Federal Circuit Issues Rule 36 Affirmance of PTAB After Acknowledging Lack of Technical Knowledge in Oral Arguments

On March 13th, the Court of Appeals for the Federal Circuit issued a decision in Cascades Projection v. Epson America, which upheld a ruling by the Patent Trial and Appeal Board (PTAB) to invalidate the asserted claims in a patent covering a system of projecting images using a liquid crystal display (LCD). During oral arguments, one judge of the Federal Circuit opined that it may not have enough testimony in order to decide the case correctly. To save themselves any discussion, the Federal Circuit panel of Circuit Judges Jimmie Reyna, Evan Wallach and Todd Hughes issued a Rule 36 affirmance of the PTAB’s decision, upholding the PTAB without discussing any reason as to why.

The patent at issue in this case is U.S. Patent No. 7688347, titled High-Efficiency Display System Utilizing an Optical Element to Reshape Light with Color and Brightness Uniformity. Issued to inventor Gene Dolgoff in March 2010. Claim 69, one of the claims at issue in Cascades Projection, claims a display system comprised of a light source; an element having a predetermined shape and capable of having an image formed thereon; and a means for enhancing brightness of an image by shaping a beam illuminating the image-forming element such that the shape of the beam substantially matches the shape of the image-forming element, wherein the enhancing means also includes a Fresnel polarizer means. The resulting invention is an LCD projection system for image display which enables adjustable size video images which can be very large while still possessing high quality and brightness.

Cascades Projection asserted the ‘347 patent against five companies in district court including Epson and Sony, the companies which were able to successfully invalidate the asserted claims in the patent at the PTAB. A total of six inter partes review (IPR) proceedings to challenge the validity of the ‘347 patent’s asserted claims were filed at the PTAB. In three cases, Cascades Projection disclaimed prior to the institution decision. On three instituted IPRs, one petition led to a settlement and two led to final written decisions by the PTAB of all asserted claims as unpatentable.


In deciding to institute the IPR filed by Epson, the PTAB’s panel of administrative patent judges (APJs) found that Epson had shown a reasonable likelihood that asserted claims of the ‘347 patent were invalid based on 35 U.S.C. § 103 grounds for obviousness based on two separate combinations of three pieces of prior art. This prior art included U.S. Patent No. 5098184, titled Optical Illumination System and Projection Apparatus Comprising Such a System (“Brandt”) and U.S. Patent No. 5042921, titled Liquid Crystal Display Apparatus (“Sato”). On institution, the PTAB panel rejected Cascades Projection’s arguments on the priority date of the ‘347 patent and the construction of claim terms including “means for enhancing brightness” and “Fresnel polarizer.” In the final written decision terminating the IPR (issued by the same panel of APJs who instituted the IPR, a common practice at PTAB which flies in the face of Congressional statutes on how the PTAB is supposed to operate) and invalidating all challenged claims of the ‘347 patent, the APJs determined that the patent did not teach the term “Fresnel polarizer” as requiring an optical coating layer, counter to an argument that had been made by Cascades Projection, because a hologram, which is itself embodied in a coating, could serve as an alternative to a multi-layer coating. The hologram-as-optical coating argument was first raised in a reply brief filed by Epson in a reply brief filed in June 2016, seven months after the PTAB decided to institute the IPR.

In oral arguments on appeal to the Federal Circuit, Phil Mann of the Mann Group, counsel representing Cascades Projection, noted that the issue related to holograms serving as an alternative to optical coatings did not come up as a question in earlier PTAB actions on the ‘347 patent’s IPR. The PTAB panel of APJs came to this conclusion even after Cascades Projection agreed with the expert witness testimony provided by Epson stating that Fresnel polarizer had to have a coating. “Our opponent’s expert was in agreement on this,” Cascades’ counsel argued. “After the evidence had been submitted to the Board, the Board on its own said, ‘Oh, well, nobody asked them about holograms, it says the patent also says holograms, nobody asked Dr. Kahn about holograms.’ So the Board in essence did this after the evidence was submitted and when it was too late for us to get in there and clarify the issue.”

In its brief on appeal to the Federal Circuit, Cascades Projection argued that the PTAB erroneously construed the claim terms “means for enhancing brightness,” “means for focusing” and “Fresnel polarizer,” which is a term coined by the inventor Dolgoff. Cascades argues that, in Sony’s IPR of the ‘347 patent, the erroneous construction of “Fresnel polarizer” led the PTAB to find that persons of ordinary skill with knowledge of both Fresnel lenses and polarizers would understand the term without the need for an optical coating (in this case a multi-layer dielectric coating), a requirement which comes from the language of the ‘347 patent. “In short, the Board reasoned that, simply because ‘Fresnel lenses’ and ‘polarizers’ existed separately in the art, one of ordinary skill would understand the coined term, ‘Fresnel polarizer’ to mean something different from what the actual inventor, Mr. Dolgoff, actually said in his own ‘347 Patent,” appellant Cascades’ brief reads. Cascades also argued that, in the Epson IPR, the APJ panel failed to appreciate that the alternative hologram embodiment “is itself a type of optical coating.” As the ‘347 patent describes, the use of a hologram “is similar to the form and function” of the multi-layer dielectric coating that is typically applied through vacuum deposition.

