In an otherwise unremarkable albeit precedential decision, the Federal Circuit set forth an explication of when the Patent Trial and Appeal Board has, and has not, given the court enough information to determine whether its factual determinations are supported by substantial evidence. And in its decision handed down today in Icon Health & Fitness, Inc. v. Strava, Inc., Judge O'Malley provided a coda regarding when failure to provide such evidence should result in remand or reversal of the Board's decision.
The case arose from inter partes reexamination (under the American Inventor Protection Act of 1999, a predecessor to inter partes review under the Leahy–Smith America Invents Act of 2011) of U.S. Patent No. 7,789,800. The claims are directed to a portable system that permits a user to retrieve one or more exercise programs from a remote server that have motivational content during exercise. During the reexamination (Control No. 95/002,359), in response to allegations of unpatentability from the third party requestor and determinations by the PTO, a number of claims were found to be obvious. The PTAB affirmed this decision and patentee Icon Health appealed.
The Federal Circuit treated the rejected claims in five groups, affirming in part, vacating in part and remanding (which prompted Judge O'Malley to dissent in part). The Federal Circuit rejected Icon's argument that the Board erred in relying on Strava's expert's opinion that the claims were obvious, for overreaching by opining on questions of law (wherein the opinion "go[es] well beyond supplying opinions regarding factual matters by 'improperly opining as to the legal conclusion of obviousness'"). As an initial matter, the panel opinion considered whether this argument had been waived for (admittedly) not being asserted before the Board. Citing Automated Merch. Sys., Inc. v. Lee, 782 F.3d 1376, 1379 (Fed. Cir. 2015), the opinion sets forth the considerations courts use for deciding whether waiver applies, including whether (1) "the issue involves a pure question of law and refusal to consider it would result in a miscarriage of justice"; (2) "the proper resolution is beyond any doubt"; (3) "the appellant had no opportunity to raise the objection" below; (4) "the issue presents significant questions of general impact or of great public concern"; or (5) "the interest of substantial justice is at stake," as well as "whether the issue has been fully briefed, a party will be prejudiced by consideration of the issue, or no purpose will be served by remand." Balancing these factors the Court decided that "[b]ecause the issue has been fully briefed, the record is complete, there will be no prejudice to any party, and no purpose is served by remand," it would consider Icon's arguments even though they had not been advanced before the Board. On the merits, the Court held that the Board could rely on Strava's expert opinions because "the PTAB is permitted to weigh expert testimony and other record evidence and, in so doing, rely on certain portions of an expert's declaration while disregarding others." On the ultimate legal question of obviousness, the opinion noted that it has permitted expert testimony to include such statements ("it would have been obvious that") so long as the expert declaration contains statements in support of factual findings (saying an expert's evidence is considered "in the context of the whole declaration").
For those claims where the panel vacated and remanded, the Court held that either the Examiner or the Board or both failed to set forth the factual bases for deciding that the claims were obvious. Claims 57-62 and 65 are directed to a cradle having electrical contacts and a computing device to mate with the cradle. The panel agreed with Icon that the PTAB's decision was not supported by substantial evidence, because neither the Examiner nor the Board made factual findings to support an obviousness determination nor recited an explanation of how the facts supported the ultimate decision that the claims were obvious. The deficiency was not that the Board relied upon the Examiner's fact-findings but that those findings were based entirely upon attorney argument by Strava. Because "[a]ttorney argument is not evidence" (other than an admission) it could not support the Board's obviousness determination by substantial evidence. The panel came to a like result for claims 46 and 74, directed to embodiments comprising a microphone for a user voice-activated controller, as well as claims 98-100, directed to embodiments comprising an accelerometer.
Icon made similar arguments for Claim 86 (for embodiments where the cradle comprised a wireless interface), but the Court rejected them. For this claim, the Board incorporated factual findings that the Examiner had actually made, and for which the Court found an adequate evidentiary basis. Moreover, the Board also explained its decision to the Court's satisfaction on review. The Court came to a similar conclusion regarding claims 43 and 71, for embodiments comprising a virtual reality display. Finally, the panel also rejected Icon's allegations that one of the prior art references taught away from the claimed invention, and that the Board had improperly relied upon a written description argument to support rejection of these claims.
Judge O'Malley dissented in part based on the panel's decision to remand for further considerations. In her view (shared with Judge Newman, in In re Van Os, 844 F.3d 1359, 1362 (Fed. Cir. 2017)), the PTO (and PTAB) bear the burden of establishing unpatentability during examination (and reexamination). Failing to do so should not result in remand (essentially, giving the Office another bite at the invalidity apple), but in the Court reversing the Board and affirming the validity of claims 46, 57-62, 65, 7 and 98-100. This differing approach reflects the differences that can be understood based on whether inter partes reexamination is considered to involve the patentee and the Board (with the third party requestor providing counterpoint to the Board's deliberations) or whether the public interest should be a bigger factor in the outcome. Insofar as reexaminations and post-grant reviews generally are thought to be best used to ensure valid patents are granted by the PTO, procedural issues like those that concern Judges O'Malley and Newman are trumped by the importance of "getting it right." Thus, the Board should be permitted on remand to properly consider the evidence and come to the "correct" conclusion. This seems to be the view held by the Patent Office and the majority of the Federal Circuit. It is also likely shared by the Supreme Court in light of that Court's concerns with patenting improperly preventing the free use of technology and falling outside the bounds of limited "monopoly" just sufficient to promote progress according to the Founders' intent.
Icon Health & Fitness, Inc. v. Strava, Inc. (Fed. Cir. 2017)
Panel: Circuit Judges O'Malley, Reyna, and Wallach
Opinion by Circuit Judge Wallach; concurring-in-part and dissenting-in-part opinion by Circuit Judge O'Malley
