Federal Circuit Reverses PTAB’s Non-Obviousness Ruling in View of Prior Art

On May 5, the United States Court of Appeals for the Federal Circuit (CAFC) reversed a decision of the United States Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) in Uber Technologies, Inc., v. X One, Inc. with respect to one claim limitation and remanded the case to the PTAB to analyze the remaining limitations of the challenged claims in the first instance.  In its decision, the PTAB determined that an asserted limitation of U.S. Patent No. 8,798,593 (the ’593 patent), which is directed to a “Buddy watch application” for a mobile device, was not obvious in view of the prior art.

Proceedings Before the PTAB

The ‘593 patent, owned by X One, Inc. (X One), is more particularly directed to a mobile device application for exchanging information with another mobile device including a map of a user’s location. The ’593 patent also discloses an “instant buddies” feature, wherein a user can share information on a temporary basis with automatic expiration of the shared information. X One asserted that the novel features of the ‘593 patent are the “two way position information sharing…the creation of such location sharing ‘groups,’… and ‘temporary location sharing’ that ‘automatically expires.’”  Uber filed a petition for inter partes review asserting that certain claims of the ’593 patent were obvious in view prior art references and the Board concluded that the prior art did not render obvious a claim limitation directed to “software . . . to transmit the map with plotted locations to the first individual.”  Uber appealed to the CAFC.

Federal Circuit’s Consideration of the Prior Art and Disputed Claim Limitation

The CAFC considered the first grounds of rejection asserted in the petition, i.e. whether certain claims of the ’593 patent were obvious in view of Japanese Unexamined Patent Application Publication No. 2002-10321 (Okubo) in view of Japanese Unexamined Patent Application Publication No. 2002-352388 (Konishi). Okubo was generally directed to a two-way “mobile terminal position information communication system” which “enable[s] acquisition of the position information for group members belonging to the same group.”  Further, Konishi was directed to a system that allows a user to reserve a vehicle using a mobile telephone, wherein the system plots “the current positions of the customer and available vehicles on a map.”

The CAFC noted that the primary dispute is whether the cited references render obvious the claim limitation directed to “software . . . to transmit the map with plotted locations to the first individual”, which is considered to require a server to first plot locations on a map and, second, to transmit the map with the plotted locations to a user’s device, i.e. server-side plotting.  The CAFC further noted that “it is undisputed that Konishi discloses such ‘server-side’ plotting”, and Okubo “does not expressly disclose server-side plotting.” Instead, Okubo discloses “terminal-side” plotting, wherein a user’s mobile device first receives a map and, second, the locations of other users are plotted on the map. On appeal, Uber challenged the Board’s conclusion that the combination of Okubo’s terminal-side plotting system and Konishi’s server-side plotting did not render obvious the server-side plotting limitation of the asserted claims. The Board reasoned that one of ordinary skill in the art would not seek out a design choice for combination with Okubo because Okubo “sufficiently [taught] the implementation of plotting the locations of group members on a map on its mobile terminal”. Uber argued that the “Board committed legal error by refusing to consider Okubo in combination with other prior art on the basis that Okubo was ‘successful’ in and of itself.”

Federal Circuit’s Rationale for Finding Obviousness

Citing KSR International Co. v. Teleflex Inc., the CAFC noted that the Supreme Court has given explicit instructions regarding design choices and predictable variations. The CAFC quoted KSR in stating:

[w]hen there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical grasp.”  The CAFC agreed with Uber’s expert’s statement that the ‘593 patent and the cited prior art all attempt to solve the same problem. Further, the CAFC noted, the record only reflected two possible solutions to the problem: server-side plotting and terminal-side plotting, both of which were known in the prior art. Thus, again quoting KSR, the CAFC explained that “server-side plotting and terminal-side plotting represent ‘a finite number of identified, predictable solutions’ to a design need that existed at the relevant time, which a person of ordinary skill in the art ‘ha[d] good reason to pursue.’

The CAFC also deemed it “important” to note that the purported novelty of the ’593 patent is not related to the differences between server-side or terminal-side plotting. The CAFC explained that the ‘593 patent’s silence on how to transmit user locations and maps from a server to a user’s device “suggest[ed] that a person of ordinary skill in the art was more than capable of selecting between the known methods of accomplishing this.”

In concluding that the Board erred in determining that a person of ordinary skill in the art would have been motivated to combine the teachings of Okubo with Konishi’s server side plotting, the CAFC explained: 1) that the prior art presented “the only two identified, predictable solutions” and 2) the combination was obvious because Konishi’s server-side plotting would have been a “predictable variation” of Okubo’s system. The CAFC referred to its prior decision in CRFD Research, Inc. v. Matal, 876 F.3d 1330 (Fed. Cir. 2017), to reinforce its conclusion. According to the CAFC, the petitioner in CRFC Research argued that the claim in question recited one of two possible solutions for transmitting a session history: before a session was discontinued or after. Noting that the same is true in the present case, the CAFC cited the court’s reasoning in CRFD Research: “’a person of ordinary skill would have two predictable choices for when the [prior art] would transmit browser information, providing a person of ordinary skill with a simple design choice’” between the two options.” The CAFC asserted that the present case is analogous to CRFD Research because the difference between server-side plotting and terminal-side plotting is essentially a choice between whether locations are plotted before or after transmitting location.

Thus, CAFC noted that a person of ordinary skill in the art would have two predictable choices for when to perform plotting, which would provide them with a simple design choice. The Court explained that since a person of ordinary skill in the art “’has good reasons to pursue the known options within his or her technical grasp,’” § 103 bars the patentability of such obvious variations.”

In conclusion, the CAFC reversed the PTAB’s determination of non-obviousness of the disputed claim limitation in view of Okubo and Konishi and remanded for evaluation of the remaining claim limitations.