Court Opinion

ID: 4204691
Source: CourtListenerOpinion
Date Created: 2017-09-20 15:02:01.479663+00
Date Added: 2024-06-11T14:41:14.422639
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                ______________________

             NFC TECHNOLOGY, LLC,
                    Appellant

                          v.

JOSEPH MATAL, PERFORMING THE FUNCTIONS
 AND DUTIES OF THE UNDER SECRETARY OF
 COMMERCE FOR INTELLECTUAL PROPERTY
AND DIRECTOR, U.S. PATENT AND TRADEMARK
                 OFFICE,
                 Intervenor
           ______________________

                      2016-1808
                ______________________

    Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2014-
01198.
                 ______________________

             Decided: September 20, 2017
               ______________________

   ROBERT AUCHTER, McKool Smith, P.C., Washington,
DC, argued for appellant. Also represented by JON
WRIGHT, ADAM LAROCK, Sterne Kessler Goldstein & Fox,
PLLC, Washington, DC.

    ROBERT J. MCMANUS, Office of the Solicitor, United
States Patent and Trademark Office, Alexandria, VA,
argued for intervenor Joseph Matal. Also represented by
2                           NFC TECHNOLOGY, LLC   v. MATAL

NATHAN K. KELLEY, MONICA BARNES LATEEF, JOSEPH
GERARD PICCOLO, SCOTT WEIDENFELLER.
               ______________________

    Before NEWMAN, LOURIE, and HUGHES, Circuit Judges.
LOURIE, Circuit Judge.
    NFC Technology, LLC (“NFC”) appeals from the final
written decision of the U.S. Patent and Trademark Office
Patent Trial and Appeal Board (“the Board”) in an inter
partes review (“IPR”) proceeding concluding that claims
1–3 and 5 of U.S. Patent 6,700,551 (“the ’551 patent”) are
unpatentable as obvious. See HTC Corp. v. NFC Tech.,
LLC, IPR 2014-01198, 2016 WL 497524, at *1 (P.T.A.B.
Feb. 3, 2016) (“Final Decision”). Specifically, the Board
rejected NFC’s argument that it had created a prototype
embodying the claimed invention before the priority date
of a cited reference, on the basis that NFC had not ade-
quately proven that certain third-party activity inured to
NFC’s benefit. Id. at *5–15. For the reasons that follow,
we reverse the Board’s determination as to inurement,
and remand for the Board to determine whether NFC
presented sufficient evidence that the prototype embodied
the claimed invention.
                     BACKGROUND
     NFC owns the ’551 patent, which generally relates to
a near-field communication device. See ’551 patent col. 1
ll. 9–12. Such devices use electromagnetic induction to
communicate information over very short distances. See
id. col. 1 ll. 14–18.
     When the application that became the ’551 patent was
filed, two near-field communications standards existed:
ISO/A and ISO/B. Id. col. 1 ll. 19–26. According to the
’551 patent, relatively simple circuits could be used to
cause a device to communicate using a single standard;
for the device to be capable of communication using both
NFC TECHNOLOGY, LLC   v. MATAL                              3

