Federal Circuit Says Corrected Inventorship Came Too Late to Revisit PTAB Decisions

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Monday issued a precedential decision holding that the principle of forfeiture can apply even where an intervening  correction of inventorship was granted that would have directly affected the outcome of a Patent Trial and Appeal Board (PTAB) proceeding. The opinion was authored by Judge Cunningham.

Implicit, LLC appealed a PTAB final written decision (FWD) on remand from the CAFC, which directed the PTAB to address what impact the certificates of correction Implicit had obtained from the U.S. Patent and Trademark Office (USPTO) adding an inventor to its two patents would have on the FWDs issued in the inter partes reviews (IPRs) brought against it by Sonos. Sonos had challenged U.S. Patent Nos. 7,391,791 and 8,942,252, both titled “Method and System Synchronization of Content Rendering,” arguing unpatentability under Sections 102 and 103. Both patents originally listed only Edward Balassanian and Scott Bradley as co-inventors, and Sonos relied on a prior art reference called “Janevski” (U.S. Patent No. 7,269,338), which has a filing date of December 11, 2001. Implicit argued that Balassanian and Bradley “conceived of the inventions and worked with engineer Guy Carpenter for implementation prior to December 11, 2001” and that therefore Janevski could not be prior art because “the work of Mr. Carpenter inured to the inventors’ benefit and the subject matter of the claims was conceived and actually reduced to practice prior to Janevski’s filing date.”

The Board ultimately determined that all of the challenged claims were unpatentable, however, finding that Implicit’s “evidence was insufficient to establish the conception of the invention and the communication of the invention to Mr. Carpenter such that any reduction to practice could inure to the inventors’ benefit.” Those decisions were issued in September 2019 and the CAFC’s decision in Arthrex v. Smith & Nephew, Inc. was issued in November 2019, after which Implicit appealed on several grounds, including Appointment Clause issues. The CAFC vacated the PTAB’s decisions and remanded for proceedings consistent with Arthrex, but then the Supreme Court decided United States v. Arthrex in 2021, and the CAFC thus remanded the case “for the limited purpose of allowing Implicit to request rehearing and review by the Director of the final written decisions in light of the Supreme Court’s Arthrex decision.” The requests for Director Review were denied.

In the meantime, Implicit asked the USPTO to correct the inventorship of both patents to add Carpenter as an inventor. The certificates of correction issued in August 2022. The CAFC then remanded to the Board “for the sole purpose of having the [Board] issue an order addressing what, if any, impact the certificates of correction would have on the final written decisions in these cases.” The Board then determined in September 2023 that “while 35 U.S.C. § 256 is generally retroactive, ‘judicial estoppel and waiver appl[ied] under the specific circumstances of these cases.’” Therefore, Implicit could not rely on the certificates of correction as a basis to revisit the decisions.

On appeal, the CAFC explained in its precedential decision today that “forfeiture can apply notwithstanding the retroactive effect of 35 U.S.C. § 256 and that the Board did not abuse its discretion in applying forfeiture to the circumstances of this case.” Implicit argued that Section 256 does not impose time limits on inventorship corrections, “and thus, forfeiture is inapplicable to section 256 corrections of inventorship.” But the CAFC agreed with the USPTO and Sonos that forfeiture could apply to Implicit’s antedating argument, irrespective of the correction of inventorship, chiefly because “Implicit had the opportunity to seek correction of inventorship and assert its change of inventorship theory earlier in this proceeding, and such a change could ‘directly affect the trial and outcome of the proceeding.’” That lack of “diligent action” justified applying forfeiture here, said the CAFC.

Implicit also argued that the Board abused its discretion in finding that Implicit had forfeited its right to bring the antedating argument as the correction of inventorship was timely filed, when proceedings were still ongoing and before Director Review. But Sonos and the USPTO claimed that “Implicit’s failure to raise its new antedating argument until years after the final written decisions and without sufficient justification for the delay constituted forfeiture.” The CAFC sided with Sonos and the USPTO, noting the Board’s argument that Implicit had failed to argue any other theories of inventorship in the first instance and only sought the correction of inventorship after the FWDs were issued. “Implicit has not adequately explained why it could not have made any arguments related to Mr. Carpenter in the first instance or more diligently sought correction of inventorship,” wrote the court.

While Implicit countered that “1) it believed its initial position was correct; and (2) Mr. Carpenter resided in Australia,” the CAFC said that “Implicit’s first response raises concerns of sandbagging, where Implicit could ‘suggest[] or permit[], for strategic reasons, that the [Board] pursue a certain course, and later—if the outcome is unfavorable—claim[] that the course followed was reversible error.’” And as to the second argument, Implicit never argued it before the Board and therefore it was forfeited.

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Author: billperry