N OTE : This disposition is nonprecedential. 

# United States **Court of Appeals**  **for the Federal Circuit**

______________________ VIVINT, INC., Appellant

v.

ALARM.COM INC., Appellee

______________________

2017

- 2076

______________________ Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. IPR2015

- 01977.

______________________
Decided: July 26, 2018

______________________

R OBERT G REENE S TERNE , Sterne Kessler Goldstein & Fox, PLLC, Washington, DC, argued for appellant. Also represented by J ASON D ANIEL E ISENBERG , W ILLIAM H. M ILLIKEN

.

R ICHARD J. S TARK , Cravath Swaine & Moore LLP, New York, NY, argued for appellee. Also represented by D AVID P HILLIP E MERY , W ILLIAM M ANDIR , Sughrue Mion PLLC, Washington, DC; T EENA -A NN V. S ANKOORIKAL , Levine Lee LLP, New York, NY.VIVINT , INC

. v. ALARM

. COM INC

. 2

______________________
Before L OURIE , C HEN , and S TOLL , Circuit Judges.

L OURIE , Circuit Judge

. Vivint, Inc. (“Vivint ”) appeals from the final written decision of the United States Patent and Trademark Office Patent Trial and Appeal Board (“the Board”) in an inter partes review proceeding determining that claims 1– 9 , 14

– 18, and 22

– 38 of U.S. Patent 6,924,727 (“the ’727

p atent”) are unpatentable as obvious. See Alarm.com Inc. v. Vivint, Inc. , No. IPR2015

- 01977, 2017 WL 1096522, at *28 (P.T.A.B. Mar. 22, 2017) (“ Decision ”). Because the Board did not err in its decision, we affirm

. B ACKGROUND Vivint owns the ’727 patent di rected to a method that allows a user to remotely control electronic devices located in the user’s home

. See ’727 patent col. 1 ll. 7

– 9. A home

located electronic device may be “a microwave, a rice cooker, a refrigerator, lighting fixtures, an air conditioner, a video recorder, a gas leakage detection device, a water heater and so forth.” Id. col. 9 ll. 6

– 10. The user controls these devices from a terminal “ such as a portab le tel ephone, a notebook PC, and PDA.” Id. col

. 8 ll. 10

– 13. The ’72 7 patent discloses a system that supports different terminal models and uses the terminal’s model name to format the display according to the terminal’s display capabilities

. See id. co l. 8 ll. 10 –33 , col. 12 ll. 43

– 49, fig. 8.
To remotely control and monitor multiple home

located devices, prior art methods relied directly upon a home server

. See id. col. 2 ll. 27

– 43

. In order to support multiple tasks running in parallel, the home ser ver required high processing power , which result ed in high operating costs

. See id. The ’727 patent purports to improve up on the prior art by employ ing a home network management facility, which is interposed between theVIVINT , INC

. v. ALARM

. COM INC

. 3

terminal and the home server

. See id. col. 2 ll. 46

– 54. By leveraging the management facility, the home server can be a “simple server” where “large processing power” is not required. See i d. col. 3 ll. 17

– 28. Using the patented method , a user can thus turn on the air conditioning in hi s or her home using a portable telephone , for example

. See id. col. 19 l. 51

– col. 20 l. 14. To do this, t he terminal must first establish a connection to the home network management facility , and send its model name to retrieve the display format appropriate for the terminal’s display capabilities

. See i d. col. 14 ll. 44

– 65. Then, a fter t he user completes the authentication
process, the network management server in the manag ement facility transmits the status information of the home

- located devic e to the user’ s terminal, s ee id. col. 16 l. 56

– col. 17 l. 4, along with a menu of options for the user to select a different status, see id. col. 17 l. 47

– col. 18 l. 36. Once t he user selects a status

, the terminal sends a “decision signal” to the home n etwork management facil ity. Id. col. 19 ll. 61

– 65 , fig. 11 item Sa17. Next, a “mod ified status information” corresponding to the decision signal is added to the decision signal , resulting in a “co ntrol instruction,” which is ultimately transmitted to the home server

. See id. col. 19 l. 6 6– col. 20 l. 5, fig. 11 items Sa18, Sa19. The home server then “executes [the] driver software of the home

- located electronic device [] ” based on the user’s selection

. See id. col. 20 ll. 6

– 13

. This cause s the air condi tioner to switch to the “ON” position. See id. col. 20 ll. 13

– 15

. Independent claim 1 is representative and reads as follows:

