PEAG LLC v. VARTA Microbattery GmbH

1. Case Identification

• Case #: IPR2020-01213
• Patent #: 9,799,858
• Filed: July 7, 2020
• Petitioner(s): PEAG LLC (d/b/a JLab Audio), Audio Partnership LLC, and Audio Partnership PLC (d/b/a Cambridge Audio)
• Patent Owner(s): VARTA Microbattery GmbH
• Challenged Claims: 1-8

2. Patent Overview

• Title: Button Cell with Orthogonally Oriented Winding
• Brief Description: The ’858 patent discloses a button cell battery containing a spiral-wound electrode-separator assembly within a two-part metal housing. The patent asserts novelty in the orientation of the winding layers being essentially orthogonal to the flat top and bottom regions of the housing, and in the use of metal foil conductors that are welded from an outer side through the housing to connect to the internal electrodes.

3. Grounds for Unpatentability

Ground 1: Obviousness over Kobayashi in view of Kwon - Claims 1-8

• Prior Art Relied Upon: Kobayashi (Japanese Patent Publication No. 2007-294111) and Kwon (Korean Patent Publication No. 10-2003-0087316A).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Kobayashi disclosed all major structural elements of claim 1, including a button cell with a two-part metal housing, an insulating seal, and a spiral-wound electrode assembly. Kobayashi’s figures allegedly showed the winding layers oriented orthogonally to the housing’s top and bottom surfaces, disc-shaped metal conductors (terminal plates), a height-to-diameter ratio less than one, and insulating plates shielding the winding. Petitioner contended the only element missing was the specific welding method. Kwon allegedly supplied this element by teaching the use of laser welding to connect a metal foil conductor to an electrode through the cell housing, with the laser beam applied from an outer side, creating a weld spot that passes through the housing.
  • Motivation to Combine: A POSITA would combine these references to improve the button cell of Kobayashi. While Kobayashi used resistance welding, a POSITA would have recognized that the precise laser welding taught in Kwon would improve the cell's electrical performance and stability, particularly for the aluminum housing disclosed in Kobayashi.
  • Expectation of Success: A POSITA would have had a high expectation of success, as applying a known and more precise welding technique (Kwon) to a standard button cell configuration (Kobayashi) was a predictable improvement.

Ground 2: Obviousness over Kaun in view of Kobayashi and Kwon - Claims 1-8

• Prior Art Relied Upon: Kaun (Application # 2005/0233212), Kobayashi (Japanese Patent Publication No. 2007-294111), and Kwon (Korean Patent Publication No. 10-2003-0087316A).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner asserted that Kaun disclosed a basic button cell with a spiral-wound "jellyroll" electrode assembly but identified a design trade-off where its Z-shaped separator required increased thickness for durability, thereby reducing usable power. Kobayashi allegedly solved this known problem by disclosing a spiral-wound assembly with a continuous separator, allowing for minimum required thickness and maximizing power. The proposed combination starts with Kaun's basic cell structure and replaces Kaun’s inefficient electrode assembly with Kobayashi’s superior one. Kwon was then added to this combination to provide the claimed method of laser welding the conductors through the housing from an outer side.
  • Motivation to Combine: A POSITA, when faced with the known performance dilemma described in Kaun, would have been motivated to substitute Kaun’s electrode assembly with the known, more efficient continuous separator design from Kobayashi to achieve predictable improvements in power density. Subsequently, the POSITA would be motivated to incorporate Kwon's laser welding technique to enhance the electrical performance and stability of the improved Kaun/Kobayashi cell.
  • Expectation of Success: The combination involved substituting one known component for another to solve a known problem, followed by applying a known technique for its established benefits, leading to a reasonable expectation of success.
• Additional Grounds: Petitioner asserted an additional obviousness challenge against claims 1-8 based on Kobayashi in view of Kwon and the general knowledge of a POSA, relying on similar theories that a POSITA would have been motivated to use metal foils for conductors and apply laser welding to improve cell performance.

4. Arguments Regarding Discretionary Denial

• Petitioner argued that the Board should not exercise discretionary denial under §314(a) or §325(d).
• Against Discretionary Denial under Fintiv: Petitioner contended that the parallel district court litigation was in its early stages, with claim construction and substantive discovery yet to occur. Petitioner asserted its intent to seek a stay upon institution and argued that the invalidity contentions presented in the IPR would differ from those in the district court action, thus minimizing overlap and preserving resources.
• Against Discretionary Denial under §325(d): Petitioner acknowledged that Kobayashi was cited in an Information Disclosure Statement (IDS) and an International Search Report (ISR) during prosecution of the ’858 patent. However, Petitioner argued that the reference was never substantively examined by the USPTO examiner. It was argued that the Examiner's reasons for allowance focused on features that were, in fact, taught by Kobayashi, demonstrating that the Examiner overlooked specific, material teachings and that the Office therefore erred in a manner material to patentability.

5. Relief Requested

• Petitioner requests institution of inter partes review and cancellation of claims 1-8 of the ’858 patent as unpatentable.