Nidec Motor Corporation v. Zhongshan Broad Ocean Motor Co

United States Court of Appeals

for the Federal Circuit

______________________

NIDEC MOTOR CORPORATION,

Appellant

v.

ZHONGSHAN BROAD OCEAN MOTOR CO. LTD.,

BROAD OCEAN MOTOR LLC, BROAD OCEAN

TECHNOLOGIES LLC,

Appellees

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

______________________

2016-2321

______________________

Appeal from the United States Patent and Trademark

Office, Patent Trial and Appeal Board in Nos. IPR2014-

01121, IPR2015-00762.

______________________

Decided: August 22, 2017

______________________

SCOTT R. BROWN, Hovey Williams LLP, Overland

Park, KS, argued for appellant. Also represented by

MATTHEW B. WALTERS; CHRISTOPHER MICHAEL HOLMAN,

2 NIDEC MOTOR CORP. v. ZHONGSHAN BROAD OCEAN MOTOR CO.

University of Missouri-Kansas City School of Law, Kan-

sas City, MO.

STEVEN F. MEYER, Locke Lord LLP, New York, NY,

argued for appellees. Also represented by JOSEPH

ANTHONY FARCO; CHARLES BAKER, Houston, TX.

NATHAN K. KELLEY, Office of the Solicitor, United

States Patent and Trademark Office, Alexandria, VA

argued for intervenor. Also represented by FRANCES

LYNCH, JOSEPH MATAL, SCOTT WEIDENFELLER.

DAVID R. MARSH, Arnold & Porter Kaye Scholer LLP,

Washington, DC, for amicus curiae Biotechnology Innova-

tion Organization. Also respresented by SEAN MICHAEL

CALLAGY, San Francisco, CA.

______________________

Before DYK, REYNA, and WALLACH, Circuit Judges.

Opinion for the court filed PER CURIAM.

Concurring opinion filed by Circuit Judge DYK, in which

Circuit Judge WALLACH joins.

PER CURIAM.

Nidec Motor Corporation (“Nidec”) appeals a final

written decision of the Patent Trial and Appeal Board

(“Board”) in an inter partes review (“IPR”). The Board

determined that claims 1–3, 8, 9, 12, 16, and 19 of U.S.

Patent No. 7,626,349 (the “’349 Patent”) are invalid as

anticipated or obvious. We affirm.

BACKGROUND

Appellant Nidec owns the ’394 patent, which is di-

rected to low-noise heating, ventilating, and air condition-

ing (“HVAC”) systems. The patented HVAC system

includes a permanent magnet electric motor that turns a

fan in order to move air through ductwork. As compared

NIDEC MOTOR CORP. v. ZHONGSHAN BROAD OCEAN MOTOR CO. 3

to conventional HVAC systems, the invention achieves

quieter operation of the motor due to improvements in the

motor controller. Specifically, the improved motor con-

troller performs sinewave commutation instead of more

conventional square-wave commutation. Commutation

refers generally to the repeated sequencing of electrical

currents applied to windings within the permanent mag-

net motor that causes the motor to rotate. Square-wave

commutation involves abrupt changes in the voltage

applied to a given winding as the sequence progresses,

similar to repeatedly flipping a switch between three

voltage states: positive, zero, and negative. Sinewave

commutation, by contrast, involves more gradual and

continuous oscillations in applied voltage, similar to

sliding a dimmer switch between those states. As com-

pared to square-wave commutation, sinewave commuta-

tion results in less vibration and noise generated from the

electric motor.

Appellees Zhongshan Broad Ocean Motor Co., Ltd.;

Broad Ocean Motor LLC; and Broad Ocean Technologies,

LLC (collectively, “Broad Ocean”) filed an IPR petition

challenging claims 1–3, 8, 9, 12, 16, and 19 of the ’349

patent (the “challenged claims”). In a revised petition

(“First Petition”), Broad Ocean asserted that the chal-

lenged claims are invalid as obvious over the combination

of U.S. Patent No. 5,410,230 (“Bessler”) and a published

doctoral thesis by Peter Franz Kocybik (“Kocybik”).

