By Brian Craig, J.D.
The Board erred in refusing to consider Apple’s reply brief arguments addressing a prior art reference.
Concluding that the Patent Trial and Appeal Board improperly refused to consider arguments asserted by Apple Inc. in challenging the validity of a patent for digital audio process in an inter partes review, the U.S. Court of Appeals for the Federal Circuit has reversed, in part, the Board’s decision. The Federal Circuit found that the Board abused its discretion when it found that Apple’s reply brief constituted an impermissible new matter where Apple did not cite any new evidence. The Federal Circuit held that is unreasonable to hold a party to such a high standard that, if they choose to rely on one example of an algorithm, they must either discuss all potential permutations of the variables or risk waiving the opportunity to further discuss other relevant examples in their reply. The Federal Circuit found, however, that substantial evidence supported the Board’s claim construction and analysis concerning anticipation and obviousness (Apple Inc. v. Andrea Electronics Corp., February 7, 2020, Plager, S.).
Andrea Electronics Corporation owns U.S. Patent No. 6,363,345 ("the ’345 patent"), which relates to certain aspects of digital audio processing. In 2016, Andrea sued Apple alleging infringement of the ’345 patent. On January 9, 2017, Apple filed two inter partes review (IPR) petitions—the ’626 IPR and ’627 IPR—with the USPTO challenging the validity of certain claims of the patent. The Board consolidated the proceedings. In its ’626 IPR final decision, the Board concluded that, in light of the prior art cited by Apple, all challenged claims except certain claims of the ’345 patent are unpatentable. In the course of reaching that conclusion, the Board declined to consider certain arguments in Apple’s reply brief on the ground that Apple was raising new arguments in its reply brief that were not entitled to consideration at that late stage in the proceedings. In its ’627 IPR decision, the Board affirmed the validity of certain claims in the patent. Apple appealed the Board’s decisions.
New arguments in reply brief. The Federal Circuit held that the Board abused its discretion when it found that Apple’s reply brief constituted new arguments. The Federal Circuit reviewed other cases where it held that the Board reasonably determined that the reply declaration raised a new argument that was not otherwise addressed in the petition. The Board may reject arguments in a reply brief that raise a new theory of unpatentability.
The Federal Circuit distinguished other cases where parties raised new theories of unpatentability in the reply brief. Here, the Federal Circuit found that Apple’s reply did not cite any new evidence or unidentified portions of the prior art reference. Apple’s reply brief merely demonstrated another example of the same algorithm to further explain why the prior art reference discloses the limitations in the claims. The Board parsed Apple’s arguments on reply with "too fine of a filter." The Federal Circuit held that it is unreasonable to hold parties to such a high standard that, if they choose to rely on one example of an algorithm, they must either discuss all potential permutations of the variables or risk waiving the opportunity to further discuss other relevant examples in their reply. Because the Board improperly failed to consider Apple’s arguments in its reply brief, the Federal Circuit reversed, in part, the Board’s decision in ’626 IPR decision.
Claim construction. The Federal Circuit found, however, that substantial evidence supported the Board’s claim construction in the ’626 IPR decision. Subsidiary factual findings are reviewed for substantial evidence. Apple argued that the Board erred because it did not construe "periodically" to also mean "from time to time." The Federal Circuit concluded that the ’345 patent’s written description and the claim language support a construction of "periodically" as "at regular intervals of time" and not "from time to time." The appeals court also found substantial evidence supported the finding that a person skilled in the art would have understood the term to be limited to "at regular intervals of time." Therefore, the Board did not err in its construction of the "periodically" term.
Anticipation and obviousness. Finally, the Federal Circuit held that the Board did not err in its analysis that the patent claims are anticipated or would have been obvious. Anticipation is a question of fact that the court reviews for substantial evidence. The Federal Circuit found that substantial evidence supported the Board’s anticipation and obviousness analysis. The court declined to read a strained interpretation of the prior art so as to obviate the claimed limitation. Having determined that substantial evidence supported the Board’s finding that a person skilled in the art would not have been motivated to combine prior art references so as to modify the running minimum estimator by adding updates to the background noise estimate, the Federal Circuit concluded that a prior art reference, in combination with another prior art reference, does not render obvious the "periodically" limitation, as required by certain claims of the ’345 patent. Accordingly, the Board affirmed the Board’s findings in the ’627 IPR decision.
This case is No. 18-2382.
Attorneys: Jeffrey Paul Kushan (Sidley Austin LLP) for Apple Inc. William D. Belanger (Pepper Hamilton LLP) for Andrea Electronics Corp.
Companies: Apple Inc.; Andrea Electronics Corp.
MainStory: TopStory Patent FedCirNews
Interested in submitting an article?
Submit your information to us today!Learn More
IP Law Daily: Breaking legal news at your fingertips
Sign up today for your free trial to this daily reporting service created by attorneys, for attorneys. Stay up to date on intellectual property legal matters with same-day coverage of breaking news, court decisions, legislation, and regulatory activity with easy access through email or mobile app.