The PTAB’s Flexibility In Its Decisions – The Federal Circuit Weighs In

On appeal of a PTAB decision that all claims in a patent on compressing video files were unpatentable, the Federal Circuit clarified two issues. This post considers the second addressed issue – is the PTAB limited to the arguments made by Petitioners? The Federal Circuit found that it is.

PTAB’s Role in IPRs

In M&K Holdings v. Samsung Electronics (No. 2020