By Eric Schweibenz
On August 7, 2013, the Federal Circuit issued a precedential opinion in Apple Inc. v. ITC (2012-1338).  This was an appeal from the International Trade Commission’s (“the Commission”) affirmance of ALJ Theodore R. Essex’s initial determination (“ID”) finding no violation of Section 337 in Certain Mobile Devices, and Related Software Thereof (Inv. No. 337-TA-750).  See our January 17, 2012 and April 12, 2012 posts for more details on this investigation.

By way of background, Complainant Apple, Inc. (“Apple”) accused Respondent Motorola Mobility, Inc. (“Motorola”) of infringing certain claims of U.S. Patent Nos. 7,812,828 (the ‘828 patent), 7,663,607 (the ‘607 patent), and 5,379,430 (the ‘430 patent).  Only the findings in relation to the ‘607 and ‘828 patents were subject to appeal.

In his January 13, 2012 ID, ALJ Essex found no violation of Section 337.  In short, the ALJ determined that the accused products do not infringe the asserted claims of the ‘828 patent, but that the ‘828 patent was valid.  With respect to the ‘607 patent, ALJ Essex found that Motorola’s products literally infringed the claims, but that the claims were invalid for anticipation and obviousness.  These conclusions were either affirmed or not reviewed by the Commission, and Apple appealed the Commission’s claim construction and its determinations of anticipation, obviousness, and noninfringement.

Anticipation By Perski ‘455

ALJ Essex found that Perski ‘455 anticipates the ‘607 patent.  According to the opinion, on appeal, Apple argued that Perski ‘455 did not qualify as prior art because Apple’s conception date pre-dated the filing date of the nonprovisional Perski ‘455 application, and the priority application failed to provide written support for the relevant disclosures in Perski ‘455.  Even if found to be prior art, Apple contended that the key feature of “detect[ing] multiple touches or near touches that occur at a same time and at distinct locations” is not taught by Perski ‘455.  The Commission and Motorola argued that Perski ‘455 does constitute prior art, and that the reference discloses all features of the claims of the ‘607 patent.

The Federal Circuit agreed with the Commission and Motorola that the disclosure in the provisional application was sufficient to provide written description for Perski ‘455 and therefore, Perski ‘455 constituted prior art.  As such, Claims 1-7 of the ‘607 patent were affirmed as anticipated.  However, the Court noted that Perski ‘455 failed to correctly incorporate by reference the teaching of a document required to anticipate Claim 10.  Specifically, simply referring to the other reference as teaching a similar method was insufficient to identify with “detailed particularity” as required to incorporate material by reference, and therefore, Claim 10 was found not to be anticipated by the Perski ‘455 reference.

Anticipation/Obviousness over SmartSkin

According to the opinion, Motorola argued that if Claim 10 was found valid over Perski ‘455, it should conversely be found invalid over SmartSkin.  ALJ Essex found that SmartSkin did not disclose the use of transparent conductive lines, and the Commission declined to review this determination.  The Court agreed with Apple’s arguments that SmartSkin does not anticipate Claim 10, as it discloses an opaque surface, rather than a clear touch-screen, and the authors point out that they “had not achieved a touchscreen employing transparent electrodes.” 

Although SmartSkin was found not to anticipate Claim 10 of the ‘607 patent, the ALJ found Claim 10 to be obvious over this reference.  The Commission reviewed this determination and upheld it.  However, Apple argued on appeal that the Commission “improperly employed a hindsight analysis” and failed to evaluate the secondary considerations of nonobviousness presented by Apple.  The Court agreed, stating it was “troubled by the ITC’s obviousness analysis” and that the Commission “never even mentioned, much less weighed as part of the obviousness analysis, the secondary consideration evidence.”  Since this is “not adequate,” the case was vacated and remanded for the Commission to consider Apple’s evidence of industry praise, copying, and commercial success.

Noninfringement of the ‘828 Patent

According to the opinion, ALJ Essex construed “mathematically fitting an ellipse” to require the method to perform “a mathematical process” whereby “an ellipse is actually fitted to the data” and “various parameters can be calculated.”  Based on this construction, Motorola did not infringe because, while they measure data from the touchscreen, they do not actually fit an ellipse/calculate parameters.  This determination was not reviewed by the Commission.  Apple argued on appeal that requiring calculation of the ellipse parameters after the ellipse has been fitted unnecessarily limits the claim, while the ITC and Motorola contend the ALJ correctly interpreted this term. 

The Federal Circuit agreed with Apple, concluding that the plain language of the claim simply requires the software to “mathematically fit” the ellipse without implying a separate step of calculating the ellipse parameters.  The Court explained how this interpretation is supported by the intrinsic record, particularly in light of the dependent claims.  With this new interpretation in mind, the Court vacated the Commission’s finding of no infringement and remanded the case for additional consideration of infringement of the ‘828 patent.

Judge Reyna’s Dissent

Judge Reyna dissented-in-part for two reasons.  First, the Judge considered that Perski ‘455 should not be entitled to the priority date of the provisional application and thus did not constitute prior art.   Specifically, the differences between the provisional and nonprovisional applications indicate that, as of the filing date of the provisional application, it was not clear that the inventors knew how to detect multiple touches.  Second, the Judge would simply reverse the finding of obviousness in relation to the ‘607 patent in view of SmartSkin.  In Judge Reyna’s view, the focus on opaque touchscreens in SmartSkin prevents any finding of obviousness over that reference.  Judge Reyna also agreed with the majority that the secondary considerations in this case are particularly important, noting they can be “the most probative evidence of nonobviousness.”