On Monday, July 10th, the U.S. Court of Appeals for the Federal Circuit (Fed. Cir.) entered a decision in a patent case which proves that there really is no end to the nightmare that patent owners face in trying to uphold the validity of their property right which is supposedly protected by the U.S. Constitution. In a decision in Google Inc. v. Intellectual Ventures II LLC, Judges Lourie, Wallach and Stoll vacated and remanded a final written decision issued at the Patent Trial and Appeal Board (PTAB) in an inter partes review (IPR) trial that patent claims owned by Intellectual Ventures were neither anticipated nor non-obvious. The Fed. Cir.’s decision affirmed the parts of the final written decision at PTAB that did find some claims of the challenged patent as directed at unpatentable subject matter.
The patent at issue is U.S. Patent No. 6121960, titled Touch Screen System and Methods and owned by Intellectual Ventures. The patent, issued in September 2000, claims a screen peripheral system having a computing device for providing a main image, a touch-activated input device for generating and displaying a composite image that simultaneously includes a representation of at least one key and the main image over which the representation of the key is laid; the screen peripheral system further uses variable-pixel control to cause pixels forming the representation of the key to be activated simultaneously with pixels selected to form the main image to display a composite image. The invention was designed to solve problems in superimposing a keyboard image over an image output by an application executed on a computer, including the keyboard’s occlusion of the underlying application output image from view. It also addressed issues with a conventional system for alternating the keyboard with the application image, which could confuse the viewer’s interpretation of the interactive features as well as the additional hardware features it was believed was needed for alternating the application image with the keyboard image effectively.
Google appealed the PTAB’s final written decision in the trial instituted on the ‘960 patent. The tech company argued that the PTAB erred in determining that certain claims of the patent were valid in light of a combination of two previous patents. Google asserted that claims of the ‘960 patent were anticipated by U.S. Patent No. 5638501 (“Gough”), titled Method and Apparatus for Displaying an Overlay Image, under 35 U.S.C. §102 in combination with 35 U.S.C. §103 obviousness objections in light of U.S. Patent No. 6118427 (“Buxton”), titled Graphical User Interface With Optimal Transparency Thresholds for Maximizing User Performance and System Efficiency. The ‘501 patent teaches a “blending engine” blending a background image with an overlay image, which may be a keyboard image, Google argued. Further, the ‘427 patent discloses a graphical user interface using variable transparency to merge images (or layers) of objects onto a graphical display, such as a transparent palette superimposed on an image. Google’s argument is that the PTAB failed to adequately explain its contradictory findings on the disclosure of logical operators in the ‘501 patent, and that “substantial evidence does not support the Board’s obviousness determination because Buxton teaches logical operators and the Board failed to adequately explain its contrary finding,” the decision reads.
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The Fed. Cir. recognized that the PTAB “did not agree… that either Gough’s description of the blending process… or Gough’s description of using the color look-up table… expressly discloses using logical operators.” “Stating a disagreement with Google, however, does not amount to a satisfactory explanation for its findings,” the decision reads, citing to the Fed. Cir.’s 2016 decision in In re: NuVasive, Inc. The court also cite other recent decisions in which “we have explained what the Board must do to permit meaningful judicial review of its final written decisions.” The Fed. Cir. panel found that the PTAB failed to comport with the basic administrative law principles of having an adequate evidentiary basis for its findings, and examining relevant data to “articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.” The Fed. Cir. noted that the PTAB did not explain why it dismissed expert testimony and evidence made by Google; it also failed to explain why it didn’t adopt Intellectual Ventures’ substantive evidence to disprove evidence or discredit testimony brought by Google. The Fed. Cir. also found that the PTAB’s determination on obviousness “suffers from similar defects.”
At a high level, all of this has to lead a patent owner to wonder whether there is any stop to the barrage of invalidity challenges facing their Constitutionally-protected property right. It makes the idea of 90 percent of patents challenged at PTAB being declared defective seem almost generous: here we have a patent which survived an IPR with some claims intact, but the Fed. Cir. decides that Google gets to have one more whack at the patent piñata because the PTAB’s decision wasn’t thorough enough. It’s a decision that further distorts the statistics published by the PTAB itself as this is technically a re-institution of an IPR on claims which have survived a final written without Google having to re-petition.
Further, this is a tremendous amount of effort being expended by Google to eliminate a patent which hasn’t been asserted against the tech firm, according to data collected from Lex Machina. The three cases filed in U.S. district court involving Intellectual Ventures’ ‘960 patent seem to have been filed mainly against digital imaging companies like Canon Inc. (NYSE:CAJ) and Nikon Corp. (TYO:7731); consumer electronics and telecom firm Motorola Mobility LLC is also listed as a defendant in one case. Statistics on patent findings collected by Lex Machina show that the ‘960 patent reached summary judgment of valid and infringed, although one summary judgment led to a finding of invalidity. The finding of invalid subject matter was made under 35 U.S.C. §112 for definiteness, not for Section 102 for anticipation or Section 103 for obviousness.