Source: https://www.ssiplaw.com/news/201705/stating-obvious-personal-web-technologies-llc-v-apple-inc
Timestamp: 2019-04-23 05:54:41+00:00

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Stating the Obvious: Personal Web Technologies, LLC v. Apple, Inc. | Shumaker & Sieffert, P.A.
On February 14, 2017, the Court of Appeals for the Federal Circuit vacated a portion of the Patent Trial and Appeals Board’s decision in an inter partes review (IPR) regarding obviousness of PersonalWeb Technologies’ appealed claims. In a precedential opinion suffused with references to administrative law, a panel of the court held that the Board’s conclusion of obviousness was unsupported by substantial evidence. The outcome of Personal Web Technologies, particularly in light of other recent Federal Circuit decisions, may indicate a heightened focus on the Board’s burden to provide evidence for conclusions of obviousness in the age of the IPR.
IPR decisions are reviewed in accordance with § 706(2)(A) of the Administrative Procedure Act (APA) to ensure that the Board’s decisions are not “arbitrary, capricious, an abuse of discretion, . . . [or] unsupported by substantial evidence.” The “substantial evidence” standard, as set forth in Consolidated Edison Co. v. NLRB and codified in the APA, provides the standard by which courts defer to an agency’s findings of fact. That is, courts are to defer to an agency’s findings of fact, provided that such findings are supported by substantial evidence. Consolidated Edison Co. elucidated what is meant by “substantial evidence” with the familiar statement that “substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” In requiring only “such evidence as a reasonable mind might accept,” “substantial evidence” is a highly deferential standard. However, in mixed questions of law and fact, such as the question of obviousness, the substantial evidence standard is only applied to the underlying questions of fact. The legal conclusion of obviousness is reviewed de novo according to applicable law.
Apple alleged that a combination of U.S. Patent No. 5,649,196 to Woodhill and U.S. Patent No. 7,359,881 to Stefik disclosed all of the elements of the claims at issue, and contended that a person of ordinary skill in the art would have understood that the combination of Woodhill and Stefik “would have allowed for the selective access feature of Stefik to be used with Woodhill’s content-dependent identifiers feature.” The Board agreed but did not provide substantial further discussion of whether a person of ordinary skill in the art would have been motivated to combine Woodhill and Stefik to arrive at the ‘310 patent claims and would have had a reasonable expectation of success in doing so.
On the surface, Personal Web Technologies simply appears to restate the familiar: agencies must provide “more than a mere scintilla” of factual evidence to support their conclusions, and the analysis supporting a conclusion of obviousness “should be made explicit.” But two notable aspects of Personal Web Technologies illuminate the Federal Circuit’s stance toward the Board’s handling of IPRs. First is the court’s focus on policy concerns underlying the relevant administrative law. For example, the court emphasized the Board’s obligation to provide a thorough administrative record, stating that “courts cannot exercise their duty of review unless they are advised of the considerations underlying the [agency] action under review.” The court’s interest in encouraging the Board to aid the exercise of judicial review is unsurprising. However, the court went on to emphasize the Board’s own interest in providing a thorough administrative record, noting that “the clear-explanation requirement prevents judicial intrusion on agency authority to make factual, policy, and discretionary determinations committed to the agency.” In focusing on the policy concerns underlying the substantial-evidence standard of review, the court appeared to warn the Board of judicial intrusion and encourage properly-rendered decisions on IPRs.
Second, the Board’s failure to provide substantial evidence in Personal Web Technologies does not reflect an isolated occurrence. On April 25, 2017, the Federal Circuit vacated a portion of the Board’s decision in Securus Tech v. Global Tel*Link, an IPR whose outcome bore significant similarity to Personal Web Technologies. In Securus, Global Tel*Link petitioned for IPR of Securus’ U.S. Patent No. 7,860,222, alleging obviousness of all thirty-six claims of the ‘222 patent. The Board agreed, stating that “[a]fter consideration of the language recited in [the claims], the Petition, the Patent Owner Response, and the Petitioner’s Reply, as well as the relevant evidence discussed in those papers, we find that one of ordinary skill in the art would have considered these dependent claims obvious over [the asserted art].” The Federal Circuit found this conclusion inadequate. In a non-precedential opinion by Judge Chen, the court noted that “the Board failed to articulate any reasoning for reaching its decision as to these claims,” and iterated the Board’s duty to provide substantial evidence to support its findings. Thus, the chronological and substantive proximity of Personal Web Technologies and Securus indicate that the Board’s handling of obviousness is of current concern for the court.
To at least some extent, the court’s holdings in Personal Web Technologies and Securus should deter the Board from accepting an IPR petitioner’s conclusory assertion of obviousness at face value, which may in turn deter the would-be IPR petitioner. Moreover, the applicability of Personal Web Technologies should extend beyond the IPR context to other actions by the Board. The astute patent practitioner would do well to consider the applicability of the court’s holding in Personal Web Technologies in response to PTAB actions, e.g., in requests for rehearing that turn on obviousness, and to monitor the court’s decisions for further developments.
 Personal Web Technologies, LLC v. Apple, Inc., No. 2016-1174, slip op. at 8 (citations omitted).
 Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938).
 Personal Web Technologies, LLC v. Apple, Inc., No. 2016-1174, slip op. at 2 (citations omitted).
 Personal Web Technologies, LLC v. Apple, Inc., No. 2016-1174, slip op. at 2–3 (citations omitted).
 Personal Web Technologies, LLC v. Apple, Inc., No. 2016-1174, slip op. at 11 (citations omitted).
 Personal Web Technologies, LLC v. Apple, Inc., No. 2016-1174, slip op. at 7 (citations omitted).
 Personal Web Technologies, LLC v. Apple, Inc., No. 2016-1174, slip op. at 12.
 Personal Web Technologies, LLC v. Apple, Inc., No. 2016-1174, slip op. at 11, quoting Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064, 1073 (Fed. Cir. 2015).
 Consolidated Edison Co. v. Labor Board, 305 U.S. 197, 229 (1938).
 Personal Web Technologies, LLC v. Apple, Inc., No. 2016-1174, slip op. at 8, quoting KSR Int’l. Co. v. Teleflex, Inc., 550 U.S. 398, 418 (2007).
 Personal Web Technologies, LLC v. Apple, Inc., No. 2016-1174, slip op. at 9 (citations omitted).
 Personal Web Technologies, LLC v. Apple, Inc., No. 2016-1174, slip op. at 9.
 Securus Tech. Inc., v. Global Tel*Link Corp., No. 2016-1992, slip op. at 5–6.
 Securus Tech. Inc., v. Global Tel*Link Corp., No. 2016-1992, slip op. at 13.

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