standards, however, it required a circuit that was more
complicated and consequently more expensive to manu-
facture. Id. col. 1 ll. 44–60.
     A primary goal of the invention described and claimed
in the ’551 patent is to allow for communication using
both standards in a circuit that is “simple in structure
and inexpensive to produce.” Id. col. 1 ll. 61–65. The
claims reflect this functionality. See id. col. 7 l. 16–col. 8
l. 32. The ’551 patent claims a priority date of March 25,
1999, the date of the filing of a French patent application.
Final Decision, 2016 WL 497524, at *5.
    HTC Corp. (“HTC”) petitioned for IPR of the ’551 pa-
tent, alleging that claims 1–3 and 5 were unpatentable as
obvious over, inter alia, U.S. Patent 6,122,492 (“Sears”).
See Joint Appendix (“J.A.”) 65. Sears bears a filing date
of February 8, 1999. Final Decision, 2016 WL 497524, at
*5. The Board instituted review. J.A. 208.
     NFC responded that Bruno Charrat (“Charrat”), the
inventor of the ’551 patent, had reduced the invention to
practice before Sears’s priority date. See J.A. 257. Specif-
ically, NFC argued that Charrat and his team at INSIDE
Technologies (“INSIDE”) had reduced the invention to
practice “on or before November 1998.” J.A. 257. NFC’s
general theory of the case was that Charrat had conceived
the invention by June 1998, and then worked with a team
at INSIDE to design a device embodying the invention
(“the M210H device”). By September 1998, NFC claimed,
Charrat and his team had sufficiently developed the
device that they commissioned Concept Electronique
(“CE”), a chip fabrication company, to generate printed
circuit board (“PCB”) layouts for the M210H device. NFC
alleged that once Charrat and his team ordered this
prototype they wrote software for it, and, once they re-
ceived the prototype, tested it to ensure that it worked for
its intended purpose and verified that the prototype
conformed to their design.
4                            NFC TECHNOLOGY, LLC   v. MATAL

    NFC presented evidence to support its contention that
Charrat’s invention was reduced to practice before Sears’s
priority date. The evidence included: (1) an initial data
sheet that purportedly described the M210H device at a
high level, dated June 26, 1998, see J.A. 2335–60;
(2) undated, unwitnessed excerpts from lab notebooks
purportedly authored by Charrat, see J.A. 2369–441;
(3) PCB diagrams for the prototype generated by CE,
dated September 1998, see J.A. 2442–53; (4) a return of a
facsimile cover sheet from CE dated September 10, 1998,
with Charrat’s signature under handwritten “OK FAB,”
although missing the four pages attached to the cover
sheet, see J.A. 2790; (5) a document entitled “Test of
Various Transmitters,” detailing tests of the “M210H-2”
antenna, authored by a Mr. de Moncuit and allegedly
detailing the results of tests of the prototype, see J.A.
2819–53 1; and (6) a highlighted wiring diagram purport-
edly used to verify that the prototype accurately reflected
the INSIDE design, dated February 5, 1999, and indicat-
ing that it reflected revision 3, see J.A. 2854–58. Charrat
also provided testimony relating to his research and
testing during the relevant period. See generally J.A.
2957–76.
     HTC presented two main arguments in reply. HTC
first argued that the documentation was only corroborat-
ed by Charrat’s own testimony, and was therefore insuffi-

    1   Although the English translation provided in the
appendix actually states that an “M2100-2” antenna was
tested, NFC’s counsel indicated at oral argument before
the Board that “[i]f one looks at the original French
language document, you’ll see that it is a 210H-2 system”
and that the difference is due to “an error in the transla-
tion.” See J.A. 608. The original French-language docu-
ment in the appendix confirms the translation error. See
J.A. 2839.
NFC TECHNOLOGY, LLC   v. MATAL                           5

cient. J.A. 451–54. HTC next argued that even if the
evidence was sufficiently corroborated, the M210H proto-
type did not work for its intended purpose or embody all
of the claim limitations. J.A. 455–66. For example, HTC
argued that Charrat had not developed the software
necessary for the prototype to function, that the tests
were not for a single device because each standard re-
quired a different configuration, and that, in any event,
the tested hardware did not work. Id.
     As NFC bore the burden of proof on antedating Sears,
it asked for and was granted permission to file a surreply.
J.A. 514–20. The surreply only addressed the arguments
presented by HTC. See id.
    In its final written decision, the Board determined
that NFC had not adequately demonstrated that Charrat
had reduced the invention to practice before Sears’s
priority date. See Final Decision, 2016 WL 497524, at
*11. The Board did not decide whether INSIDE’s proto-
type embodied the claimed invention; instead, it conclud-
ed that, even assuming that the prototype embodied the
invention, NFC had not adequately established that CE’s
fabrication of the prototype inured to Charrat’s benefit.
Id.
    The Board reasoned that CE had reduced the inven-
tion to practice because it, not Charrat, had physically
created the prototype. Id. For Charrat to receive the
benefit of that reduction to practice, the Board read our
precedents as requiring that Charrat conceived the
claimed invention and communicated the underlying
subject matter to CE. Id. at *12 (citing Cooper v. Gold-
farb, 240 F.3d 1378, 1383 (Fed. Cir. 2001) (“Cooper II”);
Genentech, Inc. v. Chiron Corp., 220 F.3d 1345, 1354 (Fed.
Cir. 2000); Cooper v. Goldfarb, 154 F.3d 1321, 1322 (Fed.
Cir. 1998) (“Cooper I”)). Thus, the Board turned to
whether NFC had produced sufficient evidence to estab-
6                           NFC TECHNOLOGY, LLC   v. MATAL

