Court Opinion

ID: 4150576
Source: CourtListenerOpinion
Date Created: 2017-03-07 16:06:30.670952+00
Date Added: 2024-06-11T14:49:55.019960
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

  PAICE LLC, THE ABELL FOUNDATION, INC.,
                 Appellants

                           v.

             FORD MOTOR COMPANY,
                      Appellee
               ______________________

                      2016-1647
                ______________________

    Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2014-
00875.
                 ______________________

                Decided: March 7, 2017
                ______________________

    RUFFIN B. CORDELL, Fish & Richardson, PC, Washing-
ton, DC, argued for appellants. Also represented by
TIMOTHY W. RIFFE, LINDA KORDZIEL, DANIEL TISHMAN,
BRIAN JAMES LIVEDALEN.

    MATTHEW J. MOORE, Latham & Watkins LLP, Wash-
ington, DC, argued for appellee. Also represented by
GABRIEL BELL; ANDREW B. TURNER, JOHN P. RONDINI,
FRANK A. ANGILERI, SANGEETA G. SHAH, Brooks Kushman
PC, Southfield, MI.
2                          PAICE LLC   v. FORD MOTOR COMPANY

                  ______________________

        Before PROST, Chief Judge, SCHALL and STOLL,
                     Circuit Judges.
STOLL, Circuit Judge.
     This is an appeal from the Patent Trial and Appeal
Board’s final written decision in an IPR proceeding that
invalidated as obvious claims 1–4, 6, 12, and 19 of Paice’s
patent relating to hybrid vehicle control strategies. Paice
contends that the Board’s findings are not supported by
substantial evidence. We disagree, except with respect to
dependent claim 3, which was incorrectly analyzed as
rising or falling with the independent claims. According-
ly, we affirm-in-part, vacate-in-part, and remand for
further proceedings consistent with this opinion.
                        BACKGROUND
     In early 2014, Paice LLC and the Abell Foundation
(collectively, “Paice”) sued Ford Motor Company for
infringement of several patents covering hybrid vehicle
technology, including U.S. Patent No. 7,559,388. Hybrid
cars, in general, contain both a gas-powered engine and
one or more battery-powered electric motors that can be
used in isolation or in tandem to propel the car. The ’388
patent teaches a vehicle control strategy to reduce emis-
sions that operates the engine only when it is efficient to
do so and utilizes the motor to propel the vehicle in sce-
narios where the engine cannot operate efficiently. The
efficient range for engine operation is determined, in part,
based on the vehicle’s instantaneous torque demands, or
“road load.” ’388 patent col. 19 ll. 31–33, col. 12 ll. 24–28.
Typically, this efficient range occurs when the vehicle’s
road load is a substantial percentage of the engine’s
maximum torque output (“MTO”), i.e., when the torque
demand is greater than 30% of MTO. Id. at col. 20 ll. 27–
35, col. 13 ll. 44–46.
PAICE LLC   v. FORD MOTOR COMPANY                          3

     The ’388 patent teaches that the vehicle can operate
in multiple different modes depending on its instantane-
ous torque requirements, the battery’s state of charge,
and other operating parameters. Id. at col. 19 ll. 31–33.
Three possible operating modes include: 1) an electric
mode used during low-speed driving in which the required
torque is provided to the wheels only by the motor, id. at
col. 35 ll. 6–13; 2) an engine mode used during highway
cruising where the engine alone provides the required
torque, id. at col. 35 ll. 29–45; and 3) a hybrid mode that
is used when the torque required is above the engine’s
MTO and the motor provides the additional torque above
that provided by the engine, id. at col. 35 ll. 46–52.
     The ’388 patent also discloses limiting the rate of
change of the engine’s output torque to a threshold value.
Id. at col. 38 ll. 55–59. The patent describes prior art cars
that respond to the driver’s depression of the accelerator
pedal by opening the throttle and injecting additional fuel
into the engine, often causing the engine to operate at
non-stoichiometric fuel-to-air ratios that increased emis-
sions. Id. at col. 38 ll. 59–66. Under the ’388 patent’s
control strategy, if the car’s instantaneous torque re-
quirement exceeds the threshold value—for example, the
driver requests rapid acceleration requiring a large in-
crease in the rate of change in the engine’s output torque
above the threshold value—the electric motor is used to
supply the difference between the car’s instantaneous
torque requirement and the threshold value. Id. at col. 38
l. 66 – col. 39 l. 19, col. 37 ll. 44–54. Independent claim 1
recites this improvement:
    1. A hybrid vehicle, comprising:
          at least two wheels, operable to receive
       power to propel said hybrid vehicle;
            a first alternating current (AC) electric
        motor, operable to provide power to said at
        least two wheels to propel said hybrid vehicle;
4                             PAICE LLC   v. FORD MOTOR COMPANY

