On June 1, 2022, the Patent Trial and Appeal Board issued a Final Written Decision finding unpatentable three claims of AutoStore Technology AS’s (“AutoStore’s”) U.S. Patent No. 10,294,025 (“the ’025 patent”), while finding another claim not patentable. See Ocado Group PLC v. AutoStore Technology AS, IPR 2021-00274. In its Final Written Decision, the PTAB determined that a U.S. patent cited by Petitioner Ocado Group PLC (“Ocado”) was prior art because it was entitled to a priority date preceding the ’025 patent’s priority date.

AutoStore’s ’025 patent is directed to a remotely operated vehicle assembly for picking up storage bins from a storage system in which the vehicle is able to change direction. Relevant to Ocado’s petition for inter partes review, the ’025 patent claims priority to a Norwegian application filed on June 19, 2014.

Ocado contended that claims 1 and 18-20 were unpatentable as anticipated or obvious, citing U.S. Patent No. 10,577,178 (“the ’178 patent), two PCT applications, and two UK patent applications, including GB Patent Application No. 1314313.6 (“the ’313 application”). The ’178 patent relates to robotic devices for handling storage containers in a storage system comprising a grid stack of units. Furthermore, the ’178 patent claims priority to the ’313 application, which has a priority date of August 9, 2013.

Ocado asserted that each claim of the allegedly prior art ’178 patent was supported by the ’313 application and therefore entitled to the August 9, 2013 priority date. AutoStore contended, however, that the applicant listed on the ’313 patent (i.e., Ocado Limited) did not file the ’178 patent or on behalf of its applicant (i.e., Ocado Innovation Limited). As the ’178 patent was filed as a continuation application of U.S. Application No. 14/910,858, AutoStore argued that the ’178 patent was only entitled to that application’s later priority date of July 24, 2014, which would result in the ’178 patent not qualifying as prior art in regard to the ’025 patent.

Ocado responded that the ’178 patent was entitled to priority to the ’313 application because each of the four named inventors of the ’178 patent were employed by Ocado Limited and were required to assign their inventions to Ocado Limited at the time of the ’313 application’s filing. Ocado also noted that under the UK Patent Act of 1977, employers own the inventions of their employees.

On the question of the ’178 patent’s priority date, the PTAB first looked to 35 U.S.C. § 119(a), which includes the language “any person . . . whose legal representatives or assigns have[] previously regularly filed an application for a patent for the same invention in a foreign country.” In applying § 119(a) to the ’178 patent and ’313 application, the Board observed that on June 12, 2014, ownership of the ’313 application was transferred from Ocado Limited to the predecessor of Ocado Innovation Limited through a Business Purchase Agreement. The Board found that under Boston Scientific Scimed Inc. v. Medtronic Vascular Inc., 497 F.3d 1293 (Fed. Cir. 2007), this evidence was sufficient to indicate that the ’313 application was indeed filed on behalf of the ’178 patent’s inventors.

The PTAB next considered whether the subject matter of the ’178 patent was supported by the ’313 application, as required under Dynamic Drinkware, LL v. Nat’l Graphics, Inc., 800 F.3d 1357 (Fed. Cir. 2015). The PTAB looked at the specification of the ’313 application, finding that it disclosed the “single space robot” that Ocado argued was also taught by the ’178 patent. The PTAB then compared the parties’ expert declarations. The PTAB found that Ocado’s expert testimony on the ’313 application, describing how the wheels engaged the rail tracks and how the rails were split to form double tracks, was more consistent with a figure from the ’313 application of a load handling device. From this finding, the PTAB was persuaded that the relevant subject matter of the ’178 patent was supported by the ’313 application.

The PTAB also considered whether the ’178 patent was prior art under 35 U.S.C. § 102(d)(2), which similarly requires that a prior-filed application to which priority is claimed must describe the relied-upon subject matter. Referring to its Dynamic Drinkware analysis, the PTAB held that the ’178 patent was entitled to claim priority to the ’313 application under § 102(d)(2).

Having concluded that the ’178 patent was entitled to the August 9, 2013 priority date and thus qualified as prior art, the PTAB went on to hold claims 1 and 18 unpatentable as anticipated by the ’178 patent, while claim 19 was anticipated by the ’313 application.

Takeaway: This decision illustrates the various issues that arise when a domestic patent reference must claim priority to a foreign patent application for it to qualify as prior art.