Broad Ocean also asserted that the challenged claims are

invalid as anticipated by Japanese Patent Publication JP

2003-348885 (“Hideji”).

On January 21, 2015, the Board instituted review on

the ground of obviousness over Bessler and Kocybik. The

Board declined to institute review on the ground of antici-

pation by Hideji, however, because Broad Ocean had

failed to provide an affidavit attesting to the accuracy of

the submitted translation of Hideji as required by 37

C.F.R. § 42.63(b).

4 NIDEC MOTOR CORP. v. ZHONGSHAN BROAD OCEAN MOTOR CO.

About a month later, Broad Ocean filed a second peti-

tion for IPR (“Second Petition”), again asserting that the

challenged claims are anticipated by Hideji. This time,

Broad Ocean included the required affidavit. At the same

time, Broad Ocean requested that the Board join the

Second Petition with Broad Ocean’s already-instituted

IPR involving the First Petition pursuant to 35 U.S.C.

§ 315(c) (allowing for joinder in an IPR at the discretion of

the Director of the United States Patent and Trademark

Office (“Director”)).

On July 20, 2015, a panel of three Administrative Pa-

tent Judges again declined to institute review on the

ground that Hideji anticipates. The panel majority de-

termined that Broad Ocean had been served with a com-

plaint alleging infringement of the ’349 patent on

September 25, 2013—more than one year before Broad

Ocean filed the Second Petition—and, therefore, the

Second Petition was time barred under 35 U.S.C. § 315(b).

The majority further held that the exception to the time

bar for requests for joinder under 35 U.S.C. § 315(b), (c),

did not apply here because, according to the majority’s

interpretation, the joinder provision does not permit a

party to join issues to a proceeding to which it is already a

party.

Broad Ocean requested a rehearing of the panel’s de-

cision, which was granted by an expanded panel of five

Administrative Patent Judges. The expanded adminis-

trative panel set aside the original panel’s decision and

concluded that

§ 315(c) permits the joinder of any person who

properly files a petition under § 311, including a

petitioner who is already a party to the earlier in-

stituted [IPR]. We also conclude that § 315(c) en-

compasses both party joinder and issue joinder,

and, as such, permits joinder of issues, including

NIDEC MOTOR CORP. v. ZHONGSHAN BROAD OCEAN MOTOR CO. 5

new grounds of unpatentability, presented in the

petition that accompanies the request for joinder.

J.A. 936 (citations omitted). Having determined that the

joinder provision is broad enough to permit joinder with

respect to the Second Petition, the expanded panel insti-

tuted review of the Second Petition and granted Broad

Ocean’s request to join the proceeding with the earlier-

instituted IPR.

On May 9, 2016, the Board, consisting of the expand-

ed panel, issued a Final Written Decision in the joined

proceedings. The Board determined that all of the chal-

lenged claims are unpatentable under 35 U.S.C. § 103 as

obvious over Bessler and Kocybik and that all of the

challenged claims are unpatentable under 35 U.S.C. § 102

as anticipated by Hideji.

Nidec appealed the Board’s joinder decision as well as

the Board’s conclusions as to obviousness and anticipa-

tion. Broad Ocean responded, and the Director inter-

vened to support the Board’s joinder decision. We have

jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A).

DISCUSSION

We review the Board’s legal conclusions de novo and

its factual findings for substantial evidence. In re Affinity

Labs of Tex., LLC, 856 F.3d 883, 889 (Fed. Cir. 2017).

I

Both Broad Ocean and the Director argue that the

Board properly applied the joinder and time bar statutes

to allow joinder and institution in this case. Nidec disa-

grees. We need not resolve this dispute. Nor need we

address the Director’s and Broad Ocean’s arguments that

the Board’s joinder determination is non-appealable in

light of 35 U.S.C. § 314(d)’s bar of judicial review for

institution decisions or Nidec’s argument that the Board’s

practice of expanding panels violates due process. For the

6 NIDEC MOTOR CORP. v. ZHONGSHAN BROAD OCEAN MOTOR CO.

reasons set forth below, we affirm the Board’s conclusion

that all of the challenged claims are unpatentable as

obvious over Bessler and Kocybik. Because there is no

dispute that Broad Ocean timely filed the First Petition

(containing the obviousness ground), the issues on appeal

relating only to the Board’s joinder determination as to

anticipation ultimately do not affect the outcome of this

case. Both parties agree that, if we affirm as to obvious-

ness, we need not address Nidec’s argument that various

procedural aspects of the Board’s joinder decision require

reversal of its holding concerning anticipation by Hideji.

