Monday, October 15, 2007

CAFC Punts on Court vs. USPTO Validity Determinations

(1) In Re Translogic Technology Inc. (2006-1192), October 12, 2007

(2) Translogic Technology, Inc. v. Hitachi, LTD, et al. (2005-1387) (nonprecedential), October 12, 2007

This case illustrated the ongoing tension between district court proceedings and parallel USPTO reexaminations, where each proceeding ended with a different result. In Translogic, the district court, after waiting 3 years on 5 reexamination requests, decided to reopen the case and found the patent-in-suit not invalid and infringed, and levied a $86.5M judgment and a permanent injunction (which was later stayed). In the meantime, the PTO found the patent obvious and invalid - for more background info, see earlier 271 Blog post here.

Despite the PTO's findings, the district court stuck to its guns and maintained its ruling, noting that "[t]he Federal Circuit is the proper forum to resolve conflicts between this court's claim construction and the Board's claim construction." One of the primary questions presented on appeal was "[s]hould the judgment of the district court be vacated and the case remanded for summary dismissal because the claims of the '666 patent are unpatentable on reexamination and the patent is void ab initio?"

To answer this question, the CAFC turned to BPAI proceedings, and found that the patent was invalid for obviousness. One of the sticking points was the interpretation of "coupled to" and "coupled to receive" - Translogic argued that the BPAI should have followed the district court's interpretation of "coupled to receive" to mean "connected to receive . . . directly or through one or more intervening inverters." The BPAI interpreted "coupled to receive" to mean "capable of receiving" signals.

Interestingly, the CAFC didn't base its decision on a "broadest reasonable interpretation," but instead engaged in a Phillips analysis of the claims, and found that the BPAI was correct:

The term "coupled to" in the phrase "second stage input terminal 'coupled to' the first stage output terminal" defines a connection between the TGMs. In other words, "coupled to" in the context of this claim phrase defines the connection between two of the TGMs essential for a series multiplexer.

On the other hand, the term "coupled to receive" in the phrase "input terminals 'coupled to receive' first and second input variables" does not specify a particular connection. In other words, the claimed circuit does not require any specific input or connection. Instead, like any logic circuit, this part of the circuit only accepts inputs from an external source. As such, "coupled to" and "coupled to receive" are clearly different in the claimed '666 patent multiplexer circuit . . . Even if the input terminals are not connected, the circuit claimed in the '666 patent defines a series multiplexer. Therefore, this court agrees with the Board's construction that "coupled to receive" means "capable of receiving."

On the issue of obviousness, Translogic argued that the prior art (Gorai) was not applicable, because it pertained to an algorithm to design logic circuits based on functional parameters, while the patent-in-suit improves a known circuit (i.e., multiplexer). The CAFC rejected this argument:

In its prior art argument, Translogic is making the same error corrected by the Supreme Court in KSR. Translogic mistakenly argues that variants of a circuit connecting 2:1 multiplexers in series are not relevant prior art with respect to the '666 patent because these variants do not address the same problem, namely an improved multiplexer circuit. However, this argument overlooks the fundamental proposition that the series circuits in Gorai are prior art within the public domain and the common knowledge of a person of ordinary skill in the art. Thus, the Gorai reference is a relevant prior art reference with respect to the '666 patent and clearly discloses a series 2:1 multiplexer circuit.

[C]laims 47 and 48 of the '666 patent define a series multiplexer circuit. Gorai Fig. 3 discloses the same serial multiplexer circuit. As any person of ordinary skill in the art would understand, the inputs to a circuit do not change the circuit itself. Therefore, this court finds that Gorai discloses a series multiplexer circuit as claimed in the '666 patent. Thus, the Board was correct in concluding that the Gorai reference discloses a series multiplexer circuit.
Regarding the question "[s]hould the judgment of the district court be vacated and the case remanded for summary dismissal because the claims of the '666 patent are unpatentable on reexamination and the patent is void ab initio?", the CAFC issued a short statement, answering this question in the affirmative:
In light of this court's decision in In re Translogic Tech., Inc., this court vacates the district court's decision and remands this case to the district court for dismissal.

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