Court Opinion

ID: 9919442
Source: CourtListenerOpinion
Date Created: 2024-01-18 16:02:03.127787+00
Date Added: 2024-06-11T08:06:44.351530
License: Public Domain

Case: 21-1855   Document: 81     Page: 1    Filed: 01/18/2024

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                 CYWEE GROUP LTD.,
                     Appellant

                            v.

      ZTE (USA), INC., LG ELECTRONICS INC.,
                      Appellees

  KATHERINE K. VIDAL, UNDER SECRETARY OF
  COMMERCE FOR INTELLECTUAL PROPERTY
    AND DIRECTOR OF THE UNITED STATES
      PATENT AND TRADEMARK OFFICE,
                  Intervenor
            ______________________

                       2021-1855
                 ______________________

     Appeal from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in No. IPR2019-
 00143.
                  ______________________

                Decided: January 18, 2024
                 ______________________

     JAY P. KESAN, DiMuroGinsberg, P.C., Tysons Corner,
 VA, argued for appellant. Also represented by CECIL E.
 KEY; WILLIAM D. ELLERMAN, ARI RAFILSON, McKool Smith,
 P.C., Dallas, TX; HENNING SCHMIDT, Stradling Yocca Carl-
 son & Rauth LLP, Austin, TX; MICHAEL W. SHORE, The
 Shore Firm, Dallas, TX.
Case: 21-1855    Document: 81     Page: 2    Filed: 01/18/2024

 2                         CYWEE GROUP LTD. v. ZTE (USA), INC.

     STEVEN A. MOORE, Dority & Manning, San Diego, CA,
 for appellee ZTE (USA), Inc. Also represented by NICOLE
 CUNNINGHAM.

     WILLIAM R. PETERSON, Morgan, Lewis & Bockius LLP,
 Houston, TX, argued for appellee LG Electronics Inc. Also
 represented by DION MICHAEL BREGMAN, ALEXANDER
 STEIN, Palo Alto, CA; ANDREW V. DEVKAR, Los Angeles, CA;
 JULIE S. GOLDEMBERG, Philadelphia, PA.

    MICHAEL S. FORMAN, Office of the Solicitor, United
 States Patent and Trademark Office, Alexandria, VA, ar-
 gued for intervenor.     Also represented by KAKOLI
 CAPRIHAN, FARHEENA YASMEEN RASHEED.
                 ______________________

     Before PROST, HUGHES, and STOLL, Circuit Judges.
 PROST, Circuit Judge.
     CyWee Group Ltd. (“CyWee”) appeals from an inter
 partes review (“IPR”) final written decision by the U.S. Pa-
 tent Trial and Appeal Board (“Board”) determining that
 claims 1, 4–5, 14–17, and 19 of U.S. Patent No. 8,441,438
 (“the ’438 patent”) are unpatentable and denying CyWee’s
 revised motion to amend its claims. ZTE (USA), Inc. v. Cy-
 Wee Grp. Ltd., No. IPR2019-00143, 2021 WL 641742
 (P.T.A.B. Feb. 17, 2021) (“Board Decision”). For the follow-
 ing reasons, we affirm.
                         BACKGROUND
                              I
     The ’438 patent is directed to a “three-dimensional (3D)
 pointing device capable of accurately outputting a devia-
 tion including yaw, pitch and roll angles in a 3D reference
 frame and preferably in an absolute manner.” ’438 patent
 Abstract. The ’438 patent specification describes the
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 CYWEE GROUP LTD. v. ZTE (USA), INC.                         3

