IP Law Daily PTAB failed to adequately explain obviousness determination
Tuesday, February 14, 2017

PTAB failed to adequately explain obviousness determination

By Peter Reap, J.D., LL.M.

Although the Patent Trial and Appeal Board correctly construed the challenged terms of Personal Web Technologies, LLC’s patent for locating and accessing data, the Board did not adequately support its findings that the prior art disclosed all elements of the challenged claims and that a relevant skilled artisan would have had a motivation to combine the prior-art references to produce the claimed ’310 inventions with a reasonable expectation of success, the U.S. Court of Appeals for the Federal Circuit has decided. Thus, the Board’s obviousness determination of the challenged claims of the patent, that Apple had petitioned for inter partes review of, was vacated, and the case remanded for further proceedings (Personal Web Technologies, LLC v. Apple, Inc., February 14, 2017, Taranto, R.).

PersonalWeb’s U.S. Patent No. 7,802,310 describes and claims methods (or devices for carrying out methods) of locating data and controlling access to data by giving a data file a substantially unique name that depends on the file’s content—a so-called "True Name." The patent describes generating a True Name using mathematical algorithms (called "hash functions" in the abstract and some claims) that use contents of the file to generate a comparatively small-size identifier for the file. As relevant here, the patent calls for comparing that name with a plurality of theorized to access the data, and providing or denying access to the data based on that determination.

Apple petitioned for inter partes review of claims 24, 32, 70, 81, 82, and 86, arguing unpatentability, under 35 U.S.C. § 103, for obviousness based on a combination of the Woodhill reference (U.S. Patent No. 5,649,196) and the Stefik reference (U.S. Patent No. 7,359,881). Woodhill focuses on a system for backing up or restoring data. Stefik focuses on a system for managing rights to access data.

On March 25, 2015, after conducting the review, the Board issued its Final Written Decision, holding claims 24, 32, 70, 81, 82, and 86 unpatentable as obvious based on a combination of the Woodhill and Stefik references. Personal Web appealed the Final Written Decision, under 35 U.S.C. §§ 141(c), 319, except as to claim 70.

Claim construction. Personal Web challenged the Board’s construction of the claim terms "content-dependent name," "content-based identifier," and "digital identifier." The appellate court used the term "content-based identifier" to refer to all of those terms, since no issue turned on any differences among them. Citing the broadest-reasonable-interpretation standard, the Board construed the terms to mean "an identifier for a data item being based, at least in part, on a given function of at least some of the bits in the particular sequence of bits of the particular data item." PersonalWeb argued that the terms require the identifier to rely on "‘all of the data in the data item.’"

Claim construction is a legal issue reviewed de novo, based on underlying factual findings that are reviewed for substantial evidence, the court noted. Here, the meaning of the language was plain from the face of the claims. The content-based identifier need not be generated from "all" of the information in a data item, the court determined.

In claim 24, for example, the content-dependent name is "based, at least in part, on at least a function of the data in the particular data item" and "the data used by the function to determine the content-dependent name comprises at least some of the contents of the particular data item." The "at least some" language is mirrored in the other independent claims containing the claim terms at issue. The "at least some" language makes it impossible to interpret the terms at issue to require use of "all" of the data, the court explained. And the absence of the argued "all" requirement in the terms at issue is further confirmed by the patent’s addition of such a requirement, through additional language, in dependent claim 32.

Thus, the appellate court affirmed the Board’s claim construction. PersonalWeb did not deny that Woodhill discloses the required content-based identifier under the Board’s construction.

Obviousness. Under the obviousness theory presented by Apple and adopted by the Board, the Board had to make findings, supported by evidence and explanation, on two points. First, the Board had to find in Woodhill and Stefik all of the elements of the ’310 patent claims at issue. Second, the Board had to find that a person of ordinary skill in the art would have been motivated to combine the prior art in the way claimed by the ’310 patent claims at issue and had a reasonable expectation of success in doing so.

Review of the Board is rooted not just in the law of obviousness but in basic principles of administrative law, the court observed. The Board’s IPR decisions are reviewed to ensure that they are not "arbitrary, capricious, an abuse of discretion, . . . otherwise not in accordance with law . . . [or] unsupported by substantial evidence." 5 U.S.C. § 706(2)(A), (E). Critically, in order to "allow effective judicial review, . . . the agency is obligated to ‘provide an administrative record showing the evidence on which the findings are based, accompanied by the agency’s reasoning in reaching its conclusions.’" Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 1309, 1322 (Fed. Cir. 2016).

The Board’s decision here was inadequate, the court held. The Board did not sufficiently explain and support the conclusions that (1) Woodhill and Stefik disclose all of the elements recited in the challenged claims of the ’310 patent and (2) a relevant skilled artisan would have been motivated to combine Woodhill and Stefik in the way the ’310 patent claims and reasonably expected success.

For example, claim 24 requires "causing the content-dependent name of the particular data item to be compared to a plurality of values." The Board found this element satisfied. That discussion, however, mentioned only Stefik, not Woodhill, and yet Apple made it clear that it relied solely on Woodhill as disclosing this claim element. The Board’s discussion did not cite, let alone explain or analyze or adopt, an earlier portion of Apple’s petition that referred to part of column 17 of Woodhill, the court noted.

The Board’s reasoning was also deficient in its finding that a relevant skilled artisan would have had a motivation to combine Woodhill and Stefik in the way claimed in the ’310 patent claims at issue and would have had a reasonable expectation of success in doing so. The Board’s most substantial discussion of this issue merely agreed with Apple’s contention that "a person of ordinary skill in the art reading Woodhill and Stefik would have understood that the combination of Woodhill and Stefik would have allowed for the selective access features of Stefik to be used with Woodhill’s content-dependent identifiers feature." But that reasoning seemed to say no more than that a skilled artisan, once presented with the two references, would have understood that they could be combined. And that was not enough: it did not imply a motivation to pick out those two references and combine them to arrive at the claimed invention, the court reasoned.

Therefore, the Board’s reasoning did not meet the requirements for a sustainable obviousness determination in this case. The court did not address whether the Board’s ultimate obviousness determination would be permissible, or should be made, on this record. Such issues were left for the Board to consider on remand. The case was remanded for the Board to reconsider the merits of the obviousness challenge, within proper procedural constraints, the court said.

The case is No. 2016-1174.

Attorneys: Lawrence Milton Hadley (McKool Smith Hennigan, PC) for Personal Web Technologies, LLC. Michael Jay (Boies, Schiller & Flexner LLP) for Apple, Inc. Joseph Matal, USPTO, for Michelle K. Lee.

Companies: Personal Web Technologies, LLC; Apple, Inc.

MainStory: TopStory Patent TechnologyInternet FedCirNews

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