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Federal Circuit Tells PTAB To Base Its Decision On Grounds The Parties Raise
10/11/2023On September 11, 2023, the United States Court of Appeals for the Federal Circuit issued an opinion, vacating the United States Patent and Trademark Office’s Patent Trial and Appeal Board (the “Board”) decision that the prior art, including U.S. Patent No. 7,859,588 (“Parulski”), did not render unpatentable Appellee Corephotonics, Ltd.’s (“Corephotonics”) U.S. Patent No. 10,225,479 (the “’479 patent”) pursuant to 35 U.S.C. § 103. Apple Inc. v. Corephotonics, Ltd., No. 2022-1350, 2023 WL 5838695 (Fed. Cir. Sept. 11, 2023).
The ’479 patent is directed at creating “portrait photos.” It discloses a thin (e.g., fitting in a cell phone) dual-aperture zoom digital camera that combines images taken by a wide lens and a tele lens to create a fused still image. The ’479 patent explains that the fused image is created by incorporating information from the out-of-focus blurred background in a Wide image with an original Tele image, ultimately providing a blurrier background and even shallower depth-of-field than the original Tele image.
Appellant Apple Inc. filed two inter partes reviews (“IPRs”) with the Board challenging the validity of various ’479 patent claims. In the first IPR, the parties disputed the construction of a claim term requiring a “fused image with a point of view (POV) of the Wide camera,” disagreeing over what “a point of view (POV) of the Wide camera” requires. Apple contended that the claim term requires only that the fused image retains a Wide perspective or Wide position POV. Corephotonics argued that “point of view” was defined to mean that the fused image must maintain both Wide perspective and Wide position POV. The Board agreed with Corephotonics’ definition and stated that the specification equates a camera’s POV with how an object will appear in that camera’s image plane, which includes both the position and perspective points of view of an object.
In the second IPR, Apple challenged the ’479 patent claims that relate to several camera parameters, e.g., track length, focal length and pixel size. Apple contended that Parulski in combination with other discussed prior art would have taught a POSA to scale their invention to include the characteristics required in the challenged claims. Corephotonics’ Response, inter alia, pointed out an alleged problem with Apple’s argument, i.e., that Apple’s expert made a typographical error in his declaration. Corephotonics briefly noted—in the Background section of its Patent Owner Response—that, because of this error, Apple’s expert information does not accurately reflect the performance of a scaled version of the prior art. Corephotonics did not mention the error again, instead, it used the remainder of its Response to focus on other issues. The Board ruled in favor of Corephotonics, finding that Apple had not shown that the ’479 patent’s challenged claims were unpatentable. Its decision focused on Apple expert’s typographical errors and not on the manufacturing and scalability arguments the parties raised. Besides the error Corephotonics mentioned, the Board purported to identify additional errors (for the first time in its decision) in Apple expert’s declaration.
On appeal, both IPRs were consolidated, and Apple argued that the Board improperly construed the claim term “fused image with a point of view of the Wide camera” in the first IPR and that the Board’s conclusion regarding Apple expert’s declaration in the second IPR was a new argument raised without notice to Apple, in violation of the Administrative Procedure Act (“APA”).
The Federal Circuit, in regard to the issue of construing claim term “fused image with a point of view of the Wide camera,” stated that the relevant question is whether the contested claim term requiring the fused image to have “a point of view of the Wide camera” means that the fused image must maintain only Wide position POV or Wide perspective POV (as Apple contended), or whether it means that the fused image must maintain both (as Corephotonics contended and the Board found).
The Federal Circuit found that a reasonable reading of the specification revealed that Wide perspective and Wide position are two different types of Wide points of view. It also found that the claim term requires only that the fused image maintain “a point of view of the Wide camera,” i.e., only one of the disclosed types of Wide point of view. See Salazar v. AT&T Mobility LLC, 64 F.4th 1311, 1315 (Fed. Cir. 2023) (“We have explained that the indefinite article ‘a’ means ‘one or more.’”). The Federal Circuit stated that the patent describes different types of points of view—Wide position, Wide perspective, Tele position and Tele perspective—but intentionally chose to claim only “a point of view of the Wide camera.” And there is no indication in the claims, specification or otherwise that the patentee meant to claim their invention more narrowly. See, e.g., Convolve, Inc. v. Compaq Comput. Corp., 812 F.3d 1313, 1321 (Fed. Cir. 2016) (“[A]bsent a clear intent in the claims themselves, the specification, or the prosecution history, we interpret ‘a processor’ to mean ‘one or more processors.’”). The Federal Circuit stated that its case law counsels against interpreting claims in a way that would omit a disclosed embodiment absent clear evidence to the contrary. See Sequoia Tech., LLC v. Dell, Inc., 66 F.4th 1317, 1327 (Fed. Cir. 2023).
The Federal Circuit then turned to the other issue on appeal, i.e., whether the Board’s conclusion regarding Apple expert’s declaration in the second IPR was a new argument raised without notice to Apple, in violation of the APA. The Federal Circuit acknowledged that the APA imposes important limits on the Board’s authority during IPRs. And under the APA, “[p]ersons entitled to notice of an agency hearing shall be timely informed of … the matters of fact and law asserted,” 5 U.S.C. § 554(b)(3), and the Board “shall give all interested parties opportunity for … the submission and consideration of facts [and] arguments,” id. § 554(c)(1). In other words, “the Board must base its decision on arguments that were advanced by a party, and to which the opposing party was given a chance to respond.” In re Magnum Oil Tools Int’l, Ltd., 829 F.3d 1364, 1381 (Fed. Cir. 2016). The Federal Circuit found that the Board focused almost entirely on the typographical errors in Apple expert’s declaration and that the Board had determined that the typographical error briefly mentioned in the Background section of Corephotonics’ IPR Response (among others that the Board identified sua sponte in its decision) meant that Apple had not shown that the challenged claims were unpatentable. The Federal Circuit stated that the Board is entitled to set aside technical expert testimony that it finds not scientifically reliable on the record, and is free to make credibility determinations, weigh the evidence and decide for itself what persuades it. The Board’s explanations, however, must be supported by substantial evidence, and its decisions must be reached only after the parties have been provided fair notice and an opportunity to be heard. See TQ Delta, LLC v. CISCO Sys., Inc., 942 F.3d 1352, 1358 (Fed. Cir. 2019).
The Federal Circuit stated that it could not discern, from the Board’s decision, why Apple expert’s typographical error may have rendered unreliable the portions of its analysis relevant to the obviousness grounds at issue. The Federal Circuit also stated that it could not discern why Apple expert’s typographical error was never identified by the parties as a dispositive issue, the resolution of which is necessary to resolve the parties’ disputes. Therefore, the Federal Circuit found that the Board’s determination that the typographical error in Apple expert’s declaration was essentially dispositive of the issues in the case does not comport with the notice requirements of the APA. And it held that the Board based its decision on a typographical error without sufficiently explaining its significance, made sua sponte findings that lacked substantial evidence, and did not resolve the issue the parties presented.
The Federal Circuit vacated and remanded the Board’s decisions for both the first and second IPRs and remanded the IPRs back to the Board for further proceedings consistent with its opinion.