 invention as “generally relat[ing] to a three-dimensional
 (3D) pointing device utilizing a motion sensor module and
 method of compensating and mapping signals of the motion
 sensor module subject to movements and rotations of said
 3D pointing device.” Id. at col. 1 ll. 17–21. The ’438 patent
 also describes aspects of the invention as obtaining abso-
 lute 3D position measurements, id. at col. 4 ll. 15–19, elim-
 inating accumulated errors resulting from combining
 measurements from motion sensors and gyroscopes, id. at
 col. 4 ll. 22–26, calculating position values in an enhanced
 way by comparing the outputs of rotation sensors and ac-
 celerometers, id. at col. 4 ll. 32–40, and providing a map-
 ping of the position of the pointing device to display a
 corresponding movement on a display frame (e.g., a
 screen), id. at col. 4 ll. 43–52.
                               II
                               A
      ZTE (USA), Inc. (“ZTE”) filed an IPR petition asserting
 that claims 1, 4–5, 14–17, and 19 of the ’438 patent are un-
 patentable. The Board instituted the IPR. LG Electronics,
 Inc. (“LG”) later filed an IPR petition challenging the ’438
 patent and moved to join ZTE’s ongoing IPR. As LG
 acknowledges, its IPR petition was untimely because Cy-
 Wee sued LG more than a year before LG filed its petition.
 Appellee’s Br. 5 (citing 35 U.S.C. § 315(b)). LG premised
 its request for joinder on several limitations, including that
 it would “act as a passive ‘understudy’ and [would] not as-
 sume an active role unless [ZTE] ceases to participate in
 the instituted IPR.” J.A. 5453.
     While LG’s motion for joinder was pending, CyWee
 moved to amend its claims, contingent on cancellation of
 the ’438 patent’s original claims. The initial motion to
 amend included proposed claims 20–24.
    ZTE opposed CyWee’s motion to amend, and the Board
 gave preliminary guidance regarding the initial motion to
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 4                        CYWEE GROUP LTD. v. ZTE (USA), INC.

 amend. The Board’s preliminary guidance found that the
 proposed claims lacked written-description support and in-
 troduced new matter and that proposed claim 23 was inva-
 lid over the asserted prior art.
     The Board then granted LG’s motion to join ZTE’s on-
 going IPR proceeding. The Board placed restrictions on
 LG’s participation and ordered LG “(1) to consolidate fil-
 ings with the current petitioner; (2) to rely on ZTE to take
 testimony and defend depositions; (3) to refrain from re-
 questing or reserving any additional deposition or oral
 hearing time; and (4) to agree to ‘other procedural conces-
 sions necessary to minimize complication or delay and re-
 sult in a speedy trial with little or no impact on the ZTE
 IPR or the Board.’” J.A. 5605 (quoting J.A. 5453–54).
                              B
     After LG’s joinder, CyWee filed a revised motion to
 amend. CyWee’s revised motion to amend included pro-
 posed revised claims 20–24. Relevant here, proposed re-
 vised claim 22 had the same limitations as proposed claim
 22, and proposed revised claims 21 and 24 recited that the
 claimed 3D pointing device was limited to a cellular phone.
     ZTE then indicated it did not oppose CyWee’s revised
 motion to amend. J.A. 1401–02. LG, arguing that ZTE was
 no longer actively participating in the IPR, moved for leave
 to oppose CyWee’s revised motion to amend.
     Although the Board initially denied LG’s request to op-
 pose the revised motion to amend, LG sought rehearing,
 which the Board granted.
     In the rehearing decision granting LG’s request to op-
 pose the revised motion to amend, the Board observed that
 while ZTE remained “an active participant with respect to
 ZTE’s and [LG’s] joint challenge to the original claims,”
 “the trial no longer appear[ed] to be meaningfully adver-
 sarial” as to CyWee’s revised motion to amend. J.A. 1438.
 The Board also noted that, in any event, it “must assess the
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 CYWEE GROUP LTD. v. ZTE (USA), INC.                       5

