Arista Networks v. Cisco Systems (Fed. Cir. 2018)
In what is mecoming a more regular outcome, the Federal Circuit has again vacated a PTAB IPR holding — holding that the USPTO’s panel of Administrative Patent Judges failed to “adequately explain its reasoning on a point that was central to its analysis.”
This time the case involves a PTAB finding for the patentee — that the IPR challenger Arista had not proven obviousness (for several challenged claims of Cisco’s Patent No. 8,051,211). The identified failure was in addressing a particular argument for how the prior art taught the claimed invention.
Tunneling of Packets: Here, Cisco’s secure networking claims include, inter alia, “tunneling” through an intermediate network – where tunneling is defined as “transmitting a frame without examination, including in layer 2 and layer 3 communications.” Based upon some claim differentiation, the Board also found that “encapsulation and de-encapsulation” of a frame don’t count as “examination” in this scenario.
In short, while “transmitting a frame” during “tunneling” must be “without examination,” certain kinds of activities involving encapsulation and de-encapsulation are not part of the excluded “examination”—hence may be present in what still qualifies as “tunneling” under the ’211 patent.
Opinion at *5. The proposed prior art reference (Kunzinger) taught something akin to tunneling, but the PTAB concluded that its intermediary examined the packets. Arista argued that Kunzinger’s was working with the outer-header of an encapsulated frame — and thus was not examining the frame itself. The Board did not particularly address this argument.
Unlike the Federal Circuit itself, the PTAB is required to write final written decisions “to ensure that their [judgments] are not ‘arbitrary, capricious, an abuse of discretion, . . . otherwise not in accordance with law . . .[or] unsupported by substantial evidence.’” Pers. Web Techs., LLC v. Apple, Inc., 848 F.3d 987, 992 (Fed. Cir. 2017) (quoting the APA). The record must include all factual findings, and a “full and reasonable explanation” their foundation and reasoning.
Here, the court finds:
[T]he Board did not adequately explain why “transmission of the IPSec packet” in Kunzinger includes an “examination” excluded from the “tunneling” claimed in the ’211 patent, even while the described use of fields and tags in the ’211 patent is not such an excluded “examination.”
On remand, it will be interesting to see how the Board responds — likely adding a bit more to its 30 page opinion.