Federal Circuit Affirms PTAB’s Finding That Claims Are Not Unpatentable As Anticipated Or Obvious
On October 23, 2019, the Court of Appeals for the Federal Circuit (CAFC) issued an opinion affirming the finding of the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) that Koninklijke Philips N.V.’s patent claims are not unpatentable. Google LLC v. Koninklijke Philips N.V., __ Fed. Appx. __ (Fed. Cir. Oct. 23, 2019). The CAFC ruled that the PTAB correctly found that Google failed to meet its burden of establishing that the claims were unpatentable as anticipated and that it was not an abuse of discretion for the PTAB to decline to consider Google’s untimely, backup obviousness argument.
In December 2016, Google petitioned for inter partes review of a patent that Koninklijke Philips N.V. asserted against Google, Acer and ASUS in the U.S. District Court for the District of Delaware. Google argued in its petition that the patent, which is directed toward an encoding scheme for transmitting audio signals, is anticipated by a certain prior art reference (“Tucker”). Each of the challenged claims of Koninklijke Philips N.V.’s patent requires a “high-pass filter.” Hence, the central dispute was whether Tucker’s disclosure of a low-pass filter and reflection step is the claimed “high-pass filter.”
The PTAB determined that the claimed high-pass filter “transmits frequencies above a given cutoff frequency and substantially attenuates all others.” While Tucker did not on its face disclose a high-pass filter, Google argued that Tucker’s low-pass filter and reflection steps together disclose the claimed “high-pass filter” because the steps collectively transmit the desired high-band portion of the input signal while attenuating the low-band portion of the input. The PTAB rejected Google’s argument, finding that this disclosure was not the claimed “high-pass filter.”
The CAFC found that substantial evidence supports the PTAB’s finding that Tucker’s low-pass filter and reflection steps do not disclose the claimed “high-pass filter,” because Tucker does not transmit the high-frequency content of an input signal. During the IPR proceedings, Google’s expert admitted that Tucker’s low-pass filter and reflection steps transmit low-frequency content of an input signal (albeit in a high-frequency band), and do not transmit the input signal’s high-frequency content. The CAFC found that this admission provided substantial evidence in support of the PTAB’s decision.
Google raised the additional argument on appeal that the CAFC should reverse the PTAB because Tucker’s process achieves the same result as the claimed high-pass filter. The CAFC rejected this additional argument, reasoning that “[t]he similarity of the resulting information that is produced by Tucker’s system to what would have been produced if Tucker had actually employed a high-pass filter does not convert Tucker’s low-pass filter and reflection steps into a high-pass filter that transmits the high-band content. To the contrary, Tucker’s process discards the high-band content of the input signal.”
As to obviousness, Google argued at the reply stage of the IPR that even if Tucker’s low-pass filter and reflection steps did not anticipate, the claims were nonetheless obvious in light of Tucker’s disclosure. The PTAB declined to consider this argument because Google failed to include the argument in its IPR petition. The CAFC found that the PTAB was within its discretion to not consider Google’s obviousness argument when Google raised that argument for the first time in its reply briefing.
The case illustrates the importance of including potential back-up arguments when filing IPR petitions.