CAFC Affirms PTAB Invalidation of MIT’s Fuel Management Patents in Dispute with Ford

On December 23, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a precedential decision in Ethanol Boosting Systems, LLC v. Ford Motor Company, affirming the Patent Trial and Appeal Board’s (PTAB) invalidation of three patents owned by the Massachusetts Institute of Technology (MIT) and licensed to Ethanol Boosting Systems (EBS). The opinion was authored by Judge Chen and joined by Judges Clevenger and Hughes.

The case centered on U.S. Patent Nos. 10,619,580, 10,781,760, and 9,708,965, which describe a fuel management system for internal combustion engines that addresses “engine knock” by injecting an “anti-knock agent” directly into the engine cylinder to cause “evaporative cooling.” MIT owned the patents and had exclusively licensed them to EBS.

The patented system contains two injection mechanisms, direct injection and port injection. In direct injection, a valve sprays fuel directly into the cylinder, whereas in port injection, a valve sprays fuel into a passageway adjacent to the cylinder, where it mixes with air before entering the cylinder. At lower torque values, only the port injector operates, but at higher torque values, both injection mechanisms are utilized. As torque increases, the direct injector supplies an increasingly greater percentage of the fuel.

The dispute began in October 2020, when EBS sued Ford for infringement, prompting Ford to petition the PTAB for inter partes review (IPR) of patents ‘580, ‘760, and ‘965. The PTAB initially denied Ford’s petitions on July 2, 2021, because it construed the disputed terms to require a fuel different from that used in the port injector, and, under that construction, Ford’s prior art challenge fell short. Ford then petitioned for rehearing, explaining that EBS had appealed a related district court construction and urging the PTAB to reconsider its denial of institution once the Federal Circuit issued a decision in that appeal. The PTAB granted Ford’s rehearing request on November 21, 2022, a few months after the Federal Circuit issued its decision in EBS I. In its final written decisions, the PTAB found the challenged claims of patents ‘580, ‘760, and ‘965 unpatentable as obvious.

On appeal to the Federal Circuit, EBS contended that the PTAB lacked the authority to pause its decision on Ford’s rehearing request for fifteen months while it awaited the outcome of the EBS I appeal. The CAFC rejected this argument, citing 35 U.S.C. § 314(d), which bars judicial review of the Director’s decision to institute an IPR. The court found that the PTAB had “sound reasons” for awaiting the EBS I decision because it would address the central claim term at issue. The court concluded this delay did not rise to the level of a “shenanigan” that would permit review under the Cuozzo Speed Techs. v. Com. for Intell. Prop. precedent.

EBS challenged the PTAB’s claim construction of the disputed terms, collectively referred to by the parties as the “DI Fuel terms.” In the district court litigation, the judge construed the terms to require both a fuel for direct injection that differed from the fuel used for port injection and an anti-knock agent other than gasoline. In the first appeal, EBS only challenged the first part of that construction. After the Federal Circuit agreed with EBS and vacated that part of the construction, EBS argued before the PTAB that the second, unappealed part of the district court’s construction had become “controlling law.” The Federal Circuit disagreed, explaining that legal doctrines such as the mandate rule and the law of the case do not apply across different proceedings.

The Federal Circuit affirmed the PTAB’s decision to apply the plain and ordinary meaning to the term, which allowed for gasoline to be used as the anti-knock agent. The court noted that this construction was supported by the patent’s own specification, which “teaches a gasoline-only embodiment.” The court stated that “[w]e normally do not interpret claim terms in a way that excludes embodiments disclosed in the specification,” adding that such exclusion only occurs “amidst clear disclaimer or disavowal.” The court found that EBS offered no persuasive evidence of disclaimer and also noted that EBS had previously argued in the EBS I appeal that the patents teach that “any fuel has a knock-suppressive effect,” including gasoline.

Furthermore, EBS contested the PTAB’s factual findings on obviousness, arguing the Board’s finding of a motivation to combine the prior art references lacked substantial evidence. The challenges focused on two combinations of prior art, one involving references known as Schray and Miura, and another involving Rubbert, Yuushiro, and Bosch. The Federal Circuit found that substantial evidence supported the PTAB’s conclusions. The court determined that the PTAB had agreed with Ford’s argument that a person of ordinary skill in the art would have been motivated to combine the references to gain additional benefits, such as improved mixing and stable combustion. The court also rejected EBS’s argument that the PTAB had deviated from the theories presented in Ford’s initial petition.

Ultimately, the Federal Circuit found all of EBS’s arguments unpersuasive and affirmed the PTAB’s decisions in their entirety.

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Author: Devon