Court Opinion

ID: 3159282
Source: CourtListenerOpinion
Date Created: 2015-12-02 16:01:18.092401+00
Date Added: 2024-06-11T11:57:03.330940
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                ______________________

              MCM PORTFOLIO LLC,
                   Appellant

                          v.

         HEWLETT-PACKARD COMPANY,
                    Appellee
             ______________________

                      2015-1091
                ______________________

    Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board, in No. IPR2013-
00217.
                 ______________________

              Decided: December 2, 2015
               ______________________

   EDWARD PETER HELLER III, Alliacense Limited LLC,
San Jose, CA, argued for appellant. Also represented by
SUSAN ANHALT, Fountainhead IP, San Jose, CA.

    MARCIA H. SUNDEEN, Goodwin Procter LLP, Washing-
ton, DC, argued for appellee. Also represented by
JENNIFER A. ALBERT; ROBERT LOUIS HAILS, JR., ADEEL
HAROON, T. CY WALKER, Kenyon & Kenyon LLP, Wash-
ington, DC; ROSE CORDERO PREY, New York, NY.

    WILLIAM ERNEST HAVEMANN, Appellate Staff, Civil
Division, United States Department of Justice, Washing-
2         MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY

ton, DC, argued for intervenor Michelle K. Lee. Also
represented by MARK R. FREEMAN, BENJAMIN C. MIZER;
NATHAN K. KELLEY, SCOTT WEIDENFELLER, Office of the
Solicitor, United States Patent and Trademark Office,
Alexandria, VA.

   ROBERT GREENSPOON, Flachsbart & Greenspoon, LLC,
Chicago, IL, for amicus curiae J. Carl Cooper.
                  ______________________

    Before PROST, Chief Judge, DYK, and HUGHES, Circuit
                         Judges.
DYK, Circuit Judge.
    MCM Portfolio LLC (“MCM”) owns U.S. Patent No.
7,162,549 (“the ’549 patent”), which claims methods and
systems for coupling a computer system with a flash
memory storage system. Hewlett-Packard Co. (“HP”) filed
a petition with the Patent and Trademark Office (“PTO”)
requesting inter partes review of claims 7, 11, 19, and 21
of the ’549 patent. The Patent Trial and Appeal Board
(“Board”) determined that HP’s petition demonstrated a
reasonable likelihood that the challenged claims of the
’549 patent were invalid as obvious and instituted an
inter partes review. Thereafter, the Board issued a final
decision holding that the challenged claims would have
been obvious. MCM appeals.
    We hold that we lack jurisdiction to review the
Board’s decision that the institution of inter partes review
was not barred by 35 U.S.C. § 315(b), but we conclude
that we can review the question of whether the final
decision violates Article III and the Seventh Amendment.
On the merits, we reject MCM’s argument that inter
partes review violates Article III and the Seventh
Amendment, and we affirm the Board’s decision that
claims 7, 11, 19, and 21 of the ’549 patent would have
been obvious over the prior art.
MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY             3

                       BACKGROUND
    The ’549 patent, entitled “Multimode Controller for
Intelligent and ‘Dumb’ Flash Cards,” issued on January 9,
2007, and claims a priority date of July 6, 2000. The
patent claims methods and systems for coupling flash
memory cards to a computer utilizing a “controller chip.”
’549 patent at Abstract. In general, a controller is a device
that performs the physical transfer of data between a
computer and a peripheral device, such as a monitor,
keyboard, or, as here, a flash memory card. See Allan
Freedman, The Computer Glossary 75–76 (9th ed. 2001).
    The primary purpose of the controller here is to
achieve error correction. See ’549 patent col. 28, ll. 37–54.
Error correction tests for accurate data transmission in
order to “present a flawless medium to the system, in a
specific format, so the computer [] sees an error-free
storage medium [], rather than a flash [memory] that may
have certain defects.” Id. at col. 28, ll. 37–41; see also
Freedman, supra, at 135. As described in the patent,
removable flash memory cards are commonly used in
digital cameras to store image or video files and enable
the convenient transfer of those files to a computer using
a card reader. ’549 patent at col. 1, ll. 50–56. At the time
the ’549 patent was filed, flash memory cards were made
by various companies and came in many shapes and
formats, such as CompactFlash, Secure Digital, and
Memory Stick. Id. at col. 2, ll. 28–55. The specification
describes a need for a flash memory card reader that can
be used with flash memory cards of several different
formats, and, relevant here, a controller on the card
reader “that can work with multiple types of flash
memory cards that have controllers, and also with flash
memory cards that do not have controllers.” Id. at col. 3, l.
53 to col. 4, l. 22.
    The patent claims improvements to flash memory
card readers, including a controller chip that can deter-
4         MCM PORTFOLIO LLC    v. HEWLETT-PACKARD COMPANY