See Oral Arg. at 1:28–2:33 (June 8, 2017), available at

http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20

16-2321.mp3 (Nidec agreeing that we need not address

the anticipation ground based on Hideji in any respect if

we determine that the Board was correct in its obvious-

ness determination under Bessler and Kocybik).

II

Nidec argues that the Board erred in concluding that

the challenged claims would have been obvious to a

person of ordinary skill in the art based on the combina-

tion of Bessler and Kocybik. Obviousness is a question of

law based on underlying questions of fact. Belden Inc. v.

Berk-Tek LLC, 805 F.3d 1064, 1073 (Fed. Cir. 2015).

Nidec submits that claim 1 is representative of the in-

dependent claims at issue, and Nidec does not raise

patentability arguments that are specific to any depend-

ent claims. Claim 1 is reproduced below:

1. A heating, ventilating and/or air conditioning

(HVAC) system comprising a system controller, a

motor controller, an air-moving component, and a

permanent magnet motor having a stationary as-

sembly, a rotatable assembly in magnetic coupling

relation to the stationary assembly, and a shaft

coupled to the air-moving component, wherein the

motor controller is configured for performing sin-

NIDEC MOTOR CORP. v. ZHONGSHAN BROAD OCEAN MOTOR CO. 7

ewave commutation, using independent values of

Q and d axis currents, in response to one or more

control signals received from the system controller

to produce continuous phase currents in the per-

manent magnet motor for driving the air-moving

component.

’349 Patent, col. 5 ll. 34–45.

Nidec does not appear to dispute that the claimed el-

ements are described in the prior art. In general, Bessler

describes an HVAC system that includes a thermostat, a

motor controller (or microprocessor), and an electronically

commutated motor that turns a fan (or a “blower ECM

motor”). See, e.g., J.A. 223, col. 4 ll. 35–68 (thermostat);

id. col. 5 ll. 45–48 (microprocessor); id. col. 5 l. 23 (blower

ECM motor). Bessler does not describe the claimed

sinewave commutation or the use of independent Q and d

axis currents. However, the Board determined—and

Nidec does not dispute—that Kocybik describes sinewave

commutation as well as the use of independent Q and d

axis currents in electric motors, although Kocybik does

not mention HVAC systems. And Kocybik does not limit

the application of such commutation to “high precision

control tasks,” as Nidec contends. Nidec Reply Br. 7.

The Board determined that “a person of ordinary skill

in the art would have effected the combination pro-

posed”—“configuring the system of Bessler to perform

sinewave commutation in the manner described in Kocy-

bik.” J.A. 29. The Board concluded that “the use of

sinewave commutation and independent Q and d axis

currents would have provided predictable results to

address known problems associated with other types of

motors.” J.A. 29. Nidec asks us to reweigh the evidence

the Board used to make its determination, which we may

not do. See In re Warsaw Orthopedic, Inc., 832 F.3d 1327,

1334 (Fed. Cir. 2016).

8 NIDEC MOTOR CORP. v. ZHONGSHAN BROAD OCEAN MOTOR CO.

Nidec makes two arguments as to why the Board’s

conclusion was erroneous. First, Nidec argues that the

Board wrongly construed the term “HVAC system” in the

claim preambles to be non-limiting. J.A. 21. Whether or

not Nidec is correct, the result does not change. The

Board specifically addressed the issue by stating, “[o]ur

conclusion would be unaffected by a determination that

the preambles of the claims reciting an HVAC system are

limiting. Although Kocybik is not directed specifically to

HVAC systems, Petitioner relies on Bessler for such a

teaching.” J.A. 34 n.10. There is no dispute that Bessler

teaches an HVAC system as recited in the claims. Be-

cause we need only construe terms “that are in controver-

sy, and only to the extent necessary to resolve the

controversy,” Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc.,

200 F.3d 795, 803 (Fed. Cir. 1999), we need not construe

the claim preambles here where the construction is not

“material to the [obviousness] dispute,” id. We see no

error in the Board’s decision in this regard.