lish that Charrat had conceived the claimed invention
before ordering the prototype from CE. Id.
    The Board determined that NFC had introduced in-
sufficient evidence that Charrat had conceived the subject
matter of the claims. Id. at *13. The Board determined
that although Charrat testified that he had designed the
M210H device, the other evidence did not corroborate his
testimony. Id. Specifically, the Board concluded that
none of the provided documents established “directly who
conceived of the subject matter of the challenged claims
and when that person or persons did so.” Id.
     In reaching that conclusion, the Board stepped
through each piece of evidence that NFC had presented.
The Board determined that (1) there was no author listed
on the initial data sheet, and only Charrat’s testimony
provided evidence that he was the author; (2) Charrat’s
purported lab notebooks were not signed or witnessed;
(3) the PCB layout was generated by CE, not Charrat or
INSIDE; (4) there was no evidence relating to the com-
munications that resulted in the facsimile cover sheet on
which Charrat wrote “OK FAB”; and (5) the prototype
testing document identified the device tested as “M210H-
2” and the wiring diagram indicated that it is “Revision:
3,” and so it was unclear what exactly was tested. Id. at
*13–14.
    Aside from conception, the Board also determined
that NFC had not provided sufficient evidence that CE
fabricated a prototype according to a design provided by
Charrat at his direction because NFC had not provided
any evidence establishing what was communicated to CE.
Id. at *15. Thus, the Board found that Charrat’s testimo-
ny relating to conception was not sufficiently corroborat-
ed, and that therefore NFC had not antedated Sears. Id.
Accordingly, the Board turned to the merits of HTC’s
obviousness argument, and concluded that each chal-
NFC TECHNOLOGY, LLC   v. MATAL                           7

lenged claim was unpatentable as obvious. See id. at *16–
24.
    NFC timely appealed, and the Director of the U.S. Pa-
tent and Trademark Office (“the Director”) intervened
pursuant to 35 U.S.C. § 143. After the Director inter-
vened but before filing its own brief, HTC settled its
dispute with NFC. As part of the settlement agreement,
HTC agreed not to participate in the instant appeal;
accordingly, HTC moved for, and was granted, permission
to withdraw as a party. The Director then filed a princi-
pal brief and participated in oral argument. We have
jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A).
                        DISCUSSION
    NFC does not challenge the merits of the Board’s ob-
viousness determination, and instead focuses on the
inurement analysis. Specifically, it argues that (1) the
Board should not have addressed the inurement issue at
all because it was not raised by the parties; (2) the Board
erred by evaluating the evidence using interference
standards for determining priority of invention, rather
than the 37 C.F.R. § 1.131 standard for antedating a
reference; and (3) NFC provided sufficient evidence cor-
roborating Charrat’s conception to establish inurement.
Even assuming that the Board did not err in addressing
the inurement issue or applying interference law, we
determine that the Board’s conclusions and findings
relating to Charrat’s conception are not supported; accord-
ingly, we limit our analysis to that issue.
    Inurement is a question of law that we review de no-
vo. Cooper II, 240 F.3d at 1383. Conception is a question
of law based on subsidiary factual findings. Singh v.
Brake, 317 F.3d 1334, 1340 (Fed. Cir. 2003). “We have
treated the sufficiency of corroboration as a question of
fact.” Fleming v. Escort Inc., 774 F.3d 1371, 1377 (Fed.
Cir. 2014). We review the Board’s legal conclusions de
novo, and its factual findings for substantial evidence.
8                            NFC TECHNOLOGY, LLC   v. MATAL

