IP Law Daily PTAB’s anticipation rulings affirmed, non-obviousness findings reversed, in appeal involving patents on network-session transfers
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Tuesday, December 5, 2017

PTAB’s anticipation rulings affirmed, non-obviousness findings reversed, in appeal involving patents on network-session transfers

By Mark Engstrom, J.D.

In a consolidated review of the Patent Trial and Appeal Board’s rulings in three inter partes review (IPR) proceedings requested by DISH Network, Hulu, Iron Dome LLC, and other companies, the U.S. Court of Appeals for the Federal Circuit concluded that the Board did not err in finding that U.S. Patent No. 7,191,233—owned by CRFD Research and titled "System for automated, mid-session, user-directed, device-to-device session transfer system"—was anticipated by prior art. However, the Board failed to perform a proper obviousness analysis and it "misread" a prior art reference. According to the Federal Circuit, those deficiencies caused the Board to err in its non-obviousness findings on multiple patent claims. The court thus affirmed the anticipation rulings and reversed the non-obviousness rulings (CRFD Research, Inc. v. Matal, December 5, 2017, O’Malley, K.).

CRFD Research owned a patent that pertained to "session management in a distributed computer network." The invention allowed users to direct the transfer of a software-based computer session from one device to another. More specifically, it described methods and systems that allowed users to begin a network session on one communication-enabled device—such as a mobile phone or desktop computer—and transfer that session to another device.

Iron Dome review. CRFD challenged the Board’s final written decision in the "Iron Dome" review in two ways: it argued that: (1) claim one of the ’233 patent was not anticipated by the "Phan San Jose" reference (Thomas Phan et al., "A New TWIST on Mobile Computing: TwoWay Interactive Session Transfer" in the Proceedings of the Second IEEE Workshop on Internet Applications (2001)) and (2) claims 4–6 and 8–11 would not have been obvious over Phan San Jose in combination with "Phan Helsinki" (Thomas Phan et al., "Handoff of Application Sessions Across Time and Space" in volume 5 of the IEEE International Conference on Communications (2001)). The court rejected both challenges.

According to CRFD, Phan San Jose did not anticipate claim one because its "pull" mode did not teach "specifying a second device." Nothing in Phan San Jose described "specifying" as part of a second device’s retrieval of session history from middleware servers (MWS), CRFD argued, and to anticipate claim one, Phan San Jose needed "more detail about the reinstantiation process."

The court disagreed. Claim one merely required "specifying a second device," which was a broad limitation. Significantly, the claim did not restrict "specifying" to a particular user or device. In addition, CRFD had admitted that a user or other entity could specify the second step, and according to the Board’s uncontested claim construction, the specifying step did not need to occur before the first session was discontinued, meaning that a user could specify a second device—or a second device could specify itself—after the first session had been discontinued and the session history had been transferred to the MWS.

CRFD never explained why the Board’s finding—that claim one did not prohibit a user from specifying a second device by taking action on the second device to resume the session—was erroneous, the court noted. Although it did argue that nothing in Phan San Jose described a user log-on action, it failed to explain how, under its own theory, the session history could be sent to the second device without a user or device "specifying" the second device by telling the MWS where to send the data.

The fundamental flaw in CRFD’s theory was that it failed to acknowledge that, in order for the session history to be transmitted to the second device, the MWS had to know the identity of that device. The fact that Phan San Jose did not provide the precise details of the identification process was inconsequential because identifying or "specifying" the second device was required for Phan San Jose’s operation.

Other challenges were similarly unavailing. In the court’s view, substantial evidence supported the Board’s conclusion that Phan San Jose taught all of steps of claim one.

Dish review. After the Board issued a final written decision in the DISH IPR, CRFD challenged the Board’s findings that four claims of the ’233 patent were anticipated by Phan Helsinki because that reference taught "specifying a second device" in the "pull" mode.

According to CRFD, the second device described in Phan Helsinki was identified based on the use of a user ID within the relevant client application, not by "specifying" a second device. Under that theory, CRFD argued that Phan Helsinki taught that any unspecified second device could resume a session in "pull" mode when the second device contacted the MWS through a user ID. Put another way, CRFD argued that Phan Helsinki did not teach or suggest that the user ID was associated with a particular device, such that the device could self-specify.

Again, the court disagreed. Substantial evidence supported the Board’s determination that Phan Helsinki anticipated the "specifying a second device" limitation, the court decided. Significantly, the Board found that Phan Helsinki taught the limitation through the user’s selection of a device on which to resume the session by taking action on that device, which caused the client application of the second device to communicate with the MWS to retrieve the session state. The Board also found that Phan Helsinki disclosed a second device that was specified when a user "logs on to or starts a new device to continue the session" (emphasis added by the court).

