Federal Circuits invalidates patent covering starting a session on one communication-enabled device and transferring it to another

CRFD Research, Inc. v. Matal, Nos. 2016-2198, 2016-2298, 2016-2437, 2017 (Fed. Cir. Dec. 5, 2017) (Before Newman, Mayer, and O’Malley, J.) (Opinion for the court, O’Malley, J.)

This decision resolves three appeals involving a single patent: CRFD’s ‘233 patent describing methods and systems that allow a user to begin a session on one communication-enabled device and transfer it to another. Three separate prior art references were central to these disputes:  Phan San Jose, Phan Helsinki, and Bates.

In its appeals of the Iron Dome and DISH Final Written Decisions, CRFD challenged the PTAB’s determination that certain claims of the ‘233 patent were unpatentable as anticipated or obvious over the two Phan references. Phan San Jose describes an interactive mobile application for a research project which allows hospital staff to move an application’s session from one machine to another using the hospital’s wireless network. A physician can begin a session on one device and later resume it on a different device. Middleware servers (“MWSs”) are placed between the devices and an application server. In the “pull” mode of transferring information, once the first session is suspended, it is saved to an MWS, the application is terminated, and the second device can retrieve session data from the MWS at a later time.

Phan Helsinki elaborates on the operation of the system described in Phan San Jose by explaining that an MWS serves as the home of the data and facilitates transfer between devices. Phan Helsinki also describes a remote code which facilitates the session transfer. First, a user starts the client application by providing a user ID. The remote code within the browser then contacts the MWS and begins a new session using this user ID.

The key limitation in CRFD’s patent relevant for these two appeals is the “specifying a second device” limitation of Claim 1. The Federal Circuit affirmed, finding Claim 1 unpatentable as both anticipated and obvious.

Appeal One, the Iron Dome Final Written Decision

Iron Dome LLC filed a petition seeking inter parties review of certain claims of the CRFD ‘233 Patent. The Board determined that some of the claims are unpatentable as anticipated by Phan San Jose or obvious over Phan San Jose in combination with Phan Helsinki. CRFD appealed. Iron Dome subsequently withdrew from the appeal, and the Director of the USPTO intervened under 35 U.S.C. § 143.

The Board found, and the Federal Circuit agreed, that the Claim 1 limitation “specifying a second device” is sufficiently broad to have been disclosed by Phan San Jose. It does not restrict “specifying” to a particular user or a particulate device. A user or another entity can specify the second step, which need not occur before the first session is discontinued.

The Court further agreed with the Board that Phan San Jose discloses the “specifying” step of Claim 1 either through user selection of a second device to resume the session or through the second device’s communication with the MWS to transmit the session history from the first device. In Phan San Jose, a user can specify a second device, or a second device can specify itself, after the first session has been discontinued and the session history has been transferred to the MWS. While the MWS must know the identity of the second device for the session history to be transmitted to it, this second device identification – or “specifying” – is required for Phan San Jose’s operation.

Because CRFD’s non-obviousness arguments were not separate from its anticipation arguments, the Board rejected its contention that the “pull” mode taught in Phan San Jose and Phan Helsinki did not teach the “specifying” of the second device. The Court agreed.

Appeal Two, DISH Final Written Decision 

DISH Network Corporation, DISH DBS Corporatin, and EchoStar Technologies L.L.C. (collectively, “DISH”) filed a petition seeking inter parties review of certain claims of the ‘233 Patent. The Board found that Phan Helsinki anticipated claims 1, 4, 23, and 25, including the the “specifying a second device” limitation. Claims 4 and 25 would have been obvious over Phan Helsinki in view of Phan San Jose. CRFD appealed, and the Court affirmed that Phan Helsinki anticipated the asserted claims.

The Court rejected CRFD’s argument that the second device identification is based on the use of a user ID not associated with any particular device. Instead, the second device is specified when a user “logs on to or starts a new device to continue the session.”  Phan Helsinki allows any second device that contacts the MWS to resume the session based on a user ID. Thus, the user’s action of resuming the session is the act of “specifying.” As the asserted claims do not limit who or what performs the “specifying” step, Phan Helsinki discloses this step. Furthermore, the user account discussed in Phan Helsinki can act to provide the information needed to distinguish any second device from other potential devices.

Appeal Three, Hulu Final Written Decision

Hulu, LLC, Netflix, Inc. and Spotify USA Inc. (collectively “Hulu”) filed a petition seeking inter parties review of certain claims of the ‘233 Patent. The Board concluded that the various claims of the patent were neither anticipated nor obvious based on disclosures in the Bates reference. Hulu appealed, and the Court reversed the Board’s obviousness determination as to the asserted claims.

First, the Board failed to perform a proper obviousness analysis. It performed limited fact-finding in its obviousness inquiry, only examining the level of ordinary skill in the art and then relying primarily on its determination that Bates did not anticipate the challenged claims. Anticipation is a question of fact, while obviousness is a question of law based on underlying factual findings. Even if a reference’s teachings are insufficient to find anticipation, that same reference’s teachings may be used to find obviousness. The Board’s findings on anticipation are insufficient as a matter of law to decide the obviousness inquiry. Furthermore, Hulu explicitly made the argument in its petition that it would have been obvious, based on Bates, to transmit session history after session discontinuation. The Board erred in deciding not to review the obviousness grounds of Bates alone for redundancy reason.

Next, the Board misread the Bates reference in concluding that it did not render the transmitting limitation obvious. “A reference must be considered for everything that it teaches, not simply the described invention or a preferred embodiment.” In re Applied Materials, Inc., 692 F.3d 1289, 1298  (Fed. Cir. 2012). Bates discloses a system and method for “sharing  . . . browser information between at least two browser applications” in which a web browsing session is transferred from a first computer to a second computer via one or more servers. The claim limitation in dispute was “transmitting a session history of said first device from said first device to a session transfer module after said session is discontinued on said first device.”

A person of ordinary skill would have two choices for when the Bates system transmits browser information, including transmitting browser information after discontinuation to meet Bates’s goal of preserving the entire session history. Thus, the Board erred in determination that the asserted claims of the ’233 patent were not obvious. Because the Court’s decision on obviousness invalidated all claims Hulu argued were anticipated, the Court did not address this issue.

Lack of anticipation based on a single reference does not preclude a finding of obviousness based on the same reference. Even if a reference’s is insufficient for anticipation, which is a question of fact, that same reference teachings may be used to find obviousness, a question of law based on underlying factual findings.




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