Federal Circuit Reverses PTAB’s Invalidity Decision Regarding a Wireless Communications Patent

“The PTAB cannot rely on evidence relating solely to grounds on which it never instituted, as an issue upon which the Board does not institute review is not part of the ensuing inter partes review proceeding and can be neither anticipated nor rebutted by the patent owner.”

Federal CircuitIn November, the Federal Circuit issued an opinion reversing the Patent Trial and Appeal Board’s (the PTAB or the Board) decision that claim 8 of IPR Licensing Inc.’s (IPRL) wireless communications patent—U.S. Patent No. 8,380,244 (the ‘244 Patent)—was unpatentable as obvious. The Board’s obviousness finding as to claim 8 was erroneous as it relied on a prior art reference that IPRL could neither anticipate nor rebut. Furthermore, its finding was, for the second time, unsupported by substantial evidence. See In re IPR Licensing, Inc. (Fed Cir. Nov. 22, 2019) (Before Newman, O’Malley, and Taranto, Circuit Judges) (Opinion for the Court, O’Malley, Circuit Judge).

The ’244 patent claims a “subscriber unit” such as a mobile device that can automatically select the best available wireless network – a wireless local area network if one is in range or, if not, a cellular network – and then connect to it. In addition to recognizing two types of wireless networks, the patent cites two different methods of allowing users to access the network: the Time Division Multiple Access (TMDA), which assigns the device a unique time slot during which it may transmit data to the base station, and Code Division Multiple Access (CDMA), which assigns devices unique codes so that they can all transmit data at the same time. Claim 8 requires the subscriber unit to communicate with a CDMA cellular wireless network via a CDMA transceiver.

From Jury to PTAB

After IPRL sued ZTE for infringement of the ’244 patent, the jury found all asserted claims infringed and the patent not invalid. The district court, however, stayed post-trial proceedings pending resolution of an inter partes review (IPR) filed by ZTE challenging a number of asserted claims, including claim 8 at issue in this appeal. While ZTE’s Petition challenged the claims on three separate grounds, the PTAB instituted review based only on one: a combination of three prior art references: Jawanda, General Packet Radio Service Standards (GPRS), and IEEE 802.11. The GPRS disclose a “Packet Data Protocol (PDP) Context feature” which “preserves information about the cellular communication session between the mobile devi[c]e and base station.” Importantly, ground three, which was not instituted, challenged all claims based on a combination of two other references, including the Universal Mobile Telecommunications System Standards (UMTS), which describe a version of the CDMA protocol that references the PDP Context feature.

Federal Circuit Reverses

The Board found the claims invalid, and IPRL appealed. The Federal Circuit affirmed the Board’s conclusion as to all claims except claim 8. The Court found no evidentiary support for the conclusion that a person of ordinary skill in the art (POSITA) would have applied the PDP Context feature from GPRS (relating to TDMA) in a DMA system like the one described in claim 8 and vacated the Board’s findings as to claim 8. The Court further remanded for the Board to assess “whether there was substantial evidence to support the conclusion that one of skill in the art would have ‘a motivation to combine the PDP Context feature of the GPRS standards with the CDMA network referenced in Jawanda.’” Although ZTE failed to present any additional evidence or argument, the Board again found claim 8 obvious. The only additional evidence the Board proffered to support its conclusion was a citation to UMTS. IPRL again appealed, and the Federal Circuit again reversed.

The Board improperly relied on prior art, UMTS, not asserted in support of the one instituted ground, said the Court. “[T]he Board must base its decision on arguments that were advanced by a party, and to which the opposing party was given a chance to respond.” Furthermore, “[t]he Board . . . cannot rely on evidence relating solely to grounds on which it never instituted. To hold otherwise would allow the Board’s final written decision to rest on arguments that a patent owner has no ability to rebut or anticipate.” Here, UMTS was never a part of the proceeding: ZTE’s petition did not mention UMTS in discussing the one ground on which the Board instituted review, and, in turn, IPRL’s response did not reference it. Furthermore, even after the Board asked ZTE to point to evidence supporting the conclusion that a motivation to combine the prior art references cited in ground one existed, ZTE failed to do so. The Board, nonetheless, discussed UMTS in its patentability analysis—its “decision to rely on the Draft UMTS Standards to fill the gap in its evidentiary finding was, thus, erroneous.”

