Court Opinion

ID: 4546754
Source: CourtListenerOpinion
Date Created: 2020-07-08 16:00:41.297002+00
Date Added: 2024-06-11T12:50:17.839973
License: Public Domain

Case: 19-1048   Document: 46    Page: 1   Filed: 07/08/2020

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                    FITBIT, INC.,
                      Appellant

                           v.

                  VALENCELL, INC.,
                        Appellee
                 ______________________

                       2019-1048
                 ______________________

     Appeal from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in Nos. IPR2017-
 00319, IPR2017-01555.
                  ______________________

                  Decided: July 8, 2020
                 ______________________

     KEVIN P.B. JOHNSON, Quinn Emanuel Urquhart & Sul-
 livan, LLP, Redwood Shores, CA, argued for appellant.
 Also represented by MARK YEH-KAI TUNG; SAM STEPHEN
 STAKE, OGNJEN ZIVOJNOVIC, San Francisco, CA; HARPER
 BATTS, CHRISTOPHER SCOTT PONDER, Sheppard Mullin
 Richter & Hampton LLP, Palo Alto, CA.

    JEFFREY BRAGALONE, Bragalone Conroy PC, Dallas,
 TX, argued for appellee. Also represented by THOMAS
 WILLIAM KENNEDY, JR., JUSTIN KIMBLE, DANIEL FLETCHER
 OLEJKO, JONATHAN H. RASTEGAR.
                ______________________
Case: 19-1048    Document: 46     Page: 2     Filed: 07/08/2020

 2                              FITBIT, INC. v. VALENCELL, INC.

     Before NEWMAN, DYK, and REYNA, Circuit Judges.
 NEWMAN, Circuit Judge.
     Fitbit, Inc. appeals the Final Written Decision of the
 United States Patent Trial and Appeal Board (“PTAB” or
 “Board”), 1 concerning the inter partes review (“IPR”) of
 United States Patent No. 8,923,941 (“the ’941 patent”)
 owned by Valencell, Inc. The ’941 patent, entitled “Meth-
 ods and Apparatus for Generating Data Output Containing
 Physiological and Motion-Related Information,” concerns
 systems for obtaining and monitoring information such as
 blood oxygen level, heart rate, and physical activity.
      Apple Inc. petitioned the Board for IPR of claims 1–13.
 The Board granted the petition in part, instituting review
 of claims 1, 2, and 6–13, but denying review of claims 3–5.
 Fitbit then filed an IPR petition for claims 1, 2, and 6–13
 and moved for joinder with Apple’s IPR. The Board
 granted Fitbit’s petition, granted the motion for joinder,
 and terminated Fitbit’s separate proceeding.
      After the PTAB trial, but before the Final Written De-
 cision, the Supreme Court decided SAS Institute, Inc. v.
 Iancu, 138 S. Ct. 1348 (2018), holding that the America In-
 vents Act requires that all patent claims challenged in an
 IPR petition must be reviewed by the Board if the petition
 is granted. Id. at 1354. Following the Court’s decision, the
 Board re-instituted the Apple/Fitbit IPR to add claims 3–5
 of the ’941 patent.
     The Board conducted further proceedings as to
 claims 3–5, and issued a Final Written Decision that held
 claims 1, 2, and 6–13 unpatentable, and held claims 3–5
 not unpatentable. Following the decision, Apple withdrew

     1  Apple Inc. v. Valencell, Inc., No. IPR2017-00319,
 Paper No. 43, 2017 WL 9989892 (P.T.A.B. Aug. 6, 2017)
 (“Board Op.”).
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 FITBIT, INC. v. VALENCELL, INC.                               3

