By Siew Chong
A recent Federal Circuit decision in The Chamberlain Group, Inc v. One World Technologies, Inc. (Fed. Cir. December 17, 2019), is notable in that it clarifies what a patent owner may permissibly raise for the first time at an oral hearing. Despite acknowledging that Chamberlain argued a claim limitation for the first time at oral argument before the Patent Trial and Appeal Board (PTAB), the Federal Circuit panel still found that the argument acceptable because the new citation merely clarified Chamberlain’s previously articulated position.

Nonetheless, the Federal Circuit panel affirmed a Patent Trial and Appeal Board’s final written decision that found claims 8-15 of U.S. Patent No. 7,196,611 (the ’611 patent) – directed to garage door and gate operator systems – unpatentable as anticipated by U.S. Patent No. 4,638,422 (Schindler). The challenged claims were directed to methods of “teaching” barrier movement systems, e.g., garage door systems, to set various limits for operating the systems. One World Technologies, Inc. successfully petitioned for the inter partes review of claims 8-15 in the ’611 patent for being anticipated by Schindler, and claims 23 and 25 for being obvious over the combination of Schindler and “Liftmaster,” an owner’s manual for a door operator system. One World Technologies asserted that Schindler disclosed a method that sets the upper and lower limits for door positions, and thus anticipates the challenged claims. Chamberlain disagreed, and stated in its patent owner’s response that contrary to Schindler, which taught programming a “single” activity at a time, the ’611 patent was directed to a system that required identifying and guiding “multiple activities.”

At the oral hearing, Chamberlain argued for the first time that the claim limitation for the final step of the learning mode, “responsive to the first and second identifying step,” required identifying multiple activities before transmitting any guidance responsive to the identifying step. That limitation, according to Chamberlain, was not anticipated by Schindler, which disclosed transmitting a guidance signal after identifying a single activity. In its final written decision, the Board found that Chamberlain waived this argument because it was raised for the first time at the oral hearing. The Board, however, went on to address the merits of the argument and ultimately found it unpersuasive.

In its appeal, Chamberlain asserted that the Board’s finding of waiver was erroneous because Chamberlain’s argument was responsive to new arguments made in One World’s petitioner reply, and the argument was merely a clarification of its position, which had been consistent throughout the IPR. The Federal Circuit panel agreed with Chamberlain, explaining Federal Circuit case law allows parties to “elaborate” their arguments on previously raised issues.   The panel found that Chamberlain did not raise new issues or evidence, but instead tracked its previous argument and “merely pointed to different portions of the claim language” to clarify its previously stated position in response to One World’s reply.

Although the panel sided with Chamberlain on this point, it ultimately affirmed the Board’s final decision that Chamberlain’s argument was unpersuasive . Nevertheless, this panel decision is notable in that it clarifies the PTO rule prohibiting presentation of new evidence or arguments during the oral argument. Patent Office Trial Practice Guide, 77 Fed. Reg. 46,756, 48768 (Aug. 14, 2012). See also Patent Trial and Appeal Board Consolidated Trial Practice Guide, pp. 85-86 (November 2019) (“During an oral hearing, a party may rely upon . . . evidence that has been previously submitted in the proceeding, but may only present arguments relied upon in the papers previously submitted.”)

Even though Chamberlain lost, patent owners in general can take some comfort in the Federal Circuit panel’s willingness to allow patent owners some latitude in clarifying their positions at the oral hearing. The Chamberlain decision also appears to be consistent with an earlier pro-petitioner Federal Circuit decision affirming a Board decision that found prima facie obviousness based on a figure in a reference, even though the petitioner failed to make a clear or direct reference to the claim limitation or the figure. In re NuVasive, Inc., 841 F.3d 966, 971-972 (Fed. Cir. 2016). In the NuVasive case, the Federal Circuit stated the petitioner’s citation to a text discussing the figure in addition to a reference to the claim limitation was “minimally sufficient” and should have put the patent owner on notice to address that claim limitation and that figure.

The Chamberlain decision however, appears inconsistent with another Federal Circuit decision in Dell Inc., v. Acceleron, LLC (818 F.3d 1293, 1301 (Fed. Cir. 2016), where the panel found that the federal Administrative Procedures Act (APA) requires that all parties to administrative trials be given an opportunity for submission and consideration of facts and law, as well as hearing and decision on notice. 5 U.S.C. § 554 (b)(3). In Dell, the petitioner (Dell) asserted in its petition that a challenged claimed limitation, “caddies,” was anticipated by the articulating door (feature 262) in Figure 12 of a reference (Hipp). Later, Dell asserted in its petitioner’s reply that mounting mechanisms (feature 278) of Hipp’s Figure 12 was a caddy. But by the oral argument, Dell argued for the first time that a structure for supporting a power supply (feature 280) of Hipp’s Figure 12 represented a caddy. The Board held that the challenged claim was anticipated by Hipp; specifically, slides lying beneath the power supply (feature 280) met the caddy limitation.

Finding that the patent owner had not had the opportunity to respond to the assertion that the Hipp Figure 12 “slides” met the caddies limitation, the Federal Circuit vacated the Board’s cancellation of the claim and remanded on the issue of anticipation.

The Chamberlain panel’s decision distinguished the Dell decision as pertaining to a new argument. The distinction between a new argument and a clarification of an original argument remains murky, as both decisions acknowledge that new features were introduced at oral argument. While we wait for future decisions to shed light on the issue, both petitioners and patent owners should remain wary at oral hearings about straying too far from the positions they have presented in their written papers.