Patent Trial and Appeal Board Strikes Down Claims of Smart Meter Patent

  • The Patent Trial and Appeal Board has found parts of a smart power meter patent owned by Smart Meter Technologies (“SMT”) to be unpatentable.
  • A lawsuit over potential infringement of the patent by Duke Energy remains on hold pending an appeal of the Board’s decision.

In March 2016, Smart Meter Technologies, Inc. filed a lawsuit in federal court in Delaware alleging that Duke Energy infringed SMT’s U.S. Patent Number 7,058,524 by installing and operating automated power distribution equipment in residential installations.  The lawsuit named the smart meters used by Duke as OpenWay® smart meters sold by Itron, Inc.  Itron, which may have had an obligation to indemnify Duke, then petitioned the Patent Trial and Appeal Board to institute an inter partes review (“IPR”) of the ‘524 Patent, a procedure through which parties can request that the USPTO review an issued patent to challenge that the claims of the patent are not valid.

This blog previously reported on the Board’s decision to grant Itron’s request and to institute the IPR. After the institution decision, SMT and Duke filed a joint motion to stay the lawsuit in federal court until the IPR was resolved.  That motion was granted and the lawsuit was put on hold pending the Board’s decision on the validity of the claims.  In a decision dated October 10, 2018, the Board handed Itron another win and held that challenged claims 17-22 are unpatentable.

The ‘524 Patent generally describes a power meter system that converts a measured power consumption to Internet Protocol (IP) data and autonomously transmits the data across an external power line network.  Claim 17 of the ‘524 Patent recites:

A method of measuring power consumption information on a power line comprising:

measuring current fluctuations in the power line;

calculating power consumption information from the current fluctuations in a processor;

converting the power consumption information into IP-based power consumption information in the processor; and

transmitting the IP-based power consumption information from the processor to a destination autonomously in IP format over an external power line network.

In the IPR, Itron asserted that claim 17, as well as dependent claims 18-22, were unpatentable in view of existing technology as described in U.S. Patent Application Publication Number 2002/0161536 to Suh et al.  The dispute between the parties was focused on whether Suh disclosed “transmitting the IP-based power consumption information from the processor to a destination autonomously in IP format over an external power line network,” as required by claim 17.

Suh describes an “[I]nternet ready electronic power meter … [that] incorporates a communication component that enables the electronic meter to communicate in a … wide area network (WAN) … such as the [I]nternet.”  In addition, Suh also describes that the Internet ready power meters could have “automatic reporting capabilities.”  The Board agreed with Itron that this description disclosed autonomous transmission of IP-based power consumption data.

However, Itron had to rely on another power meter described in Suh to show transmission over a power line network.  In that version, Suh describes a power meter that “includes the communication components necessary to communicate by … power line … to periodically transfer collected data to a remote site.”  Itron argued that it would have been obvious to combine the two versions described in Suh to arrive at a power meter that autonomously transmits IP-based power consumption data over a power line network.  SMT countered that it would not have been obvious for a variety of reasons, including that Suh taught away from the combination and that combining the embodiments of Suh would have led to an inoperable device.

The Board agreed with Itron and determined that claim 17 was obvious in light of the disclosure of Suh.  Similarly, the Board also held that each of dependent claims 18-22 were unpatentable.  Hence, absent a successful appeal of the Board’s decision, SMT cannot enforce these claims against Itron, Duke, or any other company selling or using smart meters.

SMT has the option of appealing the decision to the Court of Appeals for the Federal Circuit.  The deadline for filing such an appeal is December 12, 2018.  SMT and Duke have jointly requested that the stay in the district court case remain in place until that appeal, if filed, is resolved.