UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD

Transcription

1 Paper Entered: June 6, 2016 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD INTEX RECREATION CORP., INTEX DEVELOPMENT COMPANY LTD., INTEX INDUSTRIES (XIAMEN) CO., LTD., INTEX MARKETING LTD., AND INTEX TRADING LTD., Petitioner, v. BESTWAY INFLATABLES & MATERIAL CORP., Patent Owner. Case Before RICHARD E. RICE, JEREMY M. PLENZLER, and CARL M. DEFRANCO, Administrative Patent Judges. DEFRANCO, Administrative Patent Judge. DECISION TO INSTITUTE 37 C.F.R

2 I. INTRODUCTION This is a preliminary proceeding to decide whether inter partes review of U.S. Patent No. 7,159,731 B2 ( the 731 patent ) should be instituted under 35 U.S.C. 314(a). Bestway Inflatables & Material Corp. ( Bestway ) is the owner of the 731 patent. Intex Recreation Corp., Intex Development Company Ltd., Intex Industries (Xiamen) Co., Ltd., Intex Marketing Ltd., and Intex Trading Ltd. (collectively, Intex ) filed a Petition ( Pet. ) seeking inter partes review of claims 1 14 of the 731 patent. Bestway, in turn, filed a Preliminary Response ( Prelim. Resp. ). After considering the Petition and Preliminary Response, we institute inter partes review on all of the challenged claims. A. The 731 Patent II. BACKGROUND The 731 patent relates to an air purge valve used to discharge excess air from a swimming pool pump system. Ex. 1001, 1:6 8, As described, the air purge valve improves upon prior air purge valves by providing a valve stem that is designed to hook into a filter pump cover so that it is not easily removed from the cover when the valve is opened to release excess air. Id. at 1: More specifically, the bottom of the valve stem includes outward-facing inverse hooks that prevent complete removal of the valve stem from an opening in the pump cover. Id. at 1:56 60, 2:1 11. B. The Related District Court Action The 731 patent is involved in a concurrent district court action, Bestway Inflatables & Materials Corp. v. Intex Recreation Corp., No. 2:16- cv (D. Ariz.), which commenced January 5, Paper 12. 2

3 Recently, the district court stayed the action pending our decision on whether to institute inter partes review. Id. C. The Challenged Claims Of the challenged claims, three of them claims 1, 5, and 10 are independent. Claims 1 and 5 are directed to an air purge valve and a valve, respectively, while claim 10 is directed to a filter pump cover that includes the valve essentially as recited in claims 1 and 5. Claim 1 is illustrative of the claims under challenge: 1. An air purge valve, comprising: a valve cap; a screw-threaded portion connected to the valve cap and being interrupted by at least one valve opening; and a valve stem connected at the top to the screw-threaded portion opposite the valve cap and having at least one outwardfacing inverse hook at the bottom, the inverse hook being inwardly compressible for insertion into an opening. Ex. 1001, 5:55 64 (emphasis added). D. The Asserted Grounds Intex s Petition raises two grounds of anticipation under 35 U.S.C. 102 and three grounds of obviousness under 35 U.S.C. 103: Ground 1: claims 1 9 are anticipated by Blomquist 1 ; Ground 2: claims 1, 3, and 5 14 are unpatentable as obvious over Blomquist and the 520 Manual 2 ; Ground 3: claims are unpatentable as obvious over Blomquist, the 520 Manual, and the 12 Manual 3 ; 1 U.S. Patent No. 4,905,863, iss. Mar. 6, 1990 ( Blomquist ) (Ex. 1018). 2 Intex Recreation Corp., Krystal Clear TM Model 520 Filter-Pump, OWNER S MANUAL, 2001 ( 520 Manual ) (Ex. 1002). 3

4 Ground 4: claim 1 6, 9 11, and 14 are anticipated by the Intex Video 4 ; and Ground 5: claims 1 14 are unpatentable as obvious over the Intex Video and Blomquist. Pet. 18. As additional support for the five grounds, Intex proffers the declaration of Joseph J. Beaman. Ex A. Claim Construction III. ANALYSIS 1. air purge valve and valve cap According to Bestway, the terms air purge valve and valve cap as used in claims 1 and 5 should be construed as requiring the valve to discharge excess air from a swimming pool pumping system, or at the very least, discharge excess air from a pumping system. Prelim Resp In support, Bestway cites to numerous passages in the specification. Id. at We are not inclined to adopt Bestway s proposed construction, as it is contrary to the plain language of claims 1 and 5 and improperly imports limitations from the specification into the claims. Although the specification describes the use of the valve in the context of a pump system, neither claims 1 nor 5 suggests that the valve is limited to a pump system. Rather, they simply recite the structural elements of an air purge valve valve cap, screw-threaded portion, valve stem, and inverse hooks in association with a filter cap retainer, without any mention of the type of system in which the valve structure is used. Indeed, mention of a pump is not found until 3 Intex Recreation Corp., Krystal Clear TM Model 12 Filter-Pump, OWNER S MANUAL, 2001 ( 12 Manual ) (Ex. 1017). 4 Intex Instructional Video (Exs ). 4

