shutterstock_1486361060_tada_images-1
26 September 2019PatentsRory O'Neill

Federal Circuit reverses ‘capricious’ PTAB ruling

The US Court of Appeals for the Federal Circuit has handed a victory to US wireless communication technology company SIPCO after it ruled that the US Patent and Trademark Office (USPTO) had reached an “arbitrary and capricious” ruling on the company’s patent.

In a 2-1 majority decision, delivered yesterday, September 25 by circuit judge Raymond Chen, the Federal Circuit ruled that the USPTO’s Patent Trial and Appeal Board (PTAB) had “misread and mischaracterised” key features of the patent.

The PTAB instituted a covered business method (CBM) review of SIPCO’s patent, covering a wireless communication device (US number 8,908,842), on the request of Emerson Electric, which claimed the patent should be invalidated as obvious.

SIPCO had previously asserted the patent against Emerson in an infringement case.

A CBM patent is defined as one that claims the method for “performing data processing or other operations used in the practice, administration, or management of a financial product”. CBM patents do not cover technological inventions.

SIPCO’s patent covers a device which enables “low-power” wireless transmission from a device to a central location. The company cited the example of a device which could transmit a bank card’s information to an ATM.

Because of the device’s low power transmission, a user would have to be in “close proximity”, such as “several feet” to the intended target in order to use it. The purpose of this feature is to mitigate the risk of the information being intercepted.

Emerson claimed that the patent was obvious, as it was merely directed towards “establishing a communication route between two points to relay information”.

According to Emerson, this concept “has been practised for centuries in applications such as the Postal Service, Pony Express, and [the] telegraph, where a route is established to relay mail or other communications from one point to another”.

The PTAB intervened on the side of Emerson, ruling that the term “low power”, as described in the patent, did not necessarily with low transmission range. As such, the PTAB decided, the patent lacked a technological invention.

The Federal Circuit majority today reversed that decision, ruling that the PTAB had misread claim 1 of the patent.

“SIPCO’s specification explicitly ties the low power transceiver to a limited transmission distance,” the judgment said.

Based on this misreading, the PTAB failed to appreciate that the patent provides a “technical solution to a technical problem,'' the court ruled, meaning that the board must revisit whether the patent is eligible for CBM review.

In a dissenting opinion, circuit judge Jimmie Reyna said that the court’s majority decision was “contrary to basic tenants of claim construction”.

“Neither party proposed the construction now adopted by the majority,” Reyna wrote.

According to the dissenting opinion, the majority had replaced the ordinary meaning of ‘power’ in the claim language and imported its own preferred construction.

Did you enjoy reading this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.

Today's top stories:

Preacher’s arrest leads to seizure of counterfeit Cartier jewellery

IP intensive industries contribute €6.6tn to EU’s GDP

Less than a quarter of businesses prepare for litigation, says study

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Patents
4 October 2019   The US Court of Appeals for the Federal Circuit has upheld a ruling that a patent owned by American Axle & Manufacturing is ineligible and cannot be enforced.