Tinnus Enterprises, LLC v. Telebrands Corp. (Fed. Cir. 2018)

When the PTAB Attacks!

By Andrew Williams --

In the past few years, the public's perception of the patent system in the United States has been at a low point.  One of the causes of this lack of confidence in the system has been the increase in abusive patent litigation from entities that have been labelled as "patent trolls."  This problem has been magnified (and likely blown out of proportion) by the mainstream media that has been reporting on (and exaggerating) the evils of the current patent system.  The patent system's alleged failings appeared to reach the public consciousness with the two episodes of the NPR show "This American Life" entitled "When Patents Attack!" and "When Patents Attack . . . Part Two!"  As we reported at the time, these episodes concluded by focusing on a single case and extrapolated all of its "perceived problems to be indicative of the entire patent system, leaving the uninitiated to probably question why we even have a patent system in the first place."  This was followed by even more one-sided "reporting" from the NPR "Planet Money" podcast (see "When NPR Podcasters Hit the Patent System") and John Oliver's HBO commentary/comedy show "Last Week Tonight."  A response from defenders of the patent system (outside of the blogosphere) has been slow in coming.  But a couple of new videos released by, of all places, the Federalist Society does just that by highlighting the plight of Josh Malone and his struggles defending his invention "Bunch O Balloons" (see here and here).  Mr. Malone's company Tinnus Enterprises has been embroiled in multiple district court litigations and post-grant review proceedings before the PTAB.  The latest chapter of that saga occurred on May 30, 2018, when the Federal Circuit reversed and remanded the Board's final written decision in PGR2015-00018.

For those readers unfamiliar with "Bunch O Balloons," (and who have not yet watched the above-referenced videos), they can be seen in the following figure next to an accused infringing device (taken from a prior Federal Circuit opinion on the subject patents):

These devices can fill multiple water balloons (or as they are known in the art "fluid-filled inflatable containers") in less time than it normally takes to fill and tie a single water balloon.  Figure 1 from U.S. Patent 9,051,066 provides a more detailed explanation of the device:

These devices have been very popular, from the initial Kickstarter campaign to the alleged copying of the accused infringing devices.

The history of the PTAB proceedings and the concurrent district court litigation is extensive.  In short, on the day the '066 patent issued, June 9, 2015, Tinnus filed suit against Telebrands and moved for a preliminary injunction.  Telebrands filed its first PGR against a Tinnus patent (and the PGR that is the subject of this appeal) on June 22, 2015.  On September 11, 2015, after the Board instituted the PGR, the Eastern District of Texas granted the injunction after determining that Telebrands had "not raised a substantial question concerning the validity of the '066 [p]atent based on the claim term 'substantially filled' being indefinite."  That decision was affirmed by the Federal Circuit in a prior opinion on January 24, 2017.  The month prior, the PTAB issued its final written decision finding the same claim term to be indefinite, thereby rendering all challenged claims to be unpatentable.  Tinnus appealed both this determination and the Board's decision granting institution.

What the Patent Office Gives, the Patent Office Takes Away

This case highlights the frustration experienced by patent owners when their patents are challenged at the Patent Office in post-issuance proceedings.  In essence, the same institution that granted the intellectual property right turns around and takes it away, often after substantial investment has been made in reliance on that grant.  In this case, issued claim 1 read (with the relevant section highlighted):

1.  An apparatus comprising:
    a housing comprising an opening at a first end, and a plurality of holes extending through a common face of the housing at a second end;
    a plurality of flexible hollow tubes, each hollow tube attached to the housing at a respective one of the holes at the second end of the housing;
    a plurality of containers, each container removably attached to a respective one of the hollow tubes; and
    a plurality of elastic fasteners, each elastic fastener clamping a respective one of the plurality of containers to a corresponding hollow tube, and each elastic fastener configured to provide a connecting force that is not less than a weight of one of the containers when substantially filled with water, and to automatically seal its respective one of the plurality of containers upon detaching the container from its corresponding hollow tube, such that shaking the hollow tubes in a state in which the containers are substantially filled with water overcomes the connecting force and causes the containers to detach from the hollow tubes thereby causing the elastic fasteners to automatically seal the containers, wherein the apparatus is configured to fill the containers substantially simultaneously with a fluid.

The claim term "substantially filled" was not defined in the specification, nor were the two words used in conjunction at any point in the disclosure.  Instead, the term was added by the Examiner in an Examiner's Amendment that was included in the Notice of Allowability.  And the focus of the Amendment was not on the "substantially filled" limitation, but rather was included in a description of the configuration and functional capability of the elastic fasteners, that was described by the Examiner as necessary to distinguish the prior art.  As the Federal Circuit put it, it "presume[d] that an examiner would not introduce an indefinite term into a claim when he/she choose to amend the claim for the very purpose of putting the application in a condition for allowance."