5 claim 3, which recites a pump in the disjunctive, or other pump element, and claim 10, which recites a pump in the preamble, filter pump cover. But, with respect to claims 1 and 5, nothing in the claim language suggests that the valve is limited to a pump system. Moreover, Bestway ignores the 731 patent s express recognition that the claimed invention may be used with a wide variety of filter pump covers, or with any other system that may advantageously employ an air purge valve. Ex. 1001, 1:60 62 (emphasis added). That language suggests that the valve called for by claims 1 and 5 is not limited necessarily to a pump system but has a broader application to any system in which air may need to be vented. As such, we reject Bestway s attempt to import limitations improperly from the specification into claims 1 and filter cap retainer Intex asks that we construe the term filter cap retainer in claims 3 and 5. Pet. 18. According to Intex, because neither of these claims imparts any actual structure of a filter cap, the term filter cap retainer should be construed only as a retainer capable of retaining a filter cap. Id. at From our initial review of the claims, the term retainer appears to be a positive structural limitation and the preface filter cap appears to describe simply an intended use for that structure. An intended use or purpose usually will not limit the scope of the claim because such statements usually do no more than define a context in which the invention operates. See Boehringer Ingelheim Vetmedica, Inc. v. Schering-Plough Corp., 320 F.3d 1339, 1345 (Fed. Cir. 2003). Indeed, as discussed above, the 731 patent expressly contemplates that the invention may be used with filter caps or with any other system that may advantageously employ an air purge 5

6 valve. Ex. 1001, 1: As such, we construe the modifier filter cap as simply defining the context in which the retainer operates. B. Threshold for Institution In this preliminary proceeding, we determine whether Intex has demonstrated a reasonable likelihood that at least 1 of the claims challenged in the petition is unpatentable. 35 U.S.C. 314(a). Intex proposes five grounds of unpatentability for the fourteen claims under challenge. Pet The Blomquist-based Grounds To begin, we address grounds 1 3 of the Petition, in which Blomquist is asserted as a common basis for unpatentability. Pet. 18. For instance, Intex challenges claim 1 as being both anticipated by Blomquist under 35 U.S.C. 102, and rendered obvious by Blomquist (plus another reference) under 35 U.S.C Id. at 20, 28. Blomquist describes an improved valve for venting air from a closable container. Ex. 1018, 1:5 24. The valve is part of a removable cap that is utilized as a cover for the container. Id. at 2:49 55, Fig. 1. As described, the valve includes a valve cap ( head 23 ), a threaded portion ( body 20 ) adjacent the cap, and a stem ( leg 26 ) at its distal end. Id. at 2:49 68, Figs. 2, 3. A simple comparison of Figure 3 of the 731 patent to Figure 3 of Blomquist reveals the identity of the claimed invention to Blomquist s valve. 6

7 Fig. 3 of 731 Patent Fig. 3 of Blomquist Each of the above figures depicts an air purge valve within an opening of a removable cap for a container. Much like the inverted hooks (element 15) of the 731 patent, Blomquist discloses barb-like feet 25 on the stem of the valve, each of which flexes inwardly when urged through the opening and snaps back to a normal, unflexed position when fully inserted. Id. at 3:11 43, Figs. 3, 4. The purpose of the hooks, according to Blomquist, is to reduc[e] the likelihood of the closure member [i.e., valve] becoming lost. Id. at 1:17 24; see also id. at 3:59 61 ( [I]t is desired to prevent the complete removal of the vent screw 4, as it might then be inadvertently lost or damaged. ). At this time, Intex persuades us that Blomquist s valve meets each and every element of claim 1. In particular, Intex provides annotated figures and a detailed claim chart mapping the elements of claim 1 to Blomquist. Pet ; Ex After careful consideration, we determine that Intex has demonstrated a reasonable likelihood of proving that claim 1 of the 731 patent is anticipated by Blomquist. At this juncture, we are not persuaded by Bestway s arguments to the contrary, as they rely, first, on a claim construction that is inconsistent with the plain language of the claim (as discussed above), and, second, on a non-meritorious attack on the 7

