Prolitec, Inc. v. Scentair Technologies, Inc.

United States Court of Appeals
for the Federal Circuit
______________________
PROLITEC, INC.,
Appellant
v.
SCENTAIR TECHNOLOGIES, INC.,
Appellee
______________________
2015-1020
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2013-
00179.
______________________
Decided: December 4, 2015
______________________
ERIKA ARNER, Finnegan, Henderson, Farabow, Gar-
rett & Dunner, LLP, Reston, VA, argued for appellant.
Also represented by J. DEREK MCCORQUINDALE; CORY C.
BELL, Boston, MA.
DAVID CLAY HOLLOWAY, Kilpatrick Townsend &
Stockton LLP, Atlanta, GA, argued for appellee. Also
represented by RENAE WAINWRIGHT; JOSHUA B. POND,
Washington, DC; ADAM HOWARD CHARNES, Winston-
Salem, NC.
2 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
FARHEENA YASMEEN RASHEED, Office of the Solicitor,
United States Patent and Trademark Office, Alexandria,
VA, argued for intervenor Michelle K. Lee. Also repre-
sented by NATHAN K. KELLEY, SCOTT WEIDENFELLER.
______________________
Before PROST, Chief Judge, NEWMAN and TARANTO,
Circuit Judges.
Opinion for the court filed by Chief Judge PROST.
Dissenting opinion filed by Circuit Judge NEWMAN.
PROST, Chief Judge.
This appeal arises from the inter partes review (“IPR”)
of U.S. Patent No. 7,712,683 (“’683 patent”) owned by
Prolitec, Inc. The United States Patent and Trademark
Office, Patent Trial and Appeal Board (“Board”) concluded
that both of the claims in the ’683 patent were unpatenta-
ble as anticipated under 35 U.S.C. § 102 alone and addi-
tionally as obvious under 35 U.S.C. § 103. See ScentAir
Techs., Inc. v. Prolitec, Inc., IPR2013-00179, Paper No. 60
(PTAB June 26, 2014) (“Board Decision”). Prolitec ap-
peals the Board’s determination that the two claims were
unpatentable and the Board’s denial of Prolitec’s motion
to amend. The Director of the United States Patent and
Trademark Office (“Director”) intervenes for the limited
purpose of addressing the Board’s regulations and prac-
tices regarding motions to amend. For the reasons stated
below, we affirm.
BACKGROUND
The ’683 patent relates to a cartridge for use with “dif-
fusion devices,” commonly known as air freshener dis-
pensers. See ’683 patent col. 1 ll. 56–60. The cartridge
contemplated by the ’683 patent with its two major com-
ponents, a reservoir 114 and a diffusion head 122, are
depicted in Figure 9, shown below:
PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC. 3
The reservoir contains a liquid to be diffused and a “head
space” above the liquid. ’683 patent col. 5 ll. 45–57. The
diffusion head includes a baffle 140 having an inlet cavity
168 and an outlet cavity 172 detailed in the figure below.
Id. at col. 6 ll. 38–62. The outlet cavity 172 is further
divided by a bulkhead 186 into a first chamber 188 and a
second chamber 190. Id. The bulkhead and the two
chambers trap larger mist particles, which would turn
into liquid and flow back to the reservoir. Id. at col. 6 l.
63–col. 7 l. 12. The goal is to have mostly the finer mist
4 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
particles exit the cartridge. Id.
The diffusion head further includes a venturi assembly,
shown below, with an atomizing chamber between the
narrow end 238 and the wide end 242. Id. col. 9 ll. 26–30.
The ’683 patent only has two apparatus claims, both
are independent. The Board’s final written decision on
June 26, 2014 found that the two claims of the ’683 patent
were anticipated by PCT Application No.
WO2004/080604A2 (“Benalikhoudja”) and obvious over
the combination of Benalikhoudja and U.S. Patent No.
7,131,603 (“Sakaida”). The Board also denied Prolitec’s
motion to amend, concluding that Prolitec did not meet its
burden of establishing that it was entitled to the relief
requested.
Prolitec appeals from the Board’s decision, and the
Director intervenes. We have jurisdiction under 28 U.S.C.
§ 1295(a)(4)(A).
DISCUSSION
We review the Board’s conclusions of law de novo and
its findings of fact for substantial evidence. See In re
PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC. 5
Gartside, 203 F.3d 1305, 1316 (Fed. Cir. 2000). The
Supreme Court clarified the standards of review for claim
construction in Teva Pharmaceuticals U.S.A., Inc. v.
Sandoz, Inc., 135 S. Ct. 831 (2015). Pursuant to Teva’s
framework and our review of Board determinations, we
review the Board’s ultimate claim constructions de novo
and its underlying factual determinations involving
extrinsic evidence for substantial evidence. See Teva, 135
S. Ct. at 841–42.
I
A
Prolitec first challenges the Board’s refusal to narrow
the meaning of the claim element “mounted,” recited in
both patent claims in the context of “a diffusion head
mounted to the reservoir.” See ’683 patent col. 16 ll. 1, 35.
Prolitec asserted that the claim element should mean
“permanently joined.” Board Decision at 13–14. The
Board did not provide a specific construction but relied on
the disclosure of the ’683 patent and the testimony of
Prolitec’s expert to reject Prolitec’s proposal. Id.
On appeal, Prolitec argues that the Board’s conclusion
was inconsistent with the use of a permanent means of
bonding in “every embodiment in the ’683 patent” and
inconsistent with “[t]he very purpose of the ’683 patent” to
provide a “disposable cartridge for one-time use” as its
expert opined. Appellant’s Br. 31–34 (citing J.A. 1553–59,
1563).
Prolitec overstates what the ’683 patent describes.