Correspondingly, the Federal Circuit found that the patent was "not indefinite under the Nautilus standard because the claims, viewed in light of the specification and prosecution history, inform a person of ordinary skill about the scope of the invention with reasonable certainty."  In addition, the Court found that "the claims, in the context of the specification, 'notify the public of what is within the protections of the patent, and what is not,'" thereby also satisfying the standard articulated in In re Packard.  This conclusion was perhaps not surprising in view of the prior Federal Circuit decision in which the Court found "it difficult to believe that a [person of ordinary skill in the art, defined as] a person with an associate's degree in a science or engineering discipline[,] who has read the specification and relevant prosecution history would be unable to determine with reasonable certainty when a water balloon is 'substantially filled.'"  As a result, the Court reversed and remanded for the Board to consider the obviousness allegations.

There were other interesting legal and procedural issues considered by the Court that were ultimately deferred to the future.  And did we mention that this was one of the first (if not the first) PGR appeals considered by the Federal Circuit.  Nevertheless, this case stands as a prime example of why patent owners are frustrated with the current system, and why the attack on the patent system has perhaps gone too far.

Tinnus Enterprises, LLC v. Telebrands Corp. (Fed. Cir. 2018)
Nonprecedential disposition
Panel: Circuit Judges O'Malley, Wallach, and Hughes
Opinion by Circuit Judge O'Malley

Comments

[Atari Man]

Am I the only one that thinks that, on the particular facts of this case - namely that the phrase in question was added by examiner's amendment - the PTO should be estopped from considering the purported indefiniteness of the claim as a result of the addition of this phrase? It's inconceivable that the PTO can suggest an amendment, thus indicating that that amendment passes muster under 112, and then after grant say, "Oh, we changed our minds". On the facts of this case, consideration of such a challenge should have been reserved for the courts.

I am relieved that the CAFC came to the correct conclusion, and that it appears that Telebrands is on its way to getting what it deserves, namely an injunction and payment of damages for infringement. Unless, of course, the PTAB concocts some other non-prior art reason to invalidate the claims.

[James F.McKeown]

I'm confused by the Tinnus exemplar you give of why patent owners are frustrated with the patent system with what appears to be a political attack on the "mainstream medium" for pointing out the very thing the Tinnus case seems to illustrate. Whatever liberties that may have been taken by a comedian like John Oliver ( I don't watch his show), the patent community needs to develop a thicker skin. In fact, the old adage may apply here. i don't care what you say about me; just spell my name correctly.

[Andrew Williams]

Dear James (spelled correctly I hope),

Thank you for your comment. My point about the Tinnus case was expressed well by Atari Man’s comment above. My “attacks” on the mainstream media have been previously documented on the blog (including the links provided in this post). However, I consider my commentary to be more a complaint against the mainstream media’s largely one-sided portrayal of the patent system, focusing on the bad actors (or sometimes only perceived bad actors), while failing to explain the benefits of the patent system. To be fair, I don’t fault Jon Oliver – I do find him to be funny, and his humor wouldn’t be as funny if he had to explain the nuances of his subjects. And Laura Sydell, who put together the This American Life episodes, did give a short explanation of the benefits of the patent system, although it was generally buried in the rest of the story that sensationlized a patent case for an invention that turned out to be novel and pretty useful. Instead, for that case, the downfall for the patent holder was an inventorship problem (which was a bizarre twist considering Ms. Sydell could have picked so many other better troll stories). But you are correct, if it was just these outlets railing against the system, I wouldn’t have a problem. But at the time, the anti-patent sentiment almost resulted in the patent reform legislation that would have seriously weakened the patent system in an attempt to curb “bad patents.” For the present case, I thought the linked videos that explained the background of the present appeal did a good job of responding to these other reports (even if they did come four or five years too late). I thought they were worth sharing as a follow-up to my previous coverage of the topic. Again, thanks for commenting.

Andrew

[Dan Feigelson]

Andrew, I'll go you one further: the mainstream press and the Silicon Valley tycoons keep trotting out the myth of the "patent troll". That's sooooo 2010. Even before the AIA, the courts were moving in the direction of reigning in troll behavior, and even since the adoption of the AIA, there have been other developments that would have likewise controlled this problem (e.g. changes in the requirements for pleadings, and of course venue limitations).

Today what we've got is a system in which a patent is hardly worth anything, because if it doesn't get killed under 101 (also a post-AIA, judicially created monster that has killed trolls and actual innovators as one), the PTAB will be more than happy to invalidate it. How many bites at the invalidation apple has Telebrands had?

Why have a patent system if it's not going to protect people like Josh Malone?