-
Federal Circuit Argues Over IPR Appeal Procedure
03/27/2018On March 23, 2018, a divided panel of the United States Court of Appeals for the Federal Circuit (CAFC) found that the Patent Trial and Appeal Board (PTAB) had not sufficiently explained its reasoning in a final written decision invalidating certain patent claims, and reversed the invalidity ruling. DSS Tech. Mgmt. v. Apple Inc., appeal nos. 2016-2523 and 2016-2524. One member of the panel (Newman, J.) dissented, both on the merits, and on whether the panel should have ordered remand instead of reversing.
In two inter partes reviews (IPRs), Apple challenged two sets of claims of United States Patent No. 6,128,290, owned by DSS Technology Management, Inc. (DSS). Apple argued that the claims were obvious. There was only one element of the claims not found in the asserted prior art: the claims required that both a wireless base station and a wireless peripheral unit transmit in a certain power-saving manner, but the prior art explicitly described only a wireless peripheral unit, not the base station, transmitting in that matter.
The PTAB ruled that the claimed inventions would have been obvious to one of ordinary skill in the art. With respect to the disputed limitation, the PTAB found that it would have been only “ordinary creativity” for one of skill in the art to modify the prior art to use the power-saving transmission protocol on the base station as well as on the peripheral unit.
The panel majority (O’Malley, J., and Reyna, J.) ruled that the PTAB’s written decisions in the two IPRs “fail to provide sufficient explanation for its obviousness finding.” The majority observed that the bulk of the PTAB’s discussion of the issue was an eight-page recitation of each side’s arguments, with only one paragraph explaining why it had adopted Apple’s position that it would have been obvious to modify the prior art to match the asserted claims. The majority compared that paragraph’s reference to “ordinary creativity” to an invocation of common sense, and found the evidence insufficient to support use of the common sense of one of ordinary skill in the art to supply what it characterized as the missing element of power-saving transmission by the base station. The panel reversed the PTAB decision, thus leaving the claims valid, and Apple estopped from challenging them again as prescribed by the IPR statute.
Judge Newman disagreed, both on the merits and on the decision to reverse the Board. She found the PTAB’s opinion adopting Apple’s arguments to be sufficient. But setting the merits aside, she also found that the proper response to an insufficiently explained PTAB opinion is remand, not reversal, both as a matter of administrative law in general, and as a matter of PTAB/CAFC appeal procedure in particular.
The panel majority’s opinion is a useful reminder that a party challenging a patent—in any forum—is far more likely to err by providing too little explanation of obviousness than too much, especially when what is argued to be obvious could be characterized as a limitation missing from the prior art, rather than a combination of several pieces of prior art that together describe every limitation of the challenged claims. Even when a design modification would have been common sense to one of ordinary skill in the art, it is important to provide an explicit evidentiary explanation of the common-sense motivation to make the proposed modification.
As for the question of reversal versus remand when a conclusion is deemed insufficiently explained, it will be interesting to see how future CAFC panels rule on that issue.
