luv 'n care - petition for rehearing

8/9/2019 Luv 'N Care - Petition for Rehearing

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2014-1653

United States Court of Appeals

for the Federal Circuit

LUV N’ CARE, LTD.,

Appellant,

v.

MUNCHKIN, I NC.,

Appellee.

Appeal from the United States Patent Trial and Appeal Board,

Patent Trial and Appeal Board in No. IPR2013-0007,

Administrative Patent Judges Fitzpatrick, Bisk and Wood.

APPELLANT’S PETITION FOR REHEARING EN BANC

Edward D. Manzo

Lead Counsel for Appellant George S. Pavlik

Daniel Kim

HUSCH BLACKWELL LLP

120 S. Riverside Plaza, Suite 2200

Chicago, Illinois 60606

Telephone: 312-655-1500

May 12, 2015

Hartwell P. Morse, IIILUV N’ CARE, LTD.

3030 Aurora Avenue

Monroe, Louisiana 71201

Telephone: 318-338-3108

Counsel for Appellant

Luv N’ Care, Ltd.


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CERTIFICATE OF INTEREST

The undersigned counsel for Appellant certifies the following:

1. The full name of every party represented by me is:

Luv n’ Care, Ltd.

3030 Aurora Avenue


2. The name of the real party in interest represented by me is:

Luv n’ Care, Ltd.

3. All parent corporations and any publicly held companies that own 10

percent or more of the stock of the party represented by me are:

None.

4. The names of all law firms and the partners or associates that

appeared for the party now represented by me in the trial court or are expected to

appear in this court are:

HUSCH BLACKWELL LLP

Edward D. Manzo, Lead Counsel for Appellant

George S. Pavlik

Daniel Kim



Goldberg Cohen LLPMorris E. Cohen

Lee A. Goldberg

1350 Avenue of the Americas, 4th Floor

New York, New York, 10019

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TABLE OF CONTENTS

Page

CERTIFICATE OF INTEREST ................................................................................ i

TABLE OF CONTENTS .......................................................................................... ii

TABLE OF AUTHORITIES ................................................................................... iv

RULE 35 STATEMENT OF COUNSEL ..................................................................1

ARGUMENT .............................................................................................................1

I. PTAB Procedures Generally ................................................................. 2

II. The Proceedings Below .........................................................................3

A. Neither the Third Oval Ring Nor the Spout Size

Were Identified as Issues in the Decision to

Institute ........................................................................................3

B. The PTAB Spontaneously Made the Third Oval

Ring an Issue at the Final Hearing ..............................................4

C. The PTAB Relied on the Third Oval in the Final

Written Decision and Added the Second NewIssue – the Spout Size ................................................................. 4

III. The Lack of Timely Notice of Issues in an IPR Is

Unconstitutional and Violates the Administrative

Procedures Act ......................................................................................5

A. U.S. Law Demands Fundamental Fairness and an

Opportunity to Present Evidence ................................................6

B. Other Circuits Prohibit Agencies from Changing

Theories at Trial Without Giving Proper Notice

and an Opportunity to Respond ..................................................9

C. This Court and One of its Predecessors Apply the

Same Due Process Requirements to Appeals at the

PTO Board ................................................................................11

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D. Notice and Opportunity Are Especially Important

in this Case. ...............................................................................12

1. The Difference Between PTAB Litigation

and District Court Litigation Make a

Complete Articulation of the IssuesParamount. ......................................................................12

2. The Statement of Issues by the PTAB is

Even More Critical with Respect to Design

Patents. ............................................................................14

CONCLUSION ........................................................................................................14

ADDENDUM ............................................................................................................1

CERTIFICATE OF SERVICE ..................................................................................2

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TABLE OF AUTHORITIES

Page(s)

Cases

Armstrong v. Manzo,380 U.S. 545, 85 S.Ct. 1187, 14 L.Ed.2d 62 (1965) ....................................... 8, 15

