Ford Gets Mixed Decision in Paice Hybrid Car Patent Attack

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By Peter Leung

Ford Motor Co.’s validity attacks on patents related to hybrid car technology were partly affirmed by a federal appeals court in two decisions Feb. 1.

But the court also sent parts of the dispute back to the Patent and Trademark Office, giving Paice LLC another chance to defend some of its patent claims.

The court, in a decision designated as precedential, clarified the legal standard for determining whether a patent application incorporates another application. Patent applications can incorporate by reference an earlier related application, which can be important when fending off a validity challenge.

Paice sought to incorporate an earlier patent application to give the patent an earlier invention date and shield it from one of Ford’s obviousness arguments.

Incorporate by Reference

Paice’s patents relate to ways to efficiently allocate the workload between the gas engine and electric motor in a hybrid car.

The PTO’s Patent Trial and Appeal Board, which decided Ford’s inter partes reviews, made a mistake in determining the priority date of some of the patent claims, the court said. The PTAB invalidated several claims in U.S. Patent No. 7,237,634, saying they were obvious in light of an earlier patent publication, PCT publication WO 00/15455 (the 455 publication).

Paice argued the 634 patent actually had a priority date from an earlier application—the 817 application—that predates the 455 publication. According to Paice, the 817 application, in turn, incorporated an earlier patent application, which it referred to as Severinsky, after the named inventor. Severinsky provides written support for the disputed patent claims, and its incorporation into the 817 application gives the 634 patent claims the earlier priority date, Paice said.

The Federal Circuit accepted the argument. The 817 application had a statement that Severinsky “is incorporated herein.” That was enough to incorporate Severinsky into the 817 application, as it specifically identified what was to be incorporated, the court said.

Design Differences

The PTAB had rejected Paice’s argument, saying another sentence specified that, where there were differences between the designs in the 817 application and Severinsky, the 817 design should apply. That means Severinsky wasn’t incorporated at all, the PTAB said.

However, the PTAB misunderstood the sentence, the court said.

The sentence merely clarified differences between the design features in the two applications and had no bearing on whether Severinsky is incorporated into the 817 patent, the court said. It explained which features from the invention in Severinsky could be imported into the 817 application, not whether the Severinsky document as a whole was incorporated, it said.

The court vacated that part of the decision, and ordered the PTAB to determine whether the disputed claims in the 634 patent were disclosed in Severinsky.

In other parts of the decision and a separate nonprecedential decision, the court affirmed the PTAB’s rulings that several of Paice’s other patent claims were invalid.

Judge Richard G. Taranto wrote the decision, which Judge Alan D. Lourie and Kathleen M. O’Malley joined. Fish & Richardson PC represented Paice. Latham & Watkins LLP and Brooks Kushman PC represented Ford.

The cases are Paice LLC v. Ford Motor Co. , Fed. Cir., 2017-1387, 2/1/18 and Paice LLC v. Ford Motor Co. , 2018 BL 34065, Fed. Cir., 2017-1263, unpublished 2/1/18 .

To contact the reporter on this story: Peter Leung in Washington at pleung@bloomberglaw.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bloomberglaw.com

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