PersonalWeb Tech v. Apple (Fed. Cir. 2017) [personalweb]
Following an administrative trial, the PTAB found the challenged claims of PersonalWeb’s Patent No. 7,802,310 obvious based upon a combination of two prior art references. On appeal, however, the Federal Circuit has vacated the judgment – holding that the Board’s factual findings were not supported by substantial evidence. In particular, the Federal Circuit could not find substantial evidence for the conclusions (1) that the prior art taught each element of the challenged claims or (2) that PHOSITA would have been motivated to combine the references to form the invention as claimed.
Substantial Evidence: For me, the substantial evidence rule is a misnomer because it suggests that a decision is based upon a substantial amount of evidence (and thus seems like a reasonable approach). I would rename it as the “scintilla rule” because, under the rule, factual conclusions made by the PTAB are affirmed on appeal so long as supported by “more than a mere scintilla” of evidence. I previously wrote:
[T]o be clear, the appellate court will affirm a factual determination even when that determination is likely wrong so long as some amount of evidence supports the determination. We have all heard the adage that ‘reasonable minds can differ.’ I think of the substantial evidence rule as a relaxed version that ‘somewhat reasonable minds can differ.‘ Or, in other words, the PTO’s factual determinations will be affirmed if somewhat reasonable.
Although the PTAB burden is not great, the Board must fully explain its conclusions and their bases. (This is a major difference when compared with the ‘black box’ of a jury trial). As part of its explanation, the Board must also specifically contend with evidence that “detracts from an agency’s decision.” The court explained in its 2002 Lee decision:
For judicial review to be meaningfully achieved within these strictures, the agency tribunal must present a full and reasoned explanation of its decision. The agency tribunal must set forth its findings and the grounds thereof, as supported by the agency record, and explain its application of the law to the found facts.
In re Lee, 277 F.3d 1338, 1343 (Fed. Cir. 2002). That is, the Board, “must articulate ‘logical and rational’ reasons for its decision.” (quoting Synopsys).
Here, the court explained that the rational in an obviousness case includes
- Particularly identifying where each element of each claim is taught by the prior art references. Here, the Board failed to explain the particular location within Woodhill that taught the claim limitation of comparing a name with a “plurality of values.” (yes, that’s right.)
- Explaining the motivation to combine.
Explaining motivation to combine is a big deal because it comes up in almost every patent case before the PTO. Here, the Board simply wrote that:
“a person of ordinary skill in the art reading Woodhill and Stefik would have understood that the combination of Woodhill and Stefik would have allowed for the selective access features of Stefik to be used with Woodhill’s content-dependent identifiers feature.”
On appeal, the Court found that justification inadequate.
Indeed, the Board nowhere clearly explained, or cited evidence showing, how the combination of the two references was supposed to work. At least in this case, such a clear, evidence-supported account of the contemplated workings of the combination is a prerequisite to
adequately explaining and supporting a conclusion that a relevant skilled artisan would have been motivated to make the combination and reasonably expect success in doing so. . . .
A brief explanation may do all that is needed if, for example, the technology is simple and familiar and the prior art is clear in its language and easily understood. See Ariosa, 805 F.3d at 1365–66. On the other hand, complexity or obscurity of the technology or prior-art descriptions may well make more detailed explanations necessary. Here, the Board’s explanation is wanting. Apple’s attempts in this court to explicate both the Board’s explanation and the underlying evidence do not persuade us otherwise.
On remand, the Board will give it another go – and we’ll see whether the exercise of actually explaining its reasoning causes the Board to change its mind as well.
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My explanation of the case skipped over details of the patent at issue. Claim 1 is shown below and basically includes three steps: (a) sending a “content based name” for a data-item from one computer to another; (b) check to see if the name is on a list; and (c) grant or deny access to the data-item depending upon the result of (b).
1. A computer-implemented method … comprising the steps:
(a) at a first computer, obtaining a content-based name for a particular data item from a second computer …, the content-based name being based at least in part on a function of at least some of the data which comprise the contents of the particular data item, wherein the function comprises a message digest function or a hash function, and wherein two identical data items will have the same content-based name; and
(b) … a processor at said first computer ascertaining whether or not the content-based name for the particular data item corresponds to an entry in a database comprising a plurality of identifiers; and
(c) based at least in part on said ascertaining in (b), determining whether or not access to the particular data item is authorized.
The patentee claims that Apple’s iTunes and iCloud services infringe.