Court Opinion

ID: 4535276
Source: CourtListenerOpinion
Date Created: 2020-05-19 16:00:35.094046+00
Date Added: 2024-06-11T12:35:44.813216
License: Public Domain

Case: 19-1659    Document: 36    Page: 1   Filed: 05/19/2020

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                  ESIP SERIES 2, LLC,
                       Appellant

                            v.

                PUZHEN LIFE USA, LLC,
                        Appellee
                 ______________________

                       2019-1659
                 ______________________

     Appeal from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in No. IPR2017-
 02197.
                  ______________________

                 Decided: May 19, 2020
                 ______________________

    GORDON K. HILL, Pate Baird, Salt Lake City, UT, ar-
 gued for appellant. Also argued by ALMA JOHN PATE.

     MARK A. MILLER, Dorsey & Whitney LLP, Salt Lake
 City, UT, argued for appellee. Also represented by ELLIOT
 HALES; GREGORY STUART SMITH, Law Offices of Gregory S.
 Smith, Washington, DC.
                 ______________________

    Before LOURIE, REYNA, and HUGHES, Circuit Judges.
 REYNA, Circuit Judge.
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 2                   ESIP SERIES 2, LLC v. PUZHEN LIFE USA, LLC

     ESIP Series 2, LLC, appeals a decision of the Patent
 Trial and Appeal Board that certain claims of ESIP’s pa-
 tent are invalid as obvious. ESIP also contends that the
 Board should not have instituted inter partes review be-
 cause appellee Puzhen failed to identify “all real parties in
 interest” as required by 35 U.S.C. § 312. We find no error
 in the Board’s obviousness determination, and the Board’s
 decision to institute inter partes review is final and non-
 appealable. We affirm.
                        BACKGROUND
                     A. The ’130 Patent
     ESIP Series 2, LLC, (“ESIP”) owns U.S. Patent
 No. 9,415,130 (“the ’130 patent”), which relates to “a novel
 system and method for combining germicidal protection
 and aromatic diffusion in enclosed habitable spaces.” ’130
 patent at 1:7–10. Products of this type are commonly
 known as “vaporizers” or “diffusers.” Figure 2 of the ’130
 patent, shown below, depicts an embodiment of the claimed
 invention with a diffusion module (45) contained within a
 housing (12).

     The ’130 patent states that it overcomes “a number of
 problems” in the prior art that stem from the diffusion of
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 ESIP SERIES 2, LLC v. PUZHEN LIFE USA, LLC                   3

 “[o]verly large particles.” ’130 patent at 4:15–28. It teaches
 that overly large particles cause waste and reduce effec-
 tiveness: “rather than remaining in the air until they have
 evaporated or been incorporated into the atmosphere, they
 may instead settle out relatively quickly, onto surfaces, fur-
 niture, floors, into HVAC systems, or the like.” Id.
     To avoid these problems, the claimed invention recites
 “a micro-cyclone for quiet, well diffused flow of ultra-fine
 droplets.” ’130 patent at 4:15–28. Figure 12, shown below,
 depicts components of the diffusion module (45), including:
 a “reservoir” (52), an “atomizer” (46), and a “micro-cyclone”
 (90). The micro-cyclone contains a “spiral channel” (91)
 that “begins below a central plane . . . defined by a plate”
 (96). Id. at 16:57–17:4. The micro-cyclone causes “the com-
 paratively larger particles in the stream of air . . . to smash
 and coalesce against the inside of the outer wall of the [spi-
 ral] channel,” leaving only “the comparatively smallest
 range of droplets [to be] passed out to the nozzle.” Id.
 at 17:26–31. After coalescing, the larger droplets “drip
 back into the atomizer . . . to be re-atomized.” Id.
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 4                   ESIP SERIES 2, LLC v. PUZHEN LIFE USA, LLC