1. A method for remote control of home

- located elec tronic devices, comprising the steps of:

receiving, at a management facility, fro m a te r minal via a network, a request signal and aVIVINT , INC

. v. ALARM

. COM INC

. 4

terminal identifier that identifies said term inal ; identifying, in said managing facility a server, said server being identified by a server ident ifi er that corresponds to said terminal identifier;
obtai ning, in said management facility, from said server via said network, status info rmation and said server identifier, said status info r mation indicative of the status of home

located electronic devices controlled by said

server; generating display information for said term inal dependent upon the performance of said
term i nal, wherein said display i n formation i ncludes the status of said home

- located ele ctronic devi c es based on said status information and a prompt for input of a co ntrol instruction for said home

- located electro nic devices, said te r minal being identified by said terminal identifier, said terminal ident ifier corr e sponding to said server identifier; transmitting said display information from said management facility to said terminal;
displaying, with said terminal, a screen sho wing the status of said home

- located electronic devi c es and a screen to prompt for input of a control instruction of said home

- located ele ctronic d e vices on the b a sis of the received di splay info r mation;

transmi tting, by said terminal, said te r minal identifier and first control info r mation ; generating, by said management facility, second control information that directs said ser v-VIVINT , INC

. v. ALARM

. COM INC

. 5

er to perform control of said home

- located electronic devices, on the b a sis of said first control info r mation ; transmitting, by said management facil i ty, said second control information to said server

, said server being identified by said server identifier that corresponds to said terminal identifier, and
controlling, by said server, said home

- located electronic devices on the basis of said second control information

. Id. col. 34 ll. 2

– 43 (emphases added)

. Alarm.com Inc. (“Alarm.com”) filed a petition for inter partes review asserting that claims 1

– 9, 14 –1 8, and 22

– 38 of the ’727 patent would have been obvious over various combinations of prior art references , which all include U.S. Patent 6,580,950 (“Johnson”) and U.S. Patent 6,161,140 (“Moriya”). The Board instituted review of all challenged claims and grounds. On appeal, Vivint only challenges the Board’s findings with respect to the teac hings of Johnson and Moriya. Johnson teaches an internet

based home communications system. See Johnson Abstract. It allows a user to monitor and control devices within a home from a remote lo cation by accessing a web page via the internet. See i d. col. 2 ll. 8

– 28. Moriya teaches a system that can detect the display capabilities or features of a particular data terminal using its model code. See Moriya Abstract. The system then sends data f

ormatted according to the display capabilities of that terminal. See id. col. 1 ll. 51

– 67.

In its final written decision , the Board concluded that all challenged claims were unpatentable as obvious. See Decision , 2017 WL 1096522, at * 28

. The Board began by maintaining its construction of “terminal identifier” from its institution decision, in which it construed the term toVIVINT , INC

. v. ALARM

. COM INC

. 6

mean “an identifier associated with a terminal that enables the home network management facility to identify or communicate with the termi nal .” I d. at * 6. The cha llenged independent claims 1, 16, 22, and 31 all recite this
term. Based on this construction, the Board found that Johnson and Moriya each independently taught “recei ving, at a management facility

, . . . a terminal ide ntifier” (“ the terminal identifier limitation”). ’727 patent col. 34 ll. 4

– 6. T he Board found that Johnson inherent ly taught the terminal identifier limitation, where the terminal identifier is in the form of an IP address, because it co mported with its claim construction

. See Decision , 2017 WL 1096522, at * 10. It also credited the testimony of Dr. Rhyne, Alarm.com’s expert, who testified that Johnson ’s disclosure of internet communications between a user computer and a data center inherently discloses an IP address

. See i d. T he Board also found that Moriya taught the terminal identi fier limitation because Moriya’s model code was a terminal identifier. See i d. at *11. C laims 29 and 37 , which depend from claims 22 and 31, respectively, recite “wherein” a terminal identifier “is a manufacturer model identi fier .” ’727 patent col. 38 ll. 35

– 36, col. 40 ll. 8

– 9. The Board found that the model code in Moriya was just such a manufacturer model identifier. See Decision , 2017 WL 1096522, at *11

– 12

. The Board also found that Johnson taught the “gene rating

. . . second control information

. . . on the basis of said first control information ” limitation recited in claims 1 and 16

. Id. at *14

– 15. According to the Board, t he command instruc tion disclosed in Johnson , which is transmitted from the terminal to the data center

, corr esponded to the “first control information”; the command instruction, which was then transmitted from the data center to the control unit , which is analogous to the home

server in the ’727 patent, corresponded to the “second control information .” Id. at *15. The Board determined that t his sequence of events was “sufficient to teachVIVINT , INC

. v. ALARM

. COM INC

. 7

generating second control information based on first control information.” Id. Based in part on these findings, the Board concluded that the challenged claims would have been obvious over the asserted combinations of prior art references

. Vivint timely appealed to this court. We have juri sdiction pursuant to 28 U.S.C. § 1295(a)(4)(A).