The closest description in the ’683 patent to Prolitec’s
“one-time use” argument is a singular mention that “[i]t is
also anticipated that all of cartridge 104 may be made of a
biodegradable material, as it may be desirable that the
cartridge is configured to be used only one time before
being discarded.” ’683 patent col. 11 ll. 6–9 (emphases
added). The problem for Prolitec is that the use of “may”
6 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
signifies that the inventors did not intend to limit the
patent as Prolitec’s expert opined.
Indeed, the very next sentence in the specification
shows that the inventors intended for the patent to cover
reusable cartridges as well: “It is also anticipated that
cartridge 104 could be configured to be returned to a
manufacturer or other entity after its planned use to have
the cartridge disassembled, cleaned, any worn or dam-
aged parts replaced and then refilled and resealed for
use.” See id. at col. 11 ll. 9-13. This explicit description of
disassembling and refilling the cartridge contradicts the
opinion of Prolitec’s expert. Prolitec’s expert cannot re-
write the intrinsic record of the ’683 patent to narrow the
scope of the patent and the claim element “mounted.” See
Phillips v. AWH Corp., 415 F.3d 1303, 1318 (Fed. Cir.
2005) (en banc) (explaining that “a court should discount
any expert testimony ‘that is clearly at odds . . . with the
written record of the patent’” (quoting Key Pharms. v.
Hercon Labs. Corp., 161 F.3d 709, 716 (Fed. Cir. 1998))).
Moreover, the key passage in the ’683 patent relied
upon by Prolitec states that “head assembly 604 and
reservoir 602 may be jointed to each other by heat or
ultrasonic welding spin welding, or by use of an adhesive.”
’683 patent col. 13 ll. 31–33 (emphasis added). As the
Board correctly explained, this passage does not limit the
possible methods to the examples listed and those exam-
ples are not limited to permanent methods of joining. In
particular, the Board explained that the use of an adhe-
sive encompasses a non-permanent method of bonding.
The Board quoted Prolitec’s expert for conceding that
bonding by “[a]n adhesive can be permanent or non-
permanent.” Board Decision at 14 (quoting J.A. 1476).
This subsidiary factual determination regarding the
nature of adhesive bonding was supported by substantial
evidence. We discern no error in the Board’s rejection of
Prolitec’s proposal to limit “mounted” to mean “perma-
nently joined.”
PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC. 7
B
Prolitec next challenges the Board’s construction of
“fixed in position,” recited in the context of “a conduit
including . . . a second end . . . fixed in position with
respect to the narrow end” in Claim 1. See ’683 patent col.
16 ll. 11–15. Prolitec’s proposal to construe this claim
element to mean “non-adjustable” was rejected by the
Board in favor of “stationary.” Board Decision at 11. The
Board noted that Prolitec’s only citation to the ’683 patent
in support of its proposal lacks any discussion of either
adjustability or non-adjustability. The Board then reject-
ed Prolitec’s expert testimony focusing on the ’683 pa-
tent’s purported contemplation of a single use cartridge as
contrary to the ’683 patent’s express statement that the
cartridges may be reused.
On appeal, Prolitec abandons its reliance on the ’683
patent’s specification. Instead, Prolitec relies solely on its
expert’s testimony and asserts that allowing for adjust-
ments of the conduit inside the venturi head would not be
necessary or desirable because the ’683 patent contem-
plates having the manufacturer setting the conduit in the
optimal position.
The Board was again correct. There is nothing in the
’683 patent that discusses either allowing or preventing
adjustment of the conduit inside the venturi head. Ra-
ther, the passage cited by Prolitec before the Board mere-
ly states that “second end 236 of tube 220 is positioned
adjacent a narrow end 238 of a venturi 240.” ’683 patent
col. 9 ll. 26–27 (emphasis added). The Board’s claim
construction is consistent with the plain meaning of the
claim language and the description of positioning the
conduit in the specification.
Moreover, as discussed above, the ’683 patent de-
scribes cartridges that can be disassembled to be reused.
See ’683 patent col. 11 ll. 9-13. Prolitec’s expert opinion,
premised upon a theory that the ’683 patent is limited to
8 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
a single-use cartridge, was inconsistent with the intrinsic
record of the ’683 patent and was properly rejected by the
Board. See Phillips, 415 F.3d at 1318. We therefore
affirm the Board’s construction of “fixed in position.”
C
Prolitec finally challenges the Board’s construction of
“second/secondary chamber,” recited in Claim 1 in the
context of “the outlet including a second chamber through
which the gas within the head space must pass to exit the
cartridge” and recited in Claim 2 in a similar context but
replacing the word “second” with “secondary.” See ’683
patent col. 16 ll. 20–24, 46–48. Prolitec proposed that the
claim element should mean “secondary in reference to the
head space, through which the gas must pass after the
head space and before exiting the cartridge.” Board
Decision at 14–15 (quoting Prolitec’s response). Prolitec
argued that the claim language contemplates a system
with three chambers: an “initial expansion chamber,” a
“head space” as a second chamber, and the claimed “sec-
ondary chamber” is the third chamber. Id. at 15 (quoting
Prolitec’s response). The Board disagreed with Prolitec,
explaining that the claim language recites only two
“chambers”: an “initial expansion chamber” and a “sec-
ond/secondary chamber.” Id. The Board therefore con-
strued the claim element to mean “secondary in reference
to the initial expansion chamber.” Id.
On appeal, Prolitec repeats its contention that the el-
ement “head space” is one of three chambers claimed by
the ’683 patent. Appellant’s Br. 36. We cannot agree
with this contention. As the Board correctly noted, each
claim recites only two “chambers”: an “initial expansion
chamber” and a “second/secondary chamber.” The inven-
tors chose to claim the element “head space” using those
precise words, rather than calling it another “chamber.”
Moreover, there is nothing else in the ’683 patent that
PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC. 9
would compel an interpretation of “head space” as a
“chamber.”