The Final Word

Next, ZTE argued that the matter should be remanded as to the two non-instituted grounds. IPRL, in turn, argued that ZTEs failure to file a cross-appeal deprived the Court of jurisdiction for a remand. The Court first rejected IPRL’s argument that filing a cross-appeal is a jurisdictional requirement. As a court-promulgated rule rooted in the Federal Rules of Appellate Procedure rather than a statutory rule established by Congress, the cross-appeal rule lacked jurisdictional import. Thus, no jurisdictional barrier to remand existed. However, ZTE’s filing an unopposed Motion to Withdraw from the appeal, pursuant to a settlement agreement between the parties, constituted waiver of its request to institute an IPR on the non-instituted grounds. The Court thus vacated the Board’s final judgment of invalidity.

 

The Author

Joseph Robinson & Robert Schaffer

Joseph Robinson & Robert Schaffer  

Joseph Robinson has over 20 years of experience in all aspects of intellectual property law. He focuses his practice in the pharmaceutical, life sciences, biotechnology, and medical device fields. His practice encompasses litigation, including Hatch-Waxman litigation; licensing; counseling; due diligence; and patent and trademark prosecution. He has served as litigation counsel in a variety of patent and trademark disputes in many different jurisdictions, and has also served as appellate counsel before the Court of Appeals for the Federal Circuit. Joe also focuses on complex inter partes matters before the U.S Patent and Trademark Office, inventorship disputes, reexaminations and reissues. His experience includes numerous interferences, a particular advantage in new U.S. Patent and Trademark Office post-grant proceedings. He also counsels on patent–related U.S. Food and Drug Administration issues, including citizen petitions, Orange Book listing, and trademark issues. For more information and to contact Joe please visit his profile page at the Troutman Sanders website.

Robert Schaffer is an intellectual property partner at Troutman Sanders. Bob applies more than 30 years of experience to IP counseling and litigation. His work includes patent procurement, strategic planning and transactional advice, due diligence investigations, district court patent cases, and Federal Circuit appeals. He regularly handles complex and high-profile domestic and international patent portfolios, intellectual property agreements and licensing, IP evaluations for collaborations, mergers, and acquisitions. In disputed court cases Bob’s work includes representing and counseling client in ANDA litigations, complex patent infringement cases and appeals, and multidistrict and international cases. In disputed Patent Office matters his work includes representing and counseling clients in interferences, reexaminations, reissues, post-grant proceedings, and in European Oppositions. For more information and to contact Bob please visit his profile page at the Troutman Sanders website.

Joseph Robinson & Robert Schaffer

Dustin Weeks is a Partner in the intellectual property practice group at Troutman Sanders. His practice spans all areas of intellectual property law, including patent prosecution, patent litigation (including Hatch-Waxman litigation), and client counseling. He represents clients ranging from start-ups and solo inventors to Fortune 500 companies. Dustin works closely with his clients to learn their business objectives so that he can tailor strategies to procure, protect, and enforce their intellectual property. Dustin specializes in post-grant proceedings (e.g. Inter Partes Reviews) before the Patent Trial and Appeal Board (PTAB) where he has extensive experience representing both patent owners and petitioners across a wide range of technologies, including wireless networking, pharmaceuticals, MEMs devices, medical devices, and electro-mechanical consumer devices. Dustin's broad experience in patent prosecution, counseling, and patent litigation uniquely positions him to navigate the blended practice of post-grant proceedings.

For more information or to contact Dustin, please visit his Firm Profile Page.

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There are currently 1 Comment comments.

  1. B December 15, 2019 4:14 pm

    “The Board improperly relied on prior art, UMTS, not asserted in support of the one instituted ground, said the Court. “[T]he Board must base its decision on arguments that were advanced by a party, and to which the opposing party was given a chance to respond.” Furthermore, ‘[t]he Board . . . cannot rely on evidence relating solely to grounds on which it never instituted. To hold otherwise would allow the Board’s final written decision to rest on arguments that a patent owner has no ability to rebut or anticipate.’“

    The PTAB remains woefully ignorant of this thing called “due process” by using evidence never before asserted against a patent claim.

    Reminds me of what happened in American Axle. However, I doubt few at the CAFC are capable of understanding that denial of due process under s101 is no more acceptable than denial under 102, 103, or 112.