 patentability of CyWee’s proposed amended claims.”
 J.A. 1439. The Board thus allowed LG “to present argu-
 ments and evidence, independently from ZTE, in response
 to CyWee’s Revised Motion to Amend.” J.A. 1440. The
 Board also explicitly noted that “CyWee may, of course, re-
 spond to any such arguments or evidence with its own re-
 buttal arguments or evidence.” J.A. 1440.
     LG’s opposition to the revised motion to amend argued
 that proposed revised claims 20–24 would have been obvi-
 ous over, among others, a combination of three references:
 Withanawasam, 1 Bachmann, 2 and Bachmann2. 3 Notably,
 ZTE did not cite Withanawasam in its opposition to Cy-
 Wee’s initial motion to amend. CyWee argued that this
 prior art combination did not teach several limitations of
 proposed revised claims 20–24.
                              C
     The Board then issued its final written decision, deter-
 mining that the challenged original claims are unpatenta-
 ble as obvious and denying the revised motion to amend.
     Relevant here, the Board determined that proposed re-
 vised claims 20–24 would have been obvious over Withan-
 awasam, Bachmann, and Bachmann2. The Board first
 concluded that a skilled artisan would be motivated to com-
 bine Withanawasam and Bachmann because a skilled arti-
 san would look to Bachmann’s known algorithm for fusing
 sensor data and would apply it to Withanawasam’s sensor
 set and because the combination “would merely involve the

     1  U.S.     Patent    Application     Publication  No.
 2010/0312468 (“Withanawasam”).
     2  U.S. Patent No. 7,089,148 (“Bachmann”).
     3  Joã o Luis Marins et al., An Extended Kalman Filter
 for Quaternion-Based Orientation Estimation Using
 MARG Sensors, Proc. 2001 IEEE/RSJ Int’l Conf. on Intelli-
 gent Robots & Sys. (Oct. 29–Nov. 3, 2001) (“Bachmann2”).
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 6                        CYWEE GROUP LTD. v. ZTE (USA), INC.

 routine engineering tasks of compiling the software of
 Bachmann for execution on the processor of Withana-
 wasam.” Board Decision, 2021 WL 641742, at *59. The
 Board then concluded that the combination of Withana-
 wasam, Bachmann, and Bachmann2 disclosed all limita-
 tions of proposed revised claims 20–24. Id. at *60–71. The
 Board also determined that CyWee failed to show written-
 description support for the “cellular phone” limitation in
 proposed revised claims 21 and 24. Id. at *53–54.
     After the Board’s final written decision, CyWee sought
 Director review, primarily regarding LG opposing the re-
 vised motion to amend. J.A. 1944–65. The United States
 Patent and Trademark Office (“PTO”) did not have an ap-
 pointed Director at the time CyWee sought Director review,
 so the Commissioner for Patents, acting in the Director’s
 stead, reviewed and rejected CyWee’s request for Director
 review. J.A. 1966–68.
    CyWee timely appealed. We have jurisdiction under
 28 U.S.C. § 1295(a)(4)(A).
                        DISCUSSION
     CyWee challenges the Board’s denial of the revised mo-
 tion to amend. Specifically, CyWee argues that (1) the
 Board erred by allowing LG to oppose the revised motion
 to amend and cite Withanawasam, (2) the Board erred by
 denying the revised motion to amend, and (3) the lack of
 opportunity for meaningful Director review mandates dis-
 missal of the IPR. We address each argument in turn.
                             I
     CyWee’s principal argument on appeal is that the
 Board erred by allowing LG to (1) oppose CyWee’s motion
 to amend in a manner that allegedly violated the terms of
 LG’s joinder and (2) raise Withanawasam in opposition to
 the revised motion to amend. For the following reasons, we
 conclude the Board did not err by allowing LG to oppose
 the revised motion to amend in the manner it did.
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 CYWEE GROUP LTD. v. ZTE (USA), INC.                          7