Prolitec further asserts on appeal that the Board’s
construction erroneously allows the headspace and the
secondary chamber to “collapse into one, such that even
just a portion of the head space satisfies the claimed
chamber limitation.” Id. More specifically, Prolitec faults
the Board for finding that a “physical separation” is not
needed for the claim element “chamber.” Reply Br. 5–6.
These arguments, however, are focused on the meaning of
the word “chamber.” Prolitec does not dispute ScentAir’s
characterization that the definition of “chamber” was not
in dispute before the Board. See id. at 6. The dispute
before the Board was focused on the basis for the term
“second/secondary.” Given what the parties disputed, the
Board was justified in stating that each claim, in explicit
terms, recites only two “chambers” and then distinguish-
ing the disputed claim element “second/secondary cham-
ber” from the “initial expansion chamber.” We are not
persuaded by Prolitec that the Board’s construction was
erroneous.
II
Prolitec appeals the Board’s finding that both claims
in the ’683 patent were anticipated by Benalikhoudja.
Benalikhoudja is an international patent application also
owned by Prolitec. According to Prolitec, Benalikhoudja
discloses Prolitec’s earlier product. A representative
drawing from Benalikhoudja is reproduced below:
10 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
Prolitec argues that Benalikhoudja’s fastening of the
liquid reservoir by a tamper-proof ring does not satisfy
the “mounted” claim element under its proposed construc-
tion of “permanently joined.” According to Prolitec, Bena-
likhoudja’s tamper-proof ring only signals whether the
device has been opened, but does not prevent opening of
the device. As discussed above, the ’683 patent also does
not require a permanent joining between the diffusion
head and the reservoir. The ’683 patent simply claims
“mounted” and describes cartridges that may be config-
ured for one-time use or configured with an ability for
remanufacturing. In terms of sealing the respective
liquid reservoirs, the ’683 patent and Benalikhoudja both
contemplate cartridges that are not intended to be opened
by consumers, but could be opened outside of normal
operation such as during remanufacturing. We are not
persuaded by Prolitec’s theory in distinguishing Bena-
PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC. 11
likhoudja based on the “mounted” claim element in the
’683 patent.
Similar to its “permanently joined” theory, Prolitec
argues that Benalikhoudja lacks a diffusion conduit “fixed
in position” under its proposed construction of “non-
adjustable” because Benalikhoudja teaches instead a
micrometer screw for adjusting its nozzle. But the ’683
patent is not limited to devices that affirmatively prevent
adjustments of the diffusion conduits and we affirm the
Board’s construction of “fixed in position” to mean simply
“stationary” as discussed above. Apart from the claim
construction, Prolitec does not dispute the Board’s finding
that Benalikhoudja’s micrometer screw holds its diffusion
nozzle stationary during normal use. See Board Decision
at 21. We therefore affirm the Board’s finding that Bena-
likhoudja teaches the ’683 patent’s “fixed in position”
claim element.
Prolitec next argues that Benalikhoudja does not
teach the ’683 patent’s “second/secondary chamber”
because Benalikhoudja lacks a three-chambered system
as Prolitec characterizes the ’683 patent to require.
Appellant’s Br. 40. Prolitec also faults the Board for
finding that the claims “do not require a third chamber.”
This is again a claim construction argument which we
rejected as discussed above. Prolitec further argues that
Benalikhoudja’s release opening 195—identified by the
Board as teaching the ’683 patent’s “second/secondary
chamber” claim element—is not a “chamber” that is
separate from a “head space”: “it is merely the top of the
head space.” Id. This argument is in large part a dispute
on the meaning of “chamber,” which was not raised before
the Board as discussed above. Aside from the meaning of
“chamber,” Prolitec clearly recognizes that the release
opening 195 in Benalikhoudja is a distinct feature from a
head space. Indeed, Benalikhoudja labels the release
opening 195 separately from the reservoir 100 in which
the head space is located. Given that release opening 195
12 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
is a feature distinct from a head space, we fail to see any
reversible error in the Board’s finding that Bena-
likhoudja’s release opening 195 satisfies the ’683 patent’s
“second/secondary chamber” claim element as Prolitec
alleges.
Finally, Prolitec argues that the ’683 patent requires
only two openings at the narrow end of the venturi in
contrast to the “three openings” “illustrate[d]” in Bena-
likhoudja. Appellant’s Br. 41. The Board found that
Benalikhoudja teaches the two openings claimed by the
’683 patent and that Benalikhoudja’s teaching of a third
opening—“nozzle 145 of outside air line 140”—is merely
optional. Board Decision at 22. The Board therefore
concluded that an “‘optional inclusion’ of a feature in the
prior art anticipates a claim that excludes the feature.”
See Board Decision at 22 (quoting Upsher-Smith Labs.,
Inc. v. Pamlab, L.L.C., 412 F.3d 1319, 1322 (Fed. Cir.
2005)). The Board’s finding and conclusion were both
correct. The disputed third opening in Benalikhoudja is
explicitly described as optional. J.A. 1349 (“Optionally,
the device comprises an outside air inlet duct . . . .”); J.A.
1356 (“The venturi 160 can also have an outside air line
140 with a nozzle 145 in the nebulization zone 130.”)
(emphasis added). To counter Benalikhoudja’s explicit
disclosures, Prolitec relies on its expert to re-characterize
Benalikhoudja’s third opening as essential, not optional.
We are not persuaded by Prolitec’s arguments.
We therefore affirm the Board’s findings that the two
claims in the ’683 patent were anticipated by Bena-
likhoudja. Because we affirm the Board on the anticipa-
tion grounds, we do not reach the Board’s determination
on the obviousness grounds.
III
Prolitec finally appeals the Board’s denial of Prolitec’s
motion to amend. Prolitec moved to amend the ’683
patent by proposing to substitute “permanently joined” for
PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC. 13
the element “mounted” in claim 1, thus incorporating its
proposed claim construction for the claim element.
