Neology, Inc. v. Itc ( 2019 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
NEOLOGY, INC.,
Appellant
v.
INTERNATIONAL TRADE COMMISSION,
Appellee
KAPSCH TRAFFICCOM USA, INC., KAPSCH
TRAFFICCOM HOLDING CORP., KAPSCH
TRAFFICCOM CANADA INC., STAR SYSTEMS
INTERNATIONAL LTD., STAR RFID CO., LTD.,
Intervenors
______________________
2018-1338
______________________
Appeal from the United States International Trade
Commission in Investigation No. 337-TA-979.
______________________
Decided: April 19, 2019
______________________
VINAY VIJAY JOSHI, Amin Turocy & Watson LLP, San
Jose, CA, argued for appellant. Also represented by
DANIEL W. BEDELL, ANTHONY KIM, ANDREW TIMOTHY
OLIVER.
2 NEOLOGY, INC. v. ITC
CATHY CHEN, Office of the General Counsel, United
States International Trade Commission, Washington, DC,
argued for appellee. Also represented by DOMINIC L.
BIANCHI, WAYNE W. HERRINGTON, SIDNEY A. ROSENZWEIG.
NATHAN S. MAMMEN, Kirkland & Ellis LLP, Washing-
ton, DC, argued for intervenors. Also represented by
GREGG F. LOCASCIO, BRIAN H. GOLD.
______________________
Before TARANTO, SCHALL, and CHEN, Circuit Judges.
TARANTO, Circuit Judge.
Neology filed a complaint with the International Trade
Commission in 2015, alleging, as now relevant, infringe-
ment of claims 13, 14, and 25 of its U.S. Patent No.
8,325,044 and claims 1, 2, and 4 of its U.S. Patent No.
8,587,436. The patents, which share a specification, de-
scribe and claim systems and methods for tracking identi-
fying information, particularly those relying on radio
frequency identification (RFID). The Commission held the
claims now at issue invalid because (1) they lack adequate
written description support and (2) they are invalid for an-
ticipation by U.S. Patent No. 5,627,544 (Snodgrass) or for
obviousness based on the combination of Snodgrass and
two other pieces of prior art. Neology appeals. We affirm
on the written-description ground and do not reach antici-
pation or obviousness.
I
A
Neology filed applications for both the ’044 and ’436 pa-
tents in 2012, both applications tracing by the same chain
of continuation applications to an application filed in 2003
and a provisional application filed in 2002. The claims that
appeared in the 2012 applications as filed (the 2012 claims)
issued with very few changes as the claims in the ’044 and
NEOLOGY, INC. v. ITC
3
’436 patents. Compare J.A. 3549–54, with ’044 patent, col.
23, line 5, through col. 24, line 63; compare J.A. 3755–59,
with ’436 patent, col. 23, line 13, through col. 25, line 17.
The patents share a title, “System and Method for Provid-
ing Secure Identification Solutions,” as well as a specifica-
tion. They describe and claim methods and systems “for
verifying and tracking identification information” in a se-
cure system that, for one embodiment, “includes at least
one of the following: a radio frequency (RF) identification
device, an identification mechanism (e.g., a card, sticker),
and an RF reader/writer.” See, e.g., ’044 patent, col. 1, lines
39–45. An example is an RF device (corresponding to the
claims “RFID transponder”) on an automobile, with identi-
fying information embedded in the RFID device readable
by an RFID reader. The important claim limitation for the
asserted claims here involves exchanges of a “security key”
between the RFID reader and transponder.
The claims of the ’044 patent now at issue are claims
13, 14, and 25. Claims 13 and 14 depend on claim 10, which
reads:
10. A toll system, comprising:
a central database configured to:
store toll accounts,
receive identifiers related to toll accounts, and
compare the received identifiers to identifiers
associated with the toll accounts to determine
if a match exists;
an RFID reader comprising a radio and an an-
tenna, the RFID reader configured to:
send a first communication to a RFID tran-
sponder that includes a memory the contents of
which include an identifier,
4 NEOLOGY, INC. v. ITC
send a second communication to the RFID
transponder that includes a security key for
validation by the RFID transponder,
receive at least the identifier included in the
memory contents in response to the second
communication and as a result of validation of
the security key, and transmit the identifier to
the central database.