             a second AC electric motor;
             an engine coupled to said second electric
         motor, operable to provide power to said at
         least two wheels to propel the hybrid vehicle,
         and/or to said second electric motor to drive
         the second electric motor to generate electric
         power;
             a first alternating current-direct current
         (AC-DC) converter having an AC side coupled
         to said first electric motor, operable to accept
         AC or DC current and convert the current to
         DC or AC current respectively;
             a second AC-DC converter coupled to said
         second electric motor, at least operable to ac-
         cept AC current and convert the current to
         DC;
             an electrical storage device operable to
         store energy converted to DC by said AC-DC
         converters and to provide energy to be con-
         verted to AC by at least said first AC-DC con-
         verter to power at least said first electric
         motor; and
             a controller;
             wherein a rate of change of torque output
         of said engine is limited to a threshold value,
         wherein when a rate of change of road load
         exceeds said threshold value of the rate of
         change of torque output of the engine, said
         controller is operable to operate said first mo-
         tor and/or said second motor to supply addi-
         tional power to at least said two wheels to
         supply remaining required torque.
Id. at col. 56 l. 42 – col. 57 l. 5.
PAICE LLC   v. FORD MOTOR COMPANY                          5

    The crux of the parties’ dispute is the claim’s final
“wherein” clause, which limits the amount by which the
rate of change of engine torque output can increase in
response to a change in road load and activates an electric
motor to supply the remaining required torque. Depend-
ent claims 2–4, 6, and 12 each add new limitations to
claim 1 and are also at issue in this appeal. Claim 19 is
the method claim analog to claim 1.
    Following Paice’s assertion of its patents against Ford
in district court, Ford filed a series of inter partes review
petitions, one of which was instituted for the ’388 patent.
The Board subsequently invalidated claims 1, 3, and 19 as
obvious over a combination of the Vittone and Ehsani
references. It found that Vittone disclosed the disputed
road load and torque threshold concepts from the ’388
patent’s “wherein” clause, and that Ehsani taught each of
the remaining claim limitations. Ford Motor Co. v. Paice
LLC, IPR2014-875, 2015 WL 7695188, at *3 (PTAB Nov.
23, 2015) (Board Decision). For similar reasons, the
Board found that the combination of Vittone with the
Kawakatsu reference rendered obvious claims 1, 3, 4, and
19—again, the Board reasoned that Vittone taught the
disputed elements and Kawakatsu disclosed the remain-
ing claim limitations. Id. at *13. Each of the dependent
claims 2, 6, and 12 were obvious, according to the Board,
based on a combination of Ehsani and Vittone with a
third reference, which is indicated parenthetically for
each of these claims: claim 2 (Caraceni), claim 6 (Fjäll-
ström), and claim 12 (Yamaguchi). Id. at *8–13. The
Board did not separately address claim 3.
    Paice appeals from the Board’s final written decision
invalidating each of these claims as obvious. We have
jurisdiction pursuant to 35 U.S.C. § 141(a) and 28 U.S.C.
§ 1295(a)(4)(A).
6                         PAICE LLC   v. FORD MOTOR COMPANY

