications disclosing various features of the claims should be considered as a single prior art reference because one publication “expressly incorporates [the second publication] by reference.”  The Board declined to address whether the first publication incorporated the second by reference, instead determining that the two publications failed to teach all of the “all the recited claim limitations in the same form and order as listed in the claims.”

The Petitioner sought rehearing of the Board’s finding that Petitioner failed to meet its burden, arguing that the publications disclose the features of the challenged claims and that the final written decision “overlooks fundamental legal principles that govern anticipation and incorporation by reference.”  The PTAB granted the Petitioner’s request and reconsidered the incorporation by reference issue. Quoting Harari v. Lee, 656 F.3d 1331, 1334 (Fed. Cir. 2011), the Board explained: “Whether and to what extent a document incorporates material by reference is determined based on, ‘whether one reasonably skilled in the art would understand [the document] as describing with sufficient particularity the material to be incorporated.’”  Here, the first publication contains a general incorporation by reference followed by a more specific reference to the second publication.  The publications utilized different terminology, however, and the Board deemed that the Petitioner failed to establish that a person of ordinary skill would have understood what specific portions of the second publication were incorporated by the first.

The Federal Circuit disagreed, instructing that the incorporation by reference standard “relies only on the reasonably skilled artisan and his or her ability to deduce from language, however imprecise, what a host document aims to incorporate.”  The use of different terminology in the publications was not significant, and the descriptions provided in the publications were sufficient for one of ordinary skill to appreciate what portions of the second publication were incorporated in the first.  The court vacated and remanded for the Board to evaluate anticipation in view of the combination of publications.

The incorporation standard relies only on the reasonably skilled artisan and his or her ability to deduce from language, however imprecise, what a host document aims to incorporate.

The Federal Circuit ultimately determined that the Board erroneously applied the incorporation by reference standard for anticipation, but these decisions highlight a potential weakness in anticipation arguments relying on incorporation by reference.  Ideally, the primary reference contains specific incorporation by reference language that identifies the portion of the second reference relied upon “with sufficient particularity.”  Petitioners arguing that a reference is incorporated should also consider submitting an expert declaration supporting an assertion that one of ordinary skill would understand what material was incorporated.