Federal Circuit Slices the Bologna Thin with IPR Rehearing Waiver Decision

by Dennis Crouch

Voice Tech Corp. v. Unified Patents, LLC, No. 2022-2163 (Fed. Cir. Aug. 1, 2024)

Unified Patents is paid by its members to fight against non-practicing entity (NPE) patent assertions — often by challenge patent validity via inter partes review.  In this case, Unified challenged Voice Tech’s U.S. Patent No. 10,491,679 which covers technology for controlling a computer via a mobile device using voice commands. At the conclusion of the IPR, the Patent Trial and Appeal Board (PTAB) sided with Unified – finding all challenged claims (1-8) of the ‘679 patent unpatentable as obvious over the combination of two prior art references, Wong and Beauregard.  The PTAB also denied Voice Tech’s request for rehearing.

On appeal, the patentee won a minor battle on waiver, but ultimately lost on the merits. In particular, the court refused to delve into the claim construction issue because the briefing failed to explain how a narrower construction would have altered the result.  On obviousness, the court rejected the patentee’s challenges to PTAB’s conclusions on the scope of prior art disclosures and motivation to combine.

The invention purports to enable a single mobile device to remotely access and control multiple native applications and operating system functions at a computer, without requiring application-specific configurations. The mobile device sends audio data to a computer, which then uses an “audio command interface” to transform that audio data into commands.

Waiver of the Right to Appeal: The waiver issue will likely be seen as the most important precedential portion of the case going forward.  Unified argued that Voice Tech forfeited its claim construction arguments by not including those arguments in its request for rehearing before the PTAB.

The court rejected Unified’s waiver argument, holding that a party’s choice not to re-raise an argument in a request for rehearing does not, in itself, forfeit the argument for appellate review.  For guidance on the issue, the appellate panel focused on the PTAB guiding statutes as well as the USPTO’s promulgated rules. 35 U.S.C. §§ 141(c) and 319 tie appeal rights to the PTAB’s final written decision, not to rehearing requests. And the rehearing regulation, 37 C.F.R. § 42.71(d), does not require that parties regurgitate all previously raised arguments (at least as interpreted by the court here).

The stumbling block for the decision was the 2019 non-precedential case of Polycom, Inc. v. Fullview, Inc., 767 F. App’x 970 (Fed. Cir. 2019), that found waiver of an anticipation argument by failing to raise it in a request for rehearing.  The Polycom court reasoned a party’s choice to request rehearing could be used to require that party to include all points it believed the Board had misapprehended or overlooked.  By not raising the anticipation issue in its rehearing request, Polycom had deprived the PTAB of the opportunity to address the alleged error, and thus waived the argument for appeal.  That 2019 decision and language stemmed from the USPTO rule which requires a request for rehearing to “specifically identify all matters the party believes the Board misapprehended or overlooked.” 37 C.F.R. § 42.71(d).

The Voice Tech panel (that included one overlapping Judge, Judge Lourie), first distinguished Polycom by noting that it was non-precedential.  The panel went on to more substantively distinguish Polycom as focusing only on arguments that the PTAB “misapprehended or overlooked” matters.  In Voice Tech, the PTAB seems to have understood and considered the parties arguments, and then simply disagreed on the claim construction outcome.  Unlike in Polycom, the PTAB had already had the opportunity to fully consider and address Voice Tech’s arguments.  Thus, no waiver.

Claim Construction Prejudice: Despite winning on the waiver issue, Voice Tech  argument failed with its impact statement.  In particular, the Federal Circuit declined to consider the merits of claim construction because Voice Tech failed to demonstrate how its proposed constructions would have affected the obviousness determination.  See, Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., 868 F.3d 1013 (Fed. Cir. 2017) (claim terms need only be construed to the extent necessary to resolve the controversy).

An appellant must explain how a different claim construction would affect the judgment to show prejudice.  Voice Tech’s failure to provide this explanation for  either of the two claim construction arguments led the appellate panel to decline consideration of the merits.

Obviousness – Scope of the Prior Art: Finally, on the merits of the obviousness challenge, the Federal Circuit  once again affirmed the PTAB’s findings. Voice Tech challenged the PTAB’s conclusions on whether the prior art disclosed certain claim limitations.  This is a tough argument to win on appeal.  The content of the prior art is a question of fact reviewed with deference to the PTAB on appeal. The court noted that the PTAB had justification for its findings that the disputed claims elements were found in the references after reading the references and receiving Unified’s expert testimony that packaged it all together.

Motivation to Combine and Hindsight Bias: Voice Tech contended that Unified failed to adequately show that a person of ordinary skill in the art would have been motivated (back in 2007) to combine the prior art references.  The court rejected this argument, finding that substantial evidence supported the PTAB’s finding of a motivation to combine, again based largely on Unified’s expert witness testimony, and the absence of any persuasive evidence of abuse of discretion.