Boumediene v. Bush,

553 U.S. 723 (2008) ...........................................................................................1, 7

Chicago, Milwaukee, St. Paul and Pacific Railroad Co. v. United States,

585 F.2d 254 (7th Cir. 1978) ...............................................................................10

Christopher v. SmithKline Beecham Corp.,

132 S.Ct. 2156 (2012) ........................................................................................1, 6

Clear Pine Mouldings, Inc. v. NLRB,

632 F.2d 721 (9th Cir. 1980),

cert. denied, 451 U.S. 984 (1981) ........................................................................11

Dickinson v. Zurko,

527 U.S. 150, 119 S.Ct. 1816, 144 L.Ed.2d 143 (1999) ........................................ 5

General Electric Co. v. U.S. EPA,

53 F.3d 1324 (D.C. Cir. 1995) ...........................................................................7, 8

Hall v. Florida,

134 S.Ct. 1986 (2014) ............................................................................................7

In re Biedermann,

733 F.3d 329 (Fed. Cir. 2013)......................................................................... 1, 12

In re Leithem,

661 F.3d 1316 (Fed. Cir. 2011)..................................................................... 11, 12

In re Stepan Co.,660 F.3d 1341 (Fed.Cir.2011) ................................................................... 1, 11, 12

J.C. Penney Co. v. NRLB,

384 F.2d 479 (10th Cir. 1967) .............................................................................10

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Lane Hollow Coal Co. v. Director, OWCP,

137 F.3d 799 (4th Cir. 1998) .................................................................................8

Macklin v. Butler,

553 F.2d 525 (7th Cir. 1977) .................................................................................7

NLRB v. H. E. Fletcher Co.,

298 F.2d 594 (11th Cir. 1962) .............................................................................11

NLRB v. I.W.G., Inc.,

144 F.3d 685 (10th Cir. 1998) .............................................................................11

NLRB v. Johnson,

322 F.3d 216 (6th Cir. 1963) .................................................................................9

NLRB v. Pepsi-Cola Bottling Co. of Topeka, Inc.,613 F.2d 267 (10th Cir. 1980)...............................................................................11

NLRB v. Quality C.A.T.V., Inc.,

824 F.2d 542 (7th Cir. 1987) ...............................................................................10

NRLB v. Complas Industries, Inc.,

714 F.2d 729 (7th Cir. 1983) ...............................................................................10

Old Chief v. U.S.,

519 U.S. 172 (1997) ...........................................................................................1, 6

Propert v. District of Columbia,

948 F.2d 1327 (D.C. Cir. 1991) .............................................................................7

Rambus Inc. v. Rea,

731 F.3d 1248 (Fed. Cir. 2013)................................................................... 1, 2, 12

Rodale Press, Inc. v. FTC ,

407 F.2d 1252 (D.C. Cir. 1968) ................................................................... passim

Satellite Broadcasting Co. v. FCC ,824 F.2d 1 (D.C. Cir. 1987) ...................................................................................7

Simons v. City of Grand Forks,

935 F.2d 981 (8th Cir. 1993) ...................................................................................8

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Stanley Works v. FTC ,

469 F.2d 498 (2d Cir. 1972), cert. denied, 412 U.S. 928 (1973) .........................11

Stokely-Van Camp, Inc., v. NLRB,

722 F.2d 1324 (7th Cir. 1983) .............................................................................10

White v. New Hampshire Dept. of Employment Sec.,

455 U.S. 445, 102 S.Ct. 1162 (1982) .....................................................................6

Yellow Freight System, Inc. v. Martin,

954 F.2d 353 (6th Cir. 1992) .............................................................................8, 9

Statutes

U.S. Constitution, Amend. 5 ......................................................................................5

5 U.S.C. § 554(b) ................................................................................................ 7, 12

5 U.S.C. § 706(2) .......................................................................................................5

35 U.S.C. § 261 ..........................................................................................................5

35 U.S.C. § 318 ..........................................................................................................2

America Invents Act, Publ. L. 112-29, 125 Stat.284 (2011) .....................................2

Detainee Treatment Act .............................................................................................7

Other Authorities

Trial Practice Guide ........................................................................................ 2, 3, 13

Wright, Federal Practice and Procedure,

Judicial Review of Administrative Action § 8112, Vol. 32 .................................... 7

Wright, Federal Practice and Procedure,

Judicial Review of Administrative Action § 8222, Vol. 32 ................................7, 8

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RULE 35 STATEMENT OF COUNSEL

Based on my professional judgment, I believe the panel decision is contrary

to the following decisions of the U. S. Supreme Court that concern unfair surprise:

Christopher v. SmithKline Beecham Corp., 132 S.Ct. 2156 (2012); Boumediene v.

