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Perfect Surgical Techniques, Inc. v. Olympus America, Inc.

United States Court of Appeals, Federal Circuit

November 15, 2016


         Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. IPR2014-00233.

          Robert E. Freitas, Freitas Angell & Weinberg LLP, Redwood City, CA, argued for appellant. Also represented by Daniel J. Weinberg, Joshua Young.

          Deborah E. Fishman, Kaye Scholer LLP, Palo Alto, CA, argued for appellees. Also represented by Katie Jeannine Lewis Scott, Marisa Armanino Williams.

          Before Moore, Schall, and O'Malley, Circuit Judges..


          Moore. Circuit Judge

         Perfect Surgical Techniques, Inc. ("PST") appeals from a decision of the Patent Trial and Appeal Board ("Board") invalidating claims 1, 4-6, 8, 9, 11, 12, 38, 41- 44, 46, 47, and 49 of U.S. Patent No. 6, 030, 384 ("'384 patent"). For the reasons set forth below, we vacate and remand.


         This appeal arises from the Board's inter part es review ("IPR") decision determining, inter alia, that each of the claims at issue are anticipated or would have been obvious over Japanese Application Publication No. H10-33551 A ("JP '551"). The Board determined that JP '551 qualified as prior art to the '384 patent under 35 U.S.C. § 102(a). First, the Board rejected PST's argument that the Board could not rely on JP '551 as filed because the petitioners, Olympus America, Inc. and Olympus Medical Systems Corp. (collectively, "Olympus"), failed to translate the bibliographic page containing the publication date. Second, the Board determined that PST failed to antedate JP '551 because it had not proven that the inventor of the '384 patent was reasonably diligent in reducing his invention to practice. After concluding that JP '551 was prior art, the Board examined the prior art under its claim construction and determined JP '551 anticipated or rendered obvious the claims at issue.

         PST's appeal addresses all three aspects of the Board's decision. We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).


         A. Partial Translation of JP '551

         Pursuant to 37 C.F.R. § 42.63(b), the Board requires a party relying on a non-English document to submit "a translation of the document into English and an affidavit attesting to the accuracy of the translation." PST argues that Olympus' failure to translate the bibliographic page of JP '551 rendered their submission defective and that the Board violated its own regulations by relying on Olympus' partially-translated submission. PST argues that the bibliographic page contained the publication date, and since that page was not translated, Olympus did not present sufficient evidence for the Board to determine that JP '551 was prior art to the '384 patent.

         The Board is not free to disregard its own regulations. Nor can it mandate compliance by only some parties. But in this case, even if the Board erred by accepting Olympus' submission of JP '551, its error is harmless.

         PST concedes that the only relevant information on the untranslated page is the publication date, and the date is discernable from the face of the untranslated page. See J.A. 13 (citing Manual of Patent Examining Procedure § 901.05(a) (describing how to convert Japanese format publication date information to Gregorian calendar date information)). As noted by the Board, the translator's certification further attested that JP '551 was published on February 10, 1998. J.A. 12-13. PST does not dispute that JP '551 was published on this date, nor does it dispute the remainder of the translation. For these reasons, PST has not established that the Board's acceptance of a not fully translated version of JP '551 was anything other than harmless error.

         B. Antedating JP '551

         1. Background

         Pre-AIA section 102(g) allows a patent owner to antedate a reference by proving earlier conception and reasonable diligence in reducing to practice.[1] Monsanto Co. v. Mycogen Plant Sci., Inc., 261 F.3d 1356, 1362 (Fed. Cir. 2001). Reasonable diligence must be shown throughout the entire critical period, which begins just prior to the competing reference's effective date and ends on the date of the invention's reduction to practice. Id. at 1363.

         Dr. Camran Nezhat, the inventor of the '384 patent, hired James Heslin to draft and file the application that would issue as the '384 patent. On January 28, 1998, Mr. Heslin sent an initial draft of the application to Dr. Nezhat. Mr. Heslin later filed the application with the Patent and Trademark Office ("PTO") on May 1, 1998. During this 93-day lapse of time-and only thirteen days after Dr. Nezhat received the initial draft application- JP '551 published. To show diligence in reduction to practice, PST must prove that Dr. Nezhat was reasonably diligent during the critical period, which began on February 9, 1998, one day prior to JP '551's publication date, and ended on May 1, 1998, the date the invention was constructively reduced to practice by filing the application that resulted in the '384 patent with the PTO.

         Dr. Nezhat testified that he was reasonably diligent in reducing his invention to practice from February 9 to May 1, 1998. He testified that, although he did not recall all of his daily activities, he "diligently worked with Mr. Heslin between February 1, 1998 and May 1, 1998, within the reasonable limits of my busy medical practice and teaching schedule[.]" J.A. 686. He testified that throughout these months, his medical practice required him to work roughly 80 hours per week, during which he would perform approximately four to six surgeries. Id. He testified that he submitted comments on the initial draft application on March 2, received questions from Mr. Heslin on or around March 4 and 12, participated in a conference with Mr. Heslin on March 16, and received a second draft application from Mr. Heslin on April 13. J.A. 686-87. He testified that he "again carefully reviewed the second draft" before it was finalized and filed on May 1. J.A. 687.

