Dynamic Drinkware, LLC v. National Graphics, Inc. , 800 F.3d 1375 ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
DYNAMIC DRINKWARE, LLC,
Appellant
v.
NATIONAL GRAPHICS, INC.,
Appellee
______________________
2015-1214
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2013-
00131.
______________________
Decided: September 4, 2015
______________________
MATTHEW R. MCCLEAN¸ Davis & Kuelthau, S.C., Mil-
waukee, WI, argued for appellant. Also represented by
PATRICK M. BERGIN, JOSEPH S. HEINO.
MICHAEL T. GRIGGS, Boyle Fredrickson, S.C., Milwau-
kee, WI, argued for appellee. Also represented by JOHN
PAUL FREDRICKSON, SARAH M. WONG.
______________________
Before LOURIE, BRYSON, and O’MALLEY, Circuit Judges.
2 DYNAMIC DRINKWARE, LLC v. NATIONAL GRAPHICS, INC.
LOURIE, Circuit Judge.
Dynamic Drinkware, LLC (“Dynamic”) appeals from
the decision of the United States Patent and Trademark
Office (“PTO”) Patent Trial and Appeal Board (“Board”) in
an inter partes review not to reject claims 1 and 12 of
National Graphics, Inc.’s (“National Graphics”) U.S.
Patent 6,635,196 (the “’196 patent”) as anticipated under
35 U.S.C. § 102(e) (2006). 1 See Dynamic Drinkware, LLC
v. Nat’l Graphics, Inc., No. 2013-00131, 2014 WL 4628897
(P.T.A.B. Sept. 12, 2014) (“Board Decision”). Because
Dynamic failed to carry its burden of proving unpatenta-
bility, we affirm.
BACKGROUND
National Graphics owns the ’196 patent, which is di-
rected to making molded plastic articles bearing a “lentic-
ular” image. The ’196 patent issued on October 21, 2003,
from an application filed on November 22, 2000. The ’196
patent claims the benefit of U.S. Provisional Application
60/211,112, filed on June 12, 2000.
Dynamic petitioned the PTO for inter partes review of
the ’196 patent. In its petition, Dynamic argued that
claims 1, 8, 12, and 14 of the ’196 patent were anticipated
by U.S. Patent 7,153,555 (“Raymond”). The application
for Raymond was filed on May 5, 2000, claiming the
benefit of U.S. Provisional Application 60/182,490 (the
“provisional application” or “Raymond provisional appli-
1 The relevant provision of § 102(e)(2) was reor-
ganized into newly designated § 102(d)(2) when certain
aspects of the Leahy–Smith America Invents Act (“AIA”),
Pub. L. No. 112-29, took effect on March 16, 2013. Be-
cause the application for the patent at issue in this case
was filed before that date, we refer to the pre-AIA version
of § 102.
DYNAMIC DRINKWARE, LLC v. NATIONAL GRAPHICS, INC. 3
cation”), filed on February 15, 2000. The PTO granted the
petition in part, and instituted trial on claims 1 and 12.
The Board concluded that Dynamic failed to prove by
a preponderance of the evidence that claims 1 and 12
were anticipated under § 102(e)(2) by Raymond. Board
Decision at 13. The Board first found that Dynamic failed
to prove that the Raymond patent was entitled to the
benefit of its earlier February 15, 2000 provisional filing
date, and hence that it was a § 102(e) reference as of its
provisional date. Id. at 3. According to the Board, “[t]o be
entitled to rely on the February 15, 2000 provisional filing
date, [Dynamic] had to establish that it relies on subject
matter from Raymond that is present in and supported by
its provisional.” Id. (citing In re Giacomini, 612 F.3d
1380, 1383 (Fed. Cir. 2010); Ex parte Yamaguchi, 88
U.S.P.Q.2d 1606 (B.P.A.I. 2008)). The Board found that,
rather than comparing “the portions of [Raymond] relied
on by [Dynamic] to the Raymond provisional,” Dynamic
only compared claim 1 of the ’196 patent to the Raymond
provisional application. Id. at 4. As a result, the Board
found that Dynamic “failed to carry its burden of proof
that Raymond’s effective date is earlier than May 5,
2000.” Id. It is worth emphasizing that the relevance of
the Raymond provisional application date here is not to
give the Raymond patent any earlier priority over a
competing application or patent, but to serve third party
Dynamic’s goal of creating earlier prior art against the
’196 patent.
