USPTO issues two precedential decisions on inter partes review and prior art
- December 11, 2019
- Posted by: Shazi Jiang
- Category: Blog
The United States Court of Appeals for the Federal Circuit (“CAFC” or “Federal Circuit”) recently issued two precedential decisions on obviousness in the context of inter partes review (“IPR”) proceedings. In both cases, the PTAB’s determination of obviousness was reversed at the Federal Circuit for insufficiency of evidence. Both cases illustrate that, in order for the USPTO to carry its burden of proof, it must find a motivation to combine the prior art elements in the prior art.
I. Case 1: In re IPR Licensing, Inc., Appeal No. 2018-1805 (Fed. Cir., Nov. 22, 2019).
A. Claims at issue
This case involved an IPR filed by ZTE Corporation (ZTE) against U.S. Patent 8,380,244 owned by IPR Licensing, Inc. (IPRL). The ‘244 patent generally claims a mobile device that automatically connects to the best available wireless network (either cellular or wireless local area network). Only claim 8 was at issue, which states as follows:
8. A subscriber unit comprising:
a cellular transceiver configured to communicate with a cellular wireless network via a plurality of assigned physical channels;
an IEEE 802.11 transceiver configured to communicate with an IEEE 802.11 wireless local area network; and
a processor configured to maintain a communication session with the cellular wireless network in an absence of the plurality of assigned physical channels while the IEEE 802.11 transceiver communicates packet data with the IEEE 802.11 wireless local area network, wherein the cellular wireless network is a code division multiple access (CDMA) wireless network, and the cellular transceiver is a cellular code division multiple access (CDMA) transceiver.1
“CDMA2” is one of two different methods of connecting to a cellular network discussed in the ‘244 Patent, the other being “TDMA3.”
B. Procedural history
ZTE requested IPR on three different combinations of prior art:
- A combination of Jawanda4, GPRS5, and IEEE 802.116;
- A combination of Lemiläinen7, GPRS, and IEEE 802.11; and
- Lemiläinen and UMTS.
The IPR was instituted on Ground #1. Grounds 2 and 3 were denied institution based on redundancy. The Board found all claims (including claim 8) to be obvious on the basis of ground 1. With respect to claim 8, the Board found that:
- Jawanda taught a “mobile terminal” that connects to both cellular and wireless networks, automatically determines which has the highest bandwidth, and “seamlessly hands-off data transmission to the faster connection,” but did not teach “maintain[ing] a communication session with the cellular wireless network in an absence of the plurality of assigned physical channels;”
- Jawanda taught that the cellular connection method could be either CDMA or TDMA; and
- the GPRS reference includes a feature that read on the missing feature of Jawanda.
IPRL argued that it would not be obvious to combine Jawanda with GPRS to arrive at claim 8, because the feature from the GPRS reference was specific to a TDMA system and Jawanda taught TDMA as an alternative to CDMA. The Board argued that the combination was obvious because: (a) CDMA was mentioned by Jawanda, and (b) the feature was eventually incorporated into a later version of CDMA.
IPRL appealed to the CAFC, which found that the Board lacked substantial evidence to support its claim that it would be obvious to include a feature from a TDMA system into a CDMA system. The Court held that, just because Jawanda taught that CDMA and TDMA as alternatives did not mean that a PHOSITA would be motivated to modify either standard with a reasonable expectation of success. Additionally, the mere fact that the feature of was eventually incorporated into a later version of CDMA does not mean that at the time of filing a person of ordinary skill in the art would have had a motivation to do so. Therefore, the CAFC vacated the decision and remanded solely to determine whether there was substantial evidence of record to support a motivation to incorporate the feature of GPRS into a CDMA system.
On remand, the Board again found the claim obvious. This time, the Board argued that the prior art recognized a problem of “mobile devices frequently switching between networks” and that solutions (such as the feature of the GPRS reference) were known, even in CDMA systems. This new line of argument was based on the UMTS reference, which was a part of Ground 3, not Ground 1. IPRL again appealed.
C. Decision on appeal
IPRL’s principal argument was that the Board improperly relied on the UMTS reference because it was not a part of Ground 1, the only ground of rejection instituted. The CAFC agreed. According to the Court, “the 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.” In this case, ZTE never relied upon UMTS for this ground of rejection, and IPRL has never had an opportunity to respond. Therefore, it was improper for the Board to rely on the non-instituted ground for its rejection. The decision was reversed, because no evidence of record on the instituted ground established that at the time of invention a PHOSITA would have a motivation to include a component of a TDMA system (such as that taught by GPRS) into a CDMA system (such as that taught by Jawanda).
