Federal Circuit vacates PTAB final written decision that upheld some Intellectual Ventures patent claims

By Steve Brachmann
July 13, 2017

Judges of the U.S. Court of Appeals for the Federal Circuit.

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.

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.

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 15 Comments comments. Join the discussion.

  1. Bemused July 13, 2017 11:05 am

    Google winning yet again at the CAFC; what a surprise! Not.

  2. respoding July 13, 2017 11:49 am

    Good lord! How many bites are we going to give defendants/infringers? It’s like an old west shootout, except the patent owner has an empty chamber and the defendant/infringers get to reload and keep shooting (and invite all his friends to shoot, too) while the patent owner just stands there.

  3. Paul Johnson July 13, 2017 3:21 pm

    Steve, I searched through the PTAB decision and Federal Circuit opinion, but could not find any reference to “unpatentable subject matter” (let alone s. 101 or Alice). Please tell me why you said: “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.”

  4. Steve Brachmann July 13, 2017 4:30 pm

    @Paul Johnson – From the Federal Circuit decision, available through the link in the first paragraph – “We vacate and remand the Board’s anticipation and obviousness determinations as to claims 1–3, 5, 7–10, and 12–14, and affirm the Board’s anticipation and obviousness determinations as to claims 19–22 and 24–30.” It’s right there in page 2. So they affirmed the anticipation and obviousness determinations. So now to the PTAB final written decision, also linked to first paragraph – “For the reasons that follow, we determine that Petitioner has shown by a preponderance of the evidence that claims 19–22 and 24–30 of the ’960
    patent are unpatentable.” So the Federal Circuit’s decision affirmed the parts of the final written decision which found that claims 19-22 and 24-30 of the ‘960 patent were unpatentable in light of anticipation and obviousness. I’m having trouble believing you’ve “searched” the PTAB and Fed. Cir. documents and couldn’t reach this conclusion. Or if I’m missing something, feel free to try and correct me further.

  5. Bemused July 13, 2017 5:49 pm

    Paul@3 and Steve@: I believe that Paul is interpreting “unpatentable” as meaning invalid under Section 101 (i.e. unpatentable subject matter) while Steve is interpreting “unpatentable” in the same sense as the PTAB’s final written decision (i.e. not patentable over the prior art).

  6. Brian July 13, 2017 5:51 pm

    Who would do the research on Judges Lourie, Wallach and Stoll to find out if they were installed there to defend google by the Obama administration ?

    It seems no matter who the plaintiff is with Google, Fed.Cir always hands victory to Google ? Is it me or something does not smell right !

    Oracle , Viringo, Simple Air , etc.. the list goes on and on .. but no one seems to get past the Fed. Cir hold on Google.

    Someone needs to write an Op-ed and do some research . Not just PTAB but over all Google at Fed Cir has Never Lost !

    Has it ?

  7. Anon July 13, 2017 6:12 pm

    Steve,

    Perhaps the words “unpatentable” were taken as “not eligible,” and the person was looking for 101 discussions on the case.

  8. Night Writer July 13, 2017 6:55 pm

    >>as directed at unpatentable subject matter.”

    This should probably be rephrased. Like this it sounds like 101. The claims as unpatentable over the cited references.

    @4 Brian: there is no doubt that Google selected the judges after O’Malley, which included Stoll. Wallach and Lourie have been there a long time. Lourie thinks all software is junk.

  9. Steve Brachmann July 13, 2017 7:55 pm

    @Anon – A fair assessment. Perhaps Paul was unaware that you cannot challenge 101 in IPRs.

  10. Invention Rights July 13, 2017 9:37 pm

    The confusion over the phrase “unpatentable subject matter” highlights a very important point. That is the essence of a holding that claims are obvious under §103. But the PTAB does not analyze the “subject matter” as a whole. Instead they break down the claim into whatever parts suit the petitioner, find those pieces in the prior art, fill any gaps with BRI and inherency, then adopt the petitioners expert opinion on motivation. They don’t know how to evaluate the “subject matter” as a whole. They can’t see the forest for the trees. The can’t see the invention, they only see words.

  11. Bemused July 13, 2017 9:52 pm

    Brian@6: Nope. Google has never lost at the CAFC. Never. Nor am I aware of any company (tech or otherwise) that has a 100% success rate at the CAFC (and that 100% success rate is regardless of whether Google is the Appellant or the Appellee on appeal).

    Maybe their great fortune at the CAFC has do to with the fact that Google does no evil. /Sarcasm off/

  12. JPM July 14, 2017 9:34 pm

    @Brian

    Looks like Judge Stoll and 6 other judges were put there by Obama.

    See: https://en.wikipedia.org/wiki/United_States_Court_of_Appeals_for_the_Federal_Circuit

    Appointed by Obama:

    Kathleen M. O’Malley
    Jimmie V. Reyna
    Evan Wallach
    Richard G. Taranto
    Raymond T. Chen
    Todd M. Hughes
    Kara Farnandez Stoll

  13. Anon July 15, 2017 10:18 am

    Now that 101 is “put to the side,”

    How is 112 any more proper?

    Consider 35 USC 311(b): Scope.—
    A petitioner in an inter partes review may request to cancel as unpatentable 1 or more claims of a patent only on a ground that could be raised under section 102 or 103 and only on the basis of prior art consisting of patents or printed publications.

    If 112 can be introduced once past the initiation decision point, then why not 101?

    Further, can (or perhaps more properly, should) a reviewing court of appeal – for the purpose of review – venture outside of the parameters of what Congress set forth for IPRs? Should not the reviewing court chastise the PTAB for venturing past the bounds of what Congress set up?

    Thoughts…?

  14. Night Writer July 15, 2017 6:58 pm

    >Kathleen M. O’Malley — before Google selections started
    >Jimmie V. Reyna — admitted to knowing nothing about patents/technology
    >Evan Wallach — don’t know about this one
    >Richard G. Taranto – held that simulating a process of the human mind is per se obvious
    >Raymond T. Chen – was virulently anti-patent at PTO, but seems to not be bad
    >Todd M. Hughes — Google judge.
    >Kara Farnandez Stoll — a mediocre mean person that probably pledged to burn down the system for her appointment. A replacement for Rader? Not even close.

    Pretty sure that Renya, Hughes, and Taranto are tops on the list of invalidating patents under 101.

    Thanks Obama.

  15. Night Writer July 15, 2017 7:03 pm

    It is really pretty outrageous that Google has selected the last six judges to the CAFC.

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