When the PTAB Attacks!
In the past few years, the public's perception of the patent system in the United States has been at a low point. One of the causes of this lack of confidence in the system has been the increase in abusive patent litigation from entities that have been labelled as "patent trolls." This problem has been magnified (and likely blown out of proportion) by the mainstream media that has been reporting on (and exaggerating) the evils of the current patent system. The patent system's alleged failings appeared to reach the public consciousness with the two episodes of the NPR show "This American Life" entitled "When Patents Attack!" and "When Patents Attack . . . Part Two!" As we reported at the time, these episodes concluded by focusing on a single case and extrapolated all of its "perceived problems to be indicative of the entire patent system, leaving the uninitiated to probably question why we even have a patent system in the first place." This was followed by even more one-sided "reporting" from the NPR "Planet Money" podcast (see "When NPR Podcasters Hit the Patent System") and John Oliver's HBO commentary/comedy show "Last Week Tonight." A response from defenders of the patent system (outside of the blogosphere) has been slow in coming. But a couple of new videos released by, of all places, the Federalist Society does just that by highlighting the plight of Josh Malone and his struggles defending his invention "Bunch O Balloons" (see here and here). Mr. Malone's company Tinnus Enterprises has been embroiled in multiple district court litigations and post-grant review proceedings before the PTAB. The latest chapter of that saga occurred on May 30, 2018, when the Federal Circuit reversed and remanded the Board's final written decision in PGR2015-00018.
For those readers unfamiliar with "Bunch O Balloons," (and who have not yet watched the above-referenced videos), they can be seen in the following figure next to an accused infringing device (taken from a prior Federal Circuit opinion on the subject patents):
These devices can fill multiple water balloons (or as they are known in the art "fluid-filled inflatable containers") in less time than it normally takes to fill and tie a single water balloon. Figure 1 from U.S. Patent 9,051,066 provides a more detailed explanation of the device:
These devices have been very popular, from the initial Kickstarter campaign to the alleged copying of the accused infringing devices.
The history of the PTAB proceedings and the concurrent district court litigation is extensive. In short, on the day the '066 patent issued, June 9, 2015, Tinnus filed suit against Telebrands and moved for a preliminary injunction. Telebrands filed its first PGR against a Tinnus patent (and the PGR that is the subject of this appeal) on June 22, 2015. On September 11, 2015, after the Board instituted the PGR, the Eastern District of Texas granted the injunction after determining that Telebrands had "not raised a substantial question concerning the validity of the '066 [p]atent based on the claim term 'substantially filled' being indefinite." That decision was affirmed by the Federal Circuit in a prior opinion on January 24, 2017. The month prior, the PTAB issued its final written decision finding the same claim term to be indefinite, thereby rendering all challenged claims to be unpatentable. Tinnus appealed both this determination and the Board's decision granting institution.
What the Patent Office Gives, the Patent Office Takes Away
This case highlights the frustration experienced by patent owners when their patents are challenged at the Patent Office in post-issuance proceedings. In essence, the same institution that granted the intellectual property right turns around and takes it away, often after substantial investment has been made in reliance on that grant. In this case, issued claim 1 read (with the relevant section highlighted):
1. An apparatus comprising:
a housing comprising an opening at a first end, and a plurality of holes extending through a common face of the housing at a second end;
a plurality of flexible hollow tubes, each hollow tube attached to the housing at a respective one of the holes at the second end of the housing;
a plurality of containers, each container removably attached to a respective one of the hollow tubes; and
a plurality of elastic fasteners, each elastic fastener clamping a respective one of the plurality of containers to a corresponding hollow tube, and each elastic fastener configured to provide a connecting force that is not less than a weight of one of the containers when substantially filled with water, and to automatically seal its respective one of the plurality of containers upon detaching the container from its corresponding hollow tube, such that shaking the hollow tubes in a state in which the containers are substantially filled with water overcomes the connecting force and causes the containers to detach from the hollow tubes thereby causing the elastic fasteners to automatically seal the containers, wherein the apparatus is configured to fill the containers substantially simultaneously with a fluid.
The claim term "substantially filled" was not defined in the specification, nor were the two words used in conjunction at any point in the disclosure. Instead, the term was added by the Examiner in an Examiner's Amendment that was included in the Notice of Allowability. And the focus of the Amendment was not on the "substantially filled" limitation, but rather was included in a description of the configuration and functional capability of the elastic fasteners, that was described by the Examiner as necessary to distinguish the prior art. As the Federal Circuit put it, it "presume[d] that an examiner would not introduce an indefinite term into a claim when he/she choose to amend the claim for the very purpose of putting the application in a condition for allowance."
Correspondingly, the Federal Circuit found that the patent was "not indefinite under the Nautilus standard because the claims, viewed in light of the specification and prosecution history, inform a person of ordinary skill about the scope of the invention with reasonable certainty." In addition, the Court found that "the claims, in the context of the specification, 'notify the public of what is within the protections of the patent, and what is not,'" thereby also satisfying the standard articulated in In re Packard. This conclusion was perhaps not surprising in view of the prior Federal Circuit decision in which the Court found "it difficult to believe that a [person of ordinary skill in the art, defined as] a person with an associate's degree in a science or engineering discipline[,] who has read the specification and relevant prosecution history would be unable to determine with reasonable certainty when a water balloon is 'substantially filled.'" As a result, the Court reversed and remanded for the Board to consider the obviousness allegations.
There were other interesting legal and procedural issues considered by the Court that were ultimately deferred to the future. And did we mention that this was one of the first (if not the first) PGR appeals considered by the Federal Circuit. Nevertheless, this case stands as a prime example of why patent owners are frustrated with the current system, and why the attack on the patent system has perhaps gone too far.
Tinnus Enterprises, LLC v. Telebrands Corp. (Fed. Cir. 2018)
Nonprecedential disposition
Panel: Circuit Judges O'Malley, Wallach, and Hughes
Opinion by Circuit Judge O'Malley