Bush, 553 U.S. 723 (2008); and Old Chief v. U.S., 519 U.S. 172 (1997) and further

is contrary to In re Biedermann, 733 F.3d 329, 336-37 (Fed. Cir. 2013); Rambus

Inc. v. Rea, 731 F.3d 1248, 1255-56 (Fed. Cir. 2013); and In re Stepan Co., 660

F.3d 1341, 1344 (Fed.Cir.2011).

Second, based on my professional judgment, I

believe this appeal requires an answer to a precedent-setting question of

exceptional importance: whether this Court should follow other circuits that have

ruled that agencies cannot change the issues of a trial without giving reasonable

and timely notice to the parties and the opportunity to present evidence.

/s/ Edward David Manzo Attorney of Record for Appellant, Luv n’ Care Ltd.

ARGUMENT

The material facts are simple: the PTAB raised two new issues and relied on

them to invalidate LNC’s design patent. These two issues were not stated in the

Decision to Institute. The APJ who raised one of them conceded this absence at the

Final Hearing. With respect to trials, other circuits have ruled that agencies cannot

“change theories in midstream without giving respondents reasonable notice of the

change.” E.g., Rodale Press, Inc. v. FTC , 407 F.2d 1252, 1256 (D.C. Cir. 1968).

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This Court has applied similar due process principles with respect to appeals to the

PTO Board. E.g., Rambus Inc. v. Rea, 731 F.3d 1248, 1255-56 (Fed. Cir. 2013).

The same rule should apply to PTAB trials – especially where, as here, the patent

owner has no opportunity to muster new evidence to answer the new issues.

The PTAB rules forbade LNC from introducing further evidence at (or after)

the hearing. If LNC had received timely notice about the new issues, it could have

retained a technical expert to provide testimony to support the patent. It never had

that chance. An agency’s substitution of an issue at the hearing and addition of

another issue after the hearing are prohibited in other circuits and warrant en banc

correction and guidance for future PTAB trials.

I. PTAB Procedures Generally

The America Invents Act, Pub. L. 112-29, 125 Stat. 284 (2011), gave the

PTAB authority to conduct administrative inter partes trials in which patent claims

could be declared invalid. E.g., 35 U.S.C. §318. The PTO adopted a set of trial

rules, 37 C.F.R. Part 42, to govern such trials and added an “Office Patent Trial

Practice Guide.” 77 Fed. Reg. 48756-73 (Aug. 14, 2012) (“Trial Practice Guide”).

The Trial Practice Guide opens, “This practice guide applies to inter partes review

…” Id. at 48756. The statute, rules, and Trial Practice Guide govern an expeditious

PTAB mechanism for testing the validity of a patent claim. To do this, the PTAB

reviews petitions to institute trials and selects the issues that it will try. Thus,

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In instituting a trial, the Board will narrow the issues for

final decision by authorizing the trial to proceed only on the

challenged claims for which the threshold standards for the

proceeding have been met. Further, the Board will identify, on a

claim-by-claim basis, the grounds on which the trial will

proceed. Any claim or issue not included in the authorization

for review will not be part of the trial. …

Trial Practice Guide at 48757 (emphasis added).

In a PTAB trial, evidence is submitted with the petition seeking IPR and the

Patent Owner Response. The Final Hearing occurs long after the evidence is filed

and is an oral argument. The “trial” is circumscribed so that: (1) the issues for trial

are announced at the outset, then (2) the patent owner responds with evidence and

argument speaking to those issues, and (3) the parties present oral argument later,

but they cannot add new evidence at that time. It is prohibited :

No new evidence and arguments. A party may rely upon

evidence that has been previously submitted in the proceeding

and may only present arguments relied upon in the papers

previously submitted. No new evidence or arguments may be

presented at the oral argument.

