by Eviatar Aron, Patent Attorney

Recently, the US Court of Appeals for the Federal Circuit issued a decision in an ongoing dispute between CUPP Computing As (“CUPP”) and Trend Micro Inc. (“Trend Micro”) (Cupp Computing v. Trend Micro Inc., CAFC, November 16, 2022), affirming a previous finding that CUPP’s asserted claims were obvious and therefore invalid. Within a relatively standard decision, the Federal Circuit provided a reminder to all that the actions of parties during Inter Partes Review proceedings at the USPTO can have long lasting effects on the outcome of future related litigation. 

The case before the Federal Circuit involved US Patent nos. 8,631,488, 9,106,683, 9,843,595 (“the Patents”), which are owned by CUPP, and all of which recite a “security system processor” as a limitation in every independent claim.

In March 2019, Trend Micro petitioned the Patent Trial Appeal Board (the “Board” or “PTAB”) for Inter Partes Review (“IPR”), arguing that the claims of the Patents are unpatentable as being obvious in view of two prior art references: US Patent No. 7,818,803 (“Gordon”) and US Patent Application Publication no. 2010/0218012 (“Joseph”). During the proceedings, the Board determined that the claims in dispute were indeed obvious in view of Gordon and Joseph. 

In its appeal, CUPP presented three arguments: first, that the claims were not obvious because the security system processor had to “be separate and remote from the mobile device”. Second, CUPP argued that it “disclaimed a non-remote security processor during the initial examination of one of the Patents at issue and therefore the Board’s construction is erroneous”. Finally, CUPP contended that the Board lacked substantial evidence to find the challenged claims in the US 9,843,595 Patent (“the ‘595 Patent”) obvious.

In its decision, the Federal Circuit affirmed the Board’s conclusion that Gordon and Joseph rendered the claims obvious. CUPP argued that the claimed “security system processor” must be remote from a “mobile device processor” in order for the security system processor to transmit a wake signal to the mobile device processor. However, the Court rejected CUPP’s argument. The Court determined that all that was required for the claims to be obvious was that the two processors be different, but they do not have to be remote from one another. To emphasize this matter, the Court explained that just like an individual user can send an e-mail to him/herself, the security system processor can send a wake up message even when it is within the mobile device. 

The Disclaimer Argument (aka the main takeway from this Case)

Addressing the disclaimer argument, the Court affirmed the Board’s decision that the statements presented by CUPP during the original prosecution were far from clear and unmistakable. CUPP’s statements were open to several reasonable interpretations that were contrary to the claims construction. Furthermore, the Court held that a previous non-precedential decision of the Court in VirnetX, Inc vs. Mangrove Partners Fund, Ltd., would be considered precedential from this decision onwards.  Specifically, the arguments presented during an IPR did not qualify as a disclaimer for the purposes of claim construction. Therefore, the Court explained that while a disclaimer made during an IPR proceeding is binding on subsequent proceedings, the Board was not required to accept arguments presented by the patent owner as disclaimers “when deciding the merits of those arguments”. 

What does this mean for Disclaimers? 

Expanding on this position, the Court explained that the application of disclaimers to a proceeding in which they are made, as was suggested by CUPP, is rife with problems. IPR proceedings are more similar to district court litigation than they are to initial examination, and it is well established that disclaimers in litigation are not binding in the proceeding in which they are made. Furthermore, had the Court accepted CUPP’s proposal, it would effectively render IPR claim amendments unnecessary, since patent owners would be free to change the scope of their claims retrospectively with no regard to the protections provided by the IPR claim amendment process. Therefore, the Court concluded that a disclaimer by the patent owner cannot be used to replace the IPR claim amendment process. 

Finally, the Court rejected CUPP’s third argument, that the Board lacked substantial evidence to support its conclusion of obviousness. CUPP contended that the “security agent” limitation recited in the claims of the ’595 Patent was not disclosed by either reference. However, like the “security agent” in the ‘595 Patent that performs security services upon a wake-up call from another entity, a host agent described in Joseph and Gordon performed security services after being woken up by a security module. Because the findings of the Board were supported by substantial evidence, the Court affirmed the conclusion of the Board, that the challenged claims were obvious.

So what’s the bottom line?

An important takeaway from this case relates to the disclaimer argument raised and rejected by the Court, and is as follows:

In an IPR proceeding, an attempt by the patentee to disclaim a claim or a portion thereof during a proceeding, such as an IPR, may be rejected by the Board, as above. However, and despite the fact that such proceedings (i.e. an IPR and likely also Post-Grant Review) are considered to be administrative in nature, they are nonetheless considered by the Federal Circuit as quasi-litigation, with the similar far-reaching effects of litigation estoppel.

Therefore, once such disclaimer is made by the Patentee, regardless of the forum, it cannot then be walked back. Ever. Rather, once a patentee has submitted a disclaimer, it is committed to that position and cannot change its position when it finds it convenient to do so.

Caveat emptor!

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