In re NuVasive, Inc., (Fed. Cir. Dec. 7, 2016) (Before Moore, Wallach, and Taranto, J.) (Opinion for the court, Wallach, J.).
NuVasive owns a patent relating to spinal fusion implants. Medtronic petitioned the Patent Trial and Appeal Board (the “Board”) to institute an inter partes review challenging the validity of NuVasive’s patent over several references. The Board instituted the IPR and found the challenged claims obvious over a combination of references.
NuVasive appealed, challenging first that the Board erred in concluding that the references were prior art and second that the Board erred in concluding that Claim 1 of NuVasive’s patent was obvious. The Court vacated and remanded the Board’s decision.
The Court found that NuVasive failed to preserve its challenge to the prior art status of the cited references for appeal. NuVasive waived this challenging when it failed to make this defense to the Board. While NuVasive questioned the prior art status of the references in the preliminary stages of the IPR, it explicitly declined to address the issue later on. Consequently, the Board did not address this issue in its final decision. This resulted in a failure to preserve the issue for appeal.
Recording obviousness, the Court found that the Board’s reasons for finding a motivation to combine the references was deficient, leaving the Court unable to review the Board’s obviousness ruling. Two principles guided this decision: 1) “the [Board] must make the necessary findings and have an adequate evidentiary basis for its findings;” and 2) the [Board] must examine and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.”
The Board’s obviousness analysis did not comport with these principles. Specifically, the Board failed to articulate why a person of ordinary skill would be motivated to combine the prior art references. Instead, the Board relied on a conclusory statement by Medtronic’s expert and merely summarized the parties’ arguments. Because the Court could not reasonably discern the Board’s reasoning, it could not engage in meaningful judicial review of the obviousness decision. The Court vacated and remanded the decision on obviousness for further clarification by the board.
Arguments not made during an IPR trial before the Board are waived and not preserved for appeal. The Board must provide well-reasoned and non-conclusory explanations for its findings, e.g. re obviousness.