Trial Practice Guide, at 48768 (underlining added).

II. The Proceedings Below

A. Neither the Third Oval Ring Nor the Spout Size Were Identified

as Issues in the Decision to Institute

In instituting the IPR, the PTAB discarded most of Munchkin’s arguments.

See A91-113. The PTAB stated only two reasons for denying the patent owner the

benefit of the parent’s filing date, namely: (1) whether the spout tip is racetrack-

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Figure 3 of the ’465 patent and Figure 12a of the ’106

application each illustrate a top view of a drinking cup having a

spout, collar, and vessel, the vessels being barely visible. As

can be seen, the claimed design of the ’465 patent includes a

spout tip that is different than that disclosed in the ’106

application. Specifically, and as viewed from the top, (1) the

outer boundary of the spout tip of the claimed design is larger

than that of the ’106 application; (2) the spout tip of the claimed

design has a different, more rounded, oval shape than that of the

racetrack shape of the spout tip in the ’106 application; and (3)

the spout tip of the claimed design has three concentric rings

that the ’106 application does not disclose.

A7 (emphasis added). The two new issues were (1) the size of the spout tip and (3)

the third concentric (oval) ring. As LNC did not argue nonobviousness over the

publication of its parent application, relying only on antedating the citation, the

PTAB ruled the design patent unpatentable over it and a related citation. A8.

III. The Lack of Timely Notice of Issues in an IPR Is Unconstitutional and

Violates the Administrative Procedures Act

Patents have the attributes of personal property. 35 U.S.C. §261. As such, a

patent owner cannot be deprived of one without due process of law. U.S.

Constitution, Amend. 5; 5 U.S.C. §706(2) (Administrative Procedure Act (“APA”)

requirement for timely notice). The PTO is subject to the APA and its notice

requirements. Dickinson v. Zurko, 527 U.S. 150, 154, 119 S.Ct. 1816, 144 L.Ed.2d

143 (1999). LNC was required to rely on the PTAB’s statement of issues for trial

announced in the decision to institute trial. When the PTAB decided the case on

two other issues, with LNC never having had notice and the opportunity to provide

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evidence on the issue, this violated due process and the APA.1

A. U.S. Law Demands Fundamental Fairness and an Opportunity to

Present Evidence

American jurisprudence requires fair play and no unfair surprise. Cases

about unfair surprise span the entire jurisprudence. For example, in the context of

agency rulemaking, the Supreme Court admonishes against unfair surprise:

To defer to the agency's interpretation in this circumstance

would seriously undermine the principle that agencies should

provide regulated parties “fair warning of the conduct [a

regulation] prohibits or requires.” [citation omitted] Indeed, itwould result in precisely the kind of “unfair surprise” against

which our cases have long warned. [citations omitted]

Christopher v. SmithKline Beecham Corp., 132 S.Ct. 2156, 2167 (2012). Probative

evidence is excluded to avoid unfair surprise. Old Chief v. United States, 519 U.S.

172, 181, 117 S.Ct. 644, 651 (1997). Cf. White v. New Hampshire Dept. of

Employment Sec., 455 U.S. 445, 454, 102 S.Ct. 1162, 1167-68 (1982) (avoid unfair

surprise).

1 Although the panel decision was under Rule 36, the due process violation was

not harmless error. Addressing the racetrack/oval issue on appeal, LNC showed

enlargements of several figures of the parent application and demonstrated that the

oval shape is indeed supported by the parent application. See enlargements at Blue

Brief (“BB”) pp. 59-62. The PTAB’s “racetrack” finding is not supported by

substantial evidence.Addressing the new spout size issue, LNC showed why that ruling also lacks

support by substantial evidence. Briefly, LNC showed that the relative size of the

spout compared to the size of the top in the several figures of the parent application

is the same. BB at 24-25, 58 (34% relative length in both design patent and parent

application; relative width in design patent of 22% is within range of parent’s

illustrations of 15%-25%). Munchkin did not argue otherwise in its Red Brief.