Id., col. 23, lines 39–56. Claim 13 adds the limitation of an
RFID reader sending a “third communication . . . that in-
cludes a second security key for validation by the RFID
transponder and receive further memory contents in re-
sponse to the third communication and as a result of vali-
dation of the second security key.” Id., col. 23, line 64,
through col. 24, line 4. Claim 14, which depends on claim
13, further requires that “the second security key is based
on information received from the RFID transponder.” Id.,
col. 24, lines 5–7. Claim 25 depends on claim 23, which
recites the same series of communications and transfers of
security keys but for an RFID transponder, not the “toll
system” of claim 10. Id., col. 24, lines 37–50, 54–60.
The ’436 patent claims also include the same series of
communications between the RFID reader and tran-
sponder. ’436 patent, col. 23, lines 13–43. Independent
claim 1 recites:
1. A RFID reader, comprising:
a radio and an antenna;
a processor coupled with the radio, the processor
configured to:
send a first communication to a RFID transponder
via the radio and the antenna that includes a
memory the contents of which includes an identi-
fier,
NEOLOGY, INC. v. ITC
5
send a second communication to the RFID tran-
sponder via the radio and the antenna that in-
cludes a security key for validation by the RFID
transponder,
receive at least the identifier included in the
memory contents via the radio and the antenna in
response to the second communication and as a re-
sult of validation of the security key, and
transmit the identifier to a central database;
wherein the processor is further configured to send
a third communication to the RFID transponder
via the radio and the antenna that includes a sec-
ond security key for validation by the RFID tran-
sponder and receive via the radio and the antenna
further memory contents in response to the third
communication and as a result of validation of the
second security key.
Id., col. 23, lines 13–34. Claims 2 and 4 depend directly on
claim 1. Claim 2 adds the limitation that “the security key
is based on information received from the RFID tran-
sponder.” Id., col. 23, lines 35–36. Claim 4 adds the limi-
tation that “the second security key is based on information
received from the RFID transponder.” Id., col. 23, lines 41–
43.
B
Neology filed a complaint with the Commission on De-
cember 4, 2015. The complaint alleged infringement of var-
ious claims of the ’044 and ’436 patents, as well as claims
of another patent not at issue here. Neology accused Kap-
sch TrafficCom U.S. Corp., Kapsch TrafficCom IVHS Tech-
nologies Holding Corp., Kapsch TrafficCom IVHS Holding
Corp., Kapsch TrafficCom IVHS, Inc., Kapsch TrafficCom
Canada Inc., Kapsch TrafficCom Holding Corp., Star Sys-
tems International, Ltd., and STAR RFID Co., Ltd. (collec-
tively, Kapsch) of importing infringing products. The
6 NEOLOGY, INC. v. ITC
Commission instituted an investigation on January 11,
2016. After Neology terminated the investigation with re-
spect to claims 3, 6–12, and 14–18 of the ’436 patent, what
remained were claims 13, 14, and 25 of the ’044 patent and
claims 1, 2, and 4 of the ’436 patent.
The administrative law judge concluded on June 22,
2017, that the ’044 and ’436 patents are not entitled to the
priority date of U.S. Patent Application No. 10/615,026,
filed in 2003, because that application “does not provide
written description support” for some of the key limitations
of the at-issue claims of the ’044 and ’436 patents. The ALJ
also found invalidity of the claims on several grounds, in-
cluding the following: (a) claims 13, 14, and 25 of the ’044
patent and claims 1, 2, and 4 of the ’446 patent are invalid
for lack of written description; (b) claim 25 of the ’044 pa-
tent and claims 1, 2, and 4 of the ’436 patent are antici-
pated by Snodgrass; and (c) claims 13 and 14 of the ’044
patent are invalid for obviousness over a combination of
Snodgrass, U.S. Patent No. 5,819,234 (Slavin), and an ar-
ticle, “RFID for Road Tolling, Road-Use Pricing and Vehicle
Access Control,” by Phil Blythe (Blythe).
