DROPLETS, INC. v. E*TRADE BANK

Edited by: Paul Stewart

Federal Circuit Summaries

Before Dyk, O’Malley, and Wallach.  Appeal from the PTAB.

Summary: A priority claim must be explicitly stated in the patent and cannot be incorporated by reference from an earlier patent.  

E*Trade petitioned for IPR of Droplets’ ‘115 patent.  The ‘115 patent specifically claimed priority only to the ‘838 patent.  Droplets argued the ‘115 patent was entitled to the benefit of an earlier provisional application because the ‘115 patent incorporated by reference the ‘838 patent, which claimed priority to the provisional application.  The Board held that incorporation by reference did not satisfy 35 U.S.C. § 120’s “specific reference” requirement to claim priority and invalidated all claims as obvious over the cited art.  Droplets appealed.

Patent Office regulations require a priority claim under § 120 to recite the application number and familial relationship either in an application data sheet or in the first sentence of the specification.  The Federal Circuit held that incorporating a different patent’s priority claim by reference did not meet those requirements.  The Federal Circuit noted that § 120 should be applied strictly to prevent placing the burden of deciphering priority on the public when the patentee was in the best position to do so.  Thus, the Federal Circuit affirmed.

This case is: DROPLETS, INC. v. E*TRADE BANK