In re Affinity Labs of Texas, LLC, No. 2016-1173, 2017 U.S. App. LEXIS 7982 (Fed. Cir. May 5, 2017 (Before Taranto, Chen, and Stoll, J.) (Opinion for the court, Chen, J.).
Appellant Affinity Labs of Texas, LLC (“Affinity”) appealed from the inter partes reexamination of its patent filed by Apple Inc. (“Apple”). Apple requested reexamination after Affinity asserted the patent against Apple in district court.
The parties settled their dispute and filed a joint stipulation of dismissal with the district court. Affinity’s infringement action was dismissed with prejudice and Apple’s invalidity counterclaims were dismissed without prejudice. Apple also filed a notice of non-participation in the reexamination. Affinity petitioned the USPTO to terminate the Apple reexamination pursuant to pre-America Invents Act (AIA) 35 U.S.C. § 317(b). The USPTO dismissed Affinity’s termination request because it did not view the district court’s dismissal of Apple’s invalidity counterclaims, without prejudice, as meeting the required condition for terminating the reexamination.
The Examiner rejected all of the patent’s claims and Affinity appealed to the Patent Trial and Appeal Board (“Board”), which upheld the Examiner’s rejection.
Affinity appealed to the Federal Circuit and argued that the USPTO improperly maintained the reexamination in view of § 317(b), and, on that basis the Board’s decision should be reversed. Additionally Affinity argues that the Board’s findings are premised upon an improper claim construction of the so-called “dual download” feature.
The Federal Circuit found that the estoppel provision of section 317(b) is expressly conditioned upon the entry of a “final decision,” and specifically “that the party has not sustained its burden of proving the invalidity of any patent claim in suit.” Noting that Affinity presented no evidence of a final decision that Apple had not sustained its burden of proving invalidity, the Court rejected Affinity’s argument based upon section 317(b). Dismissal of Apple’s claims without prejudice, “neither reflects an assessment by the district court of Apple’s invalidity challenge nor a concession by Apple that it did not or could not meet its burden of proving the asserted claims’ invalidity.” Therefore, the estoppel provision of pre-AIA section 317(b) did not serve to bar the inter partes reexamination.
The “Dual Download” feature at the center of Affinity’s second argument relates to an audio download method, specifically, where content is made available for download to different devices. Affinity argues that the key aspect of a “dual download” is the ability to make a single request to download content to first and second devices automatically. The Examiner found that the claim language did not require content to be sent to both devices, and therefore found all claims unpatentable as obvious over the prior art. The Board adopted the Examiner’s construction and affirmed the Examiner, similarly, concluded all claims unpatentable as obvious over the asserted prior art.
The Court reviewed the Board’s ultimate construction de novo and the underlying factual determinations for substantial evidence. Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1297 (Fed. Cir. 2015). The Court found the open-ended nature of the claim limitations and Specification did not “command that the requested content must be simultaneously and automatically downloaded to all selected destination devices based on a single request, without any subsequent action by the user.”
Therefore, the Court affirmed the Board’s decision that all claims of the patent-in-suit were unpatentable.
The estoppel provision of Pre-AIA Section 317(b), as applied to Inter Partes Reexamination, requires a “Final Decision,” which must show that the estopped party has not sustained its burden of proving invalidity of any patent claim in suit. Thus, a joint stipulation and order of dismissal “without prejudice” did not bar the maintenance of the Inter Partes Reexamination.
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