Federal Circuit Backs Ford in PTAB Patent Ruling

On December 23, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision affirming three final written decisions of the Patent Trial and Appeal Board that invalidated patents related to fuel management systems for internal combustion engines. The appeal was brought by Ethanol Boosting Systems LLC (EBS) and the Massachusetts Institute of Technology, which owns the patents at issue and had exclusively licensed them to EBS. Ford Motor Company was the petitioner in the underlying inter partes review proceedings.

The challenged patents—U.S. Patent Nos. 10,619,580, 10,781,760, and 9,708,965—describe a system designed to mitigate engine knock by injecting an anti-knock agent directly into an engine cylinder, producing evaporative cooling. The technology relies on a combination of port fuel injection and direct injection, with the proportion of directly injected fuel increasing as engine torque rises. MIT developed the technology as part of its engine efficiency research, and EBS asserted the patents against Ford in district court litigation beginning in October 2020.

Ford responded to the infringement suit by filing petitions for inter partes review, challenging the patents as obvious in light of prior art references addressing fuel injection strategies and engine knock suppression.

Procedural History and PTAB Proceedings

The PTAB initially denied Ford’s petitions in July 2021. At that stage, the Board adopted a claim construction requiring that the fuel used in the direct injection system be different from the fuel used in port injection. Under that interpretation, Ford’s prior art combinations were deemed insufficient.

Ford sought rehearing, arguing that the Board should reconsider institution after the Federal Circuit resolved a parallel appeal concerning claim construction in the district court case. The PTAB granted rehearing in November 2022, shortly after the Federal Circuit issued its decision in that earlier appeal, often referred to as EBS I. Applying a revised claim construction consistent with the Federal Circuit’s guidance, the Board instituted review and ultimately concluded that the challenged claims of all three patents were unpatentable as obvious.

EBS appealed the final written decisions, raising challenges to the PTAB’s authority, its claim construction, and its obviousness determinations.

Federal Circuit Review of PTAB Authority

On appeal, EBS argued that the PTAB lacked authority to delay ruling on Ford’s rehearing request for approximately fifteen months while awaiting the outcome of the related Federal Circuit appeal. According to EBS, this delay amounted to an improper stay that invalidated the subsequent institution decision.

The Federal Circuit rejected this argument, holding that 35 U.S.C. § 314(d) bars judicial review of institution-related determinations, including reconsideration decisions. The court explained that challenges framed as attacks on procedural delays could not circumvent the statutory prohibition on reviewing institution decisions. The panel emphasized that the Board had “sound reasons” for awaiting guidance on claim construction from the Federal Circuit before revisiting institution, noting that the disputed claim terms were central to both proceedings.

The court further concluded that the Board’s actions did not rise to the level of extraordinary conduct that would permit review under existing precedent addressing ultra vires agency actions.

Claim Construction and the Role of Prior Decisions

A central issue on appeal concerned the construction of terms relating to “direct injection fuel,” referred to by the parties as the DI Fuel terms. In the district court litigation, the claims had been construed to require both a different fuel for direct injection and an anti-knock agent other than gasoline. In the earlier Federal Circuit appeal, EBS challenged only the first aspect of that construction, and the court vacated it.

Before the PTAB, EBS argued that the unchallenged portion of the district court’s construction—excluding gasoline as an anti-knock agent—had become binding law. The Federal Circuit disagreed, explaining that doctrines such as the mandate rule and law of the case apply within the same proceeding and do not automatically carry over to separate administrative reviews.

The court affirmed the PTAB’s decision to apply the plain and ordinary meaning of the DI Fuel terms. That interpretation allowed gasoline to serve as the anti-knock agent, a conclusion the court found consistent with the patents’ specifications. As the opinion noted, the specification disclosed embodiments in which gasoline alone was used, and claim terms are generally not construed to exclude disclosed embodiments absent clear disclaimer. The panel observed that EBS itself had previously argued that “any fuel has a knock-suppressive effect,” including gasoline.

Obviousness Findings and Motivation to Combine

EBS also challenged the PTAB’s obviousness determinations, arguing that the Board lacked substantial evidence to find a motivation to combine the prior art references relied upon by Ford. The contested combinations included references addressing direct and port injection strategies, fuel mixing, and combustion stability.

The Federal Circuit found that substantial evidence supported the Board’s conclusions. The PTAB credited testimony and technical disclosures showing that a person of ordinary skill in the art would have been motivated to combine the references to achieve benefits such as improved fuel mixing, stable combustion at varying loads, and enhanced knock suppression. The court also rejected arguments that the Board relied on theories not presented in Ford’s petitions, concluding that the Board’s analysis remained within the scope of the asserted grounds.

Ultimately, the panel affirmed the PTAB’s factual findings and its legal conclusion that the challenged claims were obvious under 35 U.S.C. § 103.

Implications for Patent Owners and IPR Practice

The decision reinforces several principles significant to patent litigation and post-grant review practice. It underscores the breadth of the statutory bar on reviewing IPR institution decisions, even when challenges are framed as procedural objections. It also highlights the independence of PTAB claim construction from district court rulings in parallel cases, particularly where aspects of those rulings were not appealed.

From a substantive patent law perspective, the ruling illustrates the Federal Circuit’s continued emphasis on aligning claim construction with the specification and avoiding interpretations that exclude disclosed embodiments without clear disclaimer. For patent owners and licensees, the case demonstrates the risks associated with narrowing claim interpretations in one forum that may later undermine validity in another.

Case Details

Case Name: Ethanol Boosting Systems, LLC v. Ford Motor Company
Court Name: U.S. Court of Appeals for the Federal Circuit
Case Number: 2024-1381, 2024-1382, 2024-1383
Plaintiff Attorney(s): Susman Godfrey LLP
Defense Attorney(s): Alston & Bird LLP