mine whether the flash memory card has an onboard
controller for error correction, and if it does not, using
firmware to manage error correction for the flash memory
card.
    Claims 7 and 11 are illustrative:
    7. A method comprising:
    using a controller chip to interface a flash storage
       system with or without a controller to a com-
       puting device, the controller chip comprising a
       flash adapter, wherein the flash storage sys-
       tem comprises a flash section and at least a
       medium ID;
    determining whether the flash storage system in-
       cludes a controller for error correction; and
    in an event where the flash storage system does
       not have a controller for error correction, using
       firmware in the flash adapter to perform oper-
       ations to manage error correction of the flash
       section, including bad block mapping of the
       flash section in the flash storage system that is
       coupled to the flash adapter section.
    11. A system comprising:
    a computing device;
    a flash storage system comprising a flash section
        and at least a portion of a medium ID; and
    a controller chip coupled between the computing
       device and the flash storage system to inter-
       face the flash storage system to the computing
       device, the controller chip comprising an inter-
       face mechanism capable of receiving flash
       storage systems with controller and controller-
       less flash storage systems, a detector to deter-
       mine whether the flash storage system
MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY            5

       includes a controller for error correction and a
       flash adapter which comprises firmware to
       perform, in an event where the flash storage
       system does not have a controller for error cor-
       rection, operations to manage error correction
       of the flash section, including bad block map-
       ping of the flash section in the flash storage
       system that is coupled to the flash adapter sec-
       tion.
Id. at col. 30, ll. 23–37, 48–65. Claims 19 and 21, which
depend from claims 7 and 11, respectively, further require
that the flash adapter comprise a plurality of interfaces
capable of receiving a plurality of flash storage systems.
Id. at col. 32, ll. 1–3, 7–9.
     On March 27, 2013, HP petitioned for inter partes
review of claims 7, 11, 19, and 21 of the ’549 patent under
35 U.S.C. § 311, asserting that those claims were antici-
pated by, or obvious over, five prior art references. MCM
filed a preliminary response on June 27, 2013. MCM
argued, inter alia, that institution of inter partes review
was barred under 35 U.S.C. § 315(b). MCM argued that
HP was a privy of Pandigital, Inc. (“Pandigital”), because
HP was reselling allegedly infringing digital picture
frames manufactured by Pandigital. Because MCM had
filed suit for infringement of the ’549 patent against
Pandigital more than one year before HP filed the petition
for inter partes review, MCM argued that § 315(b) barred
inter partes review.
    On September 10, 2013, the Board instituted inter
partes review with respect to claims 7, 11, 19, and 21 of
the ’549 patent. The Board found that there was a rea-
sonable likelihood that HP would prevail with respect to
at least one of the challenged claims based on obviousness
over two prior art references: U.S. Patent No. 6,199,122
(“Kobayashi”) and WO 98/03915 (“Kikuchi”). The Board
rejected MCM’s argument that it could not institute inter
6          MCM PORTFOLIO LLC      v. HEWLETT-PACKARD COMPANY

