Yesterday the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) refused to institute an inter partes review (IPR) of claims 1, 2 and 6 of U.S. Patent No. 5,714,927. Marathon Patent Group (NASDAQ: MARA) subsidiary Signal IP, Inc. is the owner of the ‘927 patent, which was challenged by Volkswagen Group of America, Inc.
“We are pleased with the USPTO’s decision denying Volkswagen’s IPR petition, especially since this was the only IPR filed against the 927 patent,” said Doug Croxall, Founder and CEO of Marathon Patent Group. “This ruling, along with those that have preceded it, continue to demonstrate the value of our proprietary process to assess, value, and acquire high quality patent assets that have the potential of generating meaningful return on investment for both the company and its shareholders.”
The ‘927 patent
The ‘927 patent relates to side detection vehicle radar systems that control an alarm or alert indicator to increase the perceived coverage of a vehicle’s blind spot. The system prevents, or at least minimizes, radar signal dropouts due to signal flickers in order to improve the zone of coverage in a vehicle side radar section system. Further, the system minimizes the annoying and frequent alert activity caused by passing a stationary or slow moving target.
Claim 1 of the ‘927 patent was deemed to be representative by the Board: It reads:
1. In a radar system wherein a host vehicle uses radar to detect a target vehicle in a blind spot of the host vehicle driver, a method of improving the perceived zone of coverage response of automotive radar comprising the steps of:
determining the relative speed of the host and target vehicles;
selecting a variable sustain time as a function of relative vehicle speed;
detecting target vehicle presence and producing an alert command;
activating an alert signal in response to the alert command;
at the end of the alert command, determining whether the alert signal was active for a threshold time; and
if the alert signal was active for the threshold time, sustaining the alert signal for the variable sustain time, wherein the zone of coverage appears to increase according to the variable sustain time.
Volkswagen asserted that the challenged claims of the ‘927 patent were unpatentable because they were obvious. See 35 U.S.C. § 103.
The ‘927 patent has been asserted in the following proceedings:
- Signal IP, Inc. v. Ford Motor Company, No. 2-14-cv-13729 (E.D. Mich.);
- Signal IP, Inc. v. Mercedes-Benz USA, LLC et al., No. 2-14-cv-03109 (C.D. Cal.);
- Signal IP, Inc. v. Fiat USA, Inc. et al., No. 2-14-cv-13864 (E.D. Mich.);
- Signal IP, Inc. v. BMW of North America, LLC et al., No. 2-14-cv-03111 (C.D. Cal.);
- Signal IP, Inc. v. Jaguar Land Rover North America, LLC, No. 2-14-cv-03108 (C.D. Cal.). SETTLED.
- Signal IP, Inc. v. Volkswagen Group of America, Inc. d/b/a Audi of America, Inc. et al., No. 2-14-cv-03113 (C.D. Cal.);
- Signal IP, Inc. v. Porsche Cars North America, Inc., No. 2-14-cv-03114 (C.D. Cal.). SETTLED.
- Signal IP, Inc. v. Volvo Cars of North America, LLC, No. 2-14-cv-03107 (C.D. Cal.). SETTLED.
- Signal IP, Inc. v. Nissan North America, Inc., No. 2-14-cv-02962 (C.D. Cal.);
- Signal IP, Inc. v. Mazda Motor of America, Inc., No. 8-14-cv-00491 (C.D. Cal.);
- Signal IP, Inc. v. Kia Motors America, Inc., No. 2-14-cv-02457 (C.D. Cal.); and
- Signal IP, Inc. v. American Honda Motor Co., Inc. et al., No. 2-14-cv-02454 (C.D. Cal.).
The PTAB sided with the patent owner, explaining that the mere fact that any particular invention is comprised of elements found within the prior art does not necessarily mean that the claimed invention is obvious, citing to the Supreme Court’s decision in KSR v. Teleflex. The PTAB also explained that the petitioner insufficiently made a case that the claimed invention was obvious because a proper obviousness argument must articulate some rational underpinning to support a legal conclusion of obviousness, citing to In re Kahn (Fed. Cir. 2006). The Board wrote:
Rather than articulated reasoning with rational underpinnings as to why one of ordinary skill in the art would have looked to Bernhard and Pakett’s alerting system when an obstacle is detected in a blind spot with Fujiki’s braking system, Petitioner has provided only conclusory motivation contentions. Petitioner’s argument lacks any reason, absent impermissible hindsight…
Ultimately, the PTAB went on to say: “We are not persuaded that the Petition demonstrates a reasonable likelihood that Petitioner would prevail in establishing unpatentability of claims 1, 2, and 6.”
Is the Tide Turning?
While obtaining rulings from the PTAB is extremely difficult, we know that this latest refusal to institute an IPR trial is at least the second denial this week by the PTAB. Earlier this week the PTAB similarly denied the IPR petition filed by hedge fund billionaire Kyle Bass by and through the Coalition for Affordable Drugs, an entity he backs.
The PTAB has been widely criticized for instituting too many IPR trials and being all too willing to find patent claims invalid, particularly on obviousness grounds. While it is certainly too early to tell, these recent refusals to initiate IPR trials could signal a turning point. The Office is already pursuing rule changes to post grant trial practice. There is also legislation pending that would alter the landscape significantly with respect to post grant trials, making them far more fair to the patent owner.
Perhaps these latest institution decisions are just a blip, perhaps the challenges to the most egregious patents are behind us, but there is also a possibility that the PTAB is starting to better understand that the patent system simply cannot continue to exist if the most commercially viable patent claims are continually killed at the hands of the PTAB.