      Statutory interpretation is an issue of law we review
 de novo. Facebook, Inc. v. Windy City Innovations, LLC,
 973 F.3d 1321, 1330 (Fed. Cir. 2020). We review the
 Board’s application of its own procedures for abuse of dis-
 cretion. Ultratec, Inc. v. CaptionCall, LLC, 872 F.3d 1267,
 1271 (Fed. Cir. 2017). The Board abuses its discretion if its
 decision: “(1) is clearly unreasonable, arbitrary, or fanciful;
 (2) is based on an erroneous conclusion of law; (3) rests on
 clearly erroneous fact findings; or (4) involves a record that
 contains no evidence on which the Board could rationally
 base its decision.” Id. at 1272 (citing Redline Detection,
 LLC v. Star Envirotech, Inc., 811 F.3d 435, 442 (Fed. Cir.
 2015)).
     We first address CyWee’s argument that, by allowing
 LG to oppose the revised motion to amend, the Board al-
 lowed LG to violate the terms of its joinder. We find this
 argument unpersuasive. LG stated in its joinder motion
 that “as long as ZTE remains an active participant in the
 IPR, [LG] will take a passive ‘understudy’ role and work
 with ZTE to avoid procedural disruptions” and that LG
 “will assume the primary role only if ZTE ceases to partic-
 ipate in the IPR.” J.A. 5454. LG also agreed that it “shall
 not be permitted to raise any new grounds not already in-
 stituted by the Board in the ZTE IPR, or introduce any ar-
 gument or discovery not already introduced by the original
 petitioner.” J.A. 5456. In the order granting LG’s joinder
 motion, the Board allowed LG to participate as a passive
 understudy “so long as ZTE remains active in the [IPR].”
 J.A. 5605.
      When the Board allowed LG to oppose CyWee’s revised
 motion to amend, the Board concluded that although ZTE
 still participated in the IPR, the proceeding “no longer ap-
 pear[ed] to be meaningfully adversarial” as to the revised
 motion to amend. J.A. 1438. We see no error in this con-
 clusion; ZTE itself stated that it withdrew “all objections to
 the revised amended claims” and therefore that it did not
 “challenge the patentability of the revised amended claims”
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 8                          CYWEE GROUP LTD. v. ZTE (USA), INC.

 or “oppose [CyWee’s] revised motion to amend.” J.A.
 1401–02. ZTE’s own representations indicated that there
 were no adversarial proceedings regarding the ultimate
 outcome of the revised motion to amend. And, given the
 substantive importance of a motion to amend in the context
 of an IPR (in that it can lead to the issuance of new, other-
 wise unexamined claims), and that the terms of LG’s join-
 der relegated it to understudy status only insofar as ZTE
 “remain[ed] active in the [IPR],” see J.A. 5605, we see no
 error in the Board’s allowing LG to oppose the revised mo-
 tion to amend.
      CyWee next argues that LG could not raise Withana-
 wasam in opposing the revised motion to amend because
 ZTE did not raise Withanawasam in opposition to the ini-
 tial motion to amend. CyWee grounds this argument in
 two legal principles: (1) that the IPR statutory provisions
 prohibit LG, an otherwise time-barred party, from intro-
 ducing new issues into the proceeding, and (2) that the pro-
 cedures governing a revised motion to amend prohibit LG
 from raising arguments in opposition to a revised motion
 to amend that were not raised in opposition to the initial
 motion to amend. As we explain below, both arguments are
 unavailing.
      We first address the argument that LG cannot intro-
 duce new issues into the proceeding as an otherwise time-
 barred party. CyWee observes that 35 U.S.C. § 315(c), the
 statutory provision governing IPR joinder, “does not au-
 thorize the joined party to bring new issues . . . into the ex-
 isting proceeding.” Facebook, 973 F.3d at 1335. But that
 limitation exists because, among other reasons, “[t]he al-
 ready-instituted IPR to which a person may join as a party
 is governed by its own petition and is confined to the claims
 and grounds challenged in that petition.” Id. at 1336 (cit-
 ing SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1356 (2018)).
 A motion to amend is different. The principle that the IPR
 statutory provisions permit consideration of only the
 grounds in the petition does “not apply in the context of
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 CYWEE GROUP LTD. v. ZTE (USA), INC.                         9