                       DISCUSSION
    Paice advances three sets of arguments on appeal.
First, Paice contests the Board’s conclusions that Vittone
discloses: 1) the use of road load as a control parameter
and 2) limiting the rate of change of engine output torque
to a threshold value and operating the motor to supply
the remaining required torque when a rate of change of
road load exceeds the threshold value. Paice also faults
the Board for not finding a sufficient motivation to com-
bine Vittone with Ehsani. Second, Paice attacks the
Board’s invalidation of the dependent claims on a variety
of grounds, including motivation to combine the refer-
ences. Finally, Paice claims that the Board did not estab-
lish a motivation to combine Vittone with Kawakatsu.
    A claim is unpatentable as obvious “if the differences
between the subject matter sought to be patented and the
prior art are such that the subject matter as a whole
would have been obvious at the time the invention was
made to a person having ordinary skill in the art.”
35 U.S.C. § 103. 1 We review the Board’s ultimate obvi-
ousness determination de novo and underlying factual
findings for substantial evidence. Harmonic Inc. v. Avid
Tech., Inc., 815 F.3d 1356, 1363 (Fed. Cir. 2016). Sub-
stantial evidence “means such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion.” Consol. Edison Co. v. NLRB, 305 U.S. 197,
229 (1938). Factual findings underlying the obviousness
inquiry include the scope and content of the prior art, the
differences between the prior art and the claimed inven-
tion, whether there is a motivation to combine prior art

    1   Given the effective filing date of the ’388 patent’s
claims, the version of 35 U.S.C. § 103 that applies here is
the one in force preceding the changes made by the Amer-
ica Invents Act. See Leahy–Smith America Invents Act,
Pub. L. No. 112-29, § 3(n), 125 Stat. 284, 293 (2011).
PAICE LLC   v. FORD MOTOR COMPANY                        7

references, the level of ordinary skill in the art, and
relevant secondary considerations. Merck & Cie v. Gnosis
S.P.A., 808 F.3d 829, 833 (Fed. Cir. 2015), cert. denied,
137 S. Ct. 297 (2016).
                             I.
                             A.
    First, Paice contends that Vittone’s disclosures of a
“driveability torque requirement” and the “total traction
torque” differ from the teachings of road load in the ’388
patent because Vittone relies solely on the accelerator
pedal position—how far the driver depresses the gas
pedal—whereas road load takes into account both the
pedal position and other external conditions on the car,
such as wind conditions and rolling friction. Relatedly,
Paice contends that the Board erroneously broadened its
original construction of road load such that it was met by
accelerator pedal position alone.
     The Board rejected Paice’s argument that Vittone
does not disclose road load, and its conclusion is support-
ed by substantial evidence. The Board found that the ’388
patent defines road load as “the vehicle’s instantaneous
torque demands, i.e., that amount of torque required to
propel the vehicle at a desired speed.” Board Decision,
2015 WL 7695188, at *2 (quoting ’388 patent col. 12
ll. 26–28). According to the Board, Vittone’s disclosure of
a “driveability torque requirement” and the “total traction
torque,” as determined by the accelerator pedal position,
represents the torque required to propel the vehicle, i.e.,
road load. Id. at *4. The Board credited the testimony of
Ford’s expert, Dr. Stein, who explained that a person of
ordinary skill in the art would have understood that the
driveability torque requirement and the total traction
torque represent the instantaneous torque required to
propel the vehicle. Id. (citing J.A. 230–31, ¶ 173). We
also detect no impermissible broadening of road load’s
construction.
8                         PAICE LLC   v. FORD MOTOR COMPANY

    In our opinion in the companion appeal, we construed
the term road load to mean “the amount of instantaneous
torque required to propel the vehicle, be it positive or
negative.” Paice LLC v. Ford Motor Co., Nos. 2016-1412,
-1415, -1745, slip op. at 8 (Fed. Cir. Mar. 7, 2017). In
reaching this construction, we observed that the ’388
patent does not disclose how to determine road load other
than by reference to the accelerator pedal position. For
example, the specification states: “the operator’s depress-
ing the accelerator pedal signifies an increase in desired
speed, i.e., an increase in road load, while reducing the
pressure on the accelerator or depressing the brake pedal
signifies a desired reduction in vehicle speed.” ’388 patent
col. 12 ll. 31–35. We cannot say, based on the record
before us, that the Board’s conclusion that Vittone dis-
closes road load lacks substantial evidence support.
                            B.
    Paice also alleges that the Board’s conclusion that
Vittone discloses limiting the rate of change of the en-
gine’s output torque to a threshold value and operating
the motor to supply the remaining required torque when a
rate of change of road load exceeds the threshold value
lacks the support of substantial evidence. In reaching its
conclusion, the Board relied on Vittone Figure 8, shown
below, and its accompanying statement that “[a] further
contribution to the emission reduction is achieved through
the ‘steady state’ management of the thermal engine in
transient phases, while the torque demand is assured by
the electric motor support (Fig. 8).” J.A. 451, 455; Board
Decision, 2015 WL 7695188, at *5–6.
PAICE LLC   v. FORD MOTOR COMPANY                        9

