Uusi, LLC v. United States

133 Fed. Cl. 263, 2017 U.S. Claims LEXIS 858, 2017 WL 3138444
United States Court of Federal Claims·Decided July 24, 2017·No. 12-216C·Published·Cited by 1 cases

Opinion

OPINION AND ORDER DENYING THIRD-PARTY DEFENDANT’S MOTION FOR LEAVE TO SERVE A SUPPLEMENTAL ANSWER

WILLIAMS, Judge.

This matter comes before the Court on Third-Party Defendant AM General, LLC’s (“AM General”) motion for leave to supplement its answer to assert the affirmative defense of inequitable conduct. In its proposed supplemental answer, AM General alleges that the patentee UUSI and its counsel before the Patent .Trial and Appeal Board (“PTAB”) misrepresented the expiration date of two claims of the patent at issue in filings during the institution stage of inter partes review. AM General contends that such misrepresentations were “material” “unmistakably false” “affirmative acts of egregious misconduct” made with the “specific intent to mislead and deceive the Board.” Mot. to Amend Ex. A, at ¶¶ 76-89.

Plaintiffs, respond that AM General’s proposed supplemental answer would be futile and fails to meet the heightened pleading requirement for inequitable conduct required by Rule 9(b) of the Rules of the Court of Federal Claims. Pls.’ Opp’n 1. Defendant has not stated a position on AM General’s motion and does not itself assert the defense of inequitable conduct. See Def.’s Answer 12-13.

The Court held oral argument on this motion on May 22, 2017, 1 and Plaintiffs and AM General both filed supplemental briefs on June 1, 2017. This Court orally denied AM General’s motion on July 18, 2017, finding that the alleged misrepresentations were not material and the amendment would be futile. This order confirms and explains that ruling.

Background 2

Inter Partes Review

On May 18, 2016, over two years after filing its Answer to Plaintiffs’ Amended Complaint in this action, Third-Party Defendant AM General filed a petition with the PTAB seeking inter partes review of U.S. Patent No. 6,148,258 (“the ’258 Patent”).

Inter partes review (“IPR”), is a Patent and Trademark Office (“PTO”) process permitting third parties to challenge the validity of an issued patent as either anticipated or obvious. 35 U.S.C. §§ 102-03, 311 (2016). The first part of this procedure—the institution ■stage—begins when a third party files a petition for review setting forth the grounds for the challenged patent’s invalidity and advocating constructions of contested claim *267 terms. The patent owner may file a preliminary response stating why the PTAB should not grant the petition. If the PTAB finds that there is a reasonable likelihood that the petitioner will prevail with respect to at least one of the claims challenged in the petition, it issues an “Institution Decision” that: (i) authorizes inter partes review, (ii) preliminarily determines the proper construction of certain contested claim terms, and (iii) identifies which claims of the patent will be reviewed for unpatentability. In the second stage of IPR—the “trial stage”—the PTAB hears evidence on patentability and, ultimately, “issue[s] a final written decision with respect to the patentability of any patent claim challenged by the petitioner and any new claim added ....’’Id. at § 318(a).

In its petition for inter partes review, AM General asserted that the ’258 Patent was expired, and that the claim terms should be construed pursuant to the principles outlined in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc). Petition 12 (P.T.A.B. May 18, 2016). On August 19, 2016, in its Patent Owner’s Preliminary Response, Plaintiff UUSI countered that the ’258 Patent was a continuation-in-part of U.S. Patent No. 6,009,369 and “is only expired to the extent that any claims do not add new matter.” Patent Owner’s Prelim. Resp. at 26. (P.T.A.B. Aug. 19, 2016). UUSI continued that a claim term that does not add new matter should be construed according to Phillips, while a claim term that adds new matter should be construed under the broadest reasonable interpretation (“BRI”) standard. Id. However, UUSI represented that its proposed claim construction would meet either standard. Specifically, UUSI stated:

UUSI does not concede, as Petitioner avers (see Petition at 12) that the claims at issue, which are continuation in part claims, have expired. However, for purposes of this matter, the constructions being proposed by UUSI would be supportable under either the Phillips or BRI standard.

Id. at 26 n.2.

On October 13, 2016, in its Claim Construction Order, the PTAB sought clarification from UUSI as to the scope of claims that had not expired, directing UUSI to identify the expiration date and “submit a paper that identifies which of the challenged claims contain new matter,” and state “where support for that new matter is provided in the Specification.” Claim Constr. Order 3 (P.T.A.B. Oct. 13, 2016).

UUSI responded:

Of the challenged claims in the ’258 Patent, claims 17-18 recite new matter that is not disclosed in the related parent applications. Claim 17 depends from claim 1 and recites as a further claim limitation that the apparatus of claim 1 additionally comprises a “remote temperature sensor positoned [sic] outside the housing for monitoring engine temperature.” Claim 18 depends from claim 17 and therefore also includes this additional limitation.
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Accordingly, the specification provides ample. support for the new matter recited in claims 17 and 18. Further, support for the additional limitations of claim 18, which depends on claim 17 and lists specific types of temperature sensors, is found at column 7:3-15.
B. Expiration Date of Claims Containing New Matter
The ’258 Patent was filed on May 12,1998. Thus, the expiration date for claims 17-18 is May 12, 2018, whereas the remaining challenged claims are expired and should be construed under the Phillips standard.

Patent Owner’s Resp. to Claim Constr. Order 1-3 (P.T.A.B. Oct. 20, 2016) (internal citations omitted).

AM General took issue with UUSI’s response, and, on October 27, 2016, filed a reply stating that UUSI’s claimed expiration date of May 12, 2018, was “contrary to the undisputed facts, misleading and frivolous,” and filed an exhibit indicating that “Patent expired on 11/14/2012 due to non-payment of maintenance fee.” Pet’r’s Reply to Claim Constr. Order 1-2, Ex. 1013 (P.T.A.B. Oct. 27, 2016) (internal footnote omitted). In this reply AM General stated without elaboration that “[t]he Board’s rules permit sanctions against a party for ‘advancing a misleading *268 or frivolous argument or request for relief.’ ” Id. at 2 n.2 (quoting 37 C.F.R. § 42.12(a)(2)).

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Uusi, LLC v. United States, 133 Fed. Cl. 263, 2017 U.S. Claims LEXIS 858, 2017 WL 3138444 (uscfc 2017).

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