D ISCUS SION We review the Board’s legal determinations de novo

, In re Elsner , 381 F.3d 1125, 1127 (Fed. Cir. 2004), and the Board’s factual findings underlying those determinations for substantial evidence, In re Gartside , 203 F.3d 1305, 1316 (Fed. Cir. 2000). A finding is supported by substa ntial evidence if a reasonable mind might accept the ev idence to support the finding. Consol. Edison Co. v. NLRB , 305 U.S. 197, 229 (1938). We review the Board’ s claim constructions de novo “ and its underlying factual deter minations involving extrinsic evidence for substa ntial evidence.” Microsoft Corp. v. Proxyconn, Inc. , 789 F.3d 1292, 1297 (Fed. Cir. 2015) (citing Teva Pharm. USA

, Inc. v. Sandoz, Inc.

, 135 S. Ct. 831, 841

– 42 (2015)). Obviousness is a question of law based on underlying factual findings, including “the scope and content of the prior art, difference s between the prior art and the claims at issue, the level of ordinary skill in the pertinent art, and any objective indicia of non

- obviousness.” Randall Mf g. v. Rea , 733 F.3d 1355, 1362 (Fed. Cir. 2013) (citing KSR Int’ l Co. v. Teleflex Inc. , 550 U.S. 398, 406 (2007)). Whether there are inherent teaching s in a prior art reference is a question of fact. See In re Napier , 55 F.3d 610, 613 (Fed. Cir. 1995).

V ivint argues that the Board erred in its construction of “terminal identifier” and its findings regarding the teachings of Johnson and Moriya. We address each argument in turn.VIVINT , INC

. v. ALARM

. COM INC

. 8

Vivint first argues that the Board incorrectly co nstrued “terminal identifier” by departing from the plain meaning of the term. According to Vivint, under the Board’s construction, the term would encompass an identifier that enables communication with a terminal, but not allow the terminal to be identified, which contr adicts the te rm’s plain meaning. Vivint also argues that the terminal identifier should unique ly identify the te rminal

, as with a serial number

. Alarm.com responds ∗ that the Board’s construction is reasonable in light of the claims and specification

. Alarm.com also contends that Vivint’s attempts to restrict the terminal identifier to certain forms

, like the serial number

, is not supported by the specification. We agree with Alarm.com that the Board’s claim co nstruction was reasonable

. In an inter partes review, claims are given their broadest reasonable interpretation. See Cuozzo Speed Techs., LLC v. Lee , 136 S. Ct. 2131, 2142

– 46 (2016). The specification and the claims describe the terminal identifier as being used to identify the te rminal as we ll as to enable communication with the term inal. See ’727 patent col. 8 ll. 3 4– 41

. For example

, i ndependent claim 1 recites “a terminal identifier that identifies said terminal.” Id. col. 34 ll. 5

– 6. And ind ependent claim 16 recites “said terminal identifier to determine at least one of a display capability or a co mmunication capability of said terminal .” Id. col. 36 ll. 14

– 16. The Board found these claim s instructive as to the meaning of “terminal identifie r” in that they taught a terminal identifier that is used both to identify and co mmunicate with the terminal. See Decision , 2017 WL 1986522, at *5. Contrary to Vivint’s contentions, t he plain language of the claims does not require that the

∗ It is of course the principal and expected function of an alarm to respond.VIVINT , INC

. v. ALARM

. COM INC

. 9

terminal iden tifier be unique or be in any specific format, like a serial number

. See id. T he Board’s construction simply encompasses both disclosed functions of the term inal identifier . We therefore conclude that the Board’s construction was proper

. Vivint next argues that the Board erred in finding that Johnson inherently discloses the terminal identifier limitation , where the terminal identifier is in the form of an IP address. According to Vivint, if Johnson had a gateway server or NAT router between the user terminal and the data center

, then the IP address would not nece ssarily reach the management facility as required by the claims , and thus does not meet the inherency requir ement. Alarm.com responds that substantial evidence su pport ed the Board’s finding t hat Johnson inherently teac hes the terminal identifier limitation

