In SightSound Techs., LLC v. Apple Inc., Appeal Nos. 2015-1159, -1160 (Fed. Cir. Dec. 15, 2015), the Federal Circuit affirmed the PTAB’s final written decisions in two CBM patent review proceedings that canceled claims in SightSound’s patents as being obvious over prior art (referred to as the CompuSonics publications), even though Apple did not present that specific challenge in its petitions. The Federal Circuit’s decision is important because it shows that the court will not review a PTAB decision to institute an AIA trial on a ground the petitioner did not present.
Petitioner (Apple) filed four CBM patent review petitions regarding these claims—two petitions having been denied (and not the subject of these appeals), and two granted—but never presented an obviousness attack on the basis of the CompuSonics publications. Instead, Apple’s granted petitions argued that the CompuSonics system (described by the CompuSonics publications) anticipated these claims. While the PTAB agreed and instituted review on the presented anticipation grounds, the PTAB also instituted review on obviousness grounds based on the CompuSonics publications. In its final written decisions, the PTAB concluded that the challenged claims are not anticipated after all, but concluded that those claims would have been obvious over the CompuSonics publications. Thus, the PTAB canceled the challenged claims, albeit on a ground not presented in any petition.
On appeal, Patent Owner (SightSound) argued that the PTAB’s final written decisions should be set aside because the PTAB lacked jurisdiction to institute review on an obviousness ground that Apple did not present. In support, SightSound relied on 35 U.S.C. § 322(a)(3), which requires that a petition must recite “in writing and with particularity, each claim challenged, the grounds on which the challenge to each claim is based, and the evidence that supports the grounds for the challenge to each claim,” and 37 C.F.R. § 42.204(b), which requires a petition to include the “specific statutory grounds … on which the challenge to [each] claim is based.” The PTAB previously rejected SightSound’s argument because the PTAB concluded that the petitions supported review for obviousness even if the petitions did not argue for institution on that ground. Further, once instituted on a petitioned ground (here, anticipation), the PTAB acknowledged its statutory mandate to issue a final written decision on all instituted grounds.
The Federal Circuit, in In re Cuozzo Speed Techs., LLC, 793 F.3d 1268 (Fed. Cir. 2015), concluded that it was barred (by 35 U.S.C. § 314(d)) from reviewing a patentability challenge based on a defect in a PTAB decision instituting an AIA trial that could have been cured by a proper petition. Later, in Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015), the court concluded it was barred from reviewing whether a petition seeking an AIA trial was timely filed. In both, thus, the court concluded that it lacked jurisdiction to review the PTAB’s decisions to institute AIA trials. The court here similarly concluded that it lacked jurisdiction to review SightSound’s argument challenging the PTAB’s decisions to institute CBM patent review in view of a statutory section (35 U.S.C. § 324(e)) analogous to the one on which the court relied in Cuozzo and Achates. However, relying on Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306 (Fed. Cir. 2015), the court concluded that it did have jurisdiction to review whether the challenged patents were subject to CBM review.
Continuing, the court concluded that substantial evidence supported the PTAB’s claim constructions, as well as the PTAB’s findings that (i) the patents qualified as CBM patents, (ii) all claimed features were disclosed in the prior art, (iv) the prior art references themselves manifested a reason to combine these features, and (v) SightSound failed to offer proof that the commercial success of Apple’s product is the direct result of a unique characteristic of the claimed inventions. Accordingly, the court affirmed the PTAB’s final written decisions cancelling the challenged claims as being obvious.