The PTAB Reverses Original Decision After the Federal Circuit Reverses Key Findings and Limits Issues for Review

On October 17, 2017, the PTAB issued a final written decision in an IPR holding all claims unpatentable after the Federal Circuit vacated and remanded the PTAB’s previous final written decision. The PTAB reversed their original patentability determination after the Federal Circuit decided all but one of the questions at issue on appeal. EMC Corp. v. Clouding Corp., IPR2014-01309, Paper 36 (P.T.A.B. Oct. 17, 2017).

EMC Corp. filed an IPR petition against Clouding Corp.’s patent related to a computer utility for diagnosing and solving computer system problems. The only independent claim under review had two limitations at issue. EMC argued obviousness based on a combination of two prior art patents, “Allen” and “Barnett.”  The PTAB determined that EMC had not properly argued that Allen teaches or suggests the first limitation based on EMC’s failure to rebut one of Clouding’s arguments made in the Response. Additionally, the PTAB determined that EMC withdrew any reliance on Allen for the first limitation based on concessions made during oral arguments. The PTAB found that Barnett, standing alone, does not teach the first limitation. Thus, the PTAB did not analyze the second limitation.  The PTAB therefore issued a final written decision upholding the patentability of the claims.

On appeal, the Federal Circuit determined that EMC had argued that Allen teaches or suggests the first limitation and that EMC had not withdrawn its reliance on Allen. The Federal Circuit pointed out that EMC had made the proper argument with respect to Allen in the Petition, and EMC was not required to explicitly repeat the argument in its Reply. The Federal Circuit additionally pointed out that EMC’s narrow concession with respect to a specific point was not enough to withdraw its reliance on Allen. Further, Clouding did not dispute the combination of references for the first limitation and admitted that there would have been motivation to combine the references. Accordingly, in remanding the case, the Federal Circuit instructed the PTAB to only consider the question of whether Allen and Barnett teach or suggest the second limitation.

On remand, the PTAB did not request additional briefing or evidence. The PTAB found that EMC’s arguments were supported by their expert’s testimony, and that they were more persuasive than Clouding’s attorney arguments which were not supported by expert testimony. Based on that finding and the holdings by the Federal Circuit, the PTAB held that the claims at issue are unpatentable as obvious based on Allen and Barnett.  

Previously, we reported the outcomes of remands from the Federal Circuit to the PTAB in IPR cases through 2016. [https://www.knobbe.com/news/2017/02/ipr-appeals-outcomes-fed-circ-remands-ptab-law360]. In that report, we noted that the PTAB is more likely to reverse their initial patentability determination on remand when the Federal Circuit reverses a critical component of the initial decision. This decision is in line with that trend as the Federal Circuit reversed two key components of the PTAB’s initial decision and removed the question of motivation to combine from consideration.

Written by: Clayton R. Henson & Kerry S. Taylor, Ph.D.