partes review under 35 U.S.C. § 315(b), holding that the
fact that Pandigital and HP were successive owners of the
same allegedly infringing property was not sufficient to
confer privity for the purposes of § 315(b).
    MCM filed a patent owner response on December 9,
2013, and HP filed the petitioner’s reply to the patent
owner response on March 10, 2014. After conducting a
trial hearing, the Board issued its final written decision
on August 6, 2014. The Board rejected MCM’s argument
that inter partes review proceedings violate Article III
and the Seventh Amendment. On the merits, the Board
concluded that HP had shown by a preponderance of
evidence that claims 7, 11, 19, and 21 would have been
obvious over a combination of the Kobayashi and Kikuchi
prior art references. MCM appealed. The PTO intervened.
We have jurisdiction to review the Board’s final decision
under 28 U.S.C. § 1295(a)(4)(A). We review constitutional,
statutory, and legal issues de novo, and the Board’s
factual findings for substantial evidence. Giorgio Foods,
Inc. v. United States, 785 F.3d 595, 600 (Fed. Cir. 2015);
In re Morsa, 713 F.3d 104, 109 (Fed. Cir. 2013).
                        DISCUSSION
                              I
     We first address MCM’s contention that the Board
improperly instituted inter partes review. 35 U.S.C.
§ 315(b) provides that “[a]n inter partes review may not
be instituted if the petition requesting the proceeding is
filed more than 1 year after the date on which the peti-
tioner . . . or privy of the petitioner is served with a com-
plaint alleging infringement of the patent.” MCM asserts
that it filed a complaint alleging infringement of the ’549
patent on Pandigital more than one year prior to HP’s
petition, and that, contrary to the Board’s determination,
Pandigital is a privy of HP. MCM argues on appeal that
the Board therefore erred in instituting inter partes
review.
MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY             7

     The law is clear that there is “no appeal” from the de-
cision to institute inter partes review. 35 U.S.C. § 314(d).
Section 314(d) provides that “[t]he determination . . .
whether to institute an inter partes review under this
section shall be final and nonappealable.” Id. We have
held that a patent owner cannot appeal the Board’s
decision to institute inter partes review, even after a final
decision is issued. In re Cuozzo Speed Techs., 793 F.3d
1268, 1273–74 (Fed. Cir. 2015). Specifically, in Achates
Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652, 658
(Fed. Cir. 2015), we held that “§ 314(d) prohibits this
court from reviewing the Board’s determination to initiate
inter partes review proceedings based on its assessment
of the time-bar of § 315(b).” Achates controls here. Review
of whether the PTO properly instituted inter partes
review is forbidden by § 314(d).
                             II
    MCM next argues that inter partes review is uncon-
stitutional because any action revoking a patent must be
tried in an Article III court with the protections of the
Seventh Amendment. Here there is no bar to review,
under § 314(d), of MCM’s claim that the Board lacked
authority to issue a final decision. Jurisdiction exists
because MCM challenges only the final decision of the
Board, not its decision to institute proceedings.
     In support of its constitutional argument, MCM urges
that the Supreme Court’s decision in McCormick Harvest-
ing Machine Co. v. Aultman (“McCormick II”), 169 U.S.
606 (1898), bars the PTO from invalidating patents in
inter partes review proceedings and that only an Article
III court can exercise that authority.
    In McCormick II, the owner of U.S. Patent No.
159,506, a patent on automatic twine binders for harvest-
ing machines, brought suit for infringement of claims 3,
10, 11, 25, and 26 against two accused infringers. See
McCormick Harvesting Mach. Co. v. Aultman (“McCor-
8         MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY

mick I”), 69 F. 371, 388 (6th Cir. 1895). The defendants
pointed out that the patentee had submitted to the Patent
Office an application for reissue including both claims in
the original patent and newly added claims. McCormick
II, 169 U.S. at 607. The examiner rejected five of the
original claims (the same as those asserted in the in-
fringement suit) as invalid, but allowed other claims, both
old and new. Id. at 607–08. The patent owner subsequent-
ly withdrew the application for reissue, and the original
patent was returned by the Patent Office. Id. The trial
court held that there was no infringement liability be-
cause the amended claims had been found invalid by the
Patent Office. Id. at 607. On appeal the Sixth Circuit
certified the question as to the effect of the Patent Office
action. McCormick I, 69 F. at 401. 1
    The Supreme Court held that the original patent
claims were not invalid because the reissue statute pro-
vided that the “surrender [of the original patent] shall
take effect upon the issue of the amended patent,” Rev.
Stat. § 4916 (1878), and that “until the amended patent
shall have been issued the original stand[s] precisely as if
a reissue had never been applied for . . . and must be
returned to the owner upon demand. . . . If the patentee
abandoned his application for reissue, he is entitled to a
return of his original patent precisely as it stood when