    Claim 1, reproduced below, illustrates the claimed in-
 vention:
       1. A method for introducing a scent into breath-
     able air, the method comprising;
         providing a system comprising a reservoir,
           eductor, and separator operably con-
           nected to one another;
         providing a liquid constituting an aromatic
           substance selected by an operator for the
           scent to be introduced into the breathable
           air;
         drawing a first portion of the liquid from
           the reservoir by the eductor passing a
           flow of air;
         entraining the first portion of the liquid
           into the flow;
         forming droplets of the first portion by at
           least one of restricting an area through
           which the flow passes and the entraining;
         separating out a second distribution of
           the droplets by passing the flow through
           a wall between a first chamber and a sec-
           ond chamber, the flow path spiraling ax-
           ially        and        circumferentially,
           simultaneously       and     continuously,
           through an arcuate channel formed
           through the wall; and passing a first
           distribution of the droplets out of the sep-
           arator into the breathable air.
 ’130 patent at 23:22–41 (emphases added).
                     B. IPR Proceeding
     Puzhen Life USA, LLC, (“Puzhen”) filed a petition for
 inter partes review of claims 1, 3, and 17 of the ’130 patent.
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 ESIP SERIES 2, LLC v. PUZHEN LIFE USA, LLC                 5

 Puzhen challenged the claims as obvious (i) in view of Sevy 1
 and Cronenberg 2; and (ii) in view of Sevy and Giroux 3.
     Sevy relates to “novel systems and methods for inte-
 grating air supplies, reservoirs and atomizers into an inte-
 grated system.” Sevy at 1:6–8. Sevy relies on “direction
 change and momentum of impact to further comminute []
 droplets into a more finely atomized mist.” Id. at 2:13–19.
 Sevy teaches that larger droplets are separated from the
 mist because they “cannot move with the airflow, typically
 because . . . they will not be able to quickly turn to follow
 the flow of air.” Id. at 8:64–9:4.
     Cronenberg relates to “[a] separator adapted for use as
 part of a fluid dispenser system for supplying inhalable flu-
 ids.” Cronenberg at Abstract. Cronenberg teaches that the
 “separator is adapted to be positioned within the fluid dis-
 penser system so that the mixture of liquid and gas passes
 along [a] tortuous passageway,” causing “the larger drop-
 lets of liquid [to be] removed from the mixture.” Id. at
 2:48–55. In this way, the separator “achieve[s] the desired
 vapor and avoid[s] the presence of liquid droplets in the gas
 and liquid mixture.” Id. at 1:20–22.
      Giroux relates to “a novel integrated nebulizer and par-
 ticle dispersion chamber” that “provides for delivery of a
 vortical flow of nebulized particles to the nostrils.” Giroux
 at Abstract. To achieve the size and velocity characteris-
 tics that are important for effective drug delivery, Giroux
 teaches forcing the particles to flow through a “baffle” that
 is in a “generally serpentine or helix shape,” which “cre-
 ate[s] motion of the nebulized particles in a vortex as they
 exit the dispersion chamber.” Id. at 13:32–42.

     1   U.S. Patent No. 7,878,418 (“Sevy”).
     2   U.S. Patent No. 4,243,396 (“Cronenberg”).
     3   U.S. Patent No. 8,001,963 (“Giroux”).
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 6                  ESIP SERIES 2, LLC v. PUZHEN LIFE USA, LLC

     Based on the prior art and expert testimony, the Board
 determined that the challenged claims would have been ob-
 vious in view of Sevy and Cronenberg and in view of Sevy
 and Giroux. J.A. 40, 47. The Board found that Sevy dis-
 closes every element of the challenged claims except for the
 “arcuate channel” limitation of the “separating” claim ele-
 ment. J.A. 23–31. The Board found that both Cronenberg
 and Giroux disclose the “arcuate channel” limitation. The
 Board explained:
     [N]either reference, considered by itself, teaches
     forming an arcuate channel through a wall for the
     purpose of separating liquid droplets out of a mixed
     air-droplet flow. Sevy’s separator passes flow
     through a wall, but not using an arcuate passage-
     way. Cronenberg [and Giroux] teach[] accomplish-
     ing the same type of separation using an arcuate
     passageway, but not one passing through a wall.
 J.A. 27, 43. The Board determined that a skilled artisan
 would have been motivated to combine the teachings of
 each reference with Sevy to arrive at the claimed invention.
     The Board also addressed in its final written decision
 ESIP’s argument that Puzhen’s petition was barred from
 institution because Puzhen failed to identify “all real par-
 ties in interest” as required by 35 U.S.C. § 312(a)(2).
 J.A. 849. According to ESIP, Puzhen’s petition failed to
 identify two real parties in interest: doTERRA Interna-
 tional, LLC, and Puzhen Life Co., Ltd. J.A. 5. After con-
 sidering ESIP’s asserted evidence, the Board determined
 that neither party was a real party in interest within the
 meaning of 35 U.S.C. § 312(a)(2) and that Puzhen’s petition
 was not barred from institution. J.A. 11, 14.
                          ANALYSIS
     Obviousness is a question of law with underlying fac-
 tual findings relating to the scope and content of the prior
 art; differences between the prior art and the claims at
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 ESIP SERIES 2, LLC v. PUZHEN LIFE USA, LLC                  7