. According to Alarm.com, a dding a gateway server or NAT router to Johnson is a modification imagined by Vivint and is not actually disclosed by Johnson. Furthermore, Dr. Rhyne, Alarm.com’s expert, testified that Johnson inherently disclose s an IP address because it is necessar il y used in internet communications between a user computer and a data center

. We agree with Vivint that the Board erred in finding that Johnson inherently teaches the terminal identifier limitation and hence supports a conclusion of obviousness

. The inherency doctrine allows for a prior art reference to supply a missing limitation if it is “necessarily present” or “inherent” in that reference. See Schering Corp. v. Gen eva Pharm. , 339 F.3d 1373, 1377 (Fed. Cir. 2003) (internal citation omitted)

. Inherency ordinarily applies in an anticipation context where a prior art reference , which does not expressly disclose every limita tion of a claim

, may still anticipate that claim if the missing limitation isVIVINT , INC

. v. ALARM

. COM INC

. 10

“necessarily present, or inherent, in the single anticipa ting reference.” Id. (internal citation omitted).
While anticipation is proven based on the express and inherent teachings of a single prior art reference, an obviousness analysis reaches beyond the prior art refe rence and takes into account other considerations such as the level of ordinary skill in the art and any objective indicia of nonobviousness

. See Cohesive Techs., Inc. v. Waters Corp. , 543 F.3d 1351, 1364 (Fed. Cir. 2008). Use of inherency in an obviousness context must therefore be “carefully circumscribed” because “that which may be inherent is not necessarily known and that which is unknown cannot be obvious.” Honeywell Int’l Inc. v. Mexichem Amanco Holding S.A. , 865 F.3d 1348, 1354

– 55 (Fed. Cir. 2017) (internal quotation marks and citations omitted)

. Thus

, while we have recognized that “inh erency may supply a missing claim limitation in an obviousness analysis,” we have emphasized that “the limitation at issue necessarily must be present , or the natural result of the combination of elements explicitly disclosed by the prior art.” Par Pharm. , Inc. v. TWi Pharm., Inc. , 773 F.3d 1186, 1194

– 96 (Fed. Cir. 2014) (emphasis added)

. The Board erred in finding that Johnson inherently discloses the terminal identifier limitation because its finding was not supported by substantial evidence. First

, t he Board based its finding on the rationale that “a te rminal IP address .

. . comports with [its] construction of ‘terminal identifier.’” See Decision , 2017 WL 1096522, at *10. However, inherency requires more than agreement; inherency requires inevitability

. See Schering , 339 F.3d at 1377; see also Par Pharm. , 773 F.3d at 1196

. Ther efore, the Board ’s evidence of merely “comport [ing] ” with its claim construction

, s ee Decision , 2017 WL 1096522, at *10, cannot constitute substantial evidence of the term inal identifier limitation being necessarily present in Johnson.VIVINT , INC

. v. ALARM

. COM INC

. 11

Second, t he Board credited Dr. Rhyne’s testimony in supporting its inherency finding

. See id. Dr. Rhyne, relying upon an Official Notice taken by the examiner during prosecution that data packets sent over the inte rnet contained IP addresses

, see J.A. 1623

– 24 (citing J.A. 1192), testified that the use of IP addresses in Johnson “would have been obvious ” to a person of ordinary skill in the art. J.A. 1624 (emphasis added)

. Howev er, w hat would have been obvious to a skilled artisan is not a valid consideration in an inherency analy sis. See W.L. Gore & Assocs., Inc. v. Garlock, Inc. , 721 F.2d 1540, 1555 (Fed. Cir. 1983) (“Inherency and obviousness are distinct co ncepts.”) ( citing In re Spormann

, 363 F.2d 444, 448 ( CCPA 1966) ). E ven the Board acknowledged that the exami ner’s Official Notice would have been permissible evidence in an “ obviousness evaluation.” See Decision

, 2017 WL 1096522, at *10 (emphasis added)

. Thus, Dr. Rhyne’ s testimony , which was based on the examiner’s Official No tice , d iscussed obviousness and was not substantial evidence to support the Board’s inherency find ing.