J.A. 455. The Board further credited Dr. Stein’s explana-
tion that, during the transient phases in Figure 8 where
the driveability torque requirements (solid black line)
increased at different rates between 0–1 second and 1–2
seconds, the engine torque output (dashed line) responded
by increasing at a relatively constant rate. Board Deci-
sion, 2015 WL 7695188, at *5–6 (citing J.A. 233–35,
¶¶ 177–78, 181). According to Dr. Stein, the common rate
of change in engine output torque in the two transient
phases is due to Vittone’s “steady state” management, and
the common rate of change in the engine output torque
represents a threshold value. Id. (citing J.A. 233–35,
¶¶ 177–78, 181).
    Paice complains that Dr. Stein’s analysis of Figure 8
in Vittone is unreliable because, among other reasons,
Figure 8 is merely demonstrative and not drawn to scale,
and because Vittone does not describe what is meant by
“steady state” management. Regardless of whether or not
the figure is drawn to scale, we credit Dr. Stein’s steady-
state theory that Vittone describes this recited feature
based on an analysis of the qualitative features of Fig-
10                       PAICE LLC   v. FORD MOTOR COMPANY

ure 8. In particular, substantial evidence remains to
support the Board’s fact findings that Vittone broadly
discloses limiting the rate of change of torque output of
the engine and using an electric motor to assure that the
additional torque demand is met. Vittone teaches that, in
his hybrid mode control system, “[a] further contribution
to the emission reduction is achieved through the ‘steady
state’ management of the thermal engine in transient
phases, while the torque demand is assured by the electric
motor support (Fig. 8).” J.A. 451 (emphases added). The
Board found that this sentence in Vittone discloses the
disputed claim limitation, Board Decision, 2015 WL
7695188, at *5, and Dr. Stein noted that “[a] conventional
internal combustion engine typically runs rich during
transient conditions in which the engine output torque
increases rapidly,” J.A. 232, ¶ 175. Dr. Stein further
explained that the reference to “steady state manage-
ment” in Vittone refers to “limiting the rate of engine
output torque during [these] transient conditions” in
which the output torque increases rapidly. J.A. 232–33,
¶ 175. This constitutes substantial evidence to support
the Board’s finding.
                           C.
    In addition, Paice alleges that a POSA would not have
been motivated to combine Ehsani and Vittone. Paice
contends that the control systems of Ehsani and Vittone
are incompatible because Ehsani controls its system to
operate at constant power, 2 meaning that torque must be
able to vary as the speed changes, whereas Vittone con-
trols its system by limiting the engine’s output torque.
The Board, however, was not persuaded by this argu-
ment. Because both Ehsani and Vittone are directed to

     2  As explained by Dr. Stein during his deposition,
“power is equal to torque times speed of the engine.”
J.A. 2619.
PAICE LLC   v. FORD MOTOR COMPANY                        11