Second, Nidec argues that Bessler teaches away from

the asserted combination. Nidec argues that the purpose

of Bessler is to reduce the complexity of HVAC systems by

eliminating the need for a conventional system controller.

According to Nidec, incorporating sinewave commutation

into an HVAC system only increases complexity, which is

contrary to the fundamental goal of Bessler. Thus, Nidec

urges that a person of ordinary skill in the art would not

have combined the teachings of Bessler and Kocybik. We

disagree.

There is nothing in Bessler that “criticize[s], discred-

it[s], or otherwise discourage[s]” the use of sinewave

commutation in HVAC systems. Meiresonne v. Google,

Inc., 849 F.3d 1379, 1382 (Fed. Cir. 2017) (quoting Gal-

derma Labs., L.P. v. Tolmar, Inc., 737 F.3d 731, 738 (Fed.

Cir. 2013)). As Nidec has conceded, Bessler does not even

mention sinewave commutation. Oral Arg. at 13:32–

13:47. Instead, Bessler states only that “[i]t is an object of

NIDEC MOTOR CORP. v. ZHONGSHAN BROAD OCEAN MOTOR CO. 9

this invention to provide a central [HVAC] system which

does not require a system controller.” J.A. 222, col. 2

ll. 3–5. This statement does not teach away from sin-

ewave commutation.

For support, Nidec points out that each challenged

claim requires a “system controller” and that Bessler

teaches away from the use of a system controller that is

separate from a motor controller and that receives and

processes system demand signals. But this argument has

limited relevance to sinewave commutation. In fact, the

challenged claims make clear that it is the “motor control-

ler” (not the system controller eliminated in Bessler) that

performs sinewave commutation. See, e.g., ’349 Patent,

col. 5 ll. 39–41 (claim 1 reciting “wherein the motor con-

troller is configured for performing sinewave commuta-

tion”). Nidec does not dispute that Bessler teaches a

motor controller. 1

And the ’349 Patent specification uses the term “sys-

tem controller” in a different sense than in Bessler. The

’349 Patent states that “the system controller . . . may be

a thermostat.” Id. col. 4 ll. 35–36. There is no dispute

that Bessler teaches the use of a thermostat in an HVAC

system as opposed to the eliminated system controller

1 Nidec argues that a motor controller capable of

achieving sinewave commutation requires an advanced

microprocessor, such as a “digital signal processor” (DSP),

and that Bessler teaches away from the use of such hard-

ware. In fact, however, Bessler does not limit or suggest

limiting the types of microprocessors that might be used,

and Kocybik teaches the use of DSPs with permanent

magnet motors. Kocybik explains that “[m]ass production

[of DSPs] has [led] to a decrease in prices; leading to a

whole range of reasonably priced and well-tested devices

available to implement digital control strategies.”

J.A. 267.

10 NIDEC MOTOR CORP. v. ZHONGSHAN BROAD OCEAN MOTOR CO.

which receives and processes signals from a thermostat.

See J.A. 223, col. 4 ll. 31–68 (Bessler describing the func-

tions of a “conventional thermostat” in a preferred embod-

iment).

However, Nidec argues that Bessler’s thermostat is

too primitive to qualify as the system controller required

by the ’349 Patent claims. Specifically, the claimed sys-

tem controller must be capable of sending “one or more

control signals” to the claimed motor controller. E.g., ’349

Patent, col. 5 l. 42 (claim 1); see also id. col. 6 l. 50 (claim

19 reciting “at least one control signal from a system

controller”). Nidec points to a portion of the ’349 Patent

specification that explains, “[s]uch control signals may

represent, for example, a desired torque or speed of the

motor 406. Alternatively, the control signals may repre-

sent a desired airflow to be produced by the air-moving

component 410.” Id. col. 3 l. 66–col. 4 l. 2. By contrast,

Bessler’s thermostat only “generat[es] a two state (on/off)

signal.” J.A. 223, col. 4 ll. 42–43. Thus, Nidec argues,

Bessler’s thermostat is incapable of generating the “con-

trol signals” required by the claims of the ’349 Patent.