 issue; the level of ordinary skill in the pertinent art; the
 presence or absence of a motivation to combine or modify
 prior art with a reasonable expectation of success; and any
 objective indicia of non-obviousness. Persion Pharms. LLC
 v. Alvogen Malta Operations Ltd., 945 F.3d 1184, 1189
 (Fed. Cir. 2019). We review factual determinations for sub-
 stantial evidence. Id. Substantial evidence is “such rele-
 vant evidence as a reasonable mind might accept as
 adequate to support a conclusion.” Consol. Edison Co. v.
 NLRB, 305 U.S. 197, 229 (1938). We review the Board’s
 legal conclusions de novo. Velander v. Garner, 348
 F.3d 1359, 1371 (Fed. Cir. 2003).
                       A. Obviousness
    ESIP challenges four fact findings underlying the
 Board’s conclusion that the ’130 patent claims would have
 been obvious. We determine that all four fact findings are
 supported by substantial evidence, and we affirm the
 Board’s conclusion.
      First, with respect to the “separating” claim limitation,
 ESIP challenges the Board’s finding that Sevy teaches sep-
 arating droplets by passing the flow through an orifice in a
 wall. Appellant Br. 27–28. ESIP argues that Sevy’s ori-
 fice—aperture 99, shown in Figure 7 below—“does not
 function as a separator” because it “cannot discriminate
 with regard to the size of a particle passing through it. It’s
 a hole.” Id. at 28. We disagree. In support of its finding,
 the Board relied on Sevy’s disclosure that “separator plate
 98 passes the flow of air from the atomizer 16 through ap-
 ertures 99” and that droplets with “too large a size and
 mass will not be able to quickly turn to follow the flow of
 air, and will strike the walls of the opening 100 or the sep-
 arator plate 98.” J.A. 26 (citing Sevy at 8:64–9:2). The
 Board also relied on the testimony of Puzhen’s expert, Mr.
 Smith, who testified that the separator plate (98) in Sevy
 “segregate[s]” atomizer droplets. Id. (citing J.A. 634–635).
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 8                  ESIP SERIES 2, LLC v. PUZHEN LIFE USA, LLC

     We find no error in the Board’s decision to credit the
 opinion of one expert over another, and we do not reweigh
 evidence on appeal. Impax Labs. Inc. v. Lannett Holdings
 Inc., 893 F.3d 1372, 1382 (Fed. Cir. 2018). Substantial ev-
 idence supports the Board’s finding that Sevy teaches sep-
 arating droplets by passing the flow through an orifice in a
 wall.

     Second, also with respect to the “separating” claim lim-
 itation, ESIP challenges the Board’s finding that Giroux
 discloses a “vortex” that separates large droplets from the
 air flow. ESIP argues that the circulation of particles
 through Giroux’s “vortex” “does not result in the larger
 droplets being separated from the vortex or separated from
 the air flow.” Appellant Br. at 35. For support, ESIP cites
 only the testimony of its expert, Dr. Bell, which the Board
 found to be “conclusory and unsupported” and thus “un-
 helpful and unpersuasive.” J.A. 29. In support of its find-
 ing that Giroux’s vortex separates large droplets from the
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 ESIP SERIES 2, LLC v. PUZHEN LIFE USA, LLC                   9