 from the proceeding. Fitbit appeals the Board’s decision on
 claims 3–5. Valencell does not cross-appeal as to the claims
 held unpatentable, but challenges Fitbit’s right to appeal
 as to claims 3–5 and defends the Board’s decision.
     We hold that Fitbit has a right to appeal. However, we
 conclude that the Board erred in its rulings that claims 3–
 5 are not unpatentable. We vacate these rulings, and re-
 mand for determination of the merits of patentability of
 claims 3–5.
                                   I
                JOINDER AND RIGHT OF APPEAL
     The patent statute provides:
     35 U.S.C. § 315(c) Joinder.—If the Director insti-
     tutes an inter partes review, the Director, in his or
     her discretion, may join as a party to that inter
     partes review any person who properly files a peti-
     tion under section 311 that the Director, after re-
     ceiving a preliminary response under section 313
     or the expiration of the time for filing such a re-
     sponse, determines warrants the institution of an
     inter partes review under section 314.
 Fitbit filed its IPR petition after the Board instituted Ap-
 ple’s petition as to claims 1, 2, and 6–13. Fitbit’s petition
 specified claims 1, 2, and 6–13, and was accompanied by a
 motion to “grant joinder with the Apple Inc. v. Valencell,
 Inc., Case No. IPR2017-00319 proceeding.” J.A.1736. The
 Board “granted [] Fitbit’s request to join as party,” and
 noted that the “[d]ecision addressing the status of each
 challenged claim in this proceeding applies to all parties.”
 Board Op. at *1 n.3. The Board stated that “all fil-
 ings . . . will be consolidated, and no filing by [Fitbit] alone
 will be considered without prior authorization by the
 Board.” J.A.1625. Valencell now argues that this proce-
 dure and other aspects of Fitbit’s joinder preclude Fitbit
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 4                               FITBIT, INC. v. VALENCELL, INC.

 from the right to appeal the Board’s decision concerning
 claims 3–5.
     The patent statute provides for IPR appeal by “any
 party,” as follows:
     35 U.S.C. § 319. A party dissatisfied with the final
     written decision of the Patent Trial and Appeal
     Board under section 318(a) may appeal the decision
     pursuant to sections 141 through 144. Any party
     to the inter partes review shall have the right to be
     a party to the appeal.
 Precedent has confirmed that: “Joined parties, as provided
 in § 315, may appeal pursuant to § 319.” Mylan Pharm.
 Inc. v. Research Corp. Techs., Inc., 914 F.3d 1366, 1373
 (Fed. Cir. 2019). Valencell states that it “is not contending
 that Fitbit lacks standing as a joined party to appeal the
 Board’s Final Written Decision to the extent of its petition.”
 Valencell Br. 23. Valencell’s position is that Fitbit does not
 have standing to appeal the portion of the Board’s decision
 that relates to claims 3–5, because Fitbit’s IPR petition was
 for claims 1, 2, and 6–13. Valencell cites Wasica Finance
 GmbH v. Continental Automotive Systems, Inc., 853 F.3d
1272, 1285 (Fed. Cir. 2017) for its holding that the peti-
 tioner waived any argument it did not present in its peti-
 tion for IPR.
     Thus, Valencell argues that Fitbit does not have the
 status of “party” for purposes of appeal because Fitbit did
 not request review of claims 3–5 in its initial IPR petition,
 did not request leave to amend its initial petition after the
 Supreme Court’s decision in SAS Institute, and did not sub-
 mit a separate brief with respect to claims 3–5 after the
 joined IPR was re-instituted. Valencell also argues that
 Fitbit was not a full participant in the joined IPR, because
 the Board stated that Fitbit would have “limited participa-
 tion, if at all, and required Fitbit to seek authorization from
 the Board before filing any papers.” Valencell Br. 13–14
 (internal quotation marks omitted).
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 FITBIT, INC. v. VALENCELL, INC.                                5

