Droplets, Inc. v. E*TRADE Bank

Summary

The Federal Circuit held that a patent cannot satisfy the "specific reference" requirement of 35 U.S.C. § 120 through incorporation by reference; the patent must contain an explicit reference to each prior-filed application in the priority chain. Because the patent at issue only specifically referenced its immediate parent and not the earlier provisional application, its effective filing date was the parent's filing date, making an intervening international publication prior art that rendered all claims obvious. The court also dismissed the patent challenger's conditional cross-appeal as improper, as the challenger was not dissatisfied with the Board's final judgment of invalidity.

Holdings

1. The '115 Patent is not entitled to the filing date of the '917 Provisional because incorporation by reference cannot satisfy the 'specific reference' requirement of 35 U.S.C. § 120.
2. IPR proceedings do not violate Article III or the Seventh Amendment, as previously held in MCM Portfolio and other cases.
3. The Director may delegate the institution decision to the Board.

Questions Presented

1. Whether the '115 Patent is entitled to the filing date of the '917 Provisional by virtue of incorporating the '838 Patent by reference, which in turn claims priority to the '917 Provisional.
2. Whether inter partes review violates Article III and the Seventh Amendment.
3. Whether the Director can delegate the institution decision to the Board.

Disposition

affirmed