 motions to amend where the patent owner has introduced
 new claims into the proceedings.” Nike, Inc. v. Adidas AG,
 955 F.3d 45, 51 (Fed. Cir. 2020) (concluding that “the Board
 should not be constrained to arguments and theories raised
 by the petitioner in its petition or opposition to the motion
 to amend”). We therefore fail to see why the § 315(c)-based
 limitation we articulated in Facebook is relevant to this is-
 sue.
     We next address the argument that the revised-mo-
 tion-to-amend procedures prohibit LG from making argu-
 ments in opposition to a revised motion to amend that were
 not made in opposition to the initial motion to amend. The
 language of the procedure CyWee points to provides that
 “[b]oth the opposition and the reply [to a revised motion to
 amend] may be accompanied by new evidence that re-
 sponds to issues raised in the preliminary guidance, or in
 the corresponding revised [motion to amend] or opposi-
 tion.” Notice Regarding a New Pilot Program Concerning
 Motion to Amend Practices and Procedures, 84 Fed. Reg.
 9497, 9501 (Mar. 15, 2019) (“Notice”). CyWee fails to ex-
 plain why language permitting the citation of new evidence
 in opposition to a revised motion to amend restricts the
 scope of that evidence. CyWee also invokes various regu-
 lations and Board decisions to support its argument, but
 these address only the scope of evidence that may be raised
 in a reply brief, not an opposition to a revised motion to
 amend. Appellant’s Br. 46–48; Reply Br. 23–25. We thus
 conclude that CyWee has identified nothing in the Board’s
 current procedures prohibiting LG from raising Withana-
 wasam in opposition to the revised motion to amend.
     CyWee also offers a more focused argument: that LG
 could not raise Withanawasam to demonstrate that pro-
 posed revised claim 22 is unpatentable because CyWee did
 not modify claim 22 between the initial and revised motion
 to amend. CyWee failed to raise this argument before the
 Board, so we decline to consider it. In re Baxter Int’l, Inc.,
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 10                       CYWEE GROUP LTD. v. ZTE (USA), INC.

 678 F.3d 1357, 1362 (Fed. Cir. 2012). 4 We do not address
 the extent to which the Board may permit evidence or ar-
 guments not raised in an opposition to an initial motion to
 amend to be raised in opposition to a revised motion to
 amend that does not modify the proposed claims.
                              II
      CyWee also challenges the Board’s denial of the revised
 motion to amend. CyWee argues that the Board erred in
 finding a motivation to combine the prior art and erred in
 concluding that there is no written-description support for
 the proposed revised claim limitation “cellular phone.” We
 affirm the Board’s motivation-to-combine finding and do
 not reach the written description issue.
      We review the Board’s conclusion as to whether a
 skilled artisan would be motivated to combine prior art ref-
 erences for substantial evidence. Intel Corp. v. PACT XPP
 Schweiz AG, 61 F.4th 1373, 1378 (Fed. Cir. 2023). “Sub-
 stantial evidence is such relevant evidence as a reasonable
 mind might accept as adequate to support a conclusion.”
 Id. (quoting Novartis AG v. Torrent Pharms. Ltd., 853 F.3d
 1316, 1324 (Fed. Cir. 2017)).
     Withanawasam discloses an integrated sensor device
 that purportedly reduces the footprint of sensors in a per-
 sonal navigation device, such as a smart phone. J.A. 4208.
 The sensor and computer in Withanawasam are in a single,
 integrated device. J.A. 4208. Bachmann discloses an