8 qualifications of Intex s declarant. 5 See Prelim. Resp Thus, we institute inter partes review of claim 1 of the 731 patent on the ground of anticipation by Blomquist. Furthermore, having decided that Blomquist evinces a reasonable likelihood that at least one of the claims challenged in the Petition is unpatentable, we exercise our discretion under 37 C.F.R to have the review proceed on all of the challenged claims and on all of the asserted grounds on which Blomquist serves as the primary basis for unpatentability, respectively, claims 1 14 and grounds 1 3. In doing so, we seek to secure the just, speedy, and inexpensive resolution of this proceeding (37 C.F.R. 41.1(b)), and, thereby, avoid duplicative and piecemeal review of the 731 patent, at least with respect to the petitioner, Intex, and the grounds asserted against the 731 patent. To that end, Congress, in enacting the Leahy-Smith America Invents Act (AIA), contemplated that, [i]deally, inter partes review will completely substitute for at least the patents-and-printed publications portion of the civil litigation. 157 Cong. Rec. S1376 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl) (emphasis added). But, where the Board grants review of some of the challenged claims and not others, [t]he validity of claims for which the Board [does] not institute inter partes review can still 5 Bestway argues that Mr. Beaman lacks any experience in the actual field of the invention. Prelim. Resp. 16. We disagree. Bestway defines the relevant art as swimming pools, filters, or valves. Id. (emphasis added). In our view, Mr. Beaman is eminently qualified to testify on the topic of valves. See Ex At this time, we see no reason not to allow Mr. Beaman to testify on aspects of the pertinent art for which he appears to be qualified, as we can later assess what weight, if any, his testimony deserves. 8

9 be litigated in district court. Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 1309, 1316 (Fed. Cir. 2016); see also HP Inc. v. MPHJ Tech. Inv., LLC, F.3d, 2016 WL at *7 (Fed. Cir. Apr. 5, 2016) (holding that petitioner was not estopped from raising the obviousness of claim 13 in a subsequent court or Board proceeding where Board instituted only on grounds of anticipation of claim 13). In other words, a partial institution could very well result in a serial or parallel process where the Board reviews some claims of the challenged patent and the district court reviews other claims. Indeed, that could be the outcome here because the district court, in the related litigation, has made clear that should the USPTO institute review of some, but not all of the Challenged Claims, the parties should prepare to move forward and expeditiously litigate this action. Ex. 3001, at 2 n.2. Thus, anything short of institution on all of the challenged claims in the instant proceeding may result in the district court lifting the current stay and reviewing at least the non-instituted claims in parallel with our review of the instituted claims. Taking a claim-by-claim approach in two different fora, however, would negate the efficiency of forc[ing] a party to bring all of [its] claims in one forum... and therefore to eliminate the need to press any claims in other fora. Synopsys, 814 F.3d at 1332 (quoting 154 Cong. Rec. S9989) (Newman, J., dissenting). On the other hand, [the Board s] review on all asserted claims of the sole asserted patent would weigh heavily in favor of maintaining the stay, thereby furthering the interests of judicial economy and the conservation of party resources. VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1314 (Fed. Cir. 2014). Also, maintaining the stay at the district court and instituting review on all of the 9

10 challenged claims will avert the potential for an improper collateral attack on our findings and conclusions. Id. at As discussed above, Intex demonstrates a reasonable likelihood of proving that Blomquist anticipates at least claim 1 of the 731 patent. Claim 1 recites the key feature of a compressible inverse hook on the stem of an air purge valve. There is commonality of invention among the claims, as the other independent claims claims 5 and 10 include this same feature. There is also significant overlap among the grounds, as Blomquist is common to the grounds raised under 35 U.S.C. 102 and 103. Given this overlap, and lest we undermine the AIA s central purpose of achieving finality of validity review at the Board instead of the district court, efficiency and fairness dictate that we exercise our discretion, in this particular case, to institute review on all of the claims and on all of the grounds on which Blomquist serves as the primary basis for unpatentability. 6 We recognize that the question of complete or partial institution rests on the facts and circumstances of each case and remains squarely within the Board s discretionary authority under 37 C.F.R In promulgating regulations for inter partes review, the Office was obligated to consider the effect... on the economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings. 35 U.S.C. 316(b). The [Office s] rationale for 6 We institute not only on ground 1 (anticipation under 35 U.S.C. 102) but also on grounds 2 and 3 (obviousness under 35 U.S.C. 103), as the Board is cognizant of the ramifications of partial institution where the grounds are in different statutory classes. See Comments on Changes to Implement Inter Partes Review Proceedings of the Leahy Smith America Invents Act, 80 Fed. Reg , (Aug. 20, 2015) (Response to Comment 12). 10