the problem of reducing hybrid vehicle emissions, the
Board found that a POSA would have been motivated to
improve on Ehsani’s vehicle and further reduce emissions
by implementing Vittone’s steady state management
strategy. To support this factual finding, the Board
credited the testimony of Dr. Stein, who explained that
implementing a control strategy is a simple substitution
of the existing control strategy and likely does not require
changes to the underlying system architecture. Board
Decision, 2015 WL 7695188, at *7 (citing J.A. 266–67,
¶¶ 253–54). The same portion of Dr. Stein’s expert testi-
mony also states that adding Vittone’s control strategy to
Ehsani would lead to a further reduction in emissions.
J.A. 266–67, ¶ 254. Dr. Stein’s testimony provides sub-
stantial evidence to support the Board’s conclusion that a
POSA would have been motivated to combine Vittone
with Ehsani.
                            II.
    Paice next alleges error in the Board’s invalidation of
dependent claims 2, 3, 6, and 12. With the exception of
claim 3, we disagree.
    Dependent claim 2 recites: “The hybrid vehicle of
claim 1, wherein said threshold value is no more than
about 2% per revolution.” ’388 patent col. 57 ll. 6–7.
Paice alleges that the Board erred in relying on the Cara-
ceni reference to disclose this limitation because Caraceni
only discloses an absolute rate of change of engine torque
output, not a percent change per revolution. Paice also
faults the analysis of Ford’s expert, Dr. Stein, for using
the MTO to derive the percent of change per revolution,
purportedly because limiting the rate of change of engine
torque output at MTO would be unsafe. But the Board
correctly considered and rejected both of these arguments.
Board Decision, 2015 WL 7695188, at *8–9. Dr. Stein’s
expert report converted the “torque gradient” values from
Caraceni into a “% per revolution” value using engine
12                          PAICE LLC   v. FORD MOTOR COMPANY

speed and torque values. After conversion, as the Board
notes, Dr. Stein determined that forty of the forty-two
torque gradient values found in Caraceni Figure 14
satisfied claim 2’s “no more than about 2% per revolution”
requirement. Id. at *9. The Board expressly credited
these calculations by Dr. Stein. Id. (citing J.A. 267–77,
¶¶ 255–73). Given this record, we conclude that substan-
tial evidence supports the Board’s conclusion.
    Dependent claim 3 recites: “The hybrid vehicle of
claim 1, wherein said controller is operable to vary said
threshold value with respect to a state of charge of said
electrical storage device.” ’388 patent col. 57 ll. 8–10.
Even though Paice separately argued claim 3 in its Patent
Owner’s Response, J.A. 2297–98, the Board did not sepa-
rately analyze claim 3’s limitation. Instead, the Board
invalidated it in conjunction with claims 1 and 19 without
addressing claim 3’s limitation. In order to “allow effec-
tive judicial review, . . . the agency is obligated to ‘provide
an administrative record showing the evidence on which
the findings are based, accompanied by the agency’s
reasoning in reaching its conclusions.’” Synopsys, Inc. v.
Mentor Graphics Corp., 814 F.3d 1309, 1322 (Fed. Cir.
2016) (quoting In re Lee, 277 F.3d 1338, 1342 (Fed. Cir.
2002)). The Board did not do that here. Therefore, the
Board’s invalidation of this claim is not supported by
substantial evidence, and we vacate and remand this case
to the Board for consideration of Paice’s arguments for
this claim in the first instance.
    Dependent claim 6 recites a three-motor hybrid vehi-
cle that provides all-wheel drive. While Paice does not
dispute that Fjällström discloses the three-motor all-
wheel drive limitation in claim 6, Paice argues that a
POSA would not have been motivated to modify Ehsani in
view of Fjällström to provide a third AC electric motor to
provide power to a second pair of wheels as required by
claim 6 because: Ehsani already discloses an all-wheel
drive hybrid electric vehicle; Ehsani uses AC electric
PAICE LLC   v. FORD MOTOR COMPANY                       13