Singh, 317 F.3d at 1340. A finding is supported by sub-
stantial evidence if a reasonable mind might accept the
evidence as sufficient to support the finding. Consol.
Edison Co. v. NLRB, 305 U.S. 197, 229 (1938).
     “[A]n inventor’s testimony, standing alone, is insuffi-
cient to prove conception—some form of corroboration
must be shown.” Price v. Symsek, 988 F.2d 1187, 1194
(Fed. Cir. 1993). “There is no particular formula that an
inventor must follow in providing corroboration of his
testimony of conception.” Singh, 317 F.3d at 1341. In-
stead, corroboration “is determined by a ‘rule of reason’
analysis, in which ‘an evaluation of all pertinent evidence
must be made so that a sound determination of the credi-
bility of the inventor’s story may be reached.’” Id. (quot-
ing Price, 988 F.2d at 1195). Under the rule of reason, the
evidence “must be considered as a whole, not individual-
ly.” Price, 988 F.2d at 1196; see also Perfect Surgical
Techniques, Inc. v. Olympus Am., Inc., 841 F.3d 1004,
1007–08 (Fed. Cir. 2016); Brown v. Barbacid, 436 F.3d
1376, 1380 (Fed. Cir. 2006). Thus, an inventor’s concep-
tion can be corroborated even though “no one piece of
evidence in and of itself” establishes that fact, Price, 988
F.2d at 1196, and even through circumstantial evidence,
Lacotte v. Thomas, 758 F.2d 611, 613 (Fed. Cir. 1985). At
bottom, the goal of the analysis is to determine “whether
the inventor’s story is credible.” Fleming, 774 F.3d at
1377.
    NFC argues that the Board erred in concluding that it
did not prove conception and that its finding relating to
corroboration was not supported by substantial evidence.
Specifically, NFC contends that the documentary evidence
that it introduced established Charrat’s conception, and
that the Board overly focused on perceived inconsistencies
in the facsimile cover sheet, test document, and highlight-
ed wiring diagram. Under the rule of reason, NFC ar-
gues, the independent documentary evidence adequately
corroborates conception.
NFC TECHNOLOGY, LLC   v. MATAL                            9

    The Director responds that the Board correctly con-
sidered NFC’s evidence and arguments, and reasonably
found that Charrat’s conception was not corroborated. In
particular, the Director contends that NFC did not over-
come the Board’s finding that there was insufficient
evidence that Charrat communicated the claimed inven-
tion to CE for fabrication.
    We agree with NFC that Charrat’s testimony relating
to conception was adequately corroborated by NFC’s
documentary evidence, and that NFC established concep-
tion. We determine that the Board’s findings as to the
contents of the documents are either inconsistent with the
documents themselves or do not adequately consider the
portions of the documents that support corroboration, and
are therefore not supported by substantial evidence.
     Two of the Board’s findings relating to content of the
data sheet are inconsistent with the contents of the data
sheet. The Board found that “there is no author named
on the initial project data sheet . . . , and only Mr. Char-
rat’s own testimony asserts that he is the author of the
data sheet.” Final Decision, 2016 WL 497524, at *13. In
the “Document Evolution” section of the data sheet,
however, the document is listed as “[b]y” “BC.” J.A. 2336.
Thus, contrary to the Board’s finding, the data sheet does
name an author. In addition, as Charrat’s full name is
“Bruno Charrat,” this is also strong evidence corroborat-
ing Charrat’s testimony that he created the data sheet.
See J.A. 2965–66. Accordingly, substantial evidence does
not support the Board’s finding that there is no author
named on the data sheet, or the finding that only Char-
rat’s testimony supports that he is the author.
    Aspects of the other documents also corroborate Char-
rat’s account. The Board noted that the PCB layout “was
generated by [CE], not by Mr. Charrat or the INSIDE
team.” Final Decision, 2016 WL 497524, at *13. While
true, the layout also repeatedly lists “Inside Tech.” in the
10                           NFC TECHNOLOGY, LLC   v. MATAL

