The Federal Circuit recently vacated or reversed-in-part two PTAB final written decisions on the basis that the PTAB did not adequately describe its reasons for concluding the claimed invention is obvious. In both instances, the court criticized the Board’s “broad, conclusory statements” regarding one of ordinary skill’s motivation to adjust prior art teachings. These decisions highlight an attractive grounds for appealing a PTAB’s final written decision.

In Cutsforth, Inc. v. Motivepower, Inc., No. 2015-1316 (Fed. Cir. Jan. 22, 2016), the Federal Circuit reviewed the final decision in IPR2013-00274, wherein the PTAB determined that various claims of U.S. Patent No. 7,990,018, were unpatentable under 35 U.S.C. § 103. In the final decision, the Board summarized the Petitioner’s arguments and the Patent Owner’s response, and stated that Patent Owner’s rebuttals were not persuasive. The PTAB did not, however, “formally adopt” the Petitioner’s position as its own or provide independent reasoning as to why the claims were obvious. The court held that “conclusory statements are not enough to satisfy the Board’s obligation to provide reasoned explanation for its decision,” referencing In re Sang-Su Lee, 277 F.3d 1338 (Fed. Cir. 2002). The PTAB is obligated to explain the basis for its findings to enable Patent Owners to mount an appeal and the court to conduct meaningful review of the proceedings. Here, the PTAB’s decision failed explain why a person of ordinary skill would adjust the teachings of the prior art. Considering various features to be simply a “design choice” does not render the claims obvious. As noted by the court “ [t]he Board must offer a reason why a person of ordinary skill in the art would have made the specific design choice” (emphasis added).

When the Board determines that modifications and combinations of the prior art render a claimed invention obvious, the Board must fully explain why a person of ordinary skill in the art would find such changes obvious.

Patent Owners may be tempted to view Cutsforth as signaling a higher bar for Petitioners to establish obviousness. In reality, on remand, the PTAB may simply revise its final decision to more explicitly set forth its reasoning. On remand, however, the PTAB allowed additional briefing on the asserted motivation for one of ordinary skill in the art to adjust the prior art’s teachings art. [Paper No. 37 of IPR2013-00274] Thus, appealing an adverse final written decision on the basis of PTAB failure to provide sufficient explanation of its reasoning may provide an additional opportunity for Patent Owners to address Petitioner’s allegations.

Recently, in Black & Decker, Inc. v. Positec USA, Inc., Nos. 2015-1646, 2015-1647 (Fed. Cir. May 18, 2016), the Federal Circuit reversed-in-part (not merely vacated and remanded) the PTAB’s final written decision in IPR2013-00502. The Board’s decision cancelled various claims as being obvious in view of a prior art reference, which, according to the Board, suggested a claim limitation that was not explicitly disclosed. The decision then stated what one of ordinary skill “would have known” or “could have done” to meet the limitation. The Patent Owner appealed the decision, in part, on the basis that the PTAB failed to articulate a reason why one of ordinary skill would modify the teachings of the art. The Federal Circuit agreed, instructing that merely noting what one of ordinary skill “could have done” or “would have known” is insufficient. A rationale as to why one of ordinary skill would have adjusted the prior art to arrive at a claimed invention must be made explicit. After the appeal, all challenged claims were maintained, a rare win for a Patent Owner in an IPR.