Elbit Systems v. Thales Visionix, Case No. 2017-1355 (Fed. Cir. Feb. 6, 2018)
In Elbit Systems v. Thales Visionix, the Federal Circuit ("CAFC") affirmed the finding by the Patent Trial and Appeal Board (“PTAB”) that Elbit failed to demonstrate by a preponderance of the evidence that certain claims of U.S. Patent No. 6,474,159 ("the '159 Patent") would have been obvious over the alleged prior art.
The '159 Patent, assigned to Thales, relates to "[a] system for tracking the motion of an object relative to a moving reference frame". In 2015, Elbit filed a petition to institute an Inter Partes Review (“IPR”) with respect to the '159 Patent.
In the IPR proceeding, Thales argued that the claims at issue provide a means of calculating relative orientation via a two-step method, while the cited art discloses a three-step method. Elbit on the other hand, argued that "the two- and three-step methods are 'mathematically equivalent' and that 'there is no practical difference' between them."
In the final written decision, the PTAB held that the claims at issue were not invalid. The "PTAB determined that Elbit’s expert’s testimony was 'unsupported' and entitled to 'little weight' because the expert did not address or account for the recited relative angular rate signal limitation 'anywhere in his opinion'", while Thales based their non-obviousness arguments on the claimed features relating to the relative angular rate signal limitation. Elbit subsequently appealed this decision to the CAFC.
While the CAFC reviews the PTAB's legal conclusions (e.g. obviousness determinations) de novo, the court reviews the factual findings upon which those legal conclusions are based for "substantial evidence", which " is something less than the weight of the evidence but more than a mere scintilla of evidence".
In the IPR, the PTAB based its decision primarily on the testimony of Thale's expert witness. Accordingly, the CAFC held the PTAB's reliance on Elbit's expert testimony "constitutes substantial evidence". That is, the court held that"if two 'inconsistent conclusions may reasonably be drawn from the evidence in [the] record, [the PTAB]’s decision to favor one conclusion over the other is the epitome of a decision that must be sustained upon review for substantial evidence.'" (In re Cree, Inc., 818 F.3d 694, 701 (Fed. Cir. 2016) (internal quotation marks and citation omitted).)"