The Board then found that National Graphics reduced
to practice its invention by March 28, 2000, before the
May 5, 2000 filing date of the Raymond patent. Id. at 12.
Thus, the Board concluded that Dynamic failed to demon-
strate by a preponderance of the evidence that claims 1
and 12 of the ’196 patent were anticipated by Raymond
under § 102(e). Id. at 13.
4 DYNAMIC DRINKWARE, LLC v. NATIONAL GRAPHICS, INC.
Dynamic timely appealed to this court. We have ju-
risdiction pursuant to 28 U.S.C. § 1295(a)(4)(A).
DISCUSSION
We review the Board’s legal determinations de novo,
In re Elsner, 381 F.3d 1125, 1127 (Fed. Cir. 2004), and the
Board’s factual findings underlying those determinations
for substantial evidence, In re Gartside, 203 F.3d 1305,
1316 (Fed. Cir. 2000). A finding is supported by substan-
tial evidence if a reasonable mind might accept the evi-
dence to support the finding. Consol. Edison Co. v.
NLRB, 305 U.S. 197, 229 (1938).
For a patent to claim priority from the filing date of
its provisional application, it must satisfy 35 U.S.C.
§ 119(e)(1) (2006), which provides that:
An application for patent filed under section
111(a) or section 363 of this title for an invention
disclosed in the manner provided by the first par-
agraph of section 112 of this title in a provisional
application filed under section 111(b) of this title,
by an inventor or inventors named in the provi-
sional application, shall have the same effect, as to
such invention, as though filed on the date of the
provisional application filed under section 111(b)
of this title . . . .
(emphases added). “In other words, the specification of
the provisional must ‘contain a written description of the
invention and the manner and process of making and
using it, in such full, clear, concise, and exact terms,’ 35
U.S.C. § 112 ¶ 1, to enable an ordinarily skilled artisan to
practice the invention claimed in the non-provisional
application.” New Railhead Mfg., L.L.C. v. Vermeer Mfg.
Co., 298 F.3d 1290, 1294 (Fed. Cir. 2002) (emphases in
original).
DYNAMIC DRINKWARE, LLC v. NATIONAL GRAPHICS, INC. 5
I
Dynamic argues that the Board erred in shifting the
burden to Dynamic to prove that the Raymond patent was
entitled to the filing date of its provisional application.
According to Dynamic, as a presumptively valid prior art
patent, Raymond’s presumed effective date is its February
15, 2000 provisional application filing date. Dynamic
contends that it made a prima facie showing that Ray-
mond was thus prior art to the ’196 patent under § 102(e)
as of its provisional date, and, under Giacomini, the
burden should have shifted to National Graphics to prove
that Raymond was not entitled to the filing date of its
provisional application.
In response, National Graphics argues that the Board
properly placed the burden of proof on Dynamic to sup-
port its contention that the Raymond provisional applica-
tion provided written description support for the claims of
the Raymond patent. According to National Graphics,
priority claims are not examined by the PTO as a matter
of course, and consequently are not entitled to a presump-
tion of adequate written description support in the provi-
sional application.
