Federal Circuit Affirms that the Party Seeking the Benefit of Priority Bears the Burden of Proof That Claims Are Entitled to Priority

In PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299; 86 U.S.P.Q.2D 1385 (Fed. Cir. 2008) (non-precedential), PowerOasis possessed two patents with the purpose of providing a “vending machine” that enables a customer to connect a laptop to a communications channel.  Id. at 2.  PowerOasis brought suit in the District Court for the District of New Hampshire alleging that T-Mobile’s internet “Hot-Spot” system infringed its patent.

PowerOasis’ original application in 1997 described a “vending machine” which would allow a consumer to connect his laptop to a telecommunications network.  The figures and descriptions in the original application make it very clear that the “vending machine” was to be some component external to the consumer’s laptop.  The continuation-in-part (CIP) filed in 2000 removed this external restriction, introducing examples which included an interface on the consumer’s laptop, and led to the issuance of U.S. Patents Nos. 6,466,658 and 6,721,400.  PowerOasis alleged infringement of the ‘658 and ‘400 patents by T-Mobile.  T-Mobile introduced prior art which had been carried out for more than a year prior to the filing of the CIP in 2000.  PowerOasis claimed that the prior art was no bar, as the CIP should have the benefit of the date of the filing of the original application in 1997 and the prior art had not been carried out for a year prior to that date.

In deciding this case, the Federal Circuit addressed which party bears the burden of proof for establishing the effective filing date of claims in a continuation-in-part.  If the claims in the CIP are fully described in an earlier filing, they are eligible to benefit from the date of the earlier filing.  As such, the outcome of the case revolved around the effective filing date of the CIP filed by PowerOasis which matured into the two patents at issue.  T-Mobile identified prior art that would invalidate the patents (under 35 U.S.C. § 102(b)) if the CIP retained its own filing date (June 15, 2000).  However, PowerOasis argued that the CIP should be presumed to have the filing date of the original application (February 6, 1997) for purposes of priority in date, thereby requiring T-mobile to provide evidence of a lack of written description in the original application.  The District Court held that the CIP was not entitled to the benefit of the earlier filing date because the original application did not provide a written description of the invention claimed in the CIP as required by 35 U.S.C. § 112.  As such, the District Court held that the PowerOasis patents were invalidated by the prior art presented by T-Mobile.  The Federal Circuit affirmed this holding.

The Federal Circuit began its analysis by recognizing the well established fact that a patent is presumed valid and that a party wishing to assert otherwise bears the burden of persuasion.  See Ralston Purina Co. v. Far-Mar-Co, Inc. 772 F.2d 1570 (Fed. Cir. 1985).  Moreover, there is a heightened presumption where the attack on validity is an issue already resolved during prosecution as there is a presumption that the issue was correctly resolved during the examination process.  As such, in Ralston Purina, there was a presumption that the claims were entitled to a parent application priority date as the examiner and the Board of Patent Appeals and Interferences had addressed the issue specifically relative to considered prior art.

PowerOasis argued that this presumption of validity should extend to issues of priority in time in other circumstances, but the Federal Circuit rejected this argument.  Specifically, the Federal Circuit noted that the rationale behind the presumption of validity does not extend to issues of timing in the case of CIPs because patent examiners do not generally consider the timing issues of CIPs unless the issue is raised in regards to specific prior art references.  Timing issues related to CIPs only arise during litigation, and it is not part of the United States Patent and Trademark Office’s standard procedure to make unnecessary priority determinations.  Without a presumption of priority in time, the Federal Circuit held that the party relying upon validity bears the burden of showing that the CIP should date back to the earlier filing.

The party asserting invalidity still must show by clear and convincing evidence that the patent is invalid, but, once a prima facie case is made, the party relying on validity must present evidence to the contrary.  T-Mobile met its burden here by presenting 35 U.S.C. §102(b) prior art which would invalidate the patent if the CIP had an effective date of 2000.  Once T-Mobile satisfied its burden by establishing a prima facie case, the burden shifted to PowerOasis to show that the CIP benefitted from the date of the earlier filing.

After discussing the burden of proof, the court moved on to the standard for determining whether the CIP benefitted from the filing date of an earlier filed application.  “It is elementary patent law that a patent application is entitled to the benefit of the filing date of an earlier filed application only if the disclosure of the earlier application provides support for the claims of the later application, as required by 35 U.S.C. § 112.”  (quoting In re Chu, 66 F.3d 292, 297 (Fed. Cir. 1995)).  To satisfy this requirement, the written description of the earlier filing must make it clear to those skilled in that art that the inventor possessed the invention claimed in the later filing at the time of the earlier filing.  This requirement is not fulfilled by inventions which may be obvious over what is disclosed; only by what is expressly disclosed.

The Federal Circuit agreed with the District Court that the CIP filed by PowerOasis failed to meet this standard.  The original application (filed in 1997) did not support the terms included in the CIP (filed in 2000).  The modifications in the CIP substantially changed the content of the original application, expanding it from a “unitary vending machine” to a number of different platforms, including a customer laptop.  As the CIP was not fully supported by the written description in the original filing, the CIP was not entitled to benefit from the filing date of the original application.  The District Court held, and the Federal Circuit affirmed, that the relevant claims in patents ‘658 and ‘400 were invalid due to the 35 U.S.C. §102(b) prior art presented by T-Mobile.

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