thisBy: Alex Chung and Matt Johnson

In an appeal from final written decisions of the Patent Trial and Appeal Board (“Board”) in six inter partes review (IPR) proceedings where Ford Motor Co. (“Ford”) challenged two patents owned by Paice LLC (“Paice”), the Federal Circuit found that the Board erred in interpreting the incorporation by reference statement in a priority application and, as a result, invalidating certain Paice claims for lack of written description. Paice LLC v. Ford Motor Co., Nos. 2017-1387, 1388, 1390, 1457, 1458 (February 1, 2018) (O’Malley, joined by Lourie and Taranto).

The Board had found Paice’s certain challenged claims unpatentable as obvious over two prior art references, the ‘455 PCT publication and Severinsky.  Paice argued that the ‘455 PCT publication is not prior art to the challenged claims because they claimed priority to a US application, the ‘817 application, that predates the ‘455 PCT publication. Since the claims at issue first appeared in a continuation-in-part (CIP) application, it had to be determined whether those claims found adequate written description support in the ‘817 application to be entitled to its earlier priority date.  Paice asserted that, Severinsky, which the ‘817 application properly incorporated by reference, was itself sufficient to provide the requisite support.  The Board, however, had determined that Severinsky was not properly incorporated, and thus concluded that the ‘817 application, standing alone, did not provide sufficient support.

Therefore, the threshold issue on appeal was whether the Board’s interpretation of the incorporation by reference clause was in error—to which the Court replied in the affirmative. The incorporation clause of the ‘817 application at issue read as follows:

This application discloses a number of improvements over and enhancements to the hybrid vehicles disclosed in the inventor’s U.S. Pat. No. 5,343,970 (the “’970 patent”) [Severinsky], which is incorporated herein by this reference. Where differences are not mentioned, it is to be understood that the specifics of the vehicle design shown in the ’970 patent are applicable to the vehicles shown herein as well.

The Board concluded that the second sentence limited the scope of incorporation in the first sentence only to disclosures in Severinsky that were not different from disclosures in the ‘817 application, and finding differences between those disclosures, determined that Severinsky’s disclosures were not incorporated into the ‘817 application.

The Court disagreed and found that, when read in the context, the “broad and unambiguous” language in the first sentence, “is incorporated herein by this reference,” was sufficient to incorporate the entire Severinsky document into the ‘817 application.  The second sentence, to the contrary, merely indicated that only certain specific features of Severinsky’s invention disclosed in that document were applicable to the invention in the ‘817 application, which had no bearing on the extent of the incorporation effectuated by the first sentence: the entire Severinsky document itself, despite such differences in disclosures of the inventions.

Even if the second sentence was to be read as a narrow incorporation, the Court’s holding in Harari—where a second incorporation clause’s narrower language did not diminish the broad scope of incorporation provided by a first incorporation clause, regardless of the proximity of two incorporation clauses—would have similarly dictated that the second sentence in the ‘817 application does not negate or otherwise limit the broad incorporation of the Severinsky in its entirety.  Harari v. Lee, 656 F.3d 1331, 1335-36 (Fed. Cir. 2011).  Having concluded that the Board erred in its incorporation ruling, the Court remanded for the Board to determine in the first instance whether the ‘817 application, now with Severinsky fully incorporated, supplied adequate written description support, so that whether the ‘455 PCT publication is a prior art to the claims at issue can be ultimately determined.

Paice reminds us that, the incorporation by reference clauses, especially those intending to incorporate a reference in its entirety, need to clearly make broad and unambiguous statements not to be potentially limited or negated by accompanying statements when read in the context.

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Matt Johnson is one of the Firm's primary contacts on practice before the PTAB. Matt consults on nearly every one of Jones Day's nearly 400 PTAB cases to date. He currently serves as co-chair of Jones Day's PTAB practice.