We agree with National Graphics that the Board did
not err in placing the burden on Dynamic, the petitioner
in the inter partes review, to prove that the prior art
Raymond patent was entitled to the filing date of its
provisional application. As an initial matter, and to
clarify the relative burdens, we begin with the established
concept that there are two distinct burdens of proof: a
burden of persuasion and a burden of production. See
Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d 1316,
1326–27 (Fed. Cir. 2008). The burden of persuasion “is
the ultimate burden assigned to a party who must prove
something to a specified degree of certainty,” such as by a
preponderance of the evidence or by clear and convincing
evidence. Id. (citations omitted). In an inter partes
6 DYNAMIC DRINKWARE, LLC v. NATIONAL GRAPHICS, INC.
review, the burden of persuasion is on the petitioner to
prove “unpatentability by a preponderance of the evi-
dence,” 35 U.S.C. § 316(e), and that burden never shifts to
the patentee. “Failure to prove the matter as required by
the applicable standard means that the party with the
burden of persuasion loses on that point—thus, if the fact
trier of the issue is left uncertain, the party with the
burden loses.” Tech. Licensing, 545 F.3d at 1327.
A second and distinct burden, the burden of produc-
tion, or the burden of going forward with evidence, is a
shifting burden, “the allocation of which depends on
where in the process of trial the issue arises.” Id. (cita-
tions omitted). The burden of production may entail
“producing additional evidence and presenting persuasive
argument based on new evidence or evidence already of
record.” Id.
These burdens are illustrated in Technology Licens-
ing, where the patentee, TLC, sued Gennum for infringe-
ment, and Gennum argued that TLC’s patent was
anticipated by certain prior art. Id. At issue was whether
the asserted patent was entitled to the benefit of the
priority date of a related nonprovisional application. Id.
TLC argued that the asserted claim was entitled under 35
U.S.C. § 120 to the benefit of the earlier filing date of its
parent nonprovisional application. Id. Section 120, which
has language similar to that found in § 119(e)(1), provides
that a patent application for an “invention disclosed in the
manner provided by the first paragraph of section 112 of
this title in an application previously filed in the United
States . . . shall have the same effect, as to such invention,
as though filed on the date of the prior application . . . .”
(emphasis added).
Gennum, having the ultimate burden of proving its
defense of invalidity based on anticipating prior art, also
had the initial “burden of going forward with evidence
that there is such anticipating prior art.” Tech. Licensing,
DYNAMIC DRINKWARE, LLC v. NATIONAL GRAPHICS, INC. 7
545 F.3d at 1327. In response, TLC then had “the burden
of going forward with evidence either that the prior art
does not actually anticipate, or, as [TLC] attempted in
this case, that it is not prior art because the asserted
claim is entitled to the benefit of a filing date prior to the
alleged prior art.” Id. We noted that “[t]his requires TLC
to show not only the existence of the earlier application,
but why the written description in the earlier application
supports the claim.” Id. We concluded that once “TLC’s
evidence and argument in support of the earlier filing
date is . . . before the court, the burden of going forward
again shifts to the proponent of the invalidity defense,
Gennum, to convince the court that TLC is not entitled to
the benefit of the earlier filing date.” Id. at 1328.
The aforementioned shifting burdens and related pri-
ority claims under § 120 in district court litigation paral-
lel the shifting burdens and related priority claims under
§ 119(e)(1) in inter partes reviews. Although, as Dynamic
notes, the patent in Technology Licensing was entitled to
the presumption of validity under 35 U.S.C. § 282, the
different evidentiary standard in an inter partes review
does not alter the shifting burdens between the parties
because § 316(e) also places the burden of persuasion on
the petitioner to prove unpatentability. Compare § 282
(“The burden of establishing invalidity of a patent or any
claim thereof shall rest on the party asserting such inva-
lidity.”), with § 316(e) (“In an inter partes review . . . , the
petitioner shall have the burden of proving a proposition
of unpatentability by a preponderance of the evidence.”).
In this case, Dynamic, as the petitioner, had the bur-
den of persuasion to prove unpatentability by a prepon-
derance of the evidence, and this burden never shifted.
