The Patent Trial and Appeal Board (PTAB), following institution of inter partes review of certain claims of the patent owner’s method patent, cancelled all of the challenged claims for obviousness. The PTAB also denied the patent owner’s conditional motion to amend the patent to add new claims. The patent owner appealed.

The Federal Circuit affirmed the PTAB’s obviousness determination, holding that the PTAB had permissibly ruled using the standard by which the “broadest reasonable interpretation” is applied to the challenged claims at claim construction—citing the Supreme Court’s upholding of the PTAB’s adoption of that standard in Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016).

However, the Federal Circuit vacated the PTAB’s denial of the patent owner’s motion to amend, finding that the PTAB’s decision was “arbitrary and capricious” under the Administrative Procedure Act. The PTAB denied the motion to amend solely on the grounds that the patent owner did not “discuss whether each newly added feature was separately known in the prior art.” The Federal Circuit found that the patent owner sufficiently addressed the patentability of the combination of the newly added features with other known features, and determined that “the combination as the ‘new feature’ [is] a scenario recognized in a long line of Supreme Court and Federal Circuit cases noting that novel and nonobvious inventions often are only a combination of known individual features.” Therefore, the court concluded that the PTAB’s denial of the motion merely for the patent owner’s failure to discuss each separate feature of the claim was erroneous.