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Fairness demands that parties be given a reasonable opportunity to present

evidence. E.g., Hall v. Florida, 134 S.Ct. 1986 (2014) (reversing Florida Supreme

Court to give Hall opportunity to present evidence of mental disability);

Boumediene v. Bush, 553 U.S. 723, 789, 128 S.Ct. 2229, 2272 (2008) (proceeding

under Detainee Treatment Act constitutionally inadequate, as detainee would have

no opportunity to present evidence discovered after proceedings concluded);

Macklin v. Butler, 553 F.2d 525, 528-29 (7th Cir. 1977).

“Fairness or fair procedure permeates the language of administrative law . .

. [and] expresses a special concern for those individuals especially affected by the

government action.” Wright, Federal Practice and Procedure, Judicial Review of

Administrative Action § 8112, Vol. 32, p. 5. “Notice is a basic requirement.” Id. at

§8222, pp. 349-50 (citing e.g., APA, 5 U.S.C. § 554(b) (“[W]hen private persons

are the moving parties, other parties to the proceeding shall give prompt notice of

issues controverted in fact or law; and in other instances agencies may by rule

require responsive pleading.”), General Electric Co. v. U.S. EPA, 53 F.3d 1324,

1328-30 (D.C. Cir. 1995) (The requirement of adequate notice “has now been

thoroughly incorporated into administrative law”), Satellite Broadcasting Co. v.

FCC , 824 F.2d 1, 4 (D.C. Cir. 1987), Propert v. District of Columbia, 948 F.2d

1327, 1332 (D.C. Cir. 1991) (adequacy of the notice necessarily determined by

facts of the particular adjudicative process.)).

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“It has long been established that due process requires notice reasonably

calculated, under all circumstances, to inform the private party of the nature of the

government action so as to allow an opportunity to challenge the action.” Wright, §

8222, Vol. 32, pp. 350-51 (citing e.g., General Electric Co., supra, 53 F.3d at 1329

(“Fair notice” requires clear expression of the regulations in dispute.), Simons v.

City of Grand Forks, 935 F.2d 981, 983 (8th Cir. 1993) (due process requires

reasonable notice of the adverse contentions and access to the evidence for an

adequate opportunity to participate.); Yellow Freight System, Inc. v. Martin, 954

F.2d 353, 357 (6th Cir. 1992) (“To satisfy the requirements of due process, an

administrative agency must give the party charged a clear statement of the theory

on which the agency will proceed with the case.”)). See also, Rodale Press, supra.

“Fairness also requires that the notice be given sufficiently prior to the

adjudication so as to allow the party to adequately participate.” Wright, § 8222,

Vol. 32, pp. 351-52 (citing e.g., Lane Hollow Coal Co. v. Director, OWCP, 137

F.3d 799, 807 (4th Cir. 1998) (notice must afford reasonable time to respond)).

Thus, a fundamental requirement of due process is the opportunity to be

heard “at a meaningful time and in a meaningful manner.” Armstrong v. Manzo,

380 U.S. 545, 552, 85 S.Ct. 1187, 1191, 14 L.Ed.2d 62 (1965).

8

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B. Other Circuits Prohibit Agencies from Changing Theories at

Trial Without Giving Proper Notice and an Opportunity to

Respond

Courts of appeal reverse agencies or refuse to enforce their determinations

when the agencies changed theories at (or after) trial without giving appropriate

and timely notice.

D.C. Cir.: As noted above, this rule is followed in the D.C. Circuit. In

Rodale Press, supra, the court declared, “By substituting an issue … for the one

framed by the pleadings…, the Commission has deprived petitioners of both notice

and hearing on the substituted issue.” 407 F.2d at 1256 (see also concurring

opinion of McGowan, J., at 1258). The court vacated the order of the Federal

Trade Commission and remanded for a further hearing on a new theory that the

FTC found to exist after oral argument. 407 F.2d at 1257. In doing so, the FTC had

deprived the petitioner of notice and hearing as to the substituted issue.