Dynamic also had the initial burden of production, and it
satisfied that burden by arguing that Raymond anticipat-
ed the asserted claims of the ’196 patent under
§ 102(e)(2).
8 DYNAMIC DRINKWARE, LLC v. NATIONAL GRAPHICS, INC.
The burden of production then shifted to National
Graphics to argue or produce evidence that either Ray-
mond does not actually anticipate, or, as was argued in
this case, that Raymond is not prior art because the
asserted claims in the ’196 patent are entitled to the
benefit of a filing date (constructive or otherwise) prior to
the filing date of Raymond. National Graphics produced
evidence that the invention claimed in the ’196 patent
was reduced to practice prior to the filing date of Ray-
mond, and thus contended that the asserted claims were
entitled to a date of invention prior to that of the Ray-
mond patent.
As a result, the burden of production returned to Dy-
namic to prove that either the invention was not actually
reduced to practice as argued, or that the Raymond prior
art was entitled to the benefit of a filing date prior to the
date of National Graphics’ reduction to practice. As the
Board found, however, Dynamic failed to carry its burden
of proving that Raymond’s effective date was earlier than
the date that the invention claimed in the ’196 patent was
reduced to practice. The burden of production was on
Dynamic to prove that, under § 119(e)(1), Raymond was
entitled to the benefit of the filing date of its provisional
application, and it failed to do that.
In contrast, Dynamic’s proffered approach would cre-
ate a presumption that a patent is entitled to the benefit
of the filing date of its provisional precursor, but that
would be unsound because the PTO does not examine
provisional applications as a matter of course; such a
presumption is therefore not justified. The PTO’s Manual
of Patent Examining Procedure (“MPEP”), which is
“commonly relied upon as a guide to patent attorneys and
patent examiners on procedural matters,” Litton Sys., Inc.
v. Whirlpool Corp., 728 F.2d 1423, 1439 (Fed. Cir. 1984),
explains this:
DYNAMIC DRINKWARE, LLC v. NATIONAL GRAPHICS, INC. 9
If the filing date of the earlier provisional applica-
tion is necessary, for example, in the case of an in-
terference or to overcome a reference, care must be
taken to ensure that the disclosure filed as the
provisional application adequately provides (1) a
written description of the subject matter of the
claim(s) at issue in the later filed nonprovisional
application, and (2) an enabling disclosure to
permit one of ordinary skill in the art to make and
use the claimed invention in the later filed
nonprovisional application without undue experi-
mentation.
MPEP § 211.05(I)(A) (2014) (emphasis added). Thus,
because the PTO does not examine priority claims unless
necessary, the Board has no basis to presume that a
reference patent is necessarily entitled to the filing date of
its provisional application. See, e.g., PowerOasis, Inc. v.
T-Mobile USA, Inc., 522 F.3d 1299, 1305 (Fed. Cir. 2008)
(“When neither the PTO nor the Board has previously
considered priority, there is simply no reason to presume
that claims in a [continuation-in-part] application are
entitled to the effective filing date of an earlier filed
application. Since the PTO did not make a determination
regarding priority, there is no finding for the district court
to defer to.”).
Indeed, Dynamic’s reliance on Giacomini to argue for
a presumption is misplaced. In Giacomini, the Board
rejected certain claims of Giacomini’s application as
anticipated under 35 U.S.C. § 102(e) by the Tran patent.
Giacomini, 612 F.3d at 1382. The Tran patent’s filing
date was exactly a month after Giacomini filed his appli-
cation, but the Tran patent claimed priority from a provi-
sional application that antedated Giacomini’s filing date.