field next to “concept,” J.A. 2443–44, 2447, and that the
“client” is “Inside Technologies,” J.A. 2449–53. These
inclusions support Charrat’s testimony that the prototype
was fabricated at his instruction while at INSIDE. See
J.A. 2969. The layout is also dated “09-98,” J.A. 2442, or
“09/98,” J.A. 2443–44, 2447. These dates support Char-
rat’s testimony that he sent a design to CE for fabrication
in September 1998. See J.A. 2969.
    The Board’s discounting of the facsimile cover sheet
similarly did not adequately consider its corroborative
effect. See Final Decision, 2016 WL 497524, at *14.
Although the Board gave the sheet little weight due to the
lack of detail relating to what Charrat directed CE to
fabricate, the cover sheet still corroborates Charrat’s
account in significant respects. For example, the cover
sheet was sent to “B. CHARRAT” at “Inside” on Septem-
ber 10, 1998, with “M210H” in the subject line. J.A. 2790.
The date corroborates Charrat’s testimony that he sent
the prototype to fabrication in early September 1998. See
J.A. 2969–71. In response to the cover sheet, Charrat
wrote “OK FAB” and signed his last name underneath it.
J.A. 2790. Charrat’s approval was also dated September
10, 1998—that is, the same day that CE sent the cover
sheet to him. See id. That the cover sheet was sent to
and approved only by Charrat also corroborates that it
was he who directed the project and communicated the
design for fabrication to CE. J.A. 2969–71.
     When taken “as a whole,” Price, 988 F.2d at 1196, the
documents corroborate Charrat’s account of conception.
The data sheet was created by “BC,” with no other author
listed. J.A. 2336. Although CE generated the PCB
layout, that same document refers to INSIDE as its
“client” and as providing the “concept.” J.A. 2449–53.
When it came time to approve fabrication of the proto-
type, CE communicated only with Charrat, and he alone
gave final approval for fabrication to begin. See J.A. 2790.
The initial data sheet, PCB layout, and cover sheet—
NFC TECHNOLOGY, LLC   v. MATAL                           11

which were all prepared before the creation of the proto-
type that the Board assumed embodied the claimed
invention—all refer to the “M210H” device. J.A. 2335,
2340–45, 2356, 2358, 2360, 2442–44, 2447, 2449–53, 2790.
Taken together, this independent documentary evidence
corroborates Charrat’s account of product development
and later fabrication of the prototype.
    The Board also noted that it was unpersuaded that
NFC had provided sufficient evidence to demonstrate that
CE produced the prototype according to Charrat’s design
and at his direction. Final Decision, 2016 WL 497524, at
*15. In particular, the Board appeared to find significant
the lack of emails or other communications from INSIDE
or Charrat communicating the subject matter of the
claims to CE. Id. The Board found this lack of documen-
tation counseled towards a conclusion that Charrat’s
activities were not corroborated, considering that we
have, in the past, “found significant ‘the absence of any
physical record to support the oral evidence,’ despite ‘the
ubiquitous paper trail of virtually all commercial activity’
that normally exists ‘in modern times.’” Id. (quoting
Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d
1368, 1373 (Fed. Cir. 1998)).
    On these facts, the Board’s reliance on Woodland
Trust was misplaced. Woodland Trust involved an as-
serted public use that continued for about a decade, but
was unsupported by any documentary evidence. 148 F.3d
at 1373. In the face of approximately ten years of alleged
“commercial and public use, . . . the absence of any physi-
cal record to support the oral evidence,” id., was certainly
noteworthy. Here, however, Charrat’s account of a period
of a few months, nearly twenty years ago, is nonetheless
supported by documentary evidence. The relevant period
and presence of documentary evidence places this case
closer to Loral Fairchild Corp. v. Matsushita Electric,
where we determined that the inventor’s account was
adequately corroborated by testimony of a coworker, a
12                           NFC TECHNOLOGY, LLC   v. MATAL