ScentAir opposed Prolitec’s motion and asserted that a
patent by Allred cited during the original prosecution of
the ’683 patent teaches permanently joining of a diffusion
device. On reply, Prolitec did not dispute that Allred
teaches a permanent bonding but asserted that Allred
lacks other features purportedly described in the ’683
patent. See Board Decision at 29 (quoting Prolitec’s Reply
Br. 5). The Board denied Prolitec’s motion to amend,
finding that Prolitec failed to demonstrate that the pro-
posed claim “is patentable over, for example, Bena-
likhoudja in view of Allred.” Board Decision at 30.
On appeal, Prolitec initially argued that the Board’s
placing the burden on the patentee to show patentability
of the proposed claim amendments was in conflict with
the statutes governing IPRs. Subsequent to the parties’
briefing, we issued an opinion in Microsoft Corp. v. Proxy-
conn, Inc., 789 F.3d 1292 (Fed. Cir. 2015) that resolved
this question. Prolitec concedes at oral argument that
Proxyconn foreclosed Prolitec’s contention that a patentee
in an IPR does not bear the burden to show patentability
of proposed claim amendments. Oral Arg. at 6:08–6:09,
available at http://oralarguments.cafc.uscourts.gov/
default.aspx?fl=2015-1020.mp3.
At oral argument, Prolitec raised two alternative ob-
jections to the Board’s decision. First, Prolitec argued
that it did not have the burden to establish patentability
over prior art references cited in the patent’s original
prosecution history because they are not prior art of
record in the IPR. Id. at 7:21–7:32. Prolitec also argues
that the Board failed to consider Prolitec’s arguments in
its reply brief in support of its motion to amend. Id. at
13:56–14:51. We disagree with Prolitec on both of its
arguments.
14 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
In Proxyconn, we affirmed the Board’s denial of the
patentee’s motion to amend because it failed to show that
its proposed substitute claims were patentable over “prior
art of record”—namely, a reference that the Board used
as grounds for instituting review of claims other than
those sought to be amended. 789 F.3d at 1303–08. We
explained that the Board’s interpretation of its regula-
tions in denying the proposed amendment was reasonable
under the particular circumstances in Proxyconn and was
consistent with the United States Patent and Trademark
Office’s (“PTO’s”) position expressed in the Board’s in-
formative decision in Idle Free Systems, Inc. v. Bergstrom,
Inc., IPR2012–00027, 2013 WL 5947697 (PTAB June 11,
2013). Proxyconn, 789 F.3d at 1307. However, we ex-
pressly declined to decide in Proxyconn whether the PTO’s
additional guidance about the patentee’s burden in Idle
Free also constituted a permissible interpretation of the
PTO’s regulations. Id. at 1307 n.4. Following our Proxy-
conn decision, the Board issued a “representative deci-
sion” providing further guidance on the patentee’s burden
on a motion to amend. See MasterImage 3D, Inc. v. RealD
Inc., IPR2015-00040 (PTAB July 15, 2015). In particular,
the Board stated, among other things, that “prior art of
record” includes “any material art in the prosecution
history of the patent.” Id. at 2.
We conclude that the PTO’s approach is a reasonable
one at least in a case, like this one, in which the Board’s
denial of the motion to amend rested on a merits assess-
ment of the entire record developed on the motion, not
just on the initial motion itself. The Board’s position—
that the patentee’s burden on a motion to amend includes
the burden to show patentability over prior art from the
patent’s original prosecution history—is not in conflict
with any statute or regulation. Moreover, it is not unrea-
sonable to require the patentee to meet this burden. The
prior art references cited in the original patent’s prosecu-
tion history often will be the closest prior art and will
PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC. 15
already have been reviewed by the patentee. Evaluating
the substitute claims in light of this prior art helps to
effectuate the purpose of IPRs to “improve patent quality
and limit unnecessary and counterproductive litigation
costs.” Proxyconn, 789 F.3d at 1308 (quoting H.R. Rep.
No. 112–98, pt. 1, at 40 (2011), 2011 U.S.C.C.A.N. 67,
69). 1
The course of proceedings on the motion to amend in
this case demonstrates the reasonableness of the PTO’s
position on the scope of prior art the patentee must dis-
tinguish. Prolitec knew which proposed claim elements it
was relying on to overcome the Board’s invalidity deter-
minations, and in its motion to amend, it asserted that
“[n]one of the art of record or other art known to Prolitec
discloses, teaches, or suggests a cartridge for use with a
liquid diffusion device, including all of these limitations,
and having a liquid reservoir that is permanently joined
to a diffusion head.” Board Decision at 28 (quoting Pro-
litec’s Mot. to Amend 6). But in the combination of its
motion and its reply brief supporting the motion, Prolitec
simply failed to support adequately its assertion of pa-
1 The dissent notes that the PTO has suggested
changing its rules regarding motions to amend after the
briefing was completed in this case and contends that
Prolitec did not have the benefit of those changes. Dis-
sent at 6–8. But at least as relevant here, the changes to
which the dissent refers were memorialized in MasterIm-
age 3D, under which a patent owner does not need to
show its claims are patentable over the entire universe of
uncited art, but still needs to show its claims are patenta-
ble over the prior art of record—which includes art in the
prosecution history of the patent. IPR2015-00040 at *3.
The prior art at issue here was undisputedly in the prose-
cution history of the patent. Thus, the rule change that
the dissent cites has no impact in this case.
16 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
tentability over Allred (cited in the prosecution history)
and Benalikhoudja (the key IPR prior art), even after
ScentAir had called attention to Allred in opposing the
motion to amend. See Board Decision at 29 (citing
ScentAir’s Opp. to Motion to Amend at 10–11).