Neology appealed to the full Commission, which issued
its final decision on October 30, 2017. The Commission de-
termined that the ALJ was correct that the two patents are
not entitled to an earlier priority date, that the claims are
invalid for lack of written description, and that the claims
are invalid for anticipation by Snodgrass or obviousness
based on a combination of Snodgrass, Slavin, and Blythe.
The Commission reversed certain other invalidity determi-
nations made by the ALJ.
Neology filed a timely notice of appeal on December 22,
2017. We have jurisdiction under 28 U.S.C. § 1295(a)(6).
II
We review the Commission’s factual findings for sub-
stantial evidence. Rivera v. Int’l Trade Comm’n, 857 F.3d
NEOLOGY, INC. v. ITC
7
1315, 1319 (Fed. Cir. 2017). Whether a claim is adequately
supported by the written description is an issue of fact.
GlaxoSmithKline LLC v. Banner Pharmacaps, Inc., 744
F.3d 725, 729 (Fed. Cir. 2014). We review “procedural and
evidentiary determinations made by the Commission,” in-
cluding “waiver” determinations, for abuse of discretion.
Windbond Elecs. Corp. v. Int’l Trade Comm’n, 262 F.3d
1363, 1370 (Fed. Cir. 2001).
A
1
Contrary to Neology’s initial contention, Kapsch did
not waive the argument that the claims are invalid for lack
of written description. Both the ALJ and the Commission
decided whether the claims at issue have adequate written-
description support both in determining priority and in de-
termining validity. See J.A. 38–45; J.A. 147–74. The Com-
mission specifically held that Kapsch had not waived the
direct invalidity challenge based on inadequate support in
the written description. See J.A. 39–40. We see no error
in that determination. In pre- and post-hearing briefs,
Kapsch and the Commission’s Office of Unfair Import In-
vestigations timely raised, and they and Neology all dis-
cussed, the issue of invalidity due to inadequate written
description. J.A. 764; J.A. 937; J.A. 977; J.A. 1187; J.A.
1188; J.A. 4770–71; J.A. 5135. There was no waiver.
2
When the investigation went to the Commission, on re-
view of the ALJ decision, Neology argued that the specifi-
cation and the 2012 claims themselves each provided
adequate written description, but the Commission con-
cluded that Neology had waived reliance on the 2012
claims by not relying on those claims before the ALJ as a
basis for written-description support. J.A. 42−43. We see
no error in that conclusion. Neology’s briefing, even after
the hearing, relied on the argument that the specification
8 NEOLOGY, INC. v. ITC
of the ’026 application (the 2003 application), which did not
include the 2012 claims, provided the written-description
support of the claims in the ’044 and ’436 patents, and it
did not make an argument that the 2012 claims furnished
the required written-description support. J.A. 4775 (“How
a [person of ordinary skill in the art] would specifically un-
derstand that each challenged claim limitation is disclosed
in the specification of the ’026 Application is described in
even more detail below.”) (emphasis added); id. (“As fur-
ther evidence that the specification of the ’026 Application
provides adequate written description for the asserted
claims . . . .”) (emphasis added). It was not until after the
Commission requested additional briefing that Neology
raised the argument that the 2012 claims contained ade-
quate disclosure to provide written-description support for
the issued claims. J.A. 5570 (“For validity, the written-de-
scription analysis properly relies on the cumulative disclo-
sure of the applications that became the ’044 and ’436
patents—including the originally-filed claims [(the 2012
claims)] in the asserted patents along with all prior appli-
cations incorporated by reference—to determine whether
the asserted claims have adequate support.”) (second em-
phasis added); J.A. 5573 (“Therefore, unlike priority, the
written-description analysis for invalidity in this case
. . . also relies on the originally-filed claims of the applica-
tions [(the 2012 claims)] that led to the ’044 and ’436 pa-
tents . . . .”) (emphasis added).
