By Thomas Long, J.D.
The Board erroneously relied on conclusory expert testimony in finding a motivation to combine prior art to arrive at the invention of two related patents for a system that lowered the peak-to-average power ratio of transmitted signals.
Fact findings underlying a Patent Trial and Appeal Board decision invalidating all claims of two related patents directed to improvements to electronic communications systems were not supported by substantial evidence, according to the U.S. Court of Appeals for the Federal Circuit. The court reversed the Board’s determination the challenged patents’ claims would have been obvious in view of the prior art. In particular, the court determined that there was a lack of evidence regarding a skilled artisan’s motivation to combine two prior art patents to arrive at the invention at issue. The Board’s factual finding was based, the court said, on conclusory expert testimony that did not support the Board’s conclusion regarding obviousness (TQ Delta, LLC v. Cisco Systems, Inc., November 22, 2019, Stoll, K.).
Patents at issue. The patents at issue, U.S. Patent Nos. 9,014,243 and 8,718,158, were held by TQ Delta, LLC. Both related to certain improvements to electronic communications systems that lower the peak-to-average power ratio (PAR) of the transmitted signals. PAR is the ratio of the maximum value of a parameter (such as voltage) to the time-averaged value of that parameter. Lowering a communications system’s PAR reduces power consumption and the likelihood of transmission errors. The patents addressed a PAR problem that arises with multicarrier communications systems, such as digital subscriber line (DSL) systems, when carriers are combined into a single signal for transmission of the data, sometimes causing transmitted bits to sum to create multicarrier waveforms with a high amplitude. High amplitude waves require costly equipment to deal with them and present a risk of "clipping," a phenomenon in which the peak of the transmitted signal is truncated at the maximum range of the equipment, leading to transmission failure and potential data loss. The invention of the patents at issue reduced PAR by "scrambling" the phases of the parallel carriers such that the carriers will not peak at the same time, even if the transmitted bits have mostly the same value. The challenged patents disclosed a variety of scrambling algorithms that shift the phase of each carrier by some independent amount, thereby reducing PAR.
Inter partes review. Cisco Systems, Inc., and other parties (telecommunications companies that TQ Delta had sued for infringing the patents at issue) sought inter partes review (IPR) of the patents. The Board instituted review in two separate proceedings and ultimately invalidated all claims as obvious in view of various prior art combinations that included the two references at issue on appeal, U.S. Patent Nos. 6,144,696 (Shively) and 6,625,219 (Stopler). TQ Delta appealed.
Prior art. Shively—the primary prior art reference cited by Cisco in the IPRs—was directed to an improvement to the use of "Discrete Multitone Modulation" (DMT) by DSL modems—the same field of technology at issue in the challenged patents. Generally, DMT involves independently modulating each carrier in a multicarrier communications system in accordance with assigned bits, and then combining the carriers for transmission of the data. However, the court noted that Shively addressed a different problem from the challenged patents: how to increase transmission capacity by efficiently allocating bits across the various carriers in long-loop systems. Shively increased data throughput by utilizing carriers in combination that would each be inadequate to transmit data independently. In addition, Shively did not discuss PAR or clipping.
Stopler—the secondary prior art reference asserted by Cisco—was also directed to digital data communication systems, including DMT, but it was focused on a different problem: improving the efficiency of transmission by mitigating noise and other interference. Stopler disclosed a "diagonalization" scheme for interleaving the assignment of bits across the various carriers over time, mitigating the effect of interference by spreading its impact across different carriers. Like Shively, Stopler never mentioned PAR or clipping. Stopler did briefly mention phase scrambling, but did so in a different manner than the challenged patents.
Obviousness—lack of substantial evidence. In reviewing the Board’s decisions, the court focused on the Board’s factfinding regarding the motivation to combine the cited prior art. The court explained that the "substantial evidence" standard asked "whether a reasonable fact finder could have arrived at the agency’s decision," and involved "examination of the record as a whole, taking into account evidence that both justifies and detracts from an agency’s decision." Conclusory expert testimony does not qualify as substantial evidence. Rather, the legal conclusion of obviousness must be supported by articulated reasoning with some rational underpinning. This requirement is rooted in the due process considerations embodied in the Administrative Procedure Act, as well as the language of Section 103 of the Patent Act.
The Federal Circuit held that the Board’s factfinding was based on conclusory testimony and was therefore unsupported by substantial evidence. In the IPR proceedings, the Board adopted Cisco’s evidence and argument on the issue. Cisco had relied on certain disclosures in Stopler and the declaration of its expert, Dr. Tellado. The Board relied on two paragraphs in Cisco’s petition to conclude that Stopler disclosed the use of phase scrambling as a solution to reduce the PAR of Shively; those two paragraphs were based on two paragraphs in Dr. Tellado’s declaration and two sentences of Stopler. The cited passage of Stopler did not expressly discuss and was not connected to the PAR of a multicarrier transmitter, said the court. Dr. Tellado offered only unsupported and conclusory statements that a 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. The expert stated, without providing evidentiary support, that that the combination "would have been a relatively simple and obvious solution to reduce Shively’s PAR." In the court’s view, Dr. Tellado failed to provide any meaningful explanation for why one of ordinary skill in the art would be motivated to combine Shively and Stopler at the time of the invention. His statements thus were inadequate to support the Board’s factfinding regarding motivation to combine. Because the Board identified no other evidence on the issue, the Board’s factual determination on this point was unsupported by substantial evidence, and the court reversed the Board’s obviousness determination.
Attorneys: Richard W. Bobholz (Law Plus Plus) for David Siler and Distinctive Human Resources, Inc. Joseph R. Pellington (Redding Jones, PLLC) for Elga Lejarza a/k/a Elga Lejarza-Penn, Michael Penn and Lejarza Compliance Trainings LLC.
Companies: Distinctive Human Resources, Inc.; Lejarza Compliance Trainings LLC
MainStory: TopStory Patent FedCirNews
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