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Federal Circuit’s LG Decision Leaves Patent Error Law Murky

July 13, 2022, 9:10 AM

A split Federal Circuit panel’s refusal to shift the standard for when errors in patents are considered apparent keeps in place a muddled, fact-dependent test that can make it difficult for attorneys to know when to mount challenges.

An industry expert finding a transcription mistake in a decades-old patent—through a process that included translating a Japanese application—shows that an inaccuracy doesn’t need to be immediately clear to an expert in the field to render the patent unusable to show a later patent to be invalid as obvious, a two-judge majority from the US Court of Appeals for the Federal Circuit ruled Monday.

The ruling, which shot down LG’s appeal of an administrative tribunal decision, centers on the question of whether an industry expert—referred to in patent law as a person having ordinary skill in the art—with full knowledge of the related inventions, would have found that the error was clear.

The holding provides some clarity, but leaves in place a standard based on each case’s specific facts rather than specific benchmarks, attorneys said.

“Would I prefer a more defined standard? Yes. Would the world prefer a more defined standard? Yes,” said Amy Landers, a law professor at Drexel University Thomas R. Kline School of Law. “It’s a very fact-specific analysis, which makes it tough for in-house counsel or lawyers who are trying to figure out if they should challenge the patent or not. It makes it very difficult for them to know what the next case should look like for a successful challenge.”

Newman’s Dissent

Clear mistakes in patents can’t be used in litigation that another invention would’ve been obvious. The standard was set in 1970 by the Federal Circuit’s predecessor, the US Court of Customs and Patent Appeals, and the Federal Circuit adopted all of those previous decisions as binding precedent.

In In Re Yale, the CCPA ruled that if a person skilled in the art would’ve found the inaccuracy to be apparent, then claims that another patent is obvious based on that error should fail.

The Federal Circuit’s new ruling went beyond the Yale precedent to include mistakes that aren’t consider to be “typographical or similar in nature,” Judge Pauline Newman wrote in a partial dissent.

The majority upheld ImmerVision Inc.'s patent after ImmerVision’s expert spent 10 to 12 hours finding a transcription error in a previous invention’s table on which LG Electronics Inc. based its invalidity arguments. The ruling affirmed the Patent Trial and Appeal Board’s similar finding. An error can’t be considered obvious as Yale requires, Newman wrote, if it takes so much effort to figure out, such as translating a Japanese priority application. She warned that the precedent may be “unsettling long-standing law.”

The three judges are “going back and forth” on how they view the factual record of the case, Landers said.

“It leaves people without much guidance, because when you have a spongy legal standard, like whether this hypothetical person would detect the error or not, that doesn’t give a lot of certainty to those who are trying to write patents or get patents issued or challenge patents,” she said. “It’s almost like going back and forth arguing about whether the light was red, yellow, or green, but it doesn’t really guide. It’s so factually specific.”

Newman’s point makes “intuitive sense,” said attorney Michael S. Kwun of Kwun Bhansali Lazarus LLP, but an expert would have been assumed to know all of the relevant inventions and applications, including the Japanese application used to find the copy-and-paste error.

“I’m not sure that today’s decision creates the problems that Judge Newman points out,” Kwun said in an email. “Judge Newman seems to be worried about the need to ‘search for a foreign document in a foreign language’ to determine whether there is an error, and particularly on the possibility that an error might not be apparent ‘on its face.’”

The dissent shows the case could’ve gone either way, said Scott Adams, an intellectual property attorney at Davis Wright Tremaine LLP. There’s a high evidentiary burden for the Federal Circuit to overturn the PTAB, so if the tribunal had come to a different conclusion, then the appeals court may have as well, he said.

The majority’s view is more pragmatic, Adams said, as it clarifies that errors don’t need to be immediately recognizable, which would be a difficult standard to meet.

“Practically speaking, equations, formulas, and other teachings can be quite complex and even those highly skilled in the art might not be able to immediately recognize errors until those teachings are applied, often with sophisticated software or other technology,” Adams said. “One with ordinary skill in the art is not going to treat an error as an actual teaching just because it took some work before the error became apparent.”

To contact the reporter on this story: Samantha Handler in Washington at shandler@bloombergindustry.com

To contact the editors responsible for this story: Adam M. Taylor at ataylor@bloombergindustry.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com