Federal Circuit Vacates PTAB Holding for Failure to Consider Merits of Patentability

By Rebecca Tapscott
July 15, 2020

“[T]he CAFC explained that the Board erred in holding that the patentability inquiry ended simply because it rejected Fitbit’s claim construction and agreed with Fitbit that ‘claim construction is only the first step in establishing the meaning and scope of a claim, whereby patentability is assessed for the claim as construed.’”

https://depositphotos.com/73838121/stock-photo-runner-looking-at-sports-smartwatch.htmlOn July 8, the United States Court of Appeals for the Federal Circuit (CAFC), in Fitbit, Inc. v. Valencell, Inc., vacated a Final Written Decision of the United States Patent Trial and Appeal Board (PTAB) in an appeal from an inter partes review (IPR) of U.S. Patent No. 8,923,941 (the ’941 patent). In particular, the CAFC held that the PTAB erred in failing to consider the patentability of claims 3-5 of the ‘941 patent when determining that the claims were not unpatentable. Thus, the CAFC vacated the PTAB’s decision and remanded for consideration on the merits of patentability.

Reinstituted After SAS Institute

The ‘941 patent, which is owned by Valencell, is directed to “systems for obtaining and monitoring information such as blood oxygen level, heart rate, and physical activity.” Apple Inc. petitioned for IPR of claims 1–13 of the ‘941 patent. The PTAB instituted review of claims 1, 2, and 6–13, but denied review of claims 3–5. Subsequently, Fitbit petitioned for IPR of claims 1, 2, and 6–13 and moved for joinder with Apple’s IPR. The PTAB granted Fitbit’s petition and motion for joinder. During the pendency of the IPR proceeding, the Supreme Court issued an opinion in SAS Institute, Inc. v. Iancu “holding that the America Invents Act requires that all patent claims challenged in an IPR petition must be reviewed by the Board if the petition is granted.”  Thus, the PTAB reinstituted the IPR to add claims 3-5.

The PTAB issued a Final Written Decision holding that claims 1, 2, and 6–13 were unpatentable, but claims 3–5 were not unpatentable. Apple withdrew from the proceeding and Fitbit appealed the decision on claims 3-5 to the CAFC. Valencell challenged Fitbit’s right to appeal with respect to claims 3-5.

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Fitbit’s Right to Appeal

Initially, the CAFC considered Valencell’s assertion that Fitbit did not have a status of “party” to appeal the Board’s decision on claims 3-5 because it did not request IPR of claims 3-5 in its petition. The CAFC noted that Section 319 of the patent statute provided that “[a]ny party to the inter partes review shall have the right to be a party to the appeal.” The CAFC also noted that precedent has confirmed that “joined parties” have the right to appeal in accordance with Section 319 and Fitbit’s failure to request IPR of claims 3-5 did not “override Fitbit’s statutory right of appeal.”

Valencell also argued that Fitbit’s IPR petition was not in conformity with the statute because the petition was filed more than one year after Valencell initiated a district court suit against Fitbit. Citing Thryv, Inc v. Click-To-Call Technologies, the CAFC noted that the PTAB’s acceptance of late IPR filings “at the ‘institution’ phase is, by statute, not reviewable on appeal.” Thus, the CAFC concluded that Fitbit had the right to appeal as a joined party.

Claim Construction and Patentability

The CAFC explained that claim 3 of the ‘941 patent recited the term “application-specific interface (API)”, which Fitbit proposed to broadly “include at least an application interface that specifies how some software components should interact with each other.” Fitbit asserted that claim 3 was unpatentable as obvious, given this construction. Noting that the PTAB correctly rejected Fitbit’s broad construction, the CAFC agreed with the more narrow construction of the term “application-specific interface” (API) as “an interface which enables a particular application to utilize data obtained from hardware, such as the at least one motion sensor and the at least one PPG [photoplethysmography] sensor.” However, the CAFC explained that the PTAB erred in holding that the patentability inquiry ended simply because it rejected Fitbit’s claim construction and agreed with Fitbit that “claim construction is only the first step in establishing the meaning and scope of a claim, whereby patentability is assessed for the claim as construed.” Thus, the CAFC affirmed the PTAB’s claim construction but vacated its holding that claim 3 was not unpatentable and remanded to the PTAB for consideration of obviousness.

Question of Antecedent Basis

Claim 4 of the ‘941 patent depended from claim 1 and recited “the application”, but there was no antecedent basis for “the application” in claim 1. The Court pointed out that the prosecution history made clear, and the parties to the IPR agreed, that claim 4 was intended to depend from claim 3 rather than claim 1. The CAFC noted that the PTAB panel erred in determining that claims 4 and 5 were not unpatentable “on the ground that the Board could not determine the meaning of the claims because the term ‘the application’ lacked antecedent basis.” The CAFC explained that, under the America Invents Act, the PTAB has the authority to amend the claims of issued patents and the proper action would have been to correct the error and address the merits of patentability.

Thus, the CAFC concluded that “the Agency’s treatment of this error as the basis of a Final Written Decision of patentability is not a reasonable resolution and does not comport with the Agency’s assignment to resolve patentability issues.” Accordingly, the CAFC vacated the Board’s holding with respect to claims 4-5 and remanded for correction and consideration of the obviousness issue.

Image Source: Deposit Photos
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The Author

Rebecca Tapscott

Rebecca Tapscott is an intellectual property attorney who has joined IPWatchdog as our Staff Writer. She received her Bachelor of Science degree in chemistry from the University of Central Florida and received her Juris Doctorate in 2002 from the George Mason School of Law in Arlington, VA.

Prior to joining IPWatchdog, Rebecca has worked as a senior associate attorney for the Bilicki Law Firm and Diederiks & Whitelaw, PLC. Her practice has involved intellectual property litigation, the preparation and prosecution of patent applications in the chemical, mechanical arts, and electrical arts, strategic alliance and development agreements, and trademark prosecution and opposition matters. In addition, she is admitted to the Virginia State Bar and is a registered patent attorney with the United States Patent and Trademark Office. She is also a member of the American Bar Association and the American Intellectual Property Law Association.

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.

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There are currently 1 Comment comments. Join the discussion.

  1. Josh Malone July 15, 2020 10:35 am

    For inventors considering asserting their rights, here is the rubric:

    1. Inventor loses in real court -> Federal Circuit affirms
    2. Inventor wins in real court -> Federal Circuit remands
    3. Inventor loses at PTAB -> Federal Circuit affirms
    4. Inventor wins at PTAB -> Federal Circuit remands

    The secret to success is to hang on for several remands until the infringer surrenders.

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