 airflow, the Board relied on the expert testimony of Mr.
 Smith and Giroux’s teaching that the swirl of droplets in
 Giroux’s “vortex” “sends the larger droplets to the outside
 rings and . . . keeps the smaller [] droplets in the air stream
 for a longer period of time.” J.A. 43 (quoting Giroux
 at 8:60–62, 12:33-37; J.A. 643–644). Substantial evidence
 therefore supports the Board’s finding that Giroux teaches
 a vortex that separates larger droplets from the air flow.
 See Impax, 893 F.3d at 1382.

      Third, ESIP challenges the Board’s finding that a
 skilled artisan would have been motivated to replace the
 aperture in Sevy with the arcuate passageway of Cronen-
 berg. The Board found that Sevy and Cronenberg teach
 two alternative methods for achieving the separation of
 droplets from the mixed droplet-air flow, and that a skilled
 artisan would have been motivated to substitute one
 method for the other. J.A. 26–27. ESIP argues that Sevy
 and Cronenberg “achieve different results” and that combi-
 nation of these two references would require “substantial
 reconstruction.” Appellant Br. 28–29. Again, ESIP relies
 solely on the discredited testimony of Dr. Bell. In reaching
 its finding, the Board relied on the disclosures of Sevy and
 Cronenberg, and the expert testimony of Mr. Smith, who
 testified that a skilled artisan “would [have] replace[d]
 [Sevy’s] aperture(s) in plate 98 with the helical pathway of
 Cronenberg.” J.A. 26 (citing Sevy at 8:64–9:2; Cronenberg
 at 3:12–21, 5:37–43; J.A. 634–635). Substantial evidence
 therefore supports the Board’s finding that a skilled arti-
 san would be motivated to combine Sevy and Cronenberg.
 See Impax, 893 F.3d at 1382.
     Fourth, ESIP challenges the Board’s finding that a
 skilled artisan would have been motivated to combine Sevy
 with Giroux. Appellant Br. 36. ESIP asserts that the
 Board “failed to articulate the required explication as to
 why Giroux’s helical baffle would be ‘formed through a
 wall’ as required by the subject claims.” Id. We disagree.
 The Board found that “both Sevy and Giroux teach
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 10                  ESIP SERIES 2, LLC v. PUZHEN LIFE USA, LLC

 methods for removing large droplets from [the] mixture of
 air and liquid droplets,” and thus a skilled artisan would
 have been motivated to “substitute a channel defined by a
 helical baffle, as taught by Giroux, for the straight orifice
 in Sevy’s plate.” J.A. 44–45. In reaching that determina-
 tion, the Board relied on the disclosures of Sevy and
 Giroux, and the expert testimony of Mr. Smith, who testi-
 fied that a skilled artisan “would have had a reason to com-
 bine the teachings of Sevy with those of Giroux.” Id. (citing
 Sevy at 8:64–9:2; Giroux at 8:60–62, 12:33–37; J.A. 643–
 644). Substantial evidence therefore supports the Board’s
 finding that a skilled artisan would be motivated to com-
 bine Sevy and Giroux. See Impax, 893 F.3d at 1382.
      ESIP also argues that the Board committed numerous
 legal errors when rendering its obviousness determination.
 For example, ESIP claims that the Board legally erred by
 failing to expressly define the applicable level of ordinary
 skill in the art. Appellant Br. 19–20. Yet ESIP fails to
 make the requisite showing that there are “any meaningful
 differences” between the parties proposed definitions or
 that “the outcome of [the] case would have been different
 based on which definition the Board used.” Genzyme Ther-
 apeutic Prod. Ltd. P’ship v. Biomarin Pharm. Inc., 825
 F.3d 1360, 1371–72 (Fed. Cir. 2016). Similarly, ESIP chal-
 lenges the Board’s construction of “wall,” yet ESIP “fail[s]
 to clearly explain what result would occur if this court
 adopted [the appellant’s] proposed claim construction[].”
 Fresenius USA, Inc. v. Baxter Int’l, Inc., 582 F.3d 1288,
 1304 (Fed. Cir. 2009) (holding that the appellant “gave this
 court little guidance and cited no record support regarding
 why a modified claim construction would affect the [judg-
 ment]. For that reason alone, we may decline to consider
 Fresenius’s claim construction arguments.”). We find
 ESIP’s arguments unpersuasive.
     Because the Board’s obviousness conclusion is not le-
 gally erroneous and the fact findings are supported by sub-
 stantial evidence, we affirm the determination that
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 ESIP SERIES 2, LLC v. PUZHEN LIFE USA, LLC                   11

