Fitbit Inc. v. Valencell Inc.: Joint Parties in IPR Proceeding

Published 07/20/2020 by CIONCA IP Team

Introduction

On July 8^th 2020, the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) made a decision in Fitbit Inc. v. Valencell Inc. Valencell Inc. (“Valencell”) is the owner of U.S Patent No. 8,923,941 (“the ‘941 patent”) titled “Methods and Apparatus for Generating Data Output Containing Physiological and Motion-Related Information”.

The ‘941 patent “concerns systems for obtaining and monitoring information such as blood oxygen levels, heart rate, and physical activity.” Previously, Apple Inc. (“Apple”) petitioned for an inter partes review (“IPR”) of Claims 1-13 of the ‘941 patent with the U.S Patent Trial and Appeal Board (“the Board”), which was granted in part, instituting a review of Claims 1, 2, and 6-13. Fitbit Inc. (“Fitbit”) then filed their own IPR petition for Claims 1, 2, and 6-13. This action prompted Fitbit to move for a joinder with Apple’s IPR. The Board granted Fitbit’s petition as well as granting the motion for the joinder. After the Board’s decision, before the Final Written Decision, there was a Supreme Court decision in SAS Institute Inc. v. Iancu, 138 S Ct. 1348 (2018), which concluded that the America Invents Act required that all patent claims challenged in a IPR petition must be reviewed by the Board if the petition is granted. This Supreme Court decision was a deciding factor on the Board’s reinstitution of the Apple/Fitbit IPR to add Claims 3-5 of the ‘941 patent.

The Board conducted further proceedings as to Claims 3–5 and issued a Final Written Decision that held Claims 1, 2, and 6–13 unpatentable, and held Claims 3–5 not unpatentable. Following the decision, Apple withdrew from the proceeding. Fitbit appealed the Board’s decision on Claims 3–5. The Federal Circuit had jurisdiction.

Decision

To begin, the validity of the joinder appeal was questioned. Valencell argued that Fitbit had no room to appeal because the IPR joinder with Apple did not request Claims 3-5. Valencell also stated that Fitbit did not change their petition after the court ruling, and Fitbit did not submit separate brief for Claims 3-5. Fitbit countered by agreeing that they did not change their petition, but Valencell did not object to the new petition. Fitbit also defended their petition by citing that due to the single IPR with Apple, Fitbit did not need to submit a brief about Claims 3-5. The Federal Circuit agreed with Fitbit, and that the situation and circumstances do not override Fitbit’s statutory right of appeal. Valencell countered by stating that the petition came over a year after Valencell filed their suit, therefore claiming Fitbit was outside of the conformity of statute. The Federal Circuit concluded that Fitbit’s rights as a joined party applies to the entirety of the proceeding and includes the right of appeal.

Second, we review the appeal for Claims 3-5. In this appeal, Fitbit argues “‘API’ is recognized in this field as an acronym for ‘application programming interface’—as experts for both sides agreed. Fitbit argues that the well-known meaning of ‘API’ and its consistent usage accompanying ‘application-specific interface’ in the ’941 patent demonstrate the patentee’s intended broadermeaning of ‘application programming interface” (6). Valencell disagreed, stating that Claim 3 is narrower and more precise, and therefore, not unpatentable. “The Board concluded that regarding Claim 3, the Claim is narrower as stated, and the claim construction is correct. The Board cites their reasoning as ‘application-specific interface (API)’ is directed to a ‘particular application,’ rather than broadly to different applications” (9). The Federal Circuit sustains the Board’s decision on claim construction but notes that the Board did not review the patentability of Claim 3 on grounds of obviousness. Due to this oversee, Fitbit criticized the Board for holding Claim 3 as not unpatentable but neglecting to view Claim 3 on grounds of obviousness before the Final Written Decision. The Federal Circuit “affirm[s] the Board’s claim construction, vacate[s] the Board’s decision that claim 3 is not unpatentable, and remand[s] for determination of patentability in light of the cited references” (11).

The IPR petition also challenged the validity of Claims 4-5 on grounds of obviousness. “The Board held Claims 4 and 5 not unpatentable in its Final Written Decision, on the ground that the Board could not determine the meaning of the Claims because the term ‘the application’ lacked antecedent basis” (10). The Board did not cite prior art references due to it being “speculative” (12). The Board initially ruled that Fitbit did not prove obviousness for Claims 4-5, therefore deeming them not unpatentable. Herein lies an error that both Fitbit and Valencell acknowledge. The error exists due to the Claims being renumbered after the removal of Claim 2 from Valencell’s patent. “Fitbit summarizes; ‘As originally drafted, claim 5 (which is now claim 4) recited that it depended from claim 4 (which is now claim 3). Appx262–263 (original claim listing). As explain[ed] . . . Valencell inadvertently changed claim 4’s dependency to ‘claim 1’ when it amended other Claims of the patent application” (13). The Federal Circuit “concluded that the Agency’s treatment of this error as the basis of a Final Written Decision of patentability is not a reasonable resolution and does not comport with the Agency’s assignment to resolve patentability issues. The Board’s Final Witten Decision on the ground of ‘absence of antecedent’ basis is vacated. On remand the Board shall determine patentability of corrected Claims 4 and 5 on the asserted grounds of obviousness” (14).

The Federal Circuit settled that Fitbit as a joinder had the right to appeal the Board’s decision on Claims 3-5. The Federal Circuit concludes that the Board erred in its ruling of Claims 3-5. The Federal Circuit vacates the decision that Claims 3-5 are not unpatentable and remand for determination of the merits of patentability on the grounds of evidence presented in the petition.

Conclusion

This decision determines that a joint party does have the right to appeal the Board’s decision, regardless of the joint party’s IPR petition. Furthermore, the accuracy of each claim as presented is crucial in determining the patentability of an invention.

Full Fitbit Inc. v Valencell Inc. decision can be read here: www.cafc.uscourts.gov/sites/default/files/opinions-orders/19-1048.OPINION.7-8-2020_1615429.pdf

Disclaimer: The views and opinions expressed throughout this blog are the views and opinions of the individual author(s) and/or contributor(s) and do not necessarily reflect the views and opinions of our firm, CIONCA IP Law. P.C.

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