In particular, Prolitec’s argument in its reply brief
that the proposed amendment would be patentable over
the Allred reference was limited to asserting that Allred
fails to anticipate the proposed claim, i.e., that Allred does
not teach every single limitation. Prolitec, however,
conceded that Allred teaches the very element of “perma-
nently joined” that Prolitec was seeking to add. See
Board Decision at 29–30 (quoting Prolitec’s Reply Br. 5
(“Allred’s disclosure does include a liquid reservoir that
may be welded to an ‘atomizing nozzle’ but the nozzle does
not include anything to prevent large liquid particles from
escaping the device, such as an outlet cavity having a
second opening downstream from a head space.”)).
Given Prolitec’s concession and the Board’s finding
that Benalikhoudja anticipates the original claims, Pro-
litec should have also shown that its amended claim
would be patentable over the obviousness combination of
Benalikhoudja and Allred. The Board, in fact, specifically
asked Prolitec during oral argument whether Prolitec
showed that its proposed claim would be non-obvious
over, for example, Benalikhoudja in combination with
Allred. See J.A. 2068 (“The problem is that you also need
to show why the claim is not obvious. It doesn’t seem like
an argument was made on that ground. If it was, it would
have been an argument about the claim is patentable over
Benalikhoudja in view of Allred/Poncelet.”). But Prolitec
provided no substantive and particularized response to
the Board’s direct question, asserting in closing only that
“even from an obviousness perspective, the elements still
need to be in a combination somewhere, and Prolitec is
not aware of such combination.” See J.A. 2084.
PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC. 17
The record thus shows that the Board considered Pro-
litec’s arguments, and simply rejected them on the merits,
considering the full record made on the motion to amend.
The Board plainly quoted from Prolitec’s reply brief
addressing the Allred reference cited in the prosecution
history of the ’683 patent. See Board Decision at 29
(quoting Prolitec’s Reply Br. 5). The Board further quoted
from Prolitec’s arguments made during the oral hearing
regarding the prior art reference cited in the prosecution
history of the ’683 patent. See id. (quoting Tr. 68, ll. 19–
69, l. 2). We cannot agree with Prolitec’s contention that
the Board failed to consider Prolitec’s arguments in its
reply brief. Thus, this case does not present the questions
that would be raised by a Board denial of a motion to
amend based entirely on procedural or other deficiencies
in the initial motion, independently of any consideration
or assessment of the full record developed on the motion
for what it indicates about the patentability of the pro-
posed substitute claims.
In the circumstances of this case, we also cannot find
a denial of procedural rights, such as those granted by the
Administrative Procedure Act, based on an insufficient
notice or opportunity to respond. For example, as in
Proxyconn, “this is not a case in which the patentee was
taken by surprise by the Board’s reliance on an entirely
new reference or was not given adequate notice and
opportunity to present arguments distinguishing that
reference.” Proxyconn, 789 F.3d at 1308. The Board
simply disagreed with Prolitec’s arguments for sufficient
reasons on the merits. We discern no reversible error in
the Board’s denial of Prolitec’s motion to amend.
AFFIRMED
United States Court of Appeals
for the Federal Circuit
______________________
PROLITEC, INC.,
Appellant
v.
SCENTAIR TECHNOLOGIES, INC.,
Appellee
______________________
2015-1020
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2013-
00179.
______________________
NEWMAN, Circuit Judge, dissenting.
This appeal is from inter partes review of United
States Patent No. 7,712,683 (the ’683 patent) under the
America Invents Act of 2012. Review was requested by
ScentAir Technologies, Inc., and proceeded to trial and
decision of the Patent Trial and Appeal Board (PTAB),
invalidating the patent. This appeal is directed to several
aspects of the PTO’s and this court’s implementation of
this new administrative proceeding.
The courts are charged with assuring agency fidelity
to law and to legislative purpose. The Supreme Court has
stated:
2 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
Reviewing courts are not obliged to stand aside
and rubberstamp their affirmance of administra-
tive decisions that they deem inconsistent with a
statutory mandate or that frustrate the congres-
sional policy underlying a statute. Such review is
always properly within the judicial province, and
courts would abdicate their responsibility if they
did not fully review such administrative decisions.
N.L.R.B. v. Brown, 380 U.S. 278, 291–92 (1965); see also
Bowen v. Michigan Acad. of Family Physicians, 476 U.S.
667, 672 n.3 (1986) (“The responsibility of enforcing the
limits of statutory grants of authority is a judicial func-
tion; . . . [w]ithout judicial review, statutory limits would
be naught but empty words.”) (citation omitted).
Of primary concern is the PTO’s treatment of the
statutory provisions for claim amendment in these post-
grant proceedings. The panel majority holds that the
PTAB properly refused entry of an amendment, although
Prolitec complied with all of the statutory and regulatory
requirements. The amendment would have narrowed the
claims, potentially avoiding a dispositively adverse claim
construction. I respectfully dissent from my colleagues’
ratification of this and other departures from the govern-
ing statute and the underlying congressional policy.
A
The PTO erred in refusing to enter Prolitec’s
substitute claim 3
The America Invents Act authorizes limited claim
amendment, as follows:
35 U.S.C. § 316(d)(1) In general.— During an in-
ter partes review instituted under this chapter,
the patent owner may file 1 motion to amend the
patent in 1 or more of the following ways:
(A) Cancel any challenged patent claims.
PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC. 3
(B) For each challenged claim, propose
a reasonable number of substitute
claims.
....
(3) Scope of claims. — An amendment under this
subsection may not enlarge the scope of the claims
of the patent or introduce new matter.
PTO regulations authorize denial of a claim amendment
that complies with the statute, but only when:
(i) The amendment does not respond to a ground
of unpatentability involved in the trial; or
(ii) The amendment seeks to enlarge the scope of
the claims of the patent or introduce new sub-
ject matter.
37 C.F.R. § 42.121(a)(2). “Ground of unpatentability” in
this regulation refers to the statutory basis of the petition
for inter partes review, for the regulations require the
petitioner to identify “[t]he specific statutory grounds
under 35 U.S.C. §§ 102 or 103 on which the challenge to
the claim is based and the patents or printed publications
relied upon for each ground.” 37 C.F.R. § 42.104(b)(2).