    1   The certified question asked: “If a patentee ap-
plies for a reissue of his patent, and includes among the
claims under the new application the same claims as
those which were included in the old patent, and the
examiner of the patent office rejects some of such claims,
and allows others, both old and new, does the patentee, by
abandoning his application for a reissue, and by procuring
a return of his original patent, hold his patent invalidated
as to those claims which the examiner rejected?” McCor-
mick I, 69 F. at 401.
MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY                9

such application was made.” McCormick II, 169 U.S. at
610 (citation omitted). Because the patentee had never
surrendered the original patent, the Patent Office’s rejec-
tion of the original claims was a nullity. Only the patent-
ee’s decision to surrender the original patent and to
accept the reissued patent without the rejected claims
would have eliminated the claims found to be invalid.
Because that did not occur, “[t]he only authority compe-
tent to set a patent aside, or to annul it, or to correct it for
any reason whatever, is vested in the courts of the United
States, and not in the department which issued the pa-
tent.” Id. at 609. Without statutory authorization, an
“attempt [by the Commissioner of Patents] to cancel a
patent upon an application for reissue when the first
patent is considered invalid by the examiner . . . would be
to deprive the applicant of his property without due
process of law, and would be in fact an invasion of the
judicial branch of the government by the executive.” Id. at
612; see also United States v. Am. Bell Tel. Co., 128 U.S.
315, 364–65 (1888) (noting lack of statutory authority for
the Patent Office to cancel patents).
    McCormick II did not address Article III and certainly
did not forbid Congress from granting the PTO the au-
thority to correct or cancel an issued patent. Congress has
since done so by creating the ex parte reexamination
proceeding in 1980; the inter partes reexamination proce-
dure in 1999; and inter partes review, post-grant review,
and Covered Business Method patent review in 2011. See
Bayh-Dole Act, Pub. L. No. 96-517, 94 Stat. 3015 (1980)
(codified as amended at 35 U.S.C. §§ 302–07); Intellectual
Property and Communications Omnibus Reform Act of
1999, Pub. L. No. 106-113, 113 Stat. 1501 (codified as
amended at 35 U.S.C. § 311 et seq. (1999)); Leahy–Smith
America Invents Act (“AIA”), Pub. L. No. 112-29, § 6(a),
125 Stat. 284, 299–304 (2011) (codified at 35 U.S.C.
§§ 311 et seq. (2013)). Supreme Court precedent demon-
10        MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY

strates that these statutes, and particularly the inter
partes review provisions, do not violate Article III.
    As early as in Murray’s Lessee v. Hoboken Land &
Improvement Co., 59 U.S. 272, 284 (1855), the Court
recognized that “there are matters, involving public
rights, which may be presented in such form that the
judicial power is capable of acting on them . . . but which
congress may or may not bring within the cognizance of
the courts of the United States, as it may deem proper.”
Id. at 281; see also Crowell v. Benson, 285 U.S. 22, 50
(1932). That is, Congress has the power to delegate dis-
putes over public rights to non-Article III courts. The
public rights exception was first applied to disputes
between the government and private parties, as in Mur-
ray’s Lessee. More recently, the Court has extended the
doctrine to disputes between private parties concerning
public rights. In Block v. Hirsh, 256 U.S. 135, 158 (1921),
the Court upheld the constitutionality of a District of
Columbia statute authorizing an administrative agency to
determine fair rents for holdover tenants as provided by
the statute. In Ex parte Bakelite Corp., 279 U.S. 438, 460–
61 (1929), the Court held that an adversarial proceeding
by a company against a competitor for unfair importation
practices under federal law did not need to be heard in an
Article III court.
     In Thomas v. Union Carbide Agricultural Products
Co., 473 U.S. 568, 571 (1985), the Court upheld the bind-
ing arbitration scheme of the Federal Insecticide, Fungi-
cide, and Rodenticide Act (“FIFRA”). Under FIFRA,
pesticide manufacturers seeking to register a pesticide
were required to submit health, safety, and environmen-
tal data to the EPA. Id. at 571–72. That data could be
utilized by the EPA in approving registrations by other
manufacturers, but compensation for its use was owed to
the earlier registrant. Id. The amount could be deter-
mined by agency arbitration instead of in an Article III
court. Id. at 573–74. Thomas held that this statutory
MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY            11

