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CIP Was Not Entitled to Presumption That Claims Were Supported by Written Description in Parent Application

07-1265
April 11, 2008

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Last Month at the Federal Circuit - May 2008

Judges: Newman, Schall, Moore (author)

[Appealed from: D.N.H., Judge Barbadoro]

In PowerOasis, Inc. v. T-Mobile USA, Inc., No. 07-1265 (Fed. Cir. Apr. 11, 2008), the Federal Circuit affirmed the district court’s grant of SJ of invalidity with respect to all asserted claims in favor of T-Mobile USA, Inc. (“T-Mobile”), finding that the district court correctly concluded that none of the asserted claims of the two patents-in-suit were entitled to the benefit of the filing date of PowerOasis, Inc.’s and PowerOasis Networks, LLC’s (collectively “PowerOasis”) originally filed application because it did not provide a written description of the invention in the asserted claims.

The two PowerOasis patents-in-suit, U.S. Patent Nos. 6,466,658 (“the ’658 patent”) and 6,721,400 (“the ’400 patent”) stem from a chain of continuation and CIP applications, and are both directed to vending machines that sell telecommunications access. After the district court’s claim construction, T-Mobile filed a motion for SJ that the asserted claims were anticipated by the MobileStar Networks. PowerOasis responded by claiming its asserted claims should have the benefit of the filing date of the first application in the patent chain (“Original Application”), which would antedate the MobileStar Networks. On SJ, the district court determined that the asserted claims were not entitled to the priority date of the Original Application because the written description of the Original Application did not support the later-issued claims. Because the district court concluded that the patents-in-suit were not entitled to the effective filing date of the Original Application, the district court held that the patents were anticipated by the MobileStar Networks.

On appeal, PowerOasis argued that the district court erred when it placed the burden of proof on PowerOasis to show its entitlement to the priority date of the Original Application. PowerOasis based its burden of proof argument mainly on the Federal Circuit’s decision in Ralston Purina Co. v. Far-Mar-Co, Inc., 772 F.2d 1570, 1573 (Fed. Cir. 1985), that a patent is presumed valid and “the burden of persuasion to the contrary is and remains on the party asserting invalidity.” Relying on Ralston, PowerOasis contended that the presumption of validity should include a presumption that claims in a CIP application are all entitled to the earliest effective filing date and that T-Mobile bore the burden of proof as to whether the asserted claims were entitled to the priority date of the original application.

The Federal Circuit disagreed with PowerOasis’s contention and distinguished Ralston based on two facts: (1) the CIP application at issue in Ralston had been the subject of an interference, which awarded the inventor the benefit of his earliest application; and (2) the prior art reference relied on by the defendant was brought to the attention of the examiner during prosecution. Therefore, the defendant in Ralston had to overcome the deference due to both the Board and the PTO. However, neither of the PowerOasis patents-in-suit had been the subject of an interference and the MobileStar Networks were never considered by the examiner. The Court found that in the absence of an interference or rejection, the PTO did not make priority determinations and, therefore, the validity presumption did not include an entitlement of priority date. The Court also found that while T-Mobile nevertheless bore the burden of proof of invalidity, T-Mobile met that burden by showing the MobileStar Networks to be an anticipating prior art.

Therefore, the Court found that the district court correctly placed the burden on PowerOasis to prove entitlement of priority date.

With respect to written description, the central issue before the Federal Circuit was whether the district court erred in its construction of the term “customer interface,” which was included either directly or indirectly in all of the asserted claims. The district court adopted PowerOasis’s proposed construction of “customer interface” to encompass an interface that is located on a customer’s laptop. The Federal Circuit agreed with the district court’s finding that the Original Application did not provide a written description of a “customer interface” as construed. The Court found that the Original Application described a vending machine with a “display” or “user interface” as part of the vending machine, rather than a vending machine with a “customer interface” located on a customer’s electronic device.

PowerOasis contended that for the purpose of validity analysis, the Court should adopt a broader construction of “customer interface” than the construction it proposed and was adopted by the district court. However, the Court found that the support for the broad construction was only found in the material added in the 2000 CIP application and, in fact, PowerOasis only cited to language first introduced in the 2000 CIP application to support its broad construction. Finally, PowerOasis provided an expert declaration stating that the Original Application disclosed to a person of ordinary skill in the art a customer interface located on a customer’s laptop. However, the Court found that the expert declaration, at best, demonstrated that it would be obvious to substitute a customer’s laptop with the user interface that was part of the vending machine, and that the expert declaration did not persuasively cite to any supporting references in the Original Application that demonstrated otherwise. The Court determined that the obviousness of the substitution did not show that PowerOasis was in possession of the invention of the asserted claims at the time of the filing date of the Original Application.