II. Case 2: TQ Delta, LLC v. Cisco Sys., Inc., Appeal No. 2018-1766, 2018-1767 (Fed. Cir., Nov. 22, 2019).
A. Claims at issue
The claims at issue relate generally to methods of transmitting digital data using so called “multicarrier communications systems.” Multiple bits are simultaneously transmitted across a series of narrow frequency bands called “carriers.” Each carrier is independently modulated according to its bit and a single multicarrier signal is generated for transmission of data.
In particular, the patents claim various algorithms for reducing the peak-to-average power ratio (PAR) of the transmitted signals. This is done to “reduce power consumption and the likelihood of transmission errors.” Id. at 3. However, when the carriers are combined, they occasionally develop “clipping events,” in which the amplitude of the combined signal exceeds the maximum range of the receiving instrument, which results in lost data. These clipping events can be reduced by lowering the peak-to-average power ratio (PAR) of the transmitted signals. The inventions underpinning the challenged claims relate to a new method of lowering PAR by “scrambling” the phases of the parallel carriers such that the carriers will not peak at the same time. The claims all relate to various algorithms for scrambling the carriers.
B. Procedural history
The Board found the claims to all be obvious based on a combination of Shively8 and Stopler9 in view of various other references. Both references are directed to distinct problems in the art: Shively is directed to “how to increase transmission capacity by efficiently allocating bits across the various carriers in long-loop systems,” and Stopler is directed to “improving the efficiency of transmission by mitigating noise and other interference.” Neither reference teaches or suggests PAR. However, Stopler mentions “applying its phase scrambler to all of the transmitted data.” Nonetheless, Cisco’s expert opined that “Stopler provides a solution for reducing the PAR of a multicarrier transmitter” and that “Combining Stopler’s phase scrambler into Shively’s transmitter would have been a relatively simple and obvious solution to reduce Shively’s PAR.” The Board, relying on the statements of Cisco’s expert, held the claims to obvious. TQ Delta appealed.
C. Decision on appeal
The CAFC reversed, finding no evidence in either Shively or Stopler to support a conclusion that a PHOSITA would recognize phase scrambling as a solution to PAR problems as described in the claim. The Court noted that the only teaching of phase scrambling in Stopler “provides no express discussion of, nor any connection to, the PAR of a multicarrier transmitter,” and that Cisco’s expert “offers only unsupported and conclusory statements asserting that an ordinarily skilled artisan at the time of the invention would have been motivated to apply the randomization disclosed in Stopler as a means to reduce PAR in Shively.” In particular, the CAFC criticized the expert declaration for “fail[ing] to provide any meaningful explanation for why one of ordinary skill in the art would be motivated to combine these references at the time of this invention.” The Court thus held that the expert’s “conclusory statements and unspecific expert testimony are . . . inadequate to support the Board’s factfinding regarding motivation to combine.”
III. Take home message
In both cases, the Court emphasized that, just like other elements of the claims, the motivation to combine prior art references must be supported by substantial evidence, and that the evidence must demonstrate what the PHOSITA’s motivation would have been at the time of invention.
For IPR petitioners, these cases underscore the importance of including in the petition prior art references that demonstrate a motivation to combine the other references. Where specific problems are known in the art that could form a basis to argue motivation, make sure to have a reference to support that fact. Likewise, do not gloss over dependent claims. Having strong arguments and documentary support for obviousness of critical dependent claims at the petition stage will not only strengthen your petition, it will also help appeal-proof final Board decisions. While expert declarations are critical components of establishing the motivation to combine, they should supplement, instead of replace, the evidence from the prior art. Conclusory statements from the expert are likely to discounted, or outright ignored, by the CAFC.
On the other hand, these cases shows how important it is to insist that the petitioner provide documentary support for the motivation to combine. Given that Board determinations are reviewed for whether or not the determination is supported by substantial evidence, the chances of a decision being reversed goes up if you can show that documentary support for the motivation to combine is lacking. Attacking conclusory and/or sparsely supported statements in expert declarations is a good place to start.
For patent drafters, this case illustrates the importance of having a solid sets of dependent claims and good explanations of problems addressed by the claims. Knowing the landscape in which the invention is likely to be practiced will help identify those claims that could help differentiate your invention from the prior art. And knowing the problems that the inventors were addressing will help to clarify various elements that could be introduced into the claims to help identify the significance of prior art elements that are included in the claims.
- Claim 8 depends from claim 1. The language of claim 8 is in bold italics.
- CDMA refers to “Code Division Multiple Access,” a method of connecting multiple mobile devices to a single cellular network.
- TDMA refers to “Time Division Multiple Access,” an alternative to CDMA.
- U.S. Patent No. 6,243,581
- General Packet Radio Service Standards
- Institute of Electrical and Electronics Engineers 802.11 Standard
- U.S. Patent No. 6,681,259
- US 6,144,696
- US 6,625,219