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NFC Technology, LLC v. Matal

United States Court of Appeals, Federal Circuit

September 20, 2017

NFC TECHNOLOGY, LLC, Appellant
v.
JOSEPH MATAL, PERFORMING THE FUNCTIONS AND DUTIES OF THE UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR, U.S. PATENT AND TRADEMARK OFFICE, Intervenor

         Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. IPR2014-01198.

          Robert Auchter, McKool Smith, P.C., Washington, DC, argued for appellant. Also represented by Jon Wright, Adam LaRock, Sterne Kessler Goldstein & Fox, PLLC, Washington, DC.

          Robert J. McManus, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, argued for intervenor Joseph Matal. Also represented by Nathan K. Kelley, Monica Barnes Lateef, Joseph Gerard Piccolo, Scott Weidenfeller.

          Before Newman, Lourie, and Hughes, Circuit Judges.

          LOURIE, CIRCUIT JUDGE.

         NFC Technology, LLC ("NFC") appeals from the final written decision of the U.S. Patent and Trademark Office Patent Trial and Appeal Board ("the Board") in an inter partes review ("IPR") proceeding concluding that claims 1-3 and 5 of U.S. Patent 6, 700, 551 ("the '551 patent") are unpatentable as obvious. See HTC Corp. v. NFC Tech., LLC, IPR 2014-01198, 2016 WL 497524, at *1 (P.T.A.B. Feb. 3, 2016) ("Final Decision"). Specifically, the Board rejected NFC's argument that it had created a prototype embodying the claimed invention before the priority date of a cited reference, on the basis that NFC had not adequately proven that certain third-party activity inured to NFC's benefit. Id. at *5-15. For the reasons that follow, we reverse the Board's determination as to inurement, and remand for the Board to determine whether NFC presented sufficient evidence that the prototype embodied the claimed invention.

         Background

         NFC owns the '551 patent, which generally relates to a near-field communication device. See '551 patent col. 1 ll. 9-12. Such devices use electromagnetic induction to communicate information over very short distances. See id. col. 1 ll. 14-18.

         When the application that became the '551 patent was filed, two near-field communications standards existed: ISO/A and ISO/B. Id. col. 1 ll. 19-26. According to the '551 patent, relatively simple circuits could be used to cause a device to communicate using a single standard; for the device to be capable of communication using both standards, however, it required a circuit that was more complicated and consequently more expensive to manufacture. Id. col. 1 ll. 44-60.

         A primary goal of the invention described and claimed in the '551 patent is to allow for communication using both standards in a circuit that is "simple in structure and inexpensive to produce." Id. col. 1 ll. 61-65. The claims reflect this functionality. See id. col. 7 l. 16-col. 8 l. 32. The '551 patent claims a priority date of March 25, 1999, the date of the filing of a French patent application. Final Decision, 2016 WL 497524, at *5.

         HTC Corp. ("HTC") petitioned for IPR of the '551 patent, alleging that claims 1-3 and 5 were unpatentable as obvious over, inter alia, U.S. Patent 6, 122, 492 ("Sears"). See Joint Appendix ("J.A.") 65. Sears bears a filing date of February 8, 1999. Final Decision, 2016 WL 497524, at *5. The Board instituted review. J.A. 208.

         NFC responded that Bruno Charrat ("Charrat"), the inventor of the '551 patent, had reduced the invention to practice before Sears's priority date. See J.A. 257. Specifically, NFC argued that Charrat and his team at INSIDE Technologies ("INSIDE") had reduced the invention to practice "on or before November 1998." J.A. 257. NFC's general theory of the case was that Charrat had conceived the invention by June 1998, and then worked with a team at INSIDE to design a device embodying the invention ("the M210H device"). By September 1998, NFC claimed, Charrat and his team had sufficiently developed the device that they commissioned Concept Electronique ("CE"), a chip fabrication company, to generate printed circuit board ("PCB") layouts for the M210H device. NFC alleged that once Charrat and his team ordered this prototype they wrote software for it, and, once they received the prototype, tested it to ensure that it worked for its intended purpose and verified that the prototype conformed to their design.

         NFC presented evidence to support its contention that Charrat's invention was reduced to practice before Sears's priority date. The evidence included: (1) an initial data sheet that purportedly described the M210H device at a high level, dated June 26, 1998, see J.A. 2335-60; (2) undated, unwitnessed excerpts from lab notebooks purportedly authored by Charrat, see J.A. 2369-441; (3) PCB diagrams for the prototype generated by CE, dated September 1998, see J.A. 2442-53; (4) a return of a facsimile cover sheet from CE dated September 10, 1998, with Charrat's signature under handwritten "OK FAB, " although missing the four pages attached to the cover sheet, see J.A. 2790; (5) a document entitled "Test of Various Transmitters, " detailing tests of the "M210H-2" antenna, authored by a Mr. de Moncuit and allegedly detailing the results of tests of the prototype, see J.A. 2819-53[1]; and (6) a highlighted wiring diagram purportedly used to verify that the prototype accurately reflected the INSIDE design, dated February 5, 1999, and indicating that it reflected revision 3, see J.A. 2854-58. Charrat also provided testimony relating to his research and testing during the relevant period. See generally J.A. 2957-76.

         HTC presented two main arguments in reply. HTC first argued that the documentation was only corroborated by Charrat's own testimony, and was therefore insufficient. J.A. 451-54. HTC next argued that even if the evidence was sufficiently corroborated, the M210H prototype did not work for its intended purpose or embody all of the claim limitations. J.A. 455-66. For example, HTC argued that Charrat had not developed the software necessary for the prototype to function, that the tests were not ...


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