In their oral arguments to the Federal Circuit panel, attorneys representing Epson and Sony cited to various figures from the ‘347 patent to argue that the inventor Dolgoff was simply interested in Fresnel structures, optical coatings and other elements which have been known in the art for decades. At one point (starting at 20:57 of the oral argument recording), a Federal Circuit judge interrupted an attorney’s answer to a technical question to say, “This is the problem with this case. These are very technical terms and all we have is the specification to discuss whether they’re not optical coatings or they are optical coatings and you say one thing, your friend says the other thing. I mean, you may be wrong for all I know, you may be right, I have no idea without expert testimony to distinguish between the two.”

The issue of Rule 36 affirmances upholding IPR proceedings at the PTAB without any written opinion has been noted in the recent past. Here, a Rule 36 affirmance was issued even though one of the judges expressed great concern over their ability to adjudicate the technical elements of the case. Inventor Gene Dolgoff had the following to say about the recent Rule 36 decision in Cascades Projection:

“I believe that, after they heard the comments of the opposing attorneys, the judges were unable to stay focused on the important issues regarding our arguments, which prevented their considering the points important to our position, especially given the short time allotted for oral argument. I believe the judges lack the scientific knowledge and expertise of a patent examiner, who is (or is supposed to be) an expert on the subject matter in the patent at issue, and therefore appeared to me unqualified to provide a just ruling in our case. Consequently, they simply affirmed the PTAB ruling, as they often do, using Rule 36, without revealing the reasoning behind their decision. I believe they didn’t understand the subject matter at issue and, therefore, had no reasoning. This is not justice. It does a disservice to the patent owner, to our economy, and to our country as a whole. In such a case, instead of throwing their hands up and reaffirming the PTAB ruling, they should use their own clerks or other experts to understand the technical issues in order to make a fair ruling, or at least ask for more briefing, which I understand they can and sometimes do.”

Initially, Cascades Projection had requested an en banc rehearing at the Federal Circuit on the constitutionality of IPR proceedings occurring at the PTAB. In denying the request for en banc rehearing, the Federal Circuit issued four different opinions and this split at the CAFC is one reason why the U.S. Supreme Court decided to take up the issue of the PTAB’s constitutionality in Oil States Energy Services v. Greene’s Energy Group.

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4 comments so far.

  • [Avatar for Lost In Norway]
    Lost In Norway
    April 5, 2018 04:48 am

    @B, I hope that it goes your way. I have to admit that you made me chuckle. That was pretty smarmy of you 😀

  • [Avatar for B]
    April 4, 2018 05:18 pm

    Oy, I had oral hearing before Hughes, Stoll and Prost today. PTO tried to trivialize the claims as computers doing what computers do: process data. Judge Hughes asked me (seriously) if I was aware of any case that did nothing but take in data, process data and display the processed data (Hint, hint: Electric Power Group). I was prepared . . . . DDR Holdings, Trading Technology and McRO v. Bandai – and trivialized the inventions. DDR Holdings? Changing look and feel? Adding curtains and throw pillows is enough. Trading Technologies? Merely rearranging data – just doing what computers do. McRO? McRO arguably has zero advantage as the only thing stated as additional were two new sets of rules. Multiply by one? Adding zero? Those are rules that conform with McRo.

    Hughes seemed a bit miffed, but my point was that any invention can be trivialized as merely doing what computers do. Self-referential table? So what? Abstract – just a small software change.

    Hughes was not mean to me or anything – he just didn’t get why the entire patent community was confused by the cacophony of 101 decisions. There is truly a disconnect between the CAFC and the patent community.

    Anyway, I wanted to say (but forgot because I was majorly tired and stressed): “Federal Circuit, meet Technology Centers 2100 and 2400.”

  • [Avatar for Perkins]
    April 4, 2018 12:11 pm

    Frankly, as I read this article it appears to me that the Federal Circuit is saying they can’t understand the (technical) language the litigants are speaking so instead of getting a translator or sending the case back to the PTAB for further proceedings they just got rid of the case. So much for the inventor, his rights and his patent. It also sounds to me like sending the case back to the PTAB probably wouldn’t have helped because the panel was likely stacked with phantom judges to guarantee the outcome that somebody wanted. When will the SCOTUS (or the Congress) take notice and fix these problems that big data has created?

  • [Avatar for Disenfranchised Patent Owner]
    Disenfranchised Patent Owner
    April 4, 2018 08:53 am

    Three Obama CAFC appointees issue a Rule 36 affirmance of a kangaroo court opinion, expressing they may not have had sufficient testimony or possess the technical knowledge necessary to decide the case correctly.

    Why am I not surprised? Time another en banc rehearing request?