Federal Circuit Affirms Obviousness Decision by Board, Discusses Impact of Standing on Triggering of §315(b)’s Time Bar

In Hamilton Beach Brands, Inc. v. F’real Foods, LLC, Appeal No. IPR2016-01107 (Fed. Cir. Nov. 16, 2018), the Federal Circuit affirmed the Patent Trial and Appeal Board’s final written decision in an IPR upholding the patentability of a patent claim under 35 U.S.C. § 103. Additionally, the court discussed but did not determine whether improper standing at the time of filing a complaint might impact the application of the one-year time bar under 35 U.S.C. §315(b). The decision provides a good opportunity for practitioners to brush up on the fundamentals governing obviousness determinations and suggests that the case law surrounding the one-year time-bar under §315(c) may still evolve.

The patent at issue is directed to a drink mixing machine having a removable splash shield that can be rinsed by a nozzle on the mixing machine. The challenged claim recites a method of rinsing the splash shield. The Board construed “a nozzle oriented towards the splash shield” to mean “a nozzle pre-positioned such that it points at the splash shield.” The Board construed “directing rinsing fluid onto the splash shield using the nozzle” to mean “spraying rinsing fluid onto the splash shield from the pre-positioned nozzle.” Based on these constructions, the Board concluded that a first prior art reference did not disclose any sort of rinse nozzle for cleaning a splash shield, a second prior art reference only described a spray device that is not prepositioned to point at a splash shield, and a third prior art reference disclosed an electronically controlled nozzle that was directed at the mixing shield, not the splash shield. The Board did not find a motivation to combine the prior art references and further considered objective indicia of non-obviousness, ultimately concluding that the defendant had not shown by a preponderance of the evidence that the claim would have been obvious in light of the prior art references.

On appeal, the court rejected a challenge under the Administrative Procedure Act based upon the Board allegedly changing claim construction theories midstream. The court found no error, noting that the petitioner was given the opportunity to argue against the patent owner’s proposed constructions in a reply brief and during oral argument, and that the Board’s final constructions were similar to the proposed constructions. After de novo review of the disputed nozzle claim constructions, the court found that the Board did not err in its constructions because the constructions followed the claim’s plain language read in view of the specification. The court determined that substantial evidence supported the Board’s determination that the claim was not obvious over the three prior art references. The Board had determined that the petitioner did fail to prove a motivation to combine the three cited prior art references, noting that the petitioner had not identified a reason why a person of skill in the art would have been motivated to combine the prior art references, as required under KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398, 418 (2007).

In addition, the court discussed, but did not ultimately reach, the issue of whether the appeal was time barred under 35 U.S.C. § 315(b). In Click-to-Call Techs., LP v. Ingenio, Inc., 899 F.3d 1321 (Fed Cir. 2018) (discussed here), the court held that the one-year time bar of § 315(b) is implicated once a party has been served, irrespective of subsequent events such as a voluntary dismissal. Here, the respondent had voluntarily dismissed its original complaint after realizing that it did not own the asserted patent. After ownership was corrected, a new complaint was filed. The petitioner’s IPR was timely as to the second action, but more than one year after service of the original.

The Board had determined that the one-year time bar of §315(b) had not been triggered by service of the original complaint because the respondent had lacked standing. On appeal, the Federal Circuit declined to address whether the lack of standing affected the triggering of the one-year time bar of §315(b) because a cross-appeal had not been filed on the issue. The court did observe, however, that the voluntary dismissal of the complaint would not preclude application of the one-year time bar of §315(b).

The decision is worth reviewing to brush up on the basic law governing obviousness decisions. In particular, the decision is a reminder to petitioners to clearly identify a reason why a person of ordinary skill in the art would be motivated to combine prior art references. Further, practitioners who have been unable to file an IPR due to a one-year time bar under §315(b) should verify that the presumed triggering complaint was not subject to any standing issues. If the plaintiff lacked standing to file the complaint, an IPR could be filed and the resulting legal dispute over whether the time bar of § 315(b) applies might eventually be determined by the Federal Circuit.