Nidec too narrowly construes the “control signals” lim-

itation. In an IPR involving an unexpired patent, the

“broadest reasonable construction” standard governs.

Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2144–

45 (2016); 37 C.F.R. § 42.100(b). The ’349 Patent specifi-

cation explains that “torque,” “speed,” and “airflow” are

provided only as examples of the types of control signals

that might be used; it is not an exhaustive list. See ’349

Patent, col. 3 l. 66–col. 4 l. 2. (“for example, a desired

torque or speed” and “[a]lternatively, the control signals

may represent a desired airflow” (emphases added)).

Moreover, analysis of the dependent claims supports a

broader construction than that advanced by Nidec. For

instance, dependent claim 20 provides in relevant part,

“wherein receiving includes receiving at least one control

signal representing a desired airflow for the blower, a

NIDEC MOTOR CORP. v. ZHONGSHAN BROAD OCEAN MOTOR CO. 11

desired torque of the permanent magnet motor, or a

desired speed of the permanent magnet motor.” Id. col. 6

ll. 57–60 (emphases added). This limitation confirms that

the “control signals” limitation recited in the independent

claims encompasses other signals in addition to “torque,”

“speed,” and “airflow.” An on/off signal amounts to a

control signal because a motor controller cannot carry out

its claimed function of “performing sinewave commutation

. . . in response to one or more control signals” if it does

not receive at least an “on” signal from the thermostat.

’349 Patent, col. 5 ll. 40–42. Indeed, Nidec concedes that

“Bessler . . . describes . . . a motor controller that is direct-

ly responsive to a two-state (on/off) temperature signal

provided by a thermostat.” Nidec Opening Br. 12.

We conclude that the Bessler thermostat is a “system

controller” and that the on/off signals it generates are

“control signals” encompassed by the ’349 Patent’s claims.

The Board did not err in concluding that the challenged

claims would have been obvious over the combination of

Bessler and Kocybik. 2

CONCLUSION

In summary, we conclude that the Board correctly de-

termined that challenged claims 1–3, 8, 9, 12, 16, and 19

of the ’349 Patent are invalid under § 103 as obvious over

the combination of Bessler and Kocybik. We reach no

2 Although the Board invalidated dependent claim

12, it is not clear from Nidec’s briefs whether claim 12 is

at issue on appeal. See, e.g., Nidec Opening Br. 23 (omit-

ting reference to claim 12); id. at 10–11 (omitting sum-

mary of claim 12 and identification of claim 12 as one of

the claims-at-issue); but see id. at 19, 20, 69, Nidec Reply

Br. 31 (arguing that the Board erred in invalidating, inter

alia, claim 12). In any event, both at the Board level and

on appeal, claim 12 was not separately argued.

12 NIDEC MOTOR CORP. v. ZHONGSHAN BROAD OCEAN MOTOR CO.

conclusion as to the Board’s determinations involving the

anticipation ground based on Hideji.

AFFIRMED

COSTS

Costs to appellee.

United States Court of Appeals

for the Federal Circuit

______________________

NIDEC MOTOR CORPORATION,

Appellant

v.

ZHONGSHAN BROAD OCEAN MOTOR CO. LTD.,

BROAD OCEAN MOTOR LLC, BROAD OCEAN

TECHNOLOGIES LLC,

Appellees

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

______________________

2016-2321

______________________

Appeal from the United States Patent and Trademark

Office, Patent Trial and Appeal Board in Nos. IPR2014-

01121, IPR2015-00762.

______________________

DYK, Circuit Judge, joined by Circuit Judge WALLACH,

concurring.

Although we join the per curiam decision in full, we

write separately to express our concerns as to the United

States Patent and Trademark Office’s (“PTO”) position on

joinder and expanded panels since those issues are likely

2 NIDEC MOTOR CORP. v. ZHONGSHAN BROAD OCEAN MOTOR CO.

to recur. Although we do not decide the issues here, we

have serious questions as to the Board’s (and the Direc-

tor’s) interpretation of the relevant statutes and current

practices.