6th Cir.: In Yellow Freight, supra, due process required an agency to give

the charged party a clear statement of the theory on which the agency will proceed

with the case. 954 F.2d at 357. Here, the Secretary of Labor failed to give Yellow

Freight adequate notice of a dispositive issue and violated its due process rights.

The court remanded for “proper notice and a full and fair opportunity to respond.”

Id. at 359. See also, NLRB v. Johnson, 322 F.3d 216, 220 (6th Cir. 1963).

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7th Cir.: In NRLB v. Complas Industries, Inc., 714 F.2d 729, 734, 736 (7th

Cir. 1983), an employer was denied due process when the NRLB was allowed to

amend its original complaint during a one-day administrative proceeding, where

the employer repeatedly objected to the amendment of complaint, and the

proceeding was not adjourned to give the employer a meaningful opportunity to

meet the amended claim. Citing Rodale, the court stated:

[I]t is well settled that an agency may not change theories in

midstream without giving respondents reasonable notice of the

change. …The evil ... is not remedied by observing that the outcome

would perhaps or even likely have been the same. It is the

opportunity to present argument under the new theory of

violation, which must be supplied. [citation omitted]

Id. at 734. See also, NLRB v. Quality C.A.T.V., Inc., 824 F.2d 542, 548-49 (7th Cir.

1987) (vacating and remanding); Stokely-Van Camp, Inc., v. NLRB, 722 F.2d 1324

(7th Cir. 1983); and Chicago, Milwaukee, St. Paul & Pacific Railroad Co. v.

United States, 585 F.2d 254, 260 (7th Cir. 1978) (agency action was arbitrary and

capricious without adequate notice).

10th Cir.: In J.C. Penney Co. v. NLRB, 384 F.2d 479 (10th Cir. 1967), the

court declined to enforce the portion of an order based on a charge not in the

complaint, where the issue had not been fairly litigated. The court explained,

Failure to clearly define the issues and advise an employer

charged with a violation of the law of the specific complaint he

must meet and provide a full hearing upon the issue presented

is, of course, to deny procedural due process of law…. We

10

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cannot enforce a finding based on a charge not in the complaint

where the record, as does this one, clearly discloses that the

issue has not been litigated.

Id. at 483 (citations omitted). See also, NLRB v. Pepsi-Cola Bottling Co. of

Topeka, Inc., 613 F.2d 267, 273-75 (10th Cir. 1980). Cf . NLRB v. I.W.G., Inc., 144

F.3d 685, 689 (10th Cir. 1998).

Other circuits are in accord. 2

C. This Court and One of its Predecessors Apply the Same Due

Process Requirements to Appeals at the PTO Board

This Court and the Court of Customs and Patent Appeals have long applied a

similar rule with respect to the PTO Board raising new grounds for decision on

appeal from a patent examiner. The Court should extend that rule to IPRs at the

PTAB. The error is the same – relying on new issues to reach a decision, with the

inventor never having had timely notice or the opportunity to respond. This Court

has admonished:

The Board also exceeded its limited role to “review of the

examiner's decisions during prosecution.” In re Stepan Co., 660

F.3d 1341, 1344 (Fed. Cir. 2011). Under the Administrative

Procedure Act, the PTO must ensure that the parties before it

are “fully and fairly treated at the administrative level.” In re

Leithem, 661 F.3d 1316, 1319 (Fed. Cir. 2011). Namely, the

2 NLRB v. H. E. Fletcher Co., 298 F.2d 594, 600 (1st Cir. 1962) (“In sum, theBoard made a finding of a violation which was neither charged in the complaintnor litigated at the hearing.”); Stanley Works v. FTC , 469 F.2d 498, 508 n.24 (2dCir. 1972), cert. denied, 412 U.S. 928 (1973); Clear Pine Mouldings, Inc. v. NLRB,632 F.2d 721, 728 (9th Cir. 1980) (six week adjournment to allow preparation ofdefense to new charge allowed a meaningful opportunity to defend and full and fairlitigation of the new claim), cert. denied, 451 U.S. 984 (1981).

11

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PTO must “provide prior notice to the applicant of all ‘matters

of fact and law asserted’ prior to an appeal hearing before the

Board.” Stepan, 660 F.3d at 1345 (quoting 5 U.S.C. §

554(b)(3)).