In response to the Commission’s determination that
Neology waived the argument that the 2012 claims provide
written-description support, Neology points to one passage
in the pre-hearing brief it submitted to the ALJ. There,
previewing its evidence for written description, Neology
stated that “[e]xcept for the claims, the as-filed specifica-
tion of the ’026 Application is nearly identical to the respec-
tive applications that issued as the later member patents
in the same family . . . .” J.A. 765. Neology argues that the
NEOLOGY, INC. v. ITC
9
quoted sentence differentiates between the claims in the
’026 application and the 2012 claims and thereby preserves
the argument that the 2012 claims alone provide written
description support for the issued claims.
We disagree. We have recognized that claims can be
self-describing. See, e.g., Mentor Graphics Corp. v. EVE-
USA, Inc., 851 F.3d 1275, 1297 (Fed. Cir. 2017); Ariad
Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1349–51
(Fed. Cir. 2010). On the other hand, genus claims, espe-
cially those that “use functional language to define the
boundaries of a claimed genus,” are unlikely to provide an
adequate written description so as to be self-describing.
Ariad Pharm., 598 F.3d at 1349. Determining whether a
particular claim is self-describing is not a cut-and-dried,
simple matter, but would require more development—fac-
tual and legal—than the passing reference on which Neol-
ogy now relies. We conclude that the Commission did not
abuse its discretion in finding that Neology waived its ar-
gument that the asserted claims are supported by the 2012
claims. We therefore affirm the Board’s conclusion that
Neology waived this argument. The written-description
contention preserved before the ALJ and Commission,
therefore, was simply whether support for the claims at is-
sue can be found in the body of the written description
without the 2012 claims—which is substantively the same
as the 2003 written description.
B
A patent must “contain a written description of the in-
vention . . . in such full, clear, concise, and exact terms as
to enable any person skilled in the art . . . to make and use
the same.” 35 U.S.C. § 112 ¶ 1. 1 We have long held that,
1 Although the relevant wording has not changed, we
cite the version of § 112 that pre-dated the amendments to
10 NEOLOGY, INC. v. ITC
for any given claim, “the description must ‘clearly allow
persons of ordinary skill in the art to recognize that [the
inventor] invented what is claimed.’” Ariad Pharm., 598
F.3d at 1351 (quoting Vas–Cath Inc. v. Mahurkar, 935 F.2d
1555, 1562–63 (Fed. Cir. 1991)). As we have noted, the ad-
equacy of support in the written description is a question
of fact, and we review the Commission’s answer to that
question for substantial evidence. Rivera, 857 F.3d at
1319; GlaxoSmithKline, 744 F.3d at 729.
The ALJ identified five limitations of the asserted
claims that lacked adequate written description, a finding
affirmed by the Commission. The five limitations are: “a
second communication . . . that includes a security key”;
transmission of an “identifier” from transponder memory
“in response to the second communication” as a result of
“validation” of the “security key”; a central database and
toll system; a “third communication . . . that includes a sec-
ond security key”; and a “security key is based on infor-
mation received from the RFID transponder.” J.A. 24–25;
J.A. 70. We find it unnecessary to discuss the third limita-
tion. It suffices to discuss the other four limitations, for
which the Commission’s findings of inadequate support
largely rest on a shared basis.
The first limitation claims the transmission of a second
communication containing a security key and is part of
claims 13, 14, and 25 of the ’044 patent and claims 1, 2, and
4 of the ’436 patent. It requires both the existence of a “se-
curity key” and the transmission of that same key. The
specification mentions five types of keys: cryptographic,
that section made by the Leahy-Smith America Invents
Act, Pub. L. No. 112-29, § 4(c), 125 Stat. 284, 296 (2011).
Those amendments do not apply to patents, like the ’044
and ’436 patents, that issued from applications filed before
September 16, 2012. Id., § 4(e), 125 Stat. 297.