Prolitec moved to amend by replacing claim 1 with
claim 3, which replaced the term “mounted” with the term
“permanently joined.” The PTAB refused to enter the
amendment, and then invalidated claim 1 on the “broad-
est” interpretation of “mounted” to include other than
permanent mounting. Only permanent affixation is
described in the specification, and is emphasized as a
distinction from Prolitec’s prior device, which is the
closest prior art.
When a proposed amendment would resolve a disposi-
tive aspect of claim breadth, refusal to enter the amend-
ment is contrary to both the purpose and the text of the
America Invents Act.
4 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
The PTO has intervened in this appeal to defend the
PTAB’s refusal of the amendment. However, entry of a
compliant amendment is of statutory right, and patenta-
bility of the amended claim is properly determined by the
PTAB during the IPR trial, not for the first time at the
Federal Circuit.
B
The PTO’s placement of the burden of proof
for amended claims is contrary to statute
I start with the PTO’s treatment of the burden of
proof, for if the PTO tribunal is to serve as a surrogate for
the district courts’ determination of patent validity, the
same decision-affecting procedural rules should apply in
the PTAB as in the district court.
The America Invents Act places the burden of proof on
the post-grant petitioner, and provides:
35 U.S.C. § 316(e) Evidentiary standards.—In a
post-grant review instituted under this chapter,
the petitioner shall have the burden of proving a
proposition of unpatentability by a preponderance
of the evidence.
That statutory prescription applies whether the “proposi-
tion of unpatentability” is for amended or unamended
claims. However, the PTAB disregards this statutory
requirement by placing on the patentee the burden of
proving patentability for a proposed amended claim. The
PTAB so held in Idle Free Systems, Inc. v. Bergstrom, Inc.,
109 U.S.P.Q.2d 1443, 1459 (PTAB Jan. 7, 2014) (“The
burden is not on the petitioner to show unpatentability [of
amended claims], but is on the patent owner to show
patentable distinction over the prior art of record and also
prior art known to the patent owner.”) (citing Idle Free,
Decision on Motion to Amend Claims, § 42.121 at 7,
IPR2012-00027 (PTAB June 11, 2013), Paper No. 26)
(emphasis omitted)).
PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC. 5
The America Invents Act does not authorize or sug-
gest such a shift in the statutory burden. The PTO, in its
Intervenor’s brief, invokes the practice of district court
litigation and argues that if the patentee files a motion, it
bears the burden of establishing entitlement to grant of
the motion. However, this generalization is inapplicable
when there are explicit statutory burdens that set a
different standard.
The Act requires the PTAB to analyze the patentabil-
ity of “any new claim added under section 316(d),” 35
U.S.C. § 318(a), again reflecting the statutory directive
that the new claim should be added, provided that it
qualifies under the statute. The PTAB then determines
patentability of the added claim in accordance with the
statutory burdens. The statute places the burden of
proving invalidity (unpatentability) on the petitioner. As
explained by Senator Kyl, “inter partes reexamination is
converted into an adjudicative proceeding in which the
petitioner, rather than the Office, bears the burden of
showing unpatentability.” 137 Cong. Rec. S1360, S1375
(daily ed. Mar. 8, 2011). The Act makes no distinction
between original and amended claims in inter partes
review.
My colleagues on this panel depart from the statute in
removing from the petitioner the burden of showing
unpatentability of amended claims.
C
The preponderance of the evidence is the
statutory standard for PTAB validity deci-
sions; judicial review should determine
whether the PTAB correctly applied that
standard
The PTAB invalidated Prolitec’s claims by applying
the broadest reasonable construction standard, instead of
determining the correct claim construction in accordance
6 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
with the specification and the prosecution history. Pro-
litec argues that its claims, and particularly proposed
substitute claim 3, are not invalid when given the correct
construction. However, the PTAB reviewed the claims
under the broadest reasonable construction standard, and
this court reviewed the PTAB decision under the highly
deferential substantial evidence standard. With deferen-
tial review an incorrect PTAB decision is less likely to be
corrected on appeal, contrary to the purpose of the Ameri-
ca Invents Act to achieve correct determinations of pa-
tentability.
The substantial evidence standard is inappropriate in
this context. There is no requirement that every adminis-
trative decision on every subject must receive deferential
review. The standard of review should be attuned to the
circumstances. When the America Invents Act assigned
to the PTAB the preponderance of the evidence standard
for these post-grant procedures, it became inappropriate
for the PTAB to give deference to the PTO’s prior ruling
granting the patent. It also became inappropriate for the
PTAB to use the district court’s clear and convincing
evidence standard. The America Invents Act explicitly
states that the PTAB should apply the preponderance
standard, illustrating the careful balance in the Act; it is
the judicial responsibility to assure that this balance is
preserved. 35 U.S.C. § 316(e) (requiring proof of un-
patentability by a preponderance of the evidence).
Thus, our review of the PTAB’s decision must assure
that the preponderance of the evidence standard as met.
My colleagues err in applying the substantial evidence
standard to America Invents Act post-grant appeals.
D
In the evolving state of PTAB practice, Pro-
litec is entitled to the benefit of PTO interpre-
tations and changes in practice
PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC. 7
Prolitec advises that two days after the PTO filed its
Intervenor’s Brief supporting the PTAB’s refusal to accept
substitute claim 3, the PTO announced changes with
respect to amendment entry. The Director’s Forum: A
Blog from USPTO’s Leadership: PTAB’s Quick-Fixes for
AIA Rules Are to Be Implemented Immediately, available
at http://www.uspto.gov/blog/director/entry/ptab_s_quick_
fixes_for (Mar. 27, 2015), stated that
regarding motions to amend, we are contemplat-
ing proposed changes to emphasize that a motion
for a substitutionary amendment will always be
allowed to come before the Board for consideration
(i.e., be “entered”), and for the amendment to re-
sult in the issuance (“patenting”) of amended
claims, a patent owner will not be required to
make a prior art representation as to the patenta-
bility of the narrowed amended claims beyond the
art of record before the Office.