scheme does not violate Article III, noting that “[m]any
matters that involve the application of legal standards to
facts and affect private interests are routinely decided by
agency action with limited or no review by Article III
courts.” Id. at 583. It followed that “Congress, acting for a
valid legislative purpose to its constitutional powers
under Article I, may create a seemingly ‘private’ right
that is so closely integrated into a public regulatory
scheme as to be a matter appropriate for agency resolu-
tion with limited involvement by the Article III judiciary.”
Id. at 593–94. So too the Court later upheld the constitu-
tionality of adversary proceedings in the Commodity
Futures Trading Commission (“CFTC”), for customers of
commodity brokers to seek reparations from their brokers
for violation of the Commodity Exchange Act (“CEA”) or
agency regulations. Commodity Futures Trading Comm’n
v. Schor, 478 U.S. 833, 854 (1986).
     More recently, the Court expounded on the public
rights doctrine in Stern v. Marshall, 131 S. Ct. 2594
(2011). Stern explained that the Court continued to apply
the public rights doctrine to disputes between private
parties in “cases in which the claim at issue derives from
a federal regulatory scheme, or in which resolution of the
claim by an expert government agency is deemed essen-
tial to a limited regulatory objective within the agency’s
authority. . . . [W]hat makes a right ‘public’ rather than
private is that the right is integrally related to particular
federal government action.” Id. at 2613.
     In Stern, however, the Court held that, under Article
III, a bankruptcy court could not enter judgment on a
state law counterclaim sounding in tort, because state law
counterclaims “[do] not flow from a federal statutory
scheme,” id. at 2614, “[are] not completely dependent
upon adjudication of a claim created by federal law,” id.
(quotation marks omitted), and do not involve “a situation
in which Congress devised an expert and inexpensive
method for dealing with a class of questions of fact which
12        MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY

are particularly suited to examination and determination
by an administrative agency specially assigned to that
task,” id. at 2615 (quotation marks omitted).
    Patent reexamination and inter partes review are in-
distinguishable from the agency adjudications held per-
missable in Thomas and Schor, and wholly
distinguishable from the review of state law claims at
issue in Stern. Here, as in Thomas and Schor, the agen-
cy’s sole authority is to decide issues of federal law. The
patent right “derives from an extensive federal regulatory
scheme,” Stern, 131 S. Ct. at 2613, and is created by
federal law. Congress created the PTO, “an executive
agency with specific authority and expertise” in the
patent law, Kappos v. Hyatt, 132 S. Ct. 1690, 1696 (2012),
and saw powerful reasons to utilize the expertise of the
PTO for an important public purpose—to correct the
agency’s own errors in issuing patents in the first place.
Reacting to “a growing sense that questionable patents
are too easily obtained and are too difficult to challenge,”
Congress sought to “provid[e] a more efficient system for
challenging patents that should not have issued” and to
“establish a more efficient and streamlined patent system
that will improve patent quality and limit unnecessary
and counterproductive litigation costs.” H.R. Rep. No.
112–98, at 39–40. There is notably no suggestion that
Congress lacked authority to delegate to the PTO the
power to issue patents in the first instance. It would be
odd indeed if Congress could not authorize the PTO to
reconsider its own decisions.
    The Board’s involvement is thus a quintessential sit-
uation in which the agency is adjudicating issues under
federal law, “Congress [having] devised an ‘expert and
inexpensive method for dealing with a class of questions
of fact which are particularly suited to examination and
determination by an administrative agency specially
assigned to that task.’” Stern, 131 S. Ct. at 2615 (quoting
Crowell, 285 U.S. at 46). The teachings of the Supreme
MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY          13

