The CAFC vacates PTAB decision in Grit v. Oren

The CAFC vacated the decision of PTAB:



Grit Energy Solutions, LLC (“Grit Energy”) appeals the
decision of the Patent Trial and Appeal Board (“Board”) in
an inter partes review of claims 1–7 of U.S. Patent
No. 8,585,341 (“the ’341 patent), in which the Board found
that Grit Energy had not met its burden of showing that
the challenged claims were unpatentable as obvious. Grit
Energy appealed. For the reasons below, we vacate and
remand for further proceedings.



Of the standing issue


Grit Energy contends that it has standing because
Oren previously sued Grit Energy for infringement of one
or more claims of the ’341 patent, and Oren is free to reassert those infringement claims. We agree. Grit Energy has
engaged in acts that not only could give rise to a possible
infringement suit, but did give rise to an infringement suit.
Although that lawsuit has since been dismissed, the dismissal was without prejudice and the statute of limitations
has yet to run, leaving Oren free to pursue its previous
claims of infringement in the future. See, e.g., Semtek Int’l
Inc. v. Lockheed Martin Corp., 531 U.S. 497, 505 (2001)
(“The primary meaning of ‘dismissal without prejudice’ . . .
is dismissal without barring the plaintiff from returning
later, to the same court, with the same underlying claim.”).

Furthermore, although Grit Energy transferred ownership
of the products accused of infringement in that suit, that
does not absolve Grit Energy of liability for actions it took
before the transfer.3 Under these circumstances, Grit Energy has shown that there exists a controversy of sufficient
immediacy and reality to warrant the requested judicial relief.



Of obviousness:


Grit Energy contends that the Board’s determination
that Constantin does not disclose the ’341 configuration is
unsupported by substantial evidence. We agree.
In particular, we conclude that the Board’s finding
rests on an erroneous reading of Constantin’s claim 5.
Claim 5 recites in relevant part that “the means for mechanical connection of the shutters are constituted by at
least one stud (15) provided on one of the shutter blades (8)
that lodges in a corresponding orifice (16) of the blade of
the other shutter.” J.A. 177. Claim 5 of Constantin expressly discloses that the stud is “provided on one of the
shutter blades” and the orifice is provided on “the blade of
the other shutter.” Thus, claim 5 plainly teaches that the
stud and orifice can be either in the ’341 configuration or
the opposite of the ’341 configuration.



Judge Newman dissented as to obviousness


However, I respectfully dissent from the court’s treatment of the Constantin reference—French Patent Application No. 2,640,598 A1, published June 22, 1990—with
agreed upon translation (“Constantin translation”). The
Patent Trial and Appeal Board (“PTAB” or “Board”)
correctly viewed the Constantin reference.1 It is improper
for the reviewing court to change the text of a reference to
enlarge its disclosure by removing explicit limitations, and
then apply the new enlarged content as prior art.

(...)

The court removes the reference numerals from claim 5 to remove the tie to the structure in Figure 3 of Constantin. With this exercise, the
court holds that Constantin is not limited to the structure
as disclosed in the specification.

(...)

My threshold concern is the court’s treatment of the
content of the Constantin reference. The proper analysis
is, whether the prior art in appropriate combination,
guided by law and precedent, renders obvious the ’341 patent’s subject matter. It is inappropriate to edit a reference
to remove its explicit limitations, and then to apply the judicially-enlarged disclosure as prior art.2 I respectfully dissent.