     Fitbit responds that Valencell did not object to Fitbit’s
 joinder as a party, and did not object to or seek to qualify
 Fitbit’s continued participation after the Board re-insti-
 tuted the joined IPR to include claims 3–5. Fitbit states
 that after its joinder with Apple’s IPR there was only one
 IPR, and points to the Board’s statement that both parties
 are bound by the decision. Fitbit acknowledges that it did
 not seek to file a separate brief after claims 3–5 were added
 to the IPR, and states that such separate brief was not re-
 quired in order to present the issues. We agree with Fitbit
 that these circumstances do not override Fitbit’s statutory
 right of appeal.
      Valencell also states that Fitbit’s petition was not in
 conformity to statute, for Fitbit’s petition and the accompa-
 nying request for joinder were filed more than one year af-
 ter the filing of Valencell’s district court suit against Fitbit.
 Appellate review of this aspect was resolved by the recent
 decision in Thryv, Inc v. Click-To-Call Technologies, LP,
 140 S. Ct. 1367 (2020), where the Court held, as to a tardy
 filing of a petition for IPR, that the Board’s acceptance of
 such filing at the “institution” phase is, by statute, not re-
 viewable on appeal.
     We conclude that Fitbit’s rights as a joined party ap-
 plies to the entirety of the proceedings and includes the
 right of appeal, conforming to the statutory purpose of
 avoiding redundant actions by facilitating consolidation,
 while preserving statutory rights, including judicial re-
 view.
                                   II
                    THE CLAIMS ON APPEAL
     Claims 3–5 are shown with claim 1 from which they de-
 pend, with emphases added to the aspects of claims 3–5
 that were the focus of the Board’s rulings:
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 6                               FITBIT, INC. v. VALENCELL, INC.

     1. A method of generating data output containing
     physiological and motion-related information, the
     method comprising:
     sensing physical activity and physiological infor-
     mation from a subject via a single monitoring de-
     vice attached to the subject, wherein the
     monitoring device comprises at least one motion
     sensor for sensing the physical activity and at least
     one photoplethysmography (PPG) sensor for sens-
     ing the physiological information; and
     processing signals from the at least one motion sen-
     sor and signals from the at least one PPG sensor
     via a processor of the monitoring device into a se-
     rial data output of physiological information and
     motion-related information, wherein the serial
     data output is configured such that a plurality of
     subject physiological parameters comprising sub-
     ject heart rate and subject respiration rate can be
     extracted from the physiological information and
     such that a plurality of subject physical activity pa-
     rameters can be extracted from the motion-related
     information.
                             ***
     3. The method of claim 1, wherein the serial data
     output is parsed out such that an application-
     specific interface (API) can utilize the physiolog-
     ical information and motion-related information
     for an application.
     4. The method of claim 1, wherein the applica-
     tion is configured to generate statistical relation-
     ships between subject physiological parameters
     and subject physical activity parameters in the
     physiological information and motion-related infor-
     mation.
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 FITBIT, INC. v. VALENCELL, INC.                               7

     5. The method of claim 4, wherein the applica-
     tion is configured to generate statistical relation-
     ships between subject physiological parameters
     and subject physical activity parameters via at
     least one of the following: principal component
     analysis, multiple linear regression, machine
     learning, and Bland-Altman plots.
 ’941 patent, col. 30, l. 35–col. 31, l. 9 (emphases added).
     The Board held that “Petitioner fails [to] demonstrate[]
 by a preponderance of the evidence that claims 3–5 of the
 ’941 patent are unpatentable based on the challenges as-
 serted in the Petition.” Board Op. at *33.
                                   A
  Claim 3—Construction of “Application-Specific In-
                  terface (API)”
     The Board held that claim 3 is not unpatentable, based
 solely on the Board’s rejection of Fitbit’s proposed construc-
 tion of the term “application-specific interface (API).” The
 Board did not review patentability of claim 3 on the as-
 serted grounds of obviousness.
     The Board construed “application-specific interface
 (API)” to mean “an interface which enables a particular ap-
 plication to utilize data obtained from hardware, such as
 the at least one motion sensor and the at least one PPG
 [photoplethysmography] sensor.” Board Op. at *7. We
 agree that this is the correct construction of this term.
     Fitbit had proposed a broader construction, stating
 that when given its broadest reasonable interpretation,
 “application-specific interface (API)” renders claim 3 un-
 patentable as obvious in view of several cited references.
 Fitbit argues that the broadest reasonable interpretation
 of “application-specific interface (API) . . . include[s] at
 least an application interface that specifies how some soft-
 ware components should interact with each other.” Fitbit
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 8                               FITBIT, INC. v. VALENCELL, INC.