In the court’s view, the teachings of Phan Helsinki indicated that a user’s actions to resume a session on the second device "specif[ied]" that device to the MWS, as required by claims 1, 4, 23, and 25. The user’s selection of the device that would resume the session was the act of specifying. Because the claims did not limit who or what performed the "specifying" step, the court concluded that substantial evidence supported the Board’s conclusion that Phan Helsinki disclosed the specifying step. Finally, the testimony of CRFD’s expert and the arguments of CRFD’s attorney both supported the Board’s finding that the claims at issue were anticipated by Phan Helsinki.

Hulu review. Hulu appealed the Board’s finding that: (1) five patent claims were not anticipated by U.S. Patent No. 6,963,901 (Bates); (2) 16 claims would not have been obvious over Bates and Chan (Mun Choon Chan & Thomas Y. C. Woo, "NextGeneration Wireless Data Services: Architecture and Experience," IEEE Pers. Comm., Feb. 1999); (3) four claims would not have been obvious over Bates and Zou (Bo Zou, "Mobile ID Protocol: A Badge-Activated Application Level Handoff of a Multimedia Streaming to Support User Mobility" (2000), M.S. thesis, University of Illinois at Urbana-Champaign); and (4) ten claims would not have been obvious over Bates, Zou, and Chan.

The Board found that Hulu had not shown by a preponderance of the evidence that the challenged claims were unpatentable as obvious. However, the Federal Circuit ruled that the Board had erred in two ways: (1) how it performed the obviousness analysis and (2) the merits of its non-obviousness determination. Because the Board failed to perform a proper obviousness analysis and "misread" a prior art reference, the court thus reversed the findings of non-obviousness and declined to address the anticipation determination.

According to the court, the Board’s obviousness inquiry was tainted by a limited fact-finding effort (the Board had examined the level of ordinary skill in the art and then relied on its finding that Bates did not anticipate the challenged claims)—even though Hulu had raised separate arguments regarding the obviousness of some claims.

Anticipation was a question of fact, the court explained, whereas obviousness was a question of law that was based on factual findings. Moreover, the unenforceability and invalidity defenses that a defendant could raise (inequitable conduct, anticipation and loss of right under §102, and obviousness under §103) required different elements of proof. In the court’s view, the Board’s s findings on anticipation were insufficient, as a matter of law, to decide the obviousness inquiry.

Hulu also argued that, contrary to the Board’s rulings, it would have been obvious—based on Bates—to transmit session history after session discontinuation. Hulu had made that argument expressly, in its petition, and thereafter incorporated the argument into other grounds of unpatentability—Bates in view of Chan and Bates in view of Zou—by direct citation to the petition. Review had not been instituted for obviousness over Bates alone, the Board explained, because doing so would be redundant.

The court agreed with Hulu that the Board had erred because Hulu had expressly incorporated the asserted argument as part of other grounds of unpatentability, on which the Board had instituted a trial. Hulu relied solely on the teachings of Bates to satisfy the "transmitting" limitation for all asserted claims, the court explained, but the Board declined to institute review on Bates alone "for redundancy reasons." Instead, the Board instituted review on obviousness grounds that included the only reference—Bates—that was cited in that ground.

In the court’s view, barring Hulu from pressing an argument that Hulu had raised in a ground that was deemed "redundant"—an argument that was expressly incorporated into other proposed grounds of unpatentability, on which the Board had instituted trial—would unfairly prejudice Hulu and "raise questions about the propriety of the Board’s redundancy decision."

Ultimately, the obviousness analysis was controlled by the teachings and suggestions of Bates, the court explained, and the Board’s refusal to review the obviousness ground for Bates alone could "not control the breadth of the obviousness inquiry it took below."

Finally, Hulu successfully argued that the Board had misread the Bates reference when it concluded that the reference did not render the "transmitting" limitation obvious. According to the court, the Board’s failure to perform a proper obviousness analysis, and its misreading of the Bates reference, caused it to err in its obviousness determination. The court thus reversed the finding that Hulu did not show, by a preponderance of the evidence, that 30 claims of the ’233 patent were invalid as obvious. In the court’s view, sixteen claims would have been obvious over Bates and Chan, four claims would have been obvious over Bates and Zou, and ten claims would have been obvious over Bates, Zou, and Chan.

The case is Nos. 2016-2198, 2016-2298, and 2016-2437.

Attorneys: Tarek N. Fahmi (Ascenda Law Group, PC) for CRFD Research, Inc. Nathan K. Kelley, U.S. Patent and Trademark Office, for Joseph Matal.

Companies: CRFD Research, Inc.

MainStory: TopStory Patent TechnologyInternet FedCirNews

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