NEOLOGY, INC. v. ITC
11
security, credit and debit exchange, encryption, and ex-
change encrypted. The specification describes crypto-
graphic keys as “check[ed] and validate[d]” by the “security
management unit” and being “sent to the cryptographic
block.” ’044 patent, col. 2, lines, 51–53. The “cryptographic
block” also “stores the security keys.” Id., col. 2, lines 53–
54. Credit and debit exchange keys are disclosed as part of
the “Optional Security Features” where identifying infor-
mation is stored in “[h]ighly secure chips with a hardware
programmable cryptographic block” that has the credit and
debit exchange key. Id., col. 12, lines 7, 20–23. Encryption
keys are disclosed in the same optional security features
section and are needed to “initialize[]” equipment that in-
teracts with the device storing identifying information. Id.,
col. 12, lines 28–31. Finally, the specification discloses a
“hardware wired cryptographic block 2210 (with 4 ex-
change encrypted keys . . . ).” Id., col. 22, lines 18–19.
Based on the disclosures in the specification and testi-
mony from the experts, the Commission had substantial
evidence to support its finding of insufficient written de-
scription. Despite disclosing several types of keys, the
specification discloses only where they are stored and not
whether they are exchanged. Experts for both Kapsch and
Neology agreed that cryptographic and encryption keys, by
their nature, are not exchanged. J.A. 2908–09; J.A. 3046.
Dr. Gregory Durgin, Kapsch’s expert, testified that credit
and debit exchange keys and exchange encrypted keys
function like cryptographic keys, in that they are stored in
the same cryptographic block, and are not exchanged, be-
cause cryptographic keys are not exchanged. J.A. 2433–34.
He also testified that the credit and debit exchange and ex-
change encrypted keys are not exchanged because the spec-
ification “doesn’t involve those keys in any sort of RFID
protocol.” J.A. 2433 The Commission could reasonably rely
as well on the inventor’s own testimony that the keys dis-
closed in the specification are encryption keys, J.A. 1704–
12 NEOLOGY, INC. v. ITC
07, which, as previously discussed, are not exchanged, even
though he later clarified his testimony that two of the dis-
closed keys are the credit and debit exchange keys, id. And
Jack Goldberg, Neology’s expert, originally testified that he
simply did not know if the keys were exchanged, J.A. 3060–
61, which allowed the Commission not to credit—against
other evidence—Mr. Goldberg’s later testimony that the
credit and debit and exchange encrypted keys must be ex-
changed because of their names. We conclude that there is
substantial evidence in the specification and the testimony
to support the Commission’s finding that the specification
does not adequately describe a second communication that
includes a security key.
The Commission’s finding that there is no disclosure of
a transmission of the security key supports the finding that
three additional claim limitations are likewise inade-
quately supported. The second limitation requires the
transmission of an “identifier” “in response to the second
communication” as a result of “validation of the security
key.” ’044 patent, col. 23, lines 53–56; ’436 patent, col. 23,
lines 23–26. If there is no transmission of a security key,
there cannot be validation of such a key or transmission of
an identifier in response to the second communication.
Similarly, the fourth limitation requires a “third communi-
cation . . . that includes a second security key,” ’044 patent,
col. 23, line 64 through col. 24, line 4; ’436 patent, col. 23,
lines 27–29, so the finding that there is no disclosure of a
second communication including a key means that there
can be no third communication that includes a “second” one
of that key. The fifth limitation, which requires the “secu-
rity key”/“second security key” from the independent claim
to be “based on information received from the RFID tran-
sponder,” ’044 patent, col. 24, lines 5–7; ’436 patent, col. 23,
lines 34–35, 40–43, also is reasonably found unsupported
in the absence of a disclosure of information exchanged be-
tween the transponder and the device. Additionally, Dr.
Durgin testified that “there is no disclosure of an RFID
NEOLOGY, INC. v. ITC
13
protocol or any specific step that would involve the security
key, based on information from the RFID transponder.”
J.A. 2449–53. Thus, the Commission had substantial evi-
dence to find inadequate written-description support for
limitations two, four, and five.
For those reasons, we affirm the Commission’s finding
that the asserted claims lack sufficient written-description
support. In view of that conclusion, we need not reach the
issues of anticipation or obviousness.
III
The ruling of the Commission that the claims at issue
are invalid is affirmed.
AFFIRMED