-
Federal Circuit Affirms PTAB Decision Finding Challenged Claims Unpatentable and Denying Motion to Amend the Claims
01/23/2024On January 18, 2024, the United States Court of Appeals for the Federal Circuit (“CAFC”) issued an opinion affirming the decision of the Patent Trial and Appeal Board (“Board”) finding unpatentable the challenged claims of a patent directed to a 3D pointing device for outputting yaw, pitch, and roll angles in a 3D reference frame and denying the patent owner’s motion to amend its claims. CyWee Group Ltd. v. ZTE (USA), Inc., __ F.4th __ (Fed. Cir. Jan. 18, 2024).
ZTE (USA), Inc. (“ZTE”) petitioned for inter partes review of U.S. Patent No. 8,441,438 (the “’438 Patent”), owned by CyWee Group Ltd. (“CyWee”), and the Board instituted the IPR. Subsequently, LG Electronics, Inc. (“LG”) filed its own IPR petition and moved to join ZTE’s ongoing IPR (because LG’s petition on its own would have been untimely under 35 U.S.C. § 315(b)’s one-year time bar). In its motion for joinder, LG represented, inter alia, that it would act as a passive “understudy” and would not assume an active role unless ZTE ceased to participate in the instituted IPR. While LG’s joinder motion was pending, CyWee moved to amend the claims of the ’438 Patent, ZTE opposed, and the Board issued preliminary guidance on the motion to amend (indicating that there were several issues with the proposed claims). The Board then granted LG’s joinder motion with restrictions on LG’s participation in the IPR.
In light of the Board’s preliminary guidance, CyWee filed a revised motion to amend. Because ZTE decided not to oppose the revised motion to amend, LG stepped in and moved for leave to oppose—a request that the Board initially denied and then granted on rehearing. In LG’s opposition to CyWee’s revised motion to amend, it argued that the proposed amended claims would have been obvious over three prior art references, “Withanawasam,” (which was a reference that ZTE did not cite in its opposition to the original motion to amend), “Bachmann,” and “Bachmann2.”
The Board determined that the proposed amended claims would have been obvious over the three references and that CyWee failed to show written description support for two of the proposed amended claims that required a “cellular phone.” CyWee petitioned for Director review of the decision, but its petition was denied by the Commissioner for Patents, who was acting in the Director’s stead (because there was no appointed Director at the time).
On appeal, CyWee made three arguments in challenging the Board’s denial of its motion to amend: (1) the Board erred by allowing LG to (i) oppose the revised motion to amend at all and (ii) cite Withanawasam, a new reference; (2) the Board erred by denying the revised motion to amend because there was no motivation to combine and there was no lack of written description; and (3) the lack of opportunity for meaningful Director review mandated dismissal of the IPR.
First, the CAFC explained that (i) the Board did not violate the terms of LG’s joinder and (ii) there was no error in allowing LG to assert Withanawasam.
With respect to the former, the CAFC referred to LG’s conditional statements in its joinder motion that it would remain a passive understudy as long as ZTE remained an active participant, but that LG would assume a primary role if ZTE ceased to participate in the IPR. Further, the CAFC explained that the Board did not err by finding that, when ZTE declined to oppose the revised motion to amend, the proceeding no longer appeared to be adversarial—and therefore it was proper for LG to step in to oppose CyWee’s motion.
With respect to the latter, the CAFC explained that the fact that LG was otherwise time-barred was not a reason to prohibit LG from introducing a new reference in opposition to a motion to amend. In this regard, the CAFC reasoned that the limitation on bringing new issues into an already-instituted IPR exists because, among other reasons, the already-instituted IPR is governed by its own petition that is confined to the challenges made therein. The principle that the IPR statutory provisions permit consideration of only the grounds in the petition does not apply in the context of a motion to amend where the patent owner has introduced new claims into the proceeding. The CAFC further explained that the Board’s procedural rules permit oppositions (and replies) to motions to amend to be accompanied by new evidence that responds to issues raised in preliminary guidance or in a revised motion to amend. And other regulations and Board decisions on which CyWee relied did not address the scope of evidence that may be raised in an opposition to a revised motion to amend.
Second, the CAFC explained that the Board did not err in denying the revised motion to amend. Contrary to CyWee’s argument that there was no motivation to combine the prior art, the CAFC found the Board did not err in crediting LG’s expert, who testified that a skilled artisan—with Withanawasam’s sensor/computer in hand—would have been motivated to look for an algorithm for mathematically determining sensor orientation (which algorithms are disclosed in Bachmann, along with several benefits of using those algorithms). The CAFC further credited LG’s expert testimony that implementing this combination would have been merely a routine engineering task, as combining Withanawasam’s sensors with Bachmann’s algorithms was nothing more than a combination of known elements to achieve an expected improvement.
Third, the CAFC summarily dispensed with CyWee’s argument that it was denied meaningful Director review, explaining that it had already considered and rejected that type of argument in several other recent cases, including, e.g., Arthrex, Inc. v. Smith & Nephew, Inc., 35 F.4th 1328 (Fed. Cir. 2022).