This indicates both a retreat from the PTAB’s ruling that
Prolitec was required to show patentability over “any
other prior art reference that also may teach the very
limitation,” whether or not of record, PTAB Op. at 30, and
an acknowledgement that motions to amend are to be
entered as of right. However, the PTO imposed the prior
rule on Prolitec, and its brief stated that “the Board did
not abuse its discretion by requiring Prolitec to come forth
with a showing of patentability of its proposed substitute
claim over the prior art known to it . . . .” PTO Br. 28.
When this rule change was publicly announced, it seems
unfair to punish Prolitec for non-compliance with a rule
that had already been discarded by the PTO.
Prolitec was not only denied the benefit of the PTO’s
change of position, but was also denied the right to
amend, although this right was granted by the “quick-fix.”
Prolitec’s motion met all of the requirements, and distin-
guished not only the references of record, but also the
8 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
references cited by ScentAir and references “within the
knowledge of Prolitec.” Motion to Amend at 14.
On this appeal, the PTO now concedes that “the pa-
tent owner complied with the requirements of rule
42.121.” PTO Br. 21. However, the PTO also argues that
the proposed amendment was properly “den[ied] . . .
anyway because the patent owner did not adequately
show that the new claims are patentable over the prior
art in general.” Id. (citing Idle Free, 109 U.S.P.Q.2d at
1456–61). I emphasize “in general,” for such an open-
ended expedient has no limits. Indeed, the PTO has also
retreated from this position, as the panel majority has
recognized.
The panel majority states that on July 15, 2015, the
PTAB retreated from that position in MasterImage 3D,
Inc. v. RealD Inc., IPR2015-00040 (PTAB July 15, 2015).
In MasterImage 3D, the PTAB stated that “prior art of
record . . . refer[s] to: any material art in the prosecution
history of the patent; . . . of record in the current proceed-
ing . . . ; and . . . of record in any other proceeding before
the Office involving the patent,” and that “prior art
known to the patent owner . . . should be understood as no
more than the material prior art that Patent Owner
makes of record in the current proceeding pursuant to its
duty of candor and good faith to the Office under 37
C.F.R. § 42.11, in light of a Motion to Amend.” Id. at 2-3.
My colleagues state that “changes to which the dis-
sent refers were memorialized in MasterImage 3D.” Maj.
Op. at 15 n.1. 1 If so, the PTAB has an obligation to give
1 The panel majority misapplies the PTAB’s holding
in MasterImage 3D. First, this opinion is not “preceden-
tial” within the PTAB. See PTAB Standard Operating
Procedures 2 (Revision 9), Publication of Opinions and
PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC. 9
Prolitec the benefit of that change, for the PTO states in
its Intervenor’s Brief that this is the only remaining
ground in support of the PTAB’s denial of the motion to
amend.
I take note of fresh uncertainty concerning the right
to amend, for on November 3, 2015 the following colloquy
took place at the argument of another appeal in which the
PTO intervened. I inquired of PTO counsel:
Court: So it is the position of the Office that . . . a pa-
tent owner has a statutory right to an amendment?
PTO: The patent owner has a statutory right to file
what is called a motion to amend . . .
Court: You said to file a motion to amend. Do they
have the right to have the motion granted?
PTO: No, Your Honor.
Court: Or only the right to file it?
PTO: Only the right to file a motion.
…
Designation of Opinions as Precedential (2014). All other
opinions (designated as Informative, Representative, or
Routine) are “not binding authority.” Id. at 3–4. Idle Free
was designated “Informative;” MasterImage 3D has been
placed in the newly created (Revision 9) category of “Rep-
resentative,” and does not “memorialize” anything. The
Board is not bound to follow MasterImage 3D in any later
case, nor is any practitioner before the Board able to rely
on MasterImage 3D as “providing guidance.” The PTO
has made clear that it only binds itself through “Prece-
dential” opinions. “Informative” decisions are not bind-
ing.
10 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
Court: So there is no right to amend?
PTO: No, Your honor.
Oral Argument, Synopsys, Inc. v. Mentor Graphics, Inc.,
No. 2015-1516 (Argument transcript at 24:39–27:24,
November 3, 2015, available at http://oralarguments.cafc.
uscourts.gov/default.aspx?fl=2014-1516.mp3).
I assume that such inconsistency will be clarified.
Meanwhile, however, Prolitec is entitled to the benefit of
changes “memorialized” by the Board while this case was
pending. Landgraf v. USI Film Prods., 511 U.S. 244, 264
(1994) (a court must “apply the law in effect at the time it
renders its decision”) (quoting Bradley v. Sch. Bd. of
Richmond, 416 U.S. 696, 711 (1974)); R. Pierce, Jr.,
Administrative Law Treatise § 6.7 (“[A]gencies with the
power to adjudicate cases can engage in retroactive law-
making by replicating the practice of courts . . . [t]he
Court has consistently upheld that practice.”).
In view of this error or uncertainty, we should remand
to the PTAB for reconsideration of its denial of the
amendment.
E
The PTAB’s claim construction requires judi-
cial review for correctness as a matter of law,
not deferential review as question of fact
The ’683 invention is an improvement on Prolitec’s
own prior device, which required opening the liquid
reservoir to refill the container, a messy procedure subject
to leaking and spills, inconsistent scent concentration,
clogs, and cross-contamination. Prolitec states that the
’683 device solved these problems by using disposable
cartridges where the vacuum/suction created by the
venturi effect permits sealed containers to be emptied
efficiently by the dispersal mechanism, all while avoiding
the mess.
PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC. 11
The PTAB found anticipation by the Benalikhoudja
reference, which is directed to Prolitec’s prior device. A
finding of anticipation requires that the same invention
was previously known and described, not that a claim can
be construed so broadly and incorrectly as to embrace a
prior art device. The device of the ’683 patent is not
shown in the prior art; it is not the same as the Bena-
likhoudja device.
Prolitec appeals the construction of three claim terms,
stating that the constructions do not conform to the
specification. Prolitec states that these terms were incor-
rectly broadened so as to reach subject matter that is not
within the scope of correctly construed ’683 claims.
1.
The PTAB construed the ’683 claims as including a
two-chambered system as in the prior art, although the
specification and embodiments all show a three-
chambered system and explain its advantages over the
prior art’s two chambers. The PTAB, revising the ’683
invention to eliminate the third chamber, stated that
claims 1 and 2 require an initial expansion cham-
ber, a head space, and a second/secondary cham-
ber that is secondary in reference to the initial
expansion chamber, but not necessarily a sepa-
rate, third chamber coming after the headspace.
PTAB Op. at 15 (quotations omitted). No reference sup-
ports the PTAB’s finding that the ’683 device did not
“necessarily” constitute a third chamber, and the prior art
does not show a structure comparable to the head space in
the ’683 patent. Nonetheless, the PTAB and my col-
leagues on this panel find that Prolitec’s three-chamber
device is “anticipated” by the prior art two-chamber
device. The PTAB stated:
To the extent Patent Owner means the claims re-
quire a second/secondary chamber in addition to
12 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
requiring a head space, we agree. But, to the ex-
tent that Patent Owner argues that the claims re-
quire some level of physical separation between
the head space and second/secondary chamber, we
disagree.
PTAB Op. at 19. This is not the law of anticipation.
Anticipation requires that the same invention was previ-
ously known; it is apparent from the specification that the
PTAB’s analysis is not correct.
2.
For the claim element “a diffusion head mounted to
the reservoir,” the PTAB construed the term “mounted” to
mean that the cartridge “may be reused through disas-
sembly, refilling, and reassembly.” PTAB Op. at 13. The
PTAB did not permit Prolitec to amend the claim to
replace “mounted” with “permanently joined.”
The specification describes the diffusion head as
“bonded” to the liquid reservoir, such as by “heat,” “ultra-
sonic welding,” “spin welding,” or “by use of an adhesive.”
’683 Patent, col. 13 ll. 31–33. The permanence of this
attachment pervades the description in the patent. Every
embodiment in the specification shows permanent at-
tachment of the cartridge, which cannot be disassembled
by the end user without destroying it. Prolitec’s expert
testified that:
If one were to attempt to separate the diffusion
head from the liquid reservoir, neither part would
be able to be reused and the entire cartridge
would be destroyed. Thus, the cartridge in the
’683 patent is an integrated unit that cannot be
disassembled without destroying the cartridge.
Decl. of Timothy Shedd, IPR2013-00179, Prolitec
Ex. 2003, p. 32 (Dec. 13, 2013). The panel majority incor-
rectly attributes to the expert the position that the car-
PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC. 13
tridge can be removably adhered, a theory that is contrary
to the entirety of the specification and testimony.
The panel majority further agrees with the PTAB that
the Prolitec cartridge is not a single-use cartridge, be-
cause the ’683 patent suggests that used cartridges be
returned to the factory “to have the cartridge disassem-
bled, cleaned, any worn or damaged parts replaced, and
then refilled and sealed for use.” ’683 Patent, col. 11, ll.
9–13. Factory recycling is not contrary to a single-use
cartridge in the hands of the consumer. This ruling is
incorrect.
3.
The PTAB also misconstrued the ’683 patent’s recita-
tion of “second end of the conduit . . . fixed in position with
respect to the narrow end,” col. 16, ll. 12–15, as anticipat-
ed by the prior art refillable cartridge. This error again
illustrates the incorrectness of the practice of construing
these claims “broadly,” for this broad construction is not
supported by either the specification or the prosecution
history. Since post-grant procedures are conducted for
issued patents, the claims should be construed correctly,
as would a district court and as should the Federal Cir-
cuit. The PTAB, having construed the claims overly
broadly, found them invalid, while depriving the patentee
of the statutory right to amend.
The PTAB also erred in separately analyzing each in-
cremental difference from the prior art, whereas it is the
claimed combination as a whole whose obviousness must
be determined. The PTAB, in its acknowledgement of
Prolitec’s attempt to substitute narrowed claim 3, dis-
posed of it on this improper analysis:
We understand that Patent Owner maintains that
several limitations, which are common to issued
claim 1 and proposed claim 3, provide patentable
distinctions over the prior art. As we have al-
14 PROLITEC, INC. v. SCENTAIR TECHNOLOGIES, INC.
ready held claim 1 to be unpatentable, these limi-
tations cannot distinguish claim 3 over the prior
art.
PTAB Op. at 30. This analysis fails the requirement of 35
U.S.C. § 103 that obviousness is determined on the inven-
tion as a whole. This is an error of law, and cannot be
endorsed on a “substantial evidence” standard of review.
Conclusion
I support bringing PTAB expertise to bear in a post-
grant review system. However, the purpose of post-grant
review is not to stack the deck against the patentee, but
to achieve a correct and reliable result—for innovative
enterprise is founded on the support of a system of pa-
tents.
The legislative record shows that Congress was aware
that the America Invents Act would apply to issued
patents that had previously been examined by PTO
procedures, and on which patentees may have relied for
investment and commercial activity. Returning the
patent to the granting agency, amid complaints that the
agency too often granted invalid patents, was a long-
debated recourse, intended to rehabilitate the innovation
incentive. The America Invents Act reflects a careful
balance of the various interests and needs—and it is the
judicial obligation to assure that the administrative
mechanisms are faithful to the legislative purpose. The
court’s rulings today do not meet that obligation. I re-
spectfully dissent.