 Br. 16 (citing J.A.507–08 ¶ 63). Fitbit states that following
 this construction, claim 3 is unpatentable.
     In construing claim 3, Fitbit focuses on the patent’s use
 of “API” following the term “application-specific interface.”
 Fitbit states that “API” is recognized in this field as an ac-
 ronym for “application programming interface”—as ex-
 perts for both sides agreed. Fitbit argues that the well-
 known meaning of “API” and its consistent usage accompa-
 nying “application-specific interface” in the ’941 patent
 demonstrate the patentee’s intended broader meaning of
 “application programming interface.” Fitbit Br. 25. Fitbit
 states that this broader meaning renders claim 3 obvious
 in view of the cited prior art references.
     Valencell responds that the ’941 patent’s specification
 demonstrates that “application-specific interface (API)”
 has a narrower meaning than “application programming
 interface.” The ’941 patent states, “an application-specific
 interface can utilize the physiological information and mo-
 tion-related information for an application that generates
 statistical relationships between subject physiological pa-
 rameters and subject physical activity parameters in the
 physiological information and motion-related information.”
 ’941 patent, Abstract. Valencell refers to the patent’s Fig-
 ure 18 describing use of data to generate “high-level assess-
 ments”:
     The multiplexed data outputs 604 may be a serial
     data string of activity and physiological infor-
     mation 700 (FIG. 18) parsed out specifically such
     that an application-specific interface (API) can uti-
     lize the data as required for a particular applica-
     tion. The applications may use this data to
     generate high-level assessments, such as overall
     fitness or overall health.
 ’941 patent, col. 26, ll. 15–21. Valencell states that these
 are narrow usages, to which the Board’s claim construction
 conforms. Valencell also points out that during prosecution
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 FITBIT, INC. v. VALENCELL, INC.                               9

 the applicant pointed to the narrow scope of “application-
 specific interface (API)” to distinguish a cited reference.
     The parties’ experts presented varied views of “appli-
 cation-specific interface (API)” and “application program-
 ming interface.” Fitbit’s expert, Dr. Majid Sarrafzadeh,
 testified that “by contrast [to application programming in-
 terface], ‘application-specific interface’ did not have a com-
 mon meaning in the art.” J.A.507–08 at ¶ 62 (Decl. of Dr.
 Sarrafzadeh); J.A.148. Valencell’s expert, Dr. Luca Pol-
 lonini, when asked whether his “understanding is that the
 term application-specific interface as used in the ’941 pa-
 tent is the same as the commonly understood application
 programming interface that’s known in the art,” stated
 “yes, it’s basically the same.” J.A.1364 at 128:4–12 (Test.
 of Dr. Pollonini).
      The Board concluded that the narrower claim construc-
 tion is correct, reasoning that an “‘application-specific in-
 terface (API)’ is directed to a ‘particular application,’ rather
 than broadly to different applications.” Board Op. at *7
 (emphasis in original). We agree, for this interpretation
 conforms to the specification and the prosecution history.
 We, therefore, sustain the Board’s construction of this
 term. The Board’s narrowing construction may have no
 significance, where, as here, the claimed “application-spe-
 cific interface” performs the same function as an applica-
 tion programming interface, i.e., “enabl[ing] a particular
 application to utilize data obtained from hardware.” Id.
 On remand the Board may consider this aspect.
     However, the Board did not review the patentability of
 claim 3, as construed, on the asserted grounds of obvious-
 ness. The Board held that, by rejecting Fitbit’s position on
 the meaning of “application-specific interface (API),” the
 patentability inquiry ended, and by Final Written Decision
 the Board held claim 3 not unpatentable. The Board ex-
 plained:
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 10                              FITBIT, INC. v. VALENCELL, INC.