Id. As relevant here, we found that “[b]ecause Giacomini
never argued before the Board that the Tran provisional
failed to provide written description support for the
claimed subject matter in accordance with section 119(e),
10 DYNAMIC DRINKWARE, LLC v. NATIONAL GRAPHICS, INC.
Giacomini waived the argument by failing to raise it
below.” Id. at 1383 (citation omitted). We ultimately
concluded that the Tran patent had the same “patent-
defeating effect” as though it was filed on the date of the
Tran provisional. Id. at 1385. Because Giacomini waived
the argument that the Tran provisional application did
not support the Tran patent, we did not reach the ques-
tion whether the Tran patent was presumptively entitled
to the benefit of the filing date of its provisional applica-
tion.
Thus, the Board did not err in concluding that, in
view of National Graphics’ evidence of the actual reduc-
tion to practice of the invention of the ’196 patent, Dy-
namic had the further burden to prove that Raymond was
entitled to claim the benefit of the filing date of its provi-
sional application.
II
Asserting that it carried that burden, Dynamic argues
that it provided sufficient evidence to prove that the
Raymond provisional application provided written de-
scription support for the claims of the Raymond prior art
patent. Dynamic contends that, as part of its petition, it
compared the claims of the ’196 patent to the disclosure in
the Raymond patent. According to Dynamic, it then
provided a claim chart in its reply brief to the Board
establishing anticipation of claim 1 of the ’196 patent by
the Raymond provisional application. Dynamic argues
that the combination of the two charts demonstrates that
the Raymond provisional application provides written
description support for the claims of the Raymond patent.
National Graphics responds that Dynamic only made
a conclusory assertion in its petition that Raymond was
entitled to an earlier effective date, and the argument is
therefore waived. National Graphics also argues that,
even absent a determination of waiver, the Board’s deci-
sion is supported by substantial evidence because Dynam-
DYNAMIC DRINKWARE, LLC v. NATIONAL GRAPHICS, INC. 11
ic never compared the claims of the Raymond patent to
the disclosure in the provisional application.
First, we find that Dynamic did not waive its argu-
ment that Raymond was entitled to an earlier effective
date. As discussed supra, Dynamic did not have the
burden of producing evidence relating to the Raymond
provisional application until after National Graphics
made its argument regarding reduction to practice. As a
result, it was not necessary for Dynamic to prove in its
petition that Raymond was entitled to the filing date of its
provisional application. Thus, there was no waiver.
We ultimately agree with National Graphics, howev-
er, that the Board’s decision was supported by substantial
evidence because Dynamic failed to compare the claims of
the Raymond patent to the disclosure in the Raymond
provisional application. A reference patent is only enti-
tled to claim the benefit of the filing date of its provisional
application if the disclosure of the provisional application
provides support for the claims in the reference patent in
compliance with § 112, ¶ 1. In re Wertheim, 646 F.2d 527,
537 (CCPA 1981). 2 As Dynamic acknowledges, it provided
charts to the Board comparing the claims of the ’196
patent to the disclosure of the Raymond patent and claim
1 of the ’196 patent to the disclosure of the Raymond
provisional application. See, e.g., Appellant’s Br. at 22.
Nowhere, however, does Dynamic demonstrate support in
the Raymond provisional application for the claims of the
Raymond patent. That was Dynamic’s burden. A provi-
sional application’s effectiveness as prior art depends on
its written description support for the claims of the issued
patent of which it was a provisional. Dynamic did not
make that showing.
2 Because we refer to the pre-AIA version of § 102,
we do not interpret here the AIA’s impact on Wertheim in
newly designated § 102(d).
12 DYNAMIC DRINKWARE, LLC v. NATIONAL GRAPHICS, INC.
We thus conclude that the Board’s finding that Dy-
namic failed to prove that the Raymond patent was
entitled to the filing date of its provisional application is
supported by substantial evidence. We have considered
Dynamic’s remaining arguments and find them unper-
suasive.
CONCLUSION
Because the Board properly concluded that Dynamic
failed to demonstrate by a preponderance of the evidence
that claims 1 and 12 of the ’196 patent are anticipated by
Raymond under § 102(e), we affirm.
AFFIRMED