This framework limits the Board's ability to rely on different

grounds than the examiner. The Board may not “rel[y] on new

facts and rationales not previously raised to the applicant by the

examiner.” Leithem, 661 F.3d at 1319....The ultimate criterion

is whether the appellant has had before the PTO a “fair

opportunity to react to the thrust of the rejection.” [citations and

internal quotation marks omitted]. If that condition is not met,

the Board must designate its decision a new ground of rejection

and provide the appellant with an opportunity to respond. See

Stepan, 660 F.3d at 1346; 37 C.F.R. § 41.77(b). Failure to do so

violates the appellant's notice rights and warrants vacatur of theBoard's decision. Stepan, 660 F.3d at 1346.

Rambus v. Rea, supra, 731 F.3d at 1255-56. Accord , In re Biedermann, 733 F.3d

329, 336-37 (Fed. Cir. 2013). Violating the rule calls for vacatur of the decision.

D. Notice and Opportunity Are Especially Important in this Case.

The requirements for notice and an opportunity to present evidence are

heightened in this case for two additional reasons. First, a PTAB Final Hearing in

an IPR (where one new issue arose) is nothing like a normal evidentiary hearing.

Second, because a design patent has only one claim, proper notice of an issue can

require a more detailed articulation to meet due process standards.

1. The Difference Between PTAB Litigation and DistrictCourt Litigation Make a Complete Articulation of the

Issues Paramount.

In federal district court, pleadings frame the issues for trial. The trial is an

evidentiary proceeding where parties introduce evidence through witnesses at the

12

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hearing. That is nothing like an IPR “hearing” before the PTAB. A PTAB “trial,”

like a district court case, refers to the contested case as a whole and begins with a

written decision to institute. 37 C.F.R. §42.2. The PTAB “hearing” is the

“consideration of the trial.” Id. It is simply the oral argument. See id. §42.70. It is

not an evidentiary hearing.

In a Decision to Institute, the PTAB selects issues to be tried in a

streamlined proceeding. Issues not specified there are “not part of the trial.” Thus,

the parties thereafter litigate those issues only. The patent owner provides evidence

with its response pursuant to 37 C.F.R. §42.120. This occurs months before the

hearing. (The petitioner’s evidence is already part of the record because it

accompanied the petition. Id. §42.104.)3

Receiving notice at the final hearing of a new issue is insufficient for at least

the reason that the rules deny the Patent Owner the right to present new evidence at

the hearing. Indeed, the Trial Practice Guide prohibits new evidence at the oral

argument, as quoted supra at 3. This regulation made it impossible for LNC to

present evidence on the substitute issue(s), even if it had received timely notice.

Notice of a new issue in a Final Written Decision is even more defective.

3 A patent owner addresses the issues declared in the Decision to Institute by

taking a deposition of the petitioner’s witnesses, if any, and providing documentary

evidence or testimony evidence when filing its Patent Owner Response under

§42.120; see §§ 42.53, 42.63.

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2. The Statement of Issues by the PTAB is Even More Critical

with Respect to Design Patents.

When the issue is entitlement to an earlier filing date and the PTAB has

declared specific priority issues, a patent owner is not on notice that all other

potential priority issues could be addressed also. When the issue is, for example,

the support for the existence (or absence) of slits in a design patent figure, a patent

owner would not be alerted to questioning the location of a different feature of the

drawings. And when the stated issue is the roundness (oval shape) of one feature in

a drawing, the patent owner is not on notice that the existence of another feature

that drawing, or another one, is also an issue.

Thus, when the PTAB identifies specific issues in the Decision to Institute,

and the challenged patent is a design patent, many other potential issues that might

have been litigated are put aside and not chosen for trial. The patent owner does

not have notice of the potential issues. It cannot lawfully be forced to guess what

new issues the PTAB might interject at a future time, after the evidence period.

CONCLUSION

The PTAB must adhere to the APA and due process standards. When it

conceded at the Final Hearing that the third ring issue was not in the Decision to

Institute, that should have ended that issue. It was off limits – not fair game in this

IPR unless the PTAB made a new evidence period available to LNC. The PTAB

14


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compounded this error by adding another new issue (the spout size) in its Final

Written Decision (as in Rodale Press).