11 promulgating aligns with Congress s guidance in 316, and permitting the Board to institute on a subset of claims challenged in a petition is plainly an exercise of the [Office s] rulemaking authority. Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1368 (Fed. Cir. 2016) (quotation and citation omitted); see also Shaw Indus. Grp, Inc. v. Automated Creel Sys., Inc., F.3d, 2016 WL , at *4 (Fed. Cir. Mar. 23, 2016) (affirming the Board s use of partial institution given its statutory obligation to complete inter partes review in a timely and efficient manner). Here, the particular facts and circumstances of this case do not present a reason to exercise our authority under 37 C.F.R for selective institution. Intex proposes only five grounds of unpatentability for fourteen claims. Three of those grounds proffer Blomquist as the primary basis while the other two proffer the Intex Video as the primary basis. Given the disclosures of Blomquist (discussed above) and the Intex Video (discussed below), we are satisfied that none of Intex s grounds is spurious, unduly burdensome, or would affect our ability to complete the review in a timely and efficient manner. 2. The Intex Video-based Grounds Intex also challenges claims 1 14 on variant grounds that include the Intex Video as a common basis for unpatentability. Pet. 18, For instance, Intex asserts that the Intex Video anticipates independent claim 10, which is directed to a filter pump cover. Id. at (citing Exs. 1006, 1011). The Intex Video appears to disclose each and every element of claim 10. Ex , 55 57, 101. In particular, screenshots from 11

12 the Intex Video depict a filter pump cover equipped with an air purge valve. Pet. 56. As shown, the valve comprises a cap, a threaded portion, and a stem. Ex On the stem of the valve are inverted hooks for retaining the valve within the filter cap when the valve is open. Id. What is not clear from the video per se is the compressibility of the inverted hooks. For that disclosure, Intex proffers the testimony of Mr. Beaman, who testifies that [e]ach of these hooks incorporates an inherent resiliency given the construction of the pool filter pump in the Intex Video. Id. 39. Mr. Beaman also provides testimony that the Intex video was distributed to customers as early as December 19, Id. 36 (citing Ex. 1022). We find that testimony persuasive, and thus, on the current record, determine that Intex has demonstrated a reasonable likelihood of proving that at least independent claim 10 is anticipated by the Intex Video. Having concluded that Intex demonstrates a reasonable likelihood that the Intex Video anticipates at least claim 10, we exercise our discretion to institute inter partes review on all of the claims and grounds for which Intex asserts the Intex Video as the primary basis for unpatentability. As discussed above, doing so will save the district court and the parties from possibly having to address the same validity issues in a parallel or serial action. C. The Prior Art Status of the Intex Manuals and Video Each of grounds 2, 3, 4, and 5 relies on a prior art reference over which Bestway disputes its status as a printed publication under 35 U.S.C Prelim. Resp , The disputed references include the 520 Manual, the 12 Manual, and the Intex Video. [T]here are many ways in which a prior art reference may be disseminated to the interested public. 12

13 In re Hall, 781 F.2d 897, (Fed. Cir. 1986). As such, the legal determination of whether a reference is a publication turns on underlying factual issues, and, thus, must be approached on a case-by-case basis. Id. at 899. Here, there is considerable dispute over the material facts surrounding public dissemination of the Intex manuals, as well as the Intex video. See Reply (Paper 10); Sur-Reply (Paper 11). This issue, however, is not a factor with respect to the anticipation ground based on Blomquist alone (ground 1), for which Intex has demonstrated a reasonable likelihood of unpatentability with respect to at least 1 of the claims challenged in the petition. Thus, at this stage, we need not reach the dispute regarding whether the Intex manuals have been established properly to be printed publications under 35 U.S.C Nor do we resolve, at this stage, without a complete factual record, the printed publication issue with respect to the Intex video. IV. CONCLUSION After considering the evidence and arguments presented in the Petition and Preliminary Response, we determine that Intex has demonstrated a reasonable likelihood of success in proving that at least independent claims 1 and 10 of the 731 patent are unpatentable. And, in keeping with our mission of effectively and efficiently resolving patent validity disputes while providing a timely, low-cost alternative to district court litigation, we exercise our discretion to institute on all of the challenged claims and on all of the proposed grounds as presented in the Petition. 13

14 Accordingly, it is hereby: V. ORDER ORDERED that, pursuant to 35 U.S.C. 314(a), an inter partes review of claims 1 14 of the 731 patent is instituted on the grounds that claims 1 9 are anticipated by Blomquist, that claims 1, 3, and 5 14 would have been obvious over Blomquist and the 520 Manual, that claims would have been obvious over Blomquist, the 520 Manual, and the 12 Manual, that claim 1 6, 9 11, and 14 are anticipated by the Intex Video, and that claims 1 14 would have been obvious over the Intex Video and Blomquist; and FURTHER ORDERED that, pursuant to 35 U.S.C. 314(c) and 37 C.F.R. 42.4(b), inter partes review of the 731 patent shall commence on the entry date of this Order, and notice is hereby given of the institution of a trial. FOR PETITIONER: R. Trevor Carter Trenton B. Morton FAEGRE BAKER DANIELS LLP Trevor.Carter@FaegreBD.com Trenton.Morton@FaegreBD.com FOR PATENT OWNER: Uleses C. Henderson, Jr. Stephen M. Lobbin ONE LLP uhenderson@onellp.com slobbin@onellp.com 14