motors whereas Fjällström uses DC electric motors; and
the two references teach different transmission architec-
tures. The Board rejected each of these arguments in its
opinion, in some instances explicitly crediting Dr. Stein’s
testimony to the contrary. Board Decision, 2015 WL
7695188, at *10–11. As the Board explained, Ehsani
discloses multiple different vehicle architectures—
including one with two motors, where each motor is
coupled to a different set of wheels—and explains that
various substitutions and alterations can be made to this
architecture. Continuing, the Board reasoned that Fjäll-
ström suggests one such substitution—having three
electric motors—that a POSA would have looked to when
considering alternative architectures for an all-wheel
drive hybrid vehicle. Id. at *10. Paice disagrees with the
Board’s conclusions but fails to show that the Board’s
reasoning is unsupported by substantial evidence, includ-
ing the references themselves and expert testimony.
Based on our standard of review, we cannot say the Board
lacked substantial evidence for its conclusion.
    Dependent claim 12 requires: “The hybrid vehicle of
claim 1, wherein said engine is preheated prior to start-
ing.” ’388 patent col. 57 ll. 51–52. Paice contends that a
POSA would not have been motivated to combine Yama-
guchi with Vittone because Yamaguchi discloses rotating
the engine at high speeds to heat the engine, whereas
Vittone teaches using a heated catalyst to warm up the
main catalyst while the engine works at a minimum
RPM. The Board again relied on Dr. Stein’s testimony to
reject this argument. He explained that Vittone’s refer-
ence to the use of catalysts does not relate to preheating
prior to starting the engine—instead, Vittone’s engine is
already on and working at a minimum RPM. Board
Decision, 2015 WL 7695188, at *13 (citing J.A. 2784–85,
¶¶ 103–06). The Board found that none of the evidence
proffered by Paice sufficiently proved that Vittone dis-
courages or discredits Yamaguchi’s method for preheating
14                        PAICE LLC   v. FORD MOTOR COMPANY

at a high RPM. Given this record, we find substantial
evidence supports the Board’s conclusion that a POSA
would have been motivated to combine Vittone with
Yamaguchi.
                           III.
    Finally, Paice contends that the Board erred in reject-
ing claims 1, 3, 4, and 19 as obvious over the combination
of Kawakatsu and Vittone. 3            Because both the
Ehsani/Vittone and Kawakatsu/Vittone obviousness
combinations rely on Vittone to disclose the disputed
claim limitations, the only difference between these
combinations is the motivation to combine the references.
Therefore, the only separate argument Paice raises for
this combination is whether the Board incorrectly found
that a POSA would have been motivated to modify Kawa-
katsu’s control strategy with Vittone’s.
    The Board determined that a POSA would have com-
bined the two control strategies because both references
are directed to hybrid vehicles and to reducing emissions.
The Board further credited Dr. Stein’s testimony that
adding Vittone’s control strategy to Kawakatsu would be
a “simple substitution” and that a POSA would have been
motivated to improve on Kawakatsu’s emissions reduction
control strategy by implementing Vittone’s steady state

     3  As with the combination of Ehsani and Vittone,
the Board failed to address dependent claim 3. With
respect to claim 4, Paice argued in the Patent Owner
Response that it was not obvious over the combination of
Kawakatsu and Vittone for the same reasons Paice articu-
lated for independent claim 1. J.A. 2313. Paice did not
separately argue the validity of claim 4 on appeal either.
Because we do not find Paice’s arguments for independent
claim 1 persuasive, we also do not find them persuasive
for dependent claim 4.
PAICE LLC   v. FORD MOTOR COMPANY                      15

control strategy. Board Decision, 2015 WL 7695188, at
*14 (citing J.A. 347–48, ¶¶ 434–35). Those same para-
graphs of Dr. Stein’s declaration indicate that Vittone’s
“steady state” management during transient phases
would be consistent with Kawakatsu’s stated desire for
improved efficiency and would not require a modification
of Kawakatsu’s system architecture.         J.A. 347–48,
¶¶ 434–35. In light of this evidence, we conclude that
substantial evidence supports the Board’s conclusion that
a POSA would have been motivated to combine Vittone’s
control strategy with Kawakatsu.
                        CONCLUSION
    We have considered Paice’s remaining arguments and
find them unpersuasive. For the reasons stated above,
substantial evidence supports the Board’s conclusion that
the asserted prior art references rendered claims 1, 2, 4,
6, 12, and 19 obvious. Accordingly, we affirm that portion
of the Board’s decision. The Board lacked substantial
evidence to support its invalidation of claim 3, however,
and we vacate and remand to the Board to consider
Paice’s arguments with respect to claim 3 in the first
instance.
  AFFIRMED-IN-PART, VACATED-IN-PART, AND
                REMANDED
                           COSTS
    Each party shall bear its own costs.