Whole Space Industries Ltd. v. Zipshade Industrial (B.V.I.) Corp

Addressing the procedures for seeking a covered business method (CBM) review, the Patent Trial and Appeal Board (PTAB or Board) declined to institute the CBM, finding that the petition improperly shifted the burden of deciphering the petitioner’s arguments onto the patent owner and the Board, and that the petitioner failed to show a reasonable likelihood that it would prevail on the merits with respect to at least one claim. Whole Space Industries Ltd. v. Zipshade Industrial (B.V.I.) Corp, Case No. CBM2015-00488 (PTAB, July 24, 2015) (Grossman, APJ.).

Petitioner Whole Space challenged all of the claims of Zipshade’s patent relating to a control system and method for raising and lowering window shades, filing several corrected petitions in the process. The patent owner filed a patent owner’s preliminary response to the first corrected petition.

The Board found that Whole Space’s petition failed to satisfy threshold requirements for unpatentability, in part because it contained “confusing, inconsistent grounds” and cited a “thirty-one page, seventy-four paragraph” Declaration in its entirety without referring to any specific portions of that document. The Board explained that parties requesting inter partes review should “avoid submitting a repository of all the information that a judge could possibly consider, and instead focus on concise, well-organized, easy-to-follow arguments supported by readily identifiable evidence of record.”

On the merits, the Board dismissed the petitioner’s anticipation and obviousness assertions, noting a substantial number of inconsistencies and conclusory statements in the petition. Specifically, the Board found inconsistencies between the arguments presented in the petition and accompanying claim charts, which required the Board to decipher whether the petitioner intended to make certain arguments not fully articulated in the petition. The Board also concluded that citations in the petition arose to incorporation by reference, rejecting any consideration of arguments that relied upon such citations. The Board noted that incorporation by reference “serves to circumvent the 60-page limit imposed on petitions for inter partes review, while also obscuring the arguments and evidence by requiring the patent owner and the Board to sift through the entire Declaration to locate specific, relevant arguments.” Moreover, the Board found that the petition failed to satisfy the particularity and specificity requirements by failing to identify how the “fifty-four figures and seventeen columns of text” of the reference corresponded to the challenged claims, noting the same problems in the accompanying claim charts.

In addition, the Board found that the petitioner’s assertions equated to conclusory labels that do not substitute for a fact-based analysis, concluding that the petitioner “must clearly express and explain its positions, especially on precisely how the teachings of multiple references are used in combination to meet a claimed feature.” For these reasons, the Board declined to institute an IPR.

Practice Note: The Board has shown a reluctance to decipher arguments presented in a petition without a sufficient showing of articulated and concise supporting evidence. Providing readily identifiable citations to supporting evidence together with concise explanations as to how such cited evidence applies to each of the challenged claims is essential for the Board to properly consider the arguments presented and developed in the petition.