      4  After oral argument, CyWee filed a letter providing
 record citations demonstrating where it purportedly made
 this argument to the Board. Supplemental Submission
 (Sept. 6, 2023), ECF No. 76. None of these citations demon-
 strate that CyWee argued that LG could not raise Withan-
 awasam to demonstrate the unpatentability of proposed
 revised claim 22 because CyWee did not modify claim 22
 between the initial and revised motions to amend.
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 CYWEE GROUP LTD. v. ZTE (USA), INC.                       11

 algorithm for determining the orientation of a sensor in
 three-dimensional space. J.A. 2613.
     In concluding that a skilled artisan would combine
 Withanawasam and Bachmann, the Board credited the tes-
 timony of LG’s expert. LG’s expert explained that because
 Withanawasam does not explicitly disclose algorithms to
 evaluate the orientation of its sensors, a skilled artisan
 would look to a method for mathematically determining
 sensor orientation. J.A. 4313–14 ¶ 58. Per LG’s expert,
 Bachmann teaches this algorithm. J.A. 4314 ¶ 58. LG’s
 expert testified that Bachmann’s algorithm also provides
 several benefits, including increased accuracy and preci-
 sion and the ability to analyze sensor data in all rotational
 degrees of freedom. J.A. 4314 ¶ 58. To LG’s expert, com-
 bining Withanawasam’s sensors with Bachmann’s algo-
 rithm was nothing more than a combination of known
 elements to achieve an expected improvement. J.A. 4314
 ¶ 59. Implementing this combination, according to LG’s
 expert, would merely be a routine engineering task.
 J.A. 4315 ¶ 60.
      This is substantial evidence that supports the Board’s
 motivation-to-combine conclusion. To demonstrate a moti-
 vation to combine, a petitioner can show that there is “a
 known technique to address a known problem using ‘prior
 art elements according to their established functions,’” In-
 tel, 61 F.4th at 1380 (quoting Intel Corp. v. Qualcomm Inc.,
 21 F.4th 784, 799–800 (Fed. Cir. 2021)), “unless its actual
 application is beyond” a skilled artisan’s capability, id.
 (quoting KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 417
 (2007)). LG’s expert testimony establishes precisely this.
     CyWee also argues it had no opportunity to submit new
 evidence in reply to LG’s opposition to the revised motion
 to amend and thus could not meaningfully dispute LG’s ev-
 idence regarding Withanawasam and the combination of
 Withanawasam and Bachmann. The relevant procedures
 and the Board’s orders in this case belie CyWee’s assertion.
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 12                        CYWEE GROUP LTD. v. ZTE (USA), INC.

 Notice, 84 Fed. Reg. at 9501 (“Both the opposition and the
 reply may be accompanied by new evidence that responds
 to issues raised in the preliminary guidance, or in the cor-
 responding revised [motion to amend] or opposition”);
 J.A. 1388–89 (“Specifically, both Petitioner’s opposition to
 the revised [motion to amend] and Patent Owner’s reply to
 that opposition may be accompanied by new evidence that
 responds to issues raised in the preliminary guidance (if
 provided) or in the corresponding revised [motion to
 amend] or opposition.”); J.A. 1450 (same); J.A. 1484
 (same); J.A. 1440 (“CyWee may, of course, respond to any
 such arguments or evidence with its own rebuttal argu-
 ments or evidence.”).
    Because we affirm the Board’s obviousness conclusion,
 we need not address CyWee’s written description argu-
 ments.
                              III
      CyWee finally argues that it was denied meaningful
 Director review in the time required by statute and that
 this denial mandates vacating the Board’s final written de-
 cision and dismissing the IPR petition. We have considered
 and rejected these arguments in Arthrex, Inc. v. Smith &
 Nephew, Inc., 35 F.4th 1328 (Fed. Cir. 2022), In re Palo Alto
 Networks, Inc., 44 F.4th 1369 (Fed. Cir. 2022), and CyWee
 Group Ltd. v. Google LLC, 59 F.4th 1263 (Fed. Cir. 2023).
 We reject them again here.
                        CONCLUSION
      We have considered CyWee’s remaining arguments
 and find them unpersuasive. For the foregoing reasons, we
 affirm.
                        AFFIRMED