Court in Thomas, Schor, and Stern compel the conclusion
that assigning review of patent validity to the PTO is
consistent with Article III.
     Our conclusion that the inter partes review provisions
do not violate Article III also finds support in our own
precedent. We had occasion to consider the constitutional-
ity, under Article III, of the ex parte reexamination stat-
ute in Patlex Corp. v. Mossinghoff, 758 F.2d 594 (Fed. Cir.
1985), modified on other grounds on reh’g, 771 F.2d 480
(Fed. Cir. 1985), and upheld the statute. We followed
Supreme Court precedent that affirmed “the constitution-
ality of legislative courts and administrative agencies
created by Congress to adjudicate cases involving ‘public
rights.’” Id. at 604 (quotation marks omitted). We found
that “the grant of a patent is primarily a public concern.
Validity is often brought into question in disputes be-
tween private parties, but the threshold question usually
is whether the PTO, under the authority assigned to it by
Congress, properly granted the patent. At issue is a right
that can only be conferred by the government.” Patlex,
758 F.3d at 604 (citing Crowell, 285 U.S. at 50). Patlex
also distinguished McCormick II. We held that McCor-
mick II did not “forbid[] Congress [from] authoriz[ing]
reexamination to correct governmental mistakes, even
against the will of the patent owner. A defectively exam-
ined and therefore erroneously granted patent must yield
to the reasonable Congressional purpose of facilitating the
correction of governmental mistakes.” Id. at 604.
    We again considered an Article III challenge to ex
parte reexamination in Joy Technologies v. Manbeck, 959
F.2d 226 (Fed. Cir. 1992). We concluded that “Patlex is
controlling authority and has not been impaired by . . .
subsequent Supreme Court cases,” id. at 229, and again
held that “the issuance of a valid patent is primarily a
public concern and involves a ‘right that can only be
conferred by the government’ even though validity often is
brought into question in disputes between private par-
14         MCM PORTFOLIO LLC    v. HEWLETT-PACKARD COMPANY

ties,” id. at 228 (quoting and citing Patlex, 758 F.3d at
604).
    We are bound by prior Federal Circuit precedent “un-
less relieved of that obligation by an en banc order of the
court or a decision of the Supreme Court.” Deckers Corp.
v. United States, 752 F.3d 949, 959 (Fed. Cir. 2014). We
see no basis to distinguish the reexamination proceeding
in Patlex from inter partes review. Indeed, Congress
viewed inter partes review as “amend[ing] ex parte and
inter partes reexamination,” and as a descendant of an
experiment began “[n]early 30 years ago, [when] Congress
created the administrative ‘reexamination’ process,
through which the USPTO could review the validity of
already-issued patents on the request of either the patent
holder or a third party, in the expectation that it would
serve as an effective and efficient alternative to often
costly and protracted district court litigation.” H.R. Rep.
No. 112–98, at 45. Supreme Court authority after Patlex
and Joy Technologies (discussed above) casts no doubt on
those cases. Rather, it confirms their correctness. Govern-
ing Supreme Court and Federal Circuit authority require
rejection of MCM’s argument that inter partes review
violates Article III.
                               III
    MCM argues as well that it has a right to a trial by
jury under the Seventh Amendment, which is not satis-
fied by the system of inter partes review. The Seventh
Amendment provides that, “[i]n Suits at common law,
where the value in controversy shall exceed twenty dol-
lars, the right of trial by jury shall be preserved . . . .” U.S.
Const. amend. VII. The Supreme Court has stated that
“the Seventh Amendment is generally inapplicable in
administrative proceedings, where jury trials would be
incompatible with the whole concept of administrative
adjudication and would substantially interfere with [the
agency’s] role in the statutory scheme.” Curtis v. Loether,
MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY           15