First, the IPR joinder statute provides:

(c) Joinder.—If the Director institutes an inter

partes review, the Director, in his or her discre-

tion, may join as a party to that inter partes re-

view any person who properly files a petition

under section 311 that the Director, after receiv-

ing a preliminary response under section 313 or

the expiration of the time for filing such a re-

sponse, determines warrants the institution of an

inter partes review under section 314.

35 U.S.C. § 315(c). Thus, joinder is only permissible if the

Director determines that a petition “warrants the institu-

tion of an inter partes review.” Id.

The IPR time-bar statute provides,

(b) Patent owner’s action.—An inter partes re-

view may not be instituted if the petition request-

ing the proceeding is filed more than 1 year after

the date on which the petitioner, real party in in-

terest, or privy of the petitioner is served with a

complaint alleging infringement of the patent.

The time limitation set forth in the preceding sen-

tence shall not apply to a request for joinder under

subsection (c).

35 U.S.C. § 315(b) (emphasis added). Particularly rele-

vant to this appeal is the second sentence, which provides

an exception to the 1-year time limit for “a request for

joinder under subsection (c).” Id.

The joinder dispute in this case turns on the relation-

ship between the joinder provision of § 315(c) and the

exception to the time bar in § 315(b). Section 315(b)

NIDEC MOTOR CORP. v. ZHONGSHAN BROAD OCEAN MOTOR CO. 3

ordinarily bars a petitioner from proceeding on a petition

if it is filed more than one year after the petitioner is sued

for patent infringement. Id. Without the exception to

that rule described in the second sentence of § 315(b), an

untimely petition would still be barred even if it raised

the same issues as those involved in an existing proceed-

ing that had been timely initiated by a different petition-

er. But the exception makes clear that the time bar “shall

not apply to a request for joinder under subsection (c).”

Thus, the exception to the time bar for “request[s] for

joinder” was plainly designed to apply where time-barred

Party A seeks to join an existing IPR timely commenced

by Party B when this would not introduce any new pa-

tentability issues. This is supported by the legislative

history for the joinder provision, § 315(c). See H.R. Rep.

No. 112-98, pt. 1, at 76 (2011) (explaining that under

§ 315(c), “[t]he Director may allow other petitioners to join

an [IPR]”).

The issue in this case is whether the time bar provi-

sion allows a time-barred petitioner to add new issues,

rather than simply belatedly joining a proceeding as a

new party, to an otherwise timely proceeding. Section

315(c) does not explicitly allow this practice. We think it

unlikely that Congress intended that petitioners could

employ the joinder provision to circumvent the time bar

by adding time-barred issues to an otherwise timely

proceeding, whether the petitioner seeking to add new

issues is the same party that brought the timely proceed-

ing, as in this case, or the petitioner is a new party.

Second, we are also concerned about the PTO’s prac-

tice of expanding administrative panels to decide requests

for rehearing in order to “secure and maintain uniformity

of the Board’s decisions.” Director Br. 27. Here, after a

three-member panel of administrative judges denied

petitioner Broad Ocean’s request for joinder, Broad Ocean

requested rehearing and requested that the rehearing be

decided by an expanded panel. Subsequently, “[t]he

4 NIDEC MOTOR CORP. v. ZHONGSHAN BROAD OCEAN MOTOR CO.

Acting Chief Judge, acting on behalf of the Director,” J.A.

933 n.1, expanded the panel from three to five members,

and the reconstituted panel set aside the earlier decision.

Nidec alleges that the two administrative judges add-

ed to the panel were chosen with some expectation that

they would vote to set aside the earlier panel decision.

The Director represents that the PTO “is not directing

individual judges to decide cases in a certain way.” Direc-

tor Br. 21 (quotation marks omitted). While we recognize

the importance of achieving uniformity in PTO decisions,

we question whether the practice of expanding panels

where the PTO is dissatisfied with a panel’s earlier deci-

sion is the appropriate mechanism of achieving the de-

sired uniformity. But, as with the joinder issue, we need

not resolve this issue here. Nor need we address the

predicate issue of appealability.