Federal Circuit Finds PTAB Sufficiently Addressed Arguments Actually Raised In IPR Petitions
On October 25, 2023, the Court of Appeals for the Federal Circuit (“CAFC”) affirmed two final written decisions from the U.S. Patent Trial and Appeal Board (“PTAB”), determining that appellant IPR petitioner did not meet its burden of proving unpatentability. Netflix Inc. v. DivX LLC, __ F.3d __ (Fed. Cir. October 25, 2023). In its precedential decision, the CAFC found no error in how the PTAB understood appellant’s petition arguments and further found that certain other arguments newly raised by appellant on appeal had been forfeited.
Appellant petitioner filed petitions for inter partes review of several claims of appellee’s ’720 and ’515 patents under 35 U.S.C. § 103 based on combinations of prior art references including Pyle, Marusi, and Lewis. The challenged patents are directed to methods for adaptive bit rate streaming of content to, e.g., a mobile phone. Adaptive bit rate streaming involves detecting streaming conditions (e.g., the playback device’s network bandwidth) in real time and adjusting the quality and bit rate of the streamed media accordingly. The patents generally claim methods for receiving a request for content from a playback device, retrieving a list of assets (i.e., alternate source media streams with different encoding bit rates) associated with the requested content, filtering the list of assets based on certain criteria, generating an index that describes each asset in the filtered list, and sending the index to the playback device.
At the conclusion of the IPR trial, the PTAB issued final written decisions upholding the patentability of all challenged claims. Appellant appealed on the bases that the PTAB failed to address three arguments allegedly included in the petitions. The CAFC addressed each argument in turn after first reiterating that, “[w]hile the Board should not take an overly mechanistic view of a petition and decline to address an argument because the petitioner did not present it with ideal vigor and clarity, the Board should also not have to decode a petition to locate additional arguments beyond the ones clearly made.”
The CAFC first addressed appellant’s argument regarding the “filtering the list of assets” limitation of claim 1 of the ’720 patent. For this limitation, appellant argued that the PTAB overlooked that the Petition relied on Pyle’s “new manifest” as disclosing this limitation (and not just Pyle’s “pre-existing manifest” disclosure), and alternatively that Marusi disclosed the limitation. The CAFC disagreed. The CAFC concluded that while the petition explained that Pyle disclosed two embodiments—a “new manifest” and a “pre-existing manifest” embodiment—the petition’s explanation for how Pyle taught the filtering limitation was limited to just Pyle’s pre-existing manifest. The CAFC further concluded that appellant’s block quote from Pyle stating that a new manifest “can be optimized” based on certain features did not signal to a reader that an optimized new manifest meets the “filtering the list of assets” limitation.
The CAFC also disagreed that appellant had clearly argued, in the alternative, that the filtering limitation would have been obvious, based on Marusi’s teaching of filtering. According to the CAFC, the PTAB reasonably concluded that, for the Pyle-Marusi combination, petitioner “maintains reliance upon Pyle for filtering,” given the petition’s concluding sentence, mapping Pyle to filtering and Marusi to a “database” component, and bolded language in block quotes from Marusi highlighting Marusi’s “database” and not filtering. The CAFC further noted that “[w]e do not wish to discourage petitioners from making arguments in the alternative,” but “emphasize[d] that it is the petitioner’s burden to make clear when alternative arguments are being presented and to sufficiently expound on each one.”
The CAFC next addressed appellant’s argument regarding the “retrieving … a list of assets” limitation of claim 1 in both patents. For this limitation, appellant argued that the PTAB ignored an argument contemplated in the petition that creating a manifest, as taught by Lewis, inherently involves first retrieving a list of assets that reside in the manifest itself, because the PTAB wrongfully viewed Lewis as the basis for a § 103 obviousness challenge that required modification in order to disclose this limitation. Appellant specifically argued that the petition’s “use of language like ‘a [skilled artisan] would have found it obvious to retrieve a list of assets’ does not suggest that Lewis requires any modification.” The CAFC was not convinced and observed that patent lawyers would be surprised by appellant’s assertion. After all, observed the CAFC, “[t]here is no word in patent law that sends a more unmistakable signal that § 103, rather than § 102, is being invoked than the word ‘obvious.’”
The CAFC last addressed appellant’s argument regarding the “generating … a top level index file” limitation of claim 1 of the ’515 patent. For this limitation, appellant argued that the PTAB erred in rejecting an argument that Pyle’s “new manifest” met this limitation as an improper reply argument. The CAFC again sided with the PTAB because appellant’s attempts to locate this argument cited sections of its petition devoted to the analysis of other limitations. In contrast, noted the CAFC, when addressing a similar limitation in the ’720 patent, appellant expressly identified where Pyle disclosed this “generating…” limitation.
In a dissent, Judge Dyk concluded that the PTAB should have addressed appellant’s “filtering” and “retrieving” limitation arguments above but agreed with the majority as to the “generating” limitation.