415 U.S. 189, 194 (1974). Curtis upheld “congressional
power to entrust enforcement of statutory rights to an
administrative process or specialized court of equity free
from the structures of the Seventh Amendment.” Id. at
195. Similarly, the Court held in Atlas Roofing Co., Inc. v.
Occupational Safety & Health Review Commission, 430
U.S. 442, 455 (1977), that “when Congress creates new
statutory ‘public rights,’ it may assign their adjudication
to an administrative agency with which a jury trial would
be incompatible, without violating the Seventh Amend-
ment’s injunction that jury trial is to be ‘preserved’ in
‘suits at common law.’ Congress is not required by the
Seventh Amendment to choke the already crowded federal
courts with new types of litigation or prevented from
committing some new types of litigation to administrative
agencies with special competence in the relevant field.”
See also Tull v. United States, 481 U.S. 412, 418 n.4
(1987) (“[T]he Seventh Amendment is not applicable to
administrative proceedings.”). Here, when Congress
created the new statutory right to inter partes review, it
did not violate the Seventh Amendment by assigning its
adjudication to an administrative agency. 2
    Under Supreme Court decisions such as Curtis and
Atlas Roofing, there is no basis for MCM’s contention that
it has a right to a jury trial. Indeed, we have previously

   2    Markman v. Westview Instruments, Inc., 517 U.S.
370, 377 (1996), in stating that patent infringement
actions in district court are subject to the Seventh
Amendment, does not suggest that there is a jury trial
right in an administrative adjudication of patent validity.
See also Ex parte Wood & Brundage, 22 U.S. 603 (1824).
Nor does In re Lockwood, 50 F.3d 966 (Fed. Cir.), vacated
sub nom. Am. Airlines, Inc. v. Lockwood, 515 U.S. 1182
(1995), imply that there is a right to a jury trial in an
agency proceeding.
16         MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY

addressed the jury trial argument in the context of a
challenge to ex parte reexamination proceedings in Patlex
and Joy Technologies. In Patlex, in addition to rejecting
the argument that ex parte reexamination violated Article
III, we also held that ex parte reexamination does not
violate the Seventh Amendment because “the Constitu-
tion does not require that we strike down statutes . . . that
invest administrative agencies with regulatory functions
previously filled by judge and jury.” 758 F.2d at 604–05.
    Seven years later, the patent owner in Joy Technolo-
gies argued that the intervening Supreme Court decision
in Granfinanciera v. Nordberg, 492 U.S. 33 (1989), cast
doubt on the validity of Patlex. Joy Techs., 959 F.2d at
228. In Granfinanciera, the Court held that a bankruptcy
trustee was constitutionally entitled to a jury trial in
bankruptcy court on an action to recover a fraudulent
conveyance, as such suits are matters of private rights.
492 U.S. at 55–56. The Court noted, however, that Con-
gress “may assign [the] adjudication [of statutory public
rights] to an administrative agency . . . without violating
the Seventh Amendment[].” Id. at 51 (quotation marks
omitted) (quoting and citing Atlas Roofing, 430 U.S. at
455). We determined that Granfinanciera “affirms the
basic underpinning of Patlex, viz., that cases involving
‘public rights’ may constitutionally be adjudicated by
legislative courts and administrative agencies without
implicating the Seventh Amendment right to a jury trial.”
Joy Techs., 959 F.2d at 228.
     Because patent rights are public rights, and their va-
lidity susceptible to review by an administrative agency,
the Seventh Amendment poses no barrier to agency
adjudication without a jury.
                             IV
    We turn finally to the Board’s holding on the question
of obviousness. We review the Board’s legal conclusions de
MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY             17

novo and its factual findings for substantial evidence.
Randall Mfg. v. Rea, 733 F.3d 1355, 1362 (Fed. Cir. 2013).
    HP contends that a combination of two prior art refer-
ences renders the challenged claims of the ’549 patent
obvious. Those two references are Kobayashi and Kikuchi.
The Board found that Kobayashi discloses “a memory
device for a computer with a converter that converts serial
commands of the computer to parallel commands that are
then used to control a storage medium (which can be a
flash-memory card).” J.A. 5. One embodiment of Koba-
yashi depicts a flash memory card reader that can be used
to read flash memory cards both with and without con-
trollers. A sensor determines whether the flash memory
card inserted includes a controller. If a controller is de-
tected, a selector routes the data from the flash memory
card to the computer; but if no controller is detected, the
selector connects the flash memory card with an ATA
controller, a controller based on the ATA interface stand-
ard that can read and write data on the memory card.
Kobayashi does not disclose a controller that performs
error correction.
    Kikuchi describes a flash memory card with a one-
chip ATA controller. See J.A. 7–9; Kikuchi, fig. 1. The
Kikuchi ATA controller includes an error controller that
“performs error control for read and write operations.” See
J.A. 8; Kikuchi, fig. 2. Dr. Banerjee, HP’s expert, testified
that the Kikuchi ATA controller could be placed in an
external adapter, similar to the Kobayashi flash memory
card reader. Dr. Banerjee also testified that “it would
have been obvious to one of ordinary skill in the art . . . to
incorporate Kikuchi’s error correction and bad block
mapping in ATA controller techniques into the ATA
controller 124 of Kobayashi . . . [and] would be motivated
[to do so] in order to ‘reliably retain stored data.’” J.A.
442.
18        MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY

    MCM argues that Kobayashi does not disclose com-
bining different functionalities into a single chip as re-
quired by the ’549 patent claims. MCM asserts that it
would not have been obvious, when combining the teach-
ings of Kobayashi and Kikuchi, to integrate their func-
tionality into a single chip. The Board found that the
“evidence supports a determination that one of ordinary
skill in the art would have had both the knowledge and
the inclination to place the functionality taught by Koba-
yashi and Kikuchi on a single chip.” J.A. 10. Notably,
MCM conceded at the oral hearing before the Board that
it was “common practice” to put multiple functions into a
single chip. J.A. 10.
    MCM now reframes its argument on appeal and ar-
gues that combining the two references cannot yield a
single controller chip because Kobayashi requires that its
controller be able to be placed on either the reader or the
card. 3 However, we have consistently held, as the Board

     3
        MCM also argues on appeal that Kobayashi relies
on a physical/optical detector to determine whether there
is a controller on the flash card and that this form of
detection cannot be incorporated into a single chip. How-
ever, MCM candidly admits that it only raised this argu-
ment in a few scattered sentences at the oral hearing
below. We have found that “if a party fails to raise an
argument before the trial court, or presents only a skele-
tal or undeveloped argument to the trial court, we may
deem that argument waived on appeal.” Fresenius USA,
Inc. v. Baxter Int’l, Inc., 582 F.3d 1288, 1296 (Fed. Cir.
2009). We deem MCM’s argument waived.
    MCM additionally argues that the ATA controllers in
Kobayashi and Kikuchi only work with flash cards with-
out their own ATA controllers, and not with flash cards
that have ATA controllers. MCM provides no citation to
MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY            19

recognized, that “[t]he test for obviousness is not whether
the features of a secondary reference may be bodily incor-
porated into the structure of the primary reference; nor is
it that the claimed invention must be expressly suggested
in any one or all of the references. Rather, the test is what
the combined teachings of the references would have
suggested to those of ordinary skill in the art.” In re
Keller, 642 F.2d 413, 425 (CCPA 1981); see also In re
Mouttet, 686 F.3d 1322, 1333 (Fed. Cir. 2012).
    Even if physical incorporation of the Kikuchi ATA
controller into the Kobayashi ATA controller would have
conflicted with Kobayashi’s instruction that its ATA
controller could be arranged on the memory card or on the
reader, the Board did not err in determining that the
claimed subject matter—a single controller chip with
error correction functionality on a flash card reader—
would have been obvious to a person of ordinary skill.
MCM did not argue that there were any secondary con-
siderations of nonobviousness that weighed against a
finding of obviousness.
    The Board determined that HP had shown “by a pre-
ponderance of the evidence[] that the challenged claims
would have been obvious over the combination of Koba-
yashi and Kikuchi” and “a preponderance of the evidence
demonstrates that a person of ordinary skill in the art
would have combined the Kobayashi and Kikuchi refer-
ences.” J.A. 9, 12.
    We find that the Board’s factual findings are support-
ed by substantial evidence. We affirm the Board’s conclu-
sions that it would have been obvious to combine
Kobayashi and Kikuchi, and that the challenged claims of

this proposition. This argument was not made below and
was waived.
20         MCM PORTFOLIO LLC   v. HEWLETT-PACKARD COMPANY

the ’549 patent would have been obvious over a combina-
tion of the prior art references.
                          AFFIRMED
                            COSTS
     Costs to appellee.