Authored by: Jeremy J. Gustrowsky
The Federal Circuit recently addressed whether a patent owner can challenge a final written decision based on a defendant’s post-institution violation of a Sotera stipulation, along with claim construction and secondary considerations issues. The court dismissed the institution-related arguments and affirmed the Patent Trial and Appeal Board’s unpatentability findings.
The case revolves around three patents owned by Carolyn Hafeman: U.S. Patent Nos. 10,325,122, 10,789,393, and 9,892,287. These patents describe methods for displaying owner contact information on a lost or stolen computer’s screen to help return the device. A key claim feature required that return information be initiated or changed “through remote communication without assistance by a user with the computer.” Hafeman had sued LG Electronics for selling phones, tablets, and laptops loaded with Google and Microsoft “Find My Device” features. Google and Microsoft then filed six IPR petitions naming LG as a real party in interest.
To avoid discretionary denial of institution under then-Director Vidal’s guidance, LG provided a Sotera stipulation promising not to pursue in district court any ground that Google or Microsoft raised or reasonably could have raised in the IPRs. The Board instituted review based partly on this stipulation. After institution, however, the district court found that LG had violated the stipulation. Hafeman argued the Board should have terminated the IPRs or at least explained in its final written decisions why proceedings should continue despite the violation.
The Federal Circuit dismissed this portion of the appeal as barred by 35 U.S.C. § 314(d), which makes institution decisions nonappealable. The court emphasized that simply repackaging an institution challenge as an attack on the final written decision does not bypass the statutory bar. Because the Sotera stipulation was itself a consideration for institution, Hafeman’s request to terminate the IPRs based on its violation amounted to an indirect challenge to the institution decision. The court distinguished prior cases involving estoppel and joinder rulings that were separate from institution itself.
On the merits, the court rejected Hafeman’s argument that the Board improperly construed the “without assistance by a user” limitation. Hafeman contended this phrase meant the user could not even establish an internet connection. The court disagreed, holding that the phrase modifies only the action of “initiating or changing return information” and does not restrict the separate, unrecited act of establishing connectivity. The specification supported this reading by describing updates similar to McAfee anti-virus software updates, which contemplate a user going online. The prosecution history, which added the limitation to overcome prior art requiring a user to press an interrupt key, did not extend to barring user-initiated internet connections.
Finally, the court affirmed the Board’s treatment of secondary considerations of non-obviousness. Hafeman failed to establish a nexus between her commercial product (the Retriever) and the claimed invention. The court noted that nexus is measured against the patent claims, not the specification. Industry praise focused on unpatented features like a verbal alarm component, commercial success evidence lacked any connection to the invention’s merits, and Hafeman never actually argued before the Board that the Find My Device programs constituted copying. Arguments raised for the first time on appeal were forfeited.
The decision reinforces that § 314(d) provides robust protection for institution decisions, even when post-institution events arguably undermine the original basis for institution. Patent owners faced with stipulation violations should condiser remedies in district court rather than expecting the PTAB or Federal Circuit to unwind an instituted proceeding.