      Because Petitioner’s assertions challenging claim 3
      are based on the rejected construction of this term,
      and the evidentiary support relied upon is predi-
      cated upon the same, we are not persuaded that Pe-
      titioner has shown by a preponderance of the
      evidence that claim 3 is rendered obvious over Luo 2
      and Craw 3 or over Mault 4, Al-Ali 5, and Lee 6. We
      do not address this claim further in this Decision.
 Board Op. at *8 (footnotes added) (internal citations omit-
 ted).
     Fitbit had argued before the Board that claim 3 and the
 claims dependent thereon are invalid as obvious over sev-
 eral cited prior art references. However, after the Board
 rejected Fitbit’s claim construction, the Board conducted no
 further analysis, and did not assess patentability of claim
 3 against the cited prior art references.
      Valencell acknowledges that “the Board did not make
 findings of fact regarding alleged obviousness of claim 3
 under either the rejected construction of ‘application-spe-
 cific interface (API)’ or some narrower construction.” Va-
 lencell Br. 33. Apple pressed the question before the Board,
 and in a request for reconsideration argued: “The Board
 overlooked Petitioner’s previously-submitted arguments

      2 U.S.    Patent    Application   Publication  No.
 2008/0200774, Pub. Date: Aug. 21, 2008 (“Luo”).
    3   U.S.    Patent    Application   Publication  No.
 2008/0133699, Pub. Date: June 5, 2008 (“Craw”).
    4   U.S. Patent No. 6,513,532, Issued Feb. 4, 2003
 (“Mault”).
    5   U.S.    Patent    Application   Publication  No.
 2003/0181798, Pub. Date: Sept. 25, 2003 (“Al-Ali”).
    6   R.G. Lee et al., A Mobile Care System with Alert
 Mechanism, 11(5) IEEE Transactions on Info/ Tech. in Bi-
 omedicine 507 (2007) (“Lee”).
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 FITBIT, INC. v. VALENCELL, INC.                              11

 and material facts showing the prior art still discloses an
 ‘application-specific interface (API)’ under the Board’s re-
 vised construction.” Apple Inc. v. Valencell, Inc., No.
 IPR2017-00319, Paper No. 13, at 1–4 (P.T.A.B. Aug. 6,
 2017). The Board declined reconsideration.
     Fitbit criticizes the Board’s procedure for holding
 claim 3 not unpatentable by Final Written Decision with-
 out considering any of the references cited and on the
 grounds of obviousness. Fitbit states that SAS Institute,
138 S. Ct. at 1357, confirmed this obligation. Fitbit cor-
 rectly states that claim construction is only the first step in
 establishing the meaning and scope of a claim, whereby pa-
 tentability is assessed for the claim as construed. The
 Board erred in holding that since it did not adopt Fitbit’s
 claim construction, that decided the question of patentabil-
 ity. It was improper to hold claim 3 “not unpatentable” by
 Final Written Decision, without determination of the as-
 serted grounds of obviousness.
     Fitbit now asks this court to conduct the obviousness
 analysis. However, it is inappropriate for the court to de-
 termine obviousness ab initio on appeal. See Oil States En-
 ergy Servs., LLC v. Greene’s Energy Grp., LLC, 138 S.
 Ct. 1365, 1374 (2018) (a purpose of the America Invents Act
 is to obtain review of patentability by the expert agency
 that granted the patent).
     We affirm the Board’s claim construction, vacate the
 Board’s decision that claim 3 is not unpatentable, and re-
 mand for determination of patentability in light of the cited
 references.
                                   B
   Claims 4–5—Antecedent Basis of “the application”
    The IPR petition also challenged validity of claims 4
 and 5 on grounds of obviousness in view of references to
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 12                              FITBIT, INC. v. VALENCELL, INC.

 Luo 7, Craw 8, and Wolf 9. The Board held claims 4 and 5 not
 unpatentable in its Final Written Decision, on the ground
 that the Board could not determine the meaning of the
 claims because the term “the application” lacked anteced-
 ent basis.
     The Board did not apply the cited prior art references,
 on which there were evidence and argument, instead stat-
 ing that the meaning of the claims were “speculative.” The
 Board stated:
      Although we agree that the recitation of the term
      “the application” in claim 4 lacks antecedent basis
      in claim 1, we declined to speculate as to the in-
      tended meaning of the term. Inst. Dec. 13. Alt-
      hough Petitioner and Patent Owner now seem to
      agree on the nature of the error in claims 4 and 5
      [citing briefs], we find that the nature of the error
      in claims 4 and 5 is subject to reasonable debate in
      view of the language of claims 1 and 3–5 and/or
      that the prosecution history does not demonstrate
      a single interpretation of the claims. Pet. 15 (de-
      scribing two possible errors in claim 4); . . . .
 Board Op. at *9. The Board held that Fitbit had not met
 its burden of proving obviousness, and claims 4 and 5 were
 ruled not unpatentable.
     There indeed is an error in the statement of claim de-
 pendency. Both Fitbit and Valencell agree; they state that
 the error arose when the claims were renumbered in view
 of the cancellation of claim 2. Fitbit summarizes:

      7 See n.2, supra.
      8 See n.3, supra.
     9  U.S.      Patent     Application       Publication
 No. 2007/0197881, Pub. Aug. 23, 2007 (“Wolf” ).
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 FITBIT, INC. v. VALENCELL, INC.                            13

     As originally drafted, claim 5 (which is now claim
     4) recited that it depended from claim 4 (which is
     now claim 3). Appx262–263 (original claim listing).
     As explain[ed] . . . Valencell inadvertently changed
     claim 4’s dependency to “claim 1” when it amended
     other claims of the patent application.
 Fitbit Br. 11. The prosecution history shows this conspic-
 uous error, for claims 4 and 5, as filed and throughout the
 prosecution, correctly recited their antecedent; and, in a
 claim chart filed in preparation for issuance the examiner
 was told that there was “no change.” It appears that nei-
 ther the applicant nor the examiner caught the error. How-
 ever, the error has come to light, and the Board declined to
 accept the parties’ shared view of the correct antecedent.
      The preferable agency action is to seek to serve the
 agency’s assignment under the America Invents Act, and
 to resolve the merits of patentability. Although the Board
 does not discuss its authority to correct errors, there is
 foundation for such authority in the America Invents Act,
 which assured that the Board has authority to amend
 claims of issued patents. See 35 U.S.C. § 316(d). And prec-
 edent has provided guidelines for district courts to correct
 errors in issued patents. See Novo Indus., L.P. v. Micro
 Molds Corp., 350 F.3d 1348, 1354 (Fed. Cir. 2003) (“[A] dis-
 trict court can do so if (1) the correction is not subject to
 reasonable debate based on consideration of the claim lan-
 guage and the specification and (2) the prosecution history
 does not suggest a different interpretation of the claims.”);
 see also CBT Flint Partners, LLC v. Return Path, Inc., 654
F.3d 1353, 1358 (Fed. Cir. 2011) (the district court can cor-
 rect an obvious drafting error). The concept of error correc-
 tion is not new to the Agency, which is authorized to issue
 Certificates of Correction.
     It is not alleged that the error herein was other than
 inadvertent, for the dependency of then-claim 5 from then-
 claim 4 was correctly stated in the claims as filed and
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 14                              FITBIT, INC. v. VALENCELL, INC.

 throughout prosecution. Although the Board states that
 the intended meaning of the claims is “subject to reasona-
 ble debate,” we perceive no debate. Rather, the parties to
 this proceeding agree as to the error and its correction. The
 Board erred in declining to accept the parties’ uniform po-
 sition and correct the error that claim 4 depend from
 claim 3. With this correction, the rejection of claims 4 and
 5 for absence of antecedent basis for “the application” dis-
 appears.
      We conclude that the Agency’s treatment of this error
 as the basis of a Final Written Decision of patentability is
 not a reasonable resolution, and does not comport with the
 Agency’s assignment to resolve patentability issues. On
 the correct antecedent basis, the petition’s issue of obvious-
 ness may be resolved by the Board, in furtherance of reso-
 lution of the parties’ dispute in concurrent district court
 litigation.
     The Board’s Final Written Decision on the ground of
 “absence of antecedent” basis is vacated. On remand the
 Board shall determine patentability of corrected claims 4
 and 5 on the asserted grounds of obviousness.
                         CONCLUSION
     We hold that Fitbit as a joined party has the right to
 appeal the Board’s decisions pertaining to claims 3–5. We
 conclude that the Board erred in its rulings concerning
 claims 3–5. We vacate the decision that claims 3–5 are not
 unpatentable, and remand for determination of the merits
 of patentability on the grounds presented in the petition.
             AFFIRMED IN PART, VACATED IN
                PART, AND REMANDED
      Each party shall bear its costs.