 claims 1, 3, and 17 would have been obvious in view of Sevy
 and Cronenberg and in view of Sevy and Giroux.
                   B. Real Party in Interest
      Under 35 U.S.C. § 312(a), a petition “may be considered
 only if” it includes: (1) payment of fees; (2) identification of
 all real parties in interest; (3) identification “with particu-
 larity” of each claim challenged, the grounds of each chal-
 lenge, and the supporting evidence; (4) other information
 the Director requires by regulation; and (5) copies of these
 documents for the patent owner. ESIP argues that Puzhen
 failed to identify all “real parties in interest” and thus the
 Board erred when it considered institution of inter partes
 review.      For the reasons stated below, the Board’s
 § 312(a)(2) real-party-in-interest determination is final
 and non-appealable.
      In Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131
 (2016), the Supreme Court held that this Court is pre-
 cluded from reviewing Board decisions concerning the “par-
 ticularity” requirement under § 312(a)(3). The Court
 explained that § 314(d) bars appellate review of “questions
 that are closely tied to the application and interpretation
 of statutes related to the Patent Office’s decision to initiate
 inter partes review.” Id. at 2141–42. The Court further
 explained that “where a patent holder grounds its claim in
 a statute closely related to that decision to institute inter
 partes review, § 314(d) bars judicial review.” Id.
     More recently, in Thryv, Inc v. Click-To-Call Techs.,
 LP, 140 S. Ct. 1367 (2020), the Supreme Court held that
 § 314(d) also precludes judicial review of the agency’s deci-
 sion whether to apply the one-year time bar set forth in
 § 315(b)). The Court explained that “§ 315(b)’s time limita-
 tion is integral to, indeed a condition on, institution,” and
 that “a contention that a petition fails under § 315(b) is a
 contention that the agency should have refused ‘to institute
 an inter partes review.’” Id. at 1373–74 (quoting 35 U.S.C.
 § 314(d)). The Court concluded that a challenge to a
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 12                  ESIP SERIES 2, LLC v. PUZHEN LIFE USA, LLC

 petition’s timeliness under § 315(b) raises “an ordinary dis-
 pute about the application of” an institution-related stat-
 ute and is barred from appellate review by § 314(d). Id.
     In view of Cuozzo and Click-to-Call, we find no princi-
 pled reason why preclusion of judicial review under
 § 314(d) would not extend to a Board decision concerning
 the “real parties in interest” requirement of § 312(a)(2).
 ESIP’s contention that the Board failed to comply with
 § 312(a)(2) is “a contention that the agency should have re-
 fused to institute an inter partes review.” See Click-To-
 Call, 140 S. Ct. at 1373–74. Indeed, ESIP expressly argues
 that the agency should have refused to institute inter
 partes review because of Puzhen’s failure to identify all
 “real parties in interest.” E.g., Appellant Br. at 5 (“[I]t was
 improper for the Board to ‘consider’ the IPR Petition and
 institute an IPR.”). Accordingly, we hold that ESIP’s chal-
 lenge to the Board’s “real parties in interest” determination
 “raises ‘an ordinary dispute about the application of’ an in-
 stitution-related statute,” and that § 314(d) precludes our
 review of that determination. Click-To-Call, 140 S. Ct.
 at 1373–74 (quoting Cuozzo,136 S. Ct. at 2141–42).
                         CONCLUSION
     We have considered ESIP’s other arguments and find
 them unpersuasive. We affirm the Board’s determination
 that claims 1, 3, and 17 of the ’130 patent are invalid as
 obvious.
                         AFFIRMED