Acoustic Technology, Inc. v. Itron Networked Solutions

949 F.3d 1366
Court of Appeals for the Federal Circuit·Decided February 13, 2020·No. 19-1061·Published·Cited by 10 cases

Opinion

United States Court of Appeals for the Federal Circuit

ACOUSTIC TECHNOLOGY, INC., Appellant

v.

ITRON NETWORKED SOLUTIONS, INC., Appellee

2019-1061

Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. IPR2017- 01024.

Decided: February 13, 2020

MICHELLE ARMOND, Armond Wilson LLP, Newport Beach, CA, argued for appellant. Also represented by DOUGLAS R. WILSON, Austin, TX.

ADAM R. BRAUSA, Durie Tangri LLP, San Francisco, CA, argued for appellee. Also represented by MARK A. LEMLEY.

Before MOORE, REYNA, and TARANTO, Circuit Judges.

2 ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED SOLUTIONS

REYNA, Circuit Judge.

On September 8, 2017, the Patent Trial and Appeal Board instituted inter partes review based on a petition filed by Silver Spring Networks, Inc. Nine days after institution , Silver Spring agreed to merge with Itron, Inc., an entity undisputedly time-barred under 35 U.S.C. § 315(b). Silver Spring and Itron completed the merger during the IPR proceeding. The Board later issued a final written decision and found the challenged claim unpatentable. On appeal, Acoustic asks that we vacate the Board’s final written decision on grounds that the inter partes review was time-barred due to Silver Spring’s and Itron’s merger-related activities. Acoustic also challenges the Board’s unpatentability findings. Because we find that Acoustic waived its time-bar argument and that substantial evidence supports the Board’s unpatentability findings, we affirm .

BACKGROUND I. ’841 Patent

Acoustic Technology, Inc. (“Acoustic”) owns U.S. Patent No. 6,509,841 (“the ’841 patent”), which relates to communications systems for utility providers to remotely monitor groups of utility meters, e.g., electricity meters. 1 According to Acoustic, the claimed invention was “an improvement upon prior art automated meter reading systems that used expensive and problematic radio frequency (RF)

1 The ’841 patent is a continuation of U.S. Patent Application No. 08/949,440, which issued as U.S. Patent No. 5,986,574. Acoustic filed a related appeal involving U.S. Patent No. 5,986,574 on the same day it filed this appeal . Acoustic Tech., Inc. v. Itron Networked Solutions, Inc., Case No. 2019-1059. We heard oral arguments in this case and Case No. 2019-1059 on December 4, 2019. We have issued opinions in both cases simultaneously.

ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED 3 SOLUTIONS

transmitters, or systems that relied on human meter-readers using handheld or vehicle-mounted short-range wireless devices to obtain meter readings when they were in a customer’s vicinity.” Appellant Br. 7. Central to this appeal are the “CDMA” and “relay” claim limitations.

In one embodiment, shown in Figure 1 below, a plurality of “servicing means 16” (e.g., on-site utility meters) communicate with a “relay means 14,” which in turn communicates with a “control means 12” (e.g., a remote computer at a utility facility). J.A. 94, Fig. 1; J.A. 98–99 at 2:43–3:19.

The relay can be “positioned at any desired location within the communication system,” including on a distribution pole or at a customer’s location. The relay can communicate with the control station via a Code-Division Multiple Access (“CDMA”) link. CDMA is a digital multiple access technique where all users are allowed to transmit simultaneously utilizing the same available frequency band.

Claim 8 of the ’841 patent, reproduced below, is the only claim at issue on appeal:

4 ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED SOLUTIONS

8. A system for remote two-way meter reading comprising:

a metering device comprising means for measuring usage and for transmitting data associated with said measured usage in response to receiving a read command ; a control for transmitting said read command to said metering device and for receiving said data associated with said measured usage transmitted from said metering device; and a relay for code-division multiple access (CDMA) communication between said metering device and said control, wherein said data associated with said measured usage and said read command is relayed between said control and metering device by being passed through said relay.

J.A. 100 at 8:24–39.

II. IPR Petition

In March 2010, Acoustic sued Itron Inc. (“Itron”) for infringement of the ’841 patent. Acoustic and Itron later agreed to settle the suit. As part of the settlement agreement , Acoustic licensed the ’841 patent to Itron. As a result of the lawsuit, Itron was time-barred from seeking inter partes review (“IPR”) of the ’841 patent as of March 26, 2011. See 35 U.S.C. § 315(b).

Six years after suing Itron, Acoustic sued Silver Spring Networks, Inc. (“Silver Spring”) for infringement of the ’841 patent. In response, on March 3, 2017, Silver Spring filed the IPR petition that gave rise to this appeal: IPR2017- 01024 (“the petition”).

ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED 5 SOLUTIONS

Several weeks before Silver Spring filed the petition, Silver Spring and Itron began privately discussing “a potential business combination.” J.A. 6556. The first contact occurred on February 12, 2017, when a representative of Itron phoned a Silver Spring board member to express Itron’s interest in a potential merger. The next day, Itron’s CEO continued the discussion with a director of Silver Spring. One week later, on February 20, 2017, Itron’s CEO requested a meeting with Silver Spring to discuss “a potential acquisition.” J.A. 6556.

Silver Spring and Itron continued to discuss a potential merger after Silver Spring filed the petition. Representatives from each company met on March 10, 2017, one week after Silver Spring filed the petition, and again on April 12, 2017.

The Board instituted inter partes review on September 8, 2017. Nine days later, on September 17, 2017, Silver Spring and Itron agreed to merge. Itron publicly announced the agreement the next day. Silver Spring asserts that, up until the day the parties reached an agreement, Silver Spring was exploring potential business relationships with more than a dozen other companies.

Silver Spring and Itron completed the merger on January 5, 2018, while the inter partes review proceeding remained underway. Acoustic learned of the merger three days later. On January 17, 2018, Silver Spring filed updated mandatory notices that listed Itron as a real-party- in-interest.

The Board entered a final written decision on August 21, 2018, nearly a year after Silver Spring and Itron agreed to merge, and seven months after they completed the merger. The Board’s final written decision found claim 8 unpatentable on all three asserted grounds: anticipated by NetComm; anticipated by Gastouniotis; and obvious in view of Nelson and Roach. Acoustic never raised a time- bar challenge to the Board.

6 ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED SOLUTIONS

Acoustic appeals the Board’s final written decision. We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).

DISCUSSION

Acoustic raises two issues on appeal. First, Acoustic asserts that the Board’s final written decision should be vacated because the underlying IPR proceeding is time- barred under 35 U.S.C. § 315(b). Second, Acoustic challenges the Board’s unpatentability factual findings as not supported by substantial evidence.

I. Time-Bar

Acoustic argues that we must vacate the Board’s final written decision because the inter partes review was time- barred under 35 U.S.C. § 315(b). Section 315(b) provides:

An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.

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Acoustic Technology, Inc. v. Itron Networked Solutions, 949 F.3d 1366 (Fed. Cir. 2020).

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