The addition of two new issues denied LNC the opportunity to be heard “at a

meaningful time and in a meaningful manner.” Armstrong v. Manzo, supra. LNC is

entitled to address the new issues, as many courts of appeal hold. This Court calls

for notice and an opportunity to present evidence when the PTO Board raises new

issues in ex parte appeals. Whether the outcome here might have been the same

(which LNC denies) is not a concern. See NLRB v. Complas, supra.

Rehearing en banc is needed to align this Court’s law with other circuits

which hold that agencies cannot switch theories midstream (or thereafter) without

giving proper notice and an opportunity to defend. The PTAB must not be allowed

to decide an IPR on new issues. Either the new issues must be eliminated from the

case, or the patent owner must be given a timely notice and opportunity to present

evidence. The PTAB ruling must be vacated.

Respectfully submitted,

/s/ Edward D. Manzo

Edward D. Manzo, Principal Counsel

for Appellant, Luv n’ Care, Ltd.George S. Pavlik

Daniel Kim

HUSCH BLACKWELL LLP



Telephone: 312-655-1500

Hartwell P. Morse, III

Luv n’ Care, Ltd.3030 Aurora Avenue


Telephone: 318-338-3108

Counsel for Appellant

Luv n’ Care, Ltd.

15


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ADDENDUM


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NOTE: This disposition is nonprecedential.


for the Federal Circuit ______________________

LUV N’ CARE LTD.,

Appellant

v.

MUNCHKIN, INC., Appellee

______________________

2014-1653 ______________________

Appeal from the United States Patent and Trademark

Office, Patent Trial and Appeal Board in No. IPR2013-00072.

______________________

JUDGMENT

______________________

EDWARD D AVID M ANZO, Husch Blackwell LLP, Chica-go, IL, argued for appellant. Also represented by D ANIEL

K IM, H ARTWELL POWELL MORSE, III, GEORGE S. P AVLIK ,

III.

A LLEN JUSTIN POPLIN, Lathrop & Gage, LLP, Over-

land Park, KS, argued for appellee. Also represented byTRAVIS W. MCC ALLON, ROBERT C AMERON G ARRISON,Kansas City, MO.

______________________


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THIS C AUSE having been heard and considered, it is

ORDERED and A DJUDGED:

PER CURIAM (W ALLACH, M AYER, and CHEN, CircuitJudges).

AFFIRMED. See Fed. Cir. R. 36.

ENTERED BY ORDER OF THE COURT

April 14, 2015 /s/ Daniel E. O’TooleDate Daniel E. O’Toole

Clerk of Court


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for the Federal Circuit Luv N' Care Ltd v. Munchkin, Inc., No. 2014-1653

CERTIFICATE OF SERVICE

I, Robyn Cocho, being duly sworn according to law and being over the age

of 18, upon my oath depose and say that:

Counsel Press was retained by HUSCH BLACKWELL LLP, Attorneys for

Appellant to print this document. I am an employee of Counsel Press.

On May 12, 2015, counsel has authorized me to electronically file the

foregoing Appellant’s Petition for Rehearing En Banc with the Clerk of Court

using the CM/ECF System, which will serve via e-mail notice of such filing to any

of the following counsel registered as CM/ECF users:

R. Cameron Garrison (Principal Counsel)

Travis W. McCallon

Lathrop & Gage, LC

2345 Grand Boulevard, Suite 2800

Kansas City, MO 64108816-292-2000

[email protected]

[email protected]

Allen J. Poplin

Lathrop & Gage, LLP

10851 Mastin Boulevard

Suite 1000

Overland Park, KS 66210913-451-5100

[email protected]

Paper copies will also be mailed to the above principal counsel on this date.

Additionally, sixteen paper copies will be filed with the Court within the

time provided in the Court’s rules.

May 12, 2015 /s/ Robyn Cocho

Robyn Cocho

Counsel Press

luv 'n care - petition for rehearing

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