         An inventor's testimony regarding his reasonable diligence must be corroborated by evidence. Brown v. Barbacid, 436 F.3d 1376, 1380 (Fed. Cir. 2006). A "variety of activities" may corroborate an inventor's testimony of reasonable diligence and such corroborating evidence is considered "as a whole" under a rule of reason. Id. To corroborate Dr. Nezhat's testimony, PST introduced a declaration from Mr. Heslin, letters between Dr. Nezhat and Mr. Heslin, and Mr. Heslin's billing records.

         Mr. Heslin recounted the same dates of activity as Dr. Nezhat and added that he reviewed and revised the initial draft application on April 7. J.A. 757-58. He characterized Dr. Nezhat as a "careful and serious client" who "communicated with me, in writing and in person, to finalize the application." J.A. 758. He testified that he and Dr. Nezhat "put in a significant amount of effort and work into revising and finalizing the patent application between February 1 and May 1." J.A. 758-59. He testified that during the relevant time period, he "maintained a very active practice" and typically worked 50 hours or more a week. J.A. 756, 758.

         Mr. Heslin's declaration appended a number of exhibits as support for his testimony. A March 12 letter from Mr. Heslin thanked Dr. Nezhat for his "facsimile of March 2, 1998, with comments on the initial draft." J.A. 927. The letter asked for Dr. Nezhat's "further comments on electrode surface area" and requested that they meet "to discuss finalizing the draft." Id. Mr. Heslin's billing records indicate he reviewed Dr. Nezhat's comments on March 4 and that he met with Dr. Nezhat on March 16. J.A. 604. The billing records also indicate Mr. Heslin revised the draft application on April 7. Id. An April 13 letter from Mr. Heslin to Dr. Nezhat enclosed a second draft application and expressed that he "tried to reflect the comments you made when we last met." J.A. 607. The letter asked for Dr. Nezhat's "further comments so that [the application] can be finalized and filed in the near future." Id. Mr. Heslin filed the application on May 1. J.A. 604, 634.

         The Board accepted Dr. Nezhat's testimony and corroborating evidence but determined that PST was not "sufficiently specific as to facts and dates" of Dr. Nezhat's diligence during three portions of the critical period: (1) February 10 to March 1; (2) March 12 to March 15; and (3) April 13 to May 1. J.A. 21-22. The Board therefore concluded that PST failed to demonstrate Dr. Nezhat's "continuous exercise of reasonable diligence for the entire critical period." J.A. 22.

         2. Discussion

         Whether a patent antedates a reference is a question of law based on subsidiary findings of fact. In re Steed, 802 F.3d 1311, 1316-17 (Fed. Cir. 2015). The issue of reasonable diligence "turns on the factual record, and we review Board determinations as to diligence for support by substantial evidence in the record." Id. at 1317. Throughout its opinion, the Board repeatedly characterized PST's burden as requiring proof of Dr. Nezhat's "continuous exercise of reasonable diligence." J.A. 16 (emphasis added); see also id. (requiring proof of "continuous and corroborated diligence"); J.A. 18 ("Patent Owner does not provide sufficient evidence to demonstrate . . . that Dr. Nezhat continuously exercised reasonable diligence during the entire critical period."); J.A. 19 ("[T]he evidence, taken as a whole, does not support Patent Owner's contention that there was a continuous exercise of reasonable diligence during the entire critical period."); J.A. 22 ("Patent Owner does not provide sufficient evidence to demonstrate Dr. Nezhat's continuous exercise of reasonable diligence . . . ."). The standard demanded by the Board is too exacting and in conflict with our precedent.

         A patent owner need not prove the inventor continuously exercised reasonable diligence throughout the critical period; it must show there was reasonably continuous diligence. See, e.g., Tyco Healthcare Grp. v. Ethicon Endo-Surgery, Inc., 774 F.3d 968, 975 (Fed. Cir. 2014); Monsanto, 261 F.3d at 1370. Under this standard, an inventor is not required to work on reducing his invention to practice every day during the critical period. See Monsanto, 261 F.3d at 1369. And periods of inactivity within the critical period do not automatically vanquish a patent owner's claim of reasonable diligence. For example, in Monsanto, we held that substantial evidence supported the jury's presumed finding that an inventor was reasonably diligent where there was no corroborating evidence of any activity for a series of months. Id. at 1370. We explained that, notwithstanding the absence of daily notebook entries and the resulting gaps during the critical period, "the work involved in the experiments was continuous in nature" and therefore the reduction to practice was "reasonably continuous." Id. In Brown v. Barbacid, we held that the patent owner's evidence of diligence during a 31-day critical period was "sufficient to show substantially continuing activity" despite the lack of activity during six single-day gaps. 436 F.3d at 1380-83. Our holdings in these cases are consistent with the purpose of the diligence inquiry. In determining whether an invention antedates another, the point of the diligence analysis is not to scour the patent owner's corroborating evidence in search of intervals of time where the patent owner has failed to substantiate some sort of activity. It is to assure that, in light of the evidence as a whole, "the invention was not abandoned or unreasonably delayed." Id. at 1379. That an inventor overseeing a study did not record its progress on a daily, weekly, or even monthly basis does ...

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