In a long-running dispute between Thales Visionix, Inc., and the US government and Elbit Systems of America, LLC, the Patent Trial and Appeal Board (PTAB) issued a final written decision finding that 11 claims of the challenged patent were not obvious (while invalidating other asserted claims on grounds not discussed here). The US Court of Appeals for the Federal Circuit affirmed the non-obviousness determination, finding that substantial evidence supported the determination and that Thales's expert offered more credible testimony than Elbit's invalidity expert. Thales Visionix, Inc. v. US, Case No. 17-51355 (Fed. Cir., Feb. 6, 2018) (Wallach, J).
Elbit filed a petition for inter partes review of Thales' patent having claims generally covering HMDS used by F-35 fighter jet pilots. The claims utilized mathematical equations to determine the orientation of the helmet relative to the frame of a moving vehicle through inertial sensors, such as accelerometers and gyroscopes. The key claim limitation in the PTAB's analysis was the calculation of the "relative angular rate signal." Elbit argued that certain challenged claims were obvious in view of three prior art references in combination. Thales, however, presented evidence demonstrating that the limitation of calculating the "relative angular rate signal" was not disclosed in the prior art. The PTAB agreed with Thales and found that Elbit failed to carry its burden in demonstrating that the asserted claims were obvious. Elbit appealed.
The Federal Circuit limited its analysis to a representative claim and agreed with the PTAB that "there were many 'deficiencies' in the testimony of Elbit's expert" and that the petitioner failed to prove the challenged claims were unpatentable by a preponderance of the evidence. A key distinction between the two parties in presenting evidence through their respective experts was the number of steps required to calculate the orientation or position of a moving object relative to a moving reference frame. Thales's expert explained that the challenged claims employed a two-step method to arrive at the claimed "relative angular rate signal," a position that was supported by the specification of the challenged patent and evidence that the two-step method was beneficial over the steps disclosed in the prior art.
In contrast, Elbit's expert relied on a three-step method in the prior art to calculate an object's relative orientation, arguing that the two- and three-step methods are "mathematically equivalent" and that "there is no practical difference" between them. The PTAB found Elbit's expert's testimony "unsupported" and entitled to "little weight" because the expert did not address or account for the recited relative angular rate signal limitation "anywhere in his opinion." The Federal Circuit agreed, concluding that the difference between the steps recited in the claims and the steps in the prior art provides substantial evidence that the prior art does not teach the claimed "relative angular rate signal" limitation.
Regarding the PTAB's criticism of Elbit's expert, the Federal Circuit agreed that the PTAB is entitled to weigh the credibility of witnesses and point out where an expert's testimony was unsupported.
Lastly, Elbit's counter-arguments were dismissed as unpersuasive. In particular, Elbit argued on appeal that the PTAB failed to appreciate the knowledge of a person of skill in the art. According to Elbit, a skilled artisan would understand that the sum of integrals principle extends to navigation equations, thereby negating the need for Elbit to produce a prior art reference expressly directed to the sum of integrals principle in the context of navigation equations. The Federal Circuit rejected Elbit's arguments as to what a person of ordinary skill in the art would understand as mere attorney argument that cannot rebut the testimony of Thales's expert and the PTAB's reliance on that testimony.
Practice Note: This is not the first time the Federal Circuit has had occasion to consider the Thales patent. In March 2017, the Federal Circuit reversed a US Court of Federal Claims decision invalidating Thales' claims directed to a heads-up display patent as patent ineligible under 35 USC § 101 ( IP Update, Vol. 20, No. 4). In that case, the Federal Circuit concluded the claims were not directed to an abstract idea since they specify a particular configuration of inertial sensors and a particular method of using the raw data from the sensors. The Court emphasized that "it is not enough merely to identify a patent-ineligible concept underlying the claim; we must determine whether that patent-ineligible concept is what the claim is 'directed to.'"
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