Apple Inc. v. Smartflash LLC
Addressing estoppel issues in the context of a covered business method (CBM) proceeding, the Patent Trial Appeal Board (PTAB or Board) concluded that a clarification in existing patent-ineligibility case law was not an exception to estoppel under § 325(e)(1). Apple Inc. v. Smartflash LLC, Case Nos. CBM2015-00015, -00018 (PTAB, Dec. 8, 2015) (Elluru, APJ).
Apple filed petitions seeking CBM review of two Smartflash patents relating to data storage systems. After instituting the CBM proceedings, the Board issued an order estopping Apple from arguing that the patents were unpatentable pursuant to § 101. Under 35 U.S.C. § 325(e)(1), a petitioner may not maintain a ground for unpatentability that the petitioner could have raised during a previous post-grant review. Apple had previously challenged these same patents as being direct to obvious subject matter under § 103, but had not challenged patent eligibility under § 101. Apple argued that because the Alice decision happened after the previous final decision, the case law on which it would rely did not exist at the time of the original challenge. The Board disagreed, stating that § 325(e)(1) does not make exceptions for intervening case law that merely clarifies jurisprudence. Further, Bilski and Mayo had already issued at the time of the original challenge, finding computer-based method claims invalid under § 101.
After finding that Apple was estopped from challenging the claims under § 101, the Board dismissed Apple as a petitioner, explaining that there were no remaining grounds for Apple to present. Further, the Board held it would not hear any arguments as neither proceeding had a petitioner any longer.
Without a petitioner, Smartflash requested authorization to terminate the proceedings pursuant § 325(e)(1). The Board denied this request, holding § 325(e)(1) only speaks to actions of the petitioner and does not proscribe the actions of the Board. The Board explained that there remains a public interest in resolving the issues raised by these challenges. Smartflash requested a rehearing of the decision, arguing the Board misapplied the law and § 325(e)(1). The Board denied the motion for rehearing, explaining that its prior case law only established the Board could terminate the proceedings, not that it must. Therefore, the Board reiterated its denial of Smartflash’s request for authorization to file a motion to terminate the proceedings. The Board did, however, grant Smartflash’s request for an oral hearing on the merits, limiting it to 15 minutes for both cases. The Board reiterated that Apple would not be allowed to participate in the hearing.