proposal to the Air Force, and the delivery date of “masks
necessary to practice the invention.” 266 F.3d 1358, 1365
(Fed. Cir. 2001). We forgave the inventor’s inability “to
submit documents showing production test results, con-
sidering that the events at issue occurred almost 30 years
ago.” Id. Indeed, we characterized the inventor’s inabil-
ity to submit those documents as “not surprising” given
the amount of time that had passed. Id. Here, similarly,
Charrat’s account is corroborated by the initial data sheet
that began the project, communications with CE, and
documents generated after Charrat and INSIDE received
the prototype and began to test it. “[C]orroboration of
every factual issue contested by the parties is not a re-
quirement of the law.” In re Jolley, 308 F.3d 1317, 1328
(Fed. Cir. 2002). On these facts, and particularly consid-
ering the amount of time that has passed, we determine
that Charrat’s account was adequately corroborated.
    Moreover, although the Board appeared to be troubled
by the “M210H-2” label in the testing document and
“Revision: 3” in the wiring diagram, Charrat’s reduction
to practice would antedate Sears’s priority date even if it
did not occur until the date of testing or that the wiring
diagram was produced. See J.A. 2822 (testing document
dated November 1998); J.A. 2854 (wiring diagram dated
Feb. 5, 1999); J.A. 911 (Sears priority date Feb. 8, 1999).
     Indeed, the Board’s analysis raises the question of
who, if not Charrat, designed the prototype. HTC did not
allege that CE or another INSIDE employee made any
inventive contribution to the design of the prototype. Yet
the documentation establishes that a prototype was
fabricated and later tested by INSIDE staff, and Charrat
is the only source identified by the evidence for the design
of the prototype. Indeed, there is no record evidence of
any other INSIDE employee communicating with CE.
Under the rule of reason, the totality of the evidence
establishes the credibility of Charrat’s account. See
Fleming, 774 F.3d at 1377.
NFC TECHNOLOGY, LLC   v. MATAL                         13

    Thus, the Board erred in concluding that NFC had
submitted inadequate evidence of conception, and its
finding that Charrat’s account was not adequately corrob-
orated was not supported by substantial evidence. Ac-
cordingly, we reverse the Board’s determination relating
to Charrat’s conception, and determine that CE’s fabrica-
tion of the prototype inured to Charrat’s benefit.
     We note that the foregoing analysis assumes that con-
ception is relevant under the present circumstances. Our
cases that the Board read as establishing that proof of
conception is relevant to inurement involved third-party
recognition during testing that the invention would work
for its intended purpose. See Cooper II, 240 F.3d at 1380–
86; Genentech, 220 F.3d 1352–54; Cooper I, 154 F.3d at
1331–33. Here, there is no evidence that CE did anything
other than fabricate the prototype. Although NFC ap-
pears to recognize this distinction, see NFC Br. 40–42,
NFC only uses it to argue that interference law should not
be applied to this case. As NFC has not challenged
whether and to what extent conception must be shown to
establish inurement under interference law in the present
circumstances, we leave that question for another day.
    The determination that fabrication of the prototype
inures to Charrat’s benefit does not resolve this case. As
explained previously, the Board assumed, but did not
decide, that the prototype embodied the claimed inven-
tion. That issue must be decided in order to determine
whether Sears can be antedated. Thus, we remand the
case for that determination in the first instance. Fortu-
nately, whether the prototype embodied the claimed
invention was a disputed issue between HTC and NFC
during the initial IPR. See J.A. 455–66. Accordingly, the
Board may decide the case on the briefing previously
submitted.
14                        NFC TECHNOLOGY, LLC   v. MATAL

                     CONCLUSION
    We have considered the remaining arguments, but
find them unpersuasive. For the foregoing reasons, the
decision of the Board is reversed, and we remand for
action consistent with this opinion.
           REVERSED AND REMANDED