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12 June 2017Patents

Federal Circuit outlines scope of estoppel at PTAB

The US Court of Appeals for the Federal Circuit has held that a petitioner could rechallenge claims of a patent that it had previously asserted but had not been reviewed by the Patent Trial and Appeal Board (PTAB).

On Friday, June 9, in a precedential decision, the Federal Circuit backed finance company Westlake in finding that petitioners in covered business method (CBM) reviews were not barred under estoppel from rechallenging claims if the PTAB had not issued a final written decision on the specific claims.

Credit Acceptance, an automobile finance company, is the owner of the patent concerned, US patent number 6,950,807 B2.

The patent includes both system and method claims directed to “provid[ing] financing for allowing a customer to purchase a product selected from an inventory of products maintained by a dealer”.

In March 2014, the PTAB instituted review of the patent based on section 101 grounds but with respect to fewer than all of the challenged claims, following a petition from Westlake.

The PTAB instituted review of claims 1–9, 13, and 34–42, but it did not institute review of claims 10–12 and 14–33 (the claims now at issue).

Nearly three months later, the US Supreme Court issued Alice v CLS Bank and vacated the Ultramercial II decision relied upon by the board.

In light of the developments in section 101 jurisprudence, Westlake filed a second petition for CBM review, again challenging claims 10–12 and 14–33 as patent-ineligible under the section.

The PTAB instituted review and concluded that it was “more likely than not that [the challenged claims] are directed to abstract ideas with no inventive concept”.

In its decision, the board rejected Credit Acceptance’s argument that the existence of the first CBM proceeding estopped Westlake from challenging the claims under 35 USC section 325(e)(1).

The board explained that estoppel under section 325(e)(1) applies on a claim-by-claim basis and that the final written decision in the first proceeding had only ruled upon claims 1–9, 13, and 34–42.

Under section 325(e)(1), the petitioner in a post-grant review (PGR) or a CBM is estopped from requesting or maintaining a proceeding before the US Patent and Trademark Office (USPTO) with respect to any claim that the petitioner has raised or reasonably could have raised during a prior review or CBM that results in a final written decision of that claim.

“The board’s determination was based on the fact that the first proceeding had not yet resulted in a final written decision, and therefore, Credit Acceptance’s estoppel argument was not ripe,” said the Federal Circuit.

Credit Acceptance appealed but the Federal Circuit affirmed the PTAB’s decision.

“Because a final written decision does not determine the patentability of non-instituted claims, it follows that estoppel does not apply to those non-instituted claims in future proceedings before the USPTO,” said the court.

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15 January 2018   The US Court of Appeals for the Federal Circuit typically backs decisions from the Patent Trial and Appeal Board (PTAB) in appeals, according to data from US law firm Finnegan.