We therefore conclude that the Board ’s finding that the terminal identifi er limita tion is inherently disclosed in Johnson was not supported by substantial evidence

. However , we also conclude that the Board’s error was harmless because the Board found

, in the alternative

, that Moriya independently taught the claimed terminal identifier and could serve as the basis for an obviousness rejection . W e address this next

. Vivint argues that the terminal identifier limitation is
not disclosed in Moriya , because the Board incorrectly found Moriya’s model code was a terminal identifier. Accordin g to Vivint, this cannot be the case , because the ’727 patent clearly distinguishes between a terminal identifier and a model name. Compare ’727 patent fig. 6, with id. fig. 8. It follows then

, as Vivint contends , that the model name in the ’727 patent is analogous to the model code in Moriya, which means that the terminalVIVINT , INC

. v. ALARM

. COM INC

. 12

identifier in the ’727 patent must refer to something else. Additionally , Vivint notes that the model code in Moriya would only allow the terminal to be identified generically, rather than uniquely. And

, according to Vivint

, the terminal identifier should be unique

. Alarm.com responds that substantial evidence su pported the Board’s finding that Moriya’s model code is a terminal identifier. Alarm.com points to claims 29 and 37 as reci ting a terminal identifier that is a “manufacturer model identifier.” See id. col. 38 ll. 35

– 36, col. 40 ll. 8

– 9. Additionally , the model code in Moriya, as Alarm.com explains, indicates a terminal’s display capabilities, which is a function that the terminal identifier performs in the ’727 patent as well. Finally, Alarm.com argues that Vivint’s assertion that the terminal identifier should be unique is not required by the claims or specifi cation.

We agree with Alarm.com th at substantial evidence supported the Board’s finding that Moriya teaches a terminal identifier. First, as the Board recognized

, the claims themselves recite a terminal identifier that is a “manufacturer model identifier.” See Decision , 2017 WL 1096522, at *12; s ee also ’727 patent col. 38 ll. 35

– 36, col. 40 ll. 8

– 9. Second, the Board found that the model code in Moriya allows the system to determine the terminal’s display capabilities, which is the same function ality that the terminal identifier provides in the ’727 patent. See Decision , 2017 WL 1096522, at *11. And finally, the Board correctly reasoned that the ’727 patent claims and specification do not require that the terminal identifier be unique, contrary to Vivint’s assertions. See i d. at *12. We therefore conclude that the Board’s finding that Moriya teaches the terminal identifier was supported by substa ntial evidence. Vivint finally argues that Johnson does not teach the

“ generating

. . . second control information ” limitation. Vivint contends that the Board erre d in giving the secondVIVINT , INC

. v. ALARM

. COM INC

. 13

control information the same meaning as the first control limitation. But t he difference in claim terms, according to Vivint, means that the terms require different interpret ations. Therefore, as Vivint argues

, the first control in fo rmation must be different from the second control info r mation , and the specification makes clear that the
content s of t he requests must be different.
Alarm.com responds that the Board’s finding that Johnson discloses the “generating .

. . second control information” limitation was supported by substantial evidence. According to Alarm.com, t he ’727 patent does not require that the content of the second control info rmation be different from the content of the first control information . Even if it did, Ala rm.com argues that Joh nson discloses additional control informati on that is transmitted with the second control information , which satisfies Vivint’s proposed interpretation. We agree with Alarm.com that the Board’s finding that Johnson teaches the “ generating .

. . second control information” limitation was supported by substantial evidence. T he Board found that Johnson’s “ command instruction” corresponded to the “first control info rmation” when transmitted from the terminal to the data center, and then corresponded to the “second control infor mation ” when transmitted from the data center to the control unit. See id. at *14

– 15. Even if different content were required, as Vivint urges, the Board found that Johnson teaches that “numerous operations” are undertaken by the data center after it receives the co mmand instruction and before it retransmits the info rmation to the control unit. See id. at *15 (citing Johnson col. 7 l. 67

– col. 8 l. 4 ). We therefore conclude that the Board’s finding that Johns on discloses the “ generating

. . . second control information ” limitation was supported by substantial evidence.VIVINT , INC

. v. ALARM

. COM INC

. 14

On appeal, Vivint does not challenge the Board’s fin dings with respect to the combination of Johnson and Moriya or to the other prior art references. Accordingly, given that we have affirmed the Board’s finding s that Moriya discloses a terminal identifier and that Johnson discloses “generating .

. . second control information,” we conclude that the Board did not err in deter mining that the challenged claims would have been obvious over the asserted prior art combinations, which are all based on Johnson and Moriya. We have considered Vivint’s remaining arguments, but find them unpersuasive.

C ONCLUSION For the foregoing reasons, we affirm the decision of the Board.

AFFIRMED