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Inter Partes Review (“IPR”) continues to serve as a cost-effective vehicle for invalidating patents at the USPTO’s Patent Trial and Appeal Board’s (“PTAB”). As one recent example, Fellowes, Inc. (“Fellowes”) sued paper shredder rival ACCO Brands Corp. (“ACCO”), alleging that ACCO’s shredders infringed six of Fellowes’s patents. ACCO turned the tables on Fellowes, however, by filing an IPR Petition seeking to invalidate U.S. Patent No. 8,464,767 (“the ’767 patent”) and an IPR was ultimately instituted by the PTAB. As a result, ACCO was successful in staying costly multi-patent litigation pending the outcome of the IPR—a forum which has proved to be favorable to patent challengers in many respects.
The PTAB’s recent decision in ACCO v. Fellowes (IPR No. 2013-00566, Paper 37, February 12, 2015), should serve as a reminder to both patent owners and accused infringers alike that the validity of patents can potentially be “shredded” on obviousness grounds during IPR proceedings, especially in light of the liberal obviousness standards set forth by KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007) (“KSR“). A concise summary of the PTAB’s central obviousness analysis in ACCO v. Fellowes is provided below.
Fellowes’s ’767 patent is directed to a shredder that does not jam as a result of too many papers, or an article that is too thick, being fed into the shredder. IPR2013-00566, Paper 37, at page 4. According to Fellowes’s ‘767 patent, a detector detects the thickness of an article that is placed in the shredder. If the detector detects that the thickness of the article is too thick for the capacity of the shredder mechanism (i.e., if the article is above a predetermined maximum thickness threshold), then the shredder mechanism may be shut off to reduce the likelihood of jamming the shredder. Id. at page 5.
In addition to the “predetermined maximum thickness threshold” described above, the ’767 patent also describes a “flutter threshold” that operates to prevent the controller from shutting off the motor unnecessarily, in the event that an article being shredded flutters or waves back and forth, which could cause the article to appear thicker than it actually is. Id. at page 5.
After being sued by Fellowes for patent infringement, ACCO filed an IPR Petition seeking to invalidate claims 1, 2, 4–24, and 26–45 of Fellowes’s ‘767 patent as allegedly being obvious in view of US 7,624,938 to Aries (“Aries”) and several other prior art references (which are not discussed in this article for reasons of brevity). In particular, the central issues of the PTAB’s obviousness analysis focused on the following recitations of claim 1 of the ‘767 patent, relating to the “flutter threshold” features mentioned above (id. at page 6):
A shredder comprising:
…wherein the controller …to determine whether the input from the at least one thickness detector detecting a violation of the predetermined maximum thickness threshold meets at least one criterion corresponding to an insertion of one or more additional articles, said controller performing a predetermined operation in response to determining that the at least one criterion has been met.
In an attempt to invalidate Fellowes’s ‘767 patent, ACCO argued that FIGS. 1-3 of Aries show a shredder in which movement of an actuating arm 15 detects if a stack of papers having a predetermined maximum thickness has been inserted. If a stack having the maximum thickness is detected, then switch 31 is actuated to turn OFF the power supplied to motor 9. Id. at page 5. FIG. 3 of the prior art Aries reference is reproduced above.
Notably, Aries’s embodiment in FIGS. 1-3 does not teach the claimed features concerning a controller which determines if the input meets “at least one criterion corresponding to insertion of one more additional articles” upon detection that the predetermined maximum thickness threshold has been exceeded. However, ACCO argued that an alternative embodiment of Aries’s shredder shown in FIG. 8 of Aries (reproduced above) taught similar features. Id. at page 13.
Specifically, with respect to the claimed “meets at least one criterion,” ACCO argued that Aries teaches a timer switch 146 which is actuated when an intermediate thickness threshold is exceeded (i.e., not “a predetermined maximum thickness threshold,” as claimed). The timer switch 146 operates to cut power to the primary motor 109 (driving the cutting mechanism), after a predetermined period of time, unless the arm 144 is subsequently rotated back to a position whereby it no longer blocks the light source 147 before the predetermined period of time expires. Id. at page 16.
Aries explains that the timer switch 146 reduces the risk of a jam occurring due to waving or flapping of the sheet material, while nevertheless tolerating a certain degree of such waving or flapping. Id. at page 16.
Importantly, the claims of Fellowes’s ‘767 patent require that the controller determines if the “criterion” has been met upon detection of a violation of a predetermined “maximum” threshold thickness, rather than an “intermediate” threshold, as taught by Aries’s embodiment in FIG. 8. However, ACCO argued that it would have been obvious to one having ordinary skill in the art to apply the time delay switch taught in FIG. 8 of Aries to the embodiment of FIGS. 1-3 that utilizes a single predetermined maximum thickness threshold, so as to achieve the features claimed in Fellowes’s ‘767 patent. To support these obviousness allegations, ACCO relied on the guidance provided by the Supreme Court in KSR, and also on the Declaration testimony of ACCO’s expert witness, Mr. Paul Aries, the first inventor of the prior art Aries patent. Id. at pages 16 and 17.
Fellowes attempted to rebut ACCO’s allegations by emphasizing that Aries teaches that the timer switch 146 is actuated in connection with the violation of an intermediate threshold thickness, rather than a predetermined maximum thickness, as required by the ‘767 patent claims. Therefore, Fellowes argued, there is no teaching or suggestion by Aires that a time delay may be used for the situation when the predetermined maximum threshold thickness is exceeded. Id. at page 17.
Ultimately, the PTAB was not persuaded by Fellowes’s arguments. In reaching its decision, the PTAB concluded that the claimed features of “meets at least one criterion corresponding to an insertion of one or more additional articles” were taught by Aries’s disclosure of the predetermined amount of time that the thickness threshold is exceeded before the timer switch 146 operates to shut off the shredder motor. Id. at page 18.
Thus, the central question remaining for the PTAB was whether it would have been obvious to one of ordinary skill in the art to apply Aries’s time delay disclosure (which allegedly reads on the claimed “criterion”) to a predetermined maximum thickness threshold, rather than the intermediate thickness threshold taught by Aries. As explained below, the PTAB concluded that, yes, such a modification would have been obvious. Id. at page 19.
First, the PTAB pointed out that the embodiment in FIGS. 1-3 of Aries taught that violation of a predetermined maximum thickness threshold results an almost immediate shutdown of the shredder motor as a safeguard in the event that the stack of material being fed to the shredder exceeds the shredder’s capacity. On the other hand, the PTAB noted that the embodiment in FIG. 8 of Aries taught that violation of a predetermined intermediate thickness threshold provides a feature for tolerating waving or flapping of the sheet material by actuating a time delay in which the shredder does not cease to operate if the waiving or flapping is alleviated within a period of time. Id. at pages 19-20.
Accordingly, the PTAB reasoned that the record demonstrated that it was known in the art that violation of thickness thresholds may provide either of two functions: (1) almost immediate shutdown of a shredder motor; or (2) establishment of a time period, during which motor shutdown may be preempted, but after which shutdown occurs. Id. at page 20.
Even though Aries taught that violation of a predetermined maximum thickness threshold was intended to shut down the shredder almost immediately, rather than explicitly teaching the claimed features, the PTAB nevertheless cited to KSR, for the proposition that “[i]n an obviousness analysis, it is not necessary to find precise teachings in the prior art directed to the specific subject matter claimed because inferences and creative steps that a person of ordinary skill in the art would employ can be taken into account.” Id. at page 20.
As such, the PTAB concluded that a person of ordinary skill in the art, who is also a person of ordinary creativity (see KSR), would have appreciated that a given shredder mechanism with only a single predetermined maximum thickness threshold (the embodiment in FIGS. 1-3 of Aries) may incorporate a time delay in response to violation of that threshold. The PTAB argued that this conclusion is supported by the testimony of ACCO’s expert, Mr. Aries, who is also. Further, the PTAB reasoned that although the immediate shutdown the shredder motor may be beneficial to prevent shredder damage, the triggering of a time delay to account for paper waving or flapping operates as a convenience to alleviate unnecessary motor shutdown. Hence, the PTAB concluded that such selection between those two known options was not the product of innovation, but was instead simply the exercise of the routine skill of an artisan. Id. at pages 20-21.
Although the result of the PTAB’s obviousness analysis in ACCO v. Fellowes is consistent with previous PTAB decisions, the precise reasoning applied by the PTAB in ACCO v. Fellowes in which different embodiments of the Aries patent were combined is certainly instructive for future IPR participants. More generally, ACCO v. Fellowes is an important reminder for defendants accused of patent infringement that filing an IPR can be a good strategy for mitigating the high costs of complex patent infringement litigation by seeking invalidation of the asserted patents in a potentially more favorable forum at the PTAB.