ZyXEL Communications Corp. v. UNM Rainforest Innovations, Nos. 2022-2220, -2250 (Fed. Cir. (PTAB) July 22, 2024). Opinion by Dyk, joined by Prost and Stark.

UNMRI owns a patent that relates to methods for constructing frame structures in orthogonal frequency-division multiple access systems. ZyXEL filed an IPR petition arguing that claims 1-4, 6, and 7 were unpatentable as obvious over a combination of two references and that claim 8 was unpatentable as obvious over a different combination. The Board agreed with ZyXEL as to the obviousness of claims 1-4, 6, and 7 but declined to find claim 8 obvious.

During the proceedings, UNMRI moved to exclude the testimony of ZyXEL’s expert, but the Board denied the motion as untimely. UNMRI also filed a contingent motion to amend requesting that if claims 1-4, 6, and 7 were found to be unpatentable, those claims should be canceled and new claims should be substituted. ZyXEL opposed the motion, arguing that the new claims lacked written description support. After several procedural steps, the Board ultimately granted the motion to amend.

ZyXEL appealed the Board’s decision to grant the motion to amend and the Board’s decision finding claim 8 nonobvious. UNMRI cross-appealed the Board’s finding that claims 1-4, 6, and 7 are unpatentable as obvious.

As to claims 1-4, 6, and 7, UNMRI argued that the Board erroneously refused to exclude testimony by ZyXEL’s expert, who had adopted the expert report prepared by another expert in an earlier proceeding and had “simply signed his name to” it. The Board concluded that the objection to the expert report was untimely, but UNMRI contended that it only learned of the issue during the expert’s deposition and therefore could not object earlier. The Board also concluded that it would have denied the motion on the merits even if it had been timely. The Federal Circuit saw no abuse of discretion or error by the Board.

On the merits, UNMRI argued that skilled artisans would not know how to combine the cited references. The Federal Circuit disagreed, ruling that substantial evidence, including testimony by ZyXEL’s expert, supported the Board’s findings.

Turning to claim 8, which “is nearly identical to claim 1,” the Federal Circuit reversed the finding of nonobviousness: “The Board’s determination is not supported by substantial evidence, and the record supports only a conclusion of obviousness.” The court explained that “a prior art reference does not need to explicitly articulate or express why its teachings are beneficial so long as its teachings are beneficial and a [skilled artisan] would recognize that their application was beneficial.” The Federal Circuit ruled that the cited prior art met that standard, and “there is no contrary evidence.”

As for UNMRI’s motion to amend, ZyXEL argued that the Board erred by permitting UNMRI to use its reply brief to supplement the written description support that should have been, but was not, included in the original motion to amend. The Federal Circuit saw no issue: “Even if allowing the reply brief to supply the missing information had been inconsistent with the regulations, we conclude that any error was harmless error” because ZyXEL was not prejudiced. “ZyXEL was on notice of the written description arguments and had ample opportunity to respond in its sur-reply.”

In the end, the Federal Circuit remanded to the Board to determine whether, in light of the unpatentability of claim 8 (along with the affirmed unpatentability of claims 1-4, 6, and 7), collateral estoppel should apply and the substitute claims should be deemed unpatentable. The court noted that “the Board may also wish to consider if the substitute claims are unpatentable as obvious on a new ground”—a combination of all three references cited for the unpatentability determinations.

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SoftView LLC v. Apple Inc., et al., Nos. 2023-1005, -1007 (Fed. Cir. (PTAB) July 26, 2024). Opinion by Bryson, joined by Lourie and Reyna.

SoftView owns a patent directed to displaying internet content on mobile devices. Apple filed a request for inter partes reexamination, and later filed a separate request for ex parte reexamination. Motorola also filed a request for inter partes reexamination. Meanwhile, Kyocera filed an IPR petition, and the Patent Trial and Appeal Board decided to stay all the reexamination proceedings pending the outcome of the IPR proceeding.

The Board then issued a final written decision in the IPR finding all challenged claims unpatentable, and the Federal Circuit affirmed. The Board subsequently lifted the stay of the reexamination proceedings, and SoftView amended the claims of the patent, which were then found patentable over the prior art.

In the inter partes reexaminations, the examiner found most of the claims unpatentable over the prior art. The Board reversed the examiner’s rejections but entered a new ground of rejection as to all pending claims based on 37 C.F.R. § 42.73(d)(3)(i), which prohibits a patent owner from obtaining patent claims that are “not patentably distinct from a finally refused or canceled claim.” The Board found that each claim was either essentially the same as a canceled claim or merely a combination of limitations that had previously been invalidated on obviousness grounds in the IPR. Thus, the Board held that the claims were not “patentably distinct” from those that had been invalidated in the IPR. SoftView appealed.

On appeal, SoftView challenged the Board’s interpretation of “patentably distinct” in § 42.73(d)(3)(i), which applied the term’s established meaning in double-patenting and interference contexts. According to the Federal Circuit, “SoftView’s core complaint is that the Board applied estoppel based on the IPR decision canceling claims from the [SoftView] patent rather than comparing the claims before it to the prior art. As to that issue, however, the plain text of the regulation unambiguously supports the Board’s action.”

The Federal Circuit then examined whether the Board’s action was lawful, which “depends on whether the PTO had statutory authority to issue the regulation.” On that point, the Federal Circuit ruled that § 42.73(d)(3) “was lawfully promulgated pursuant to the agency’s rulemaking authority under section 316(a)(4) of the Patent Act.”

Although the Federal Circuit agreed that the PTO was authorized to promulgate the regulation, the court disagreed with the Board’s application of the regulation to previously issued claims. “By its terms, the regulation applies to ‘obtaining’ a claim—not maintaining an existing claim.” Thus, the Federal Circuit vacated the Board’s decision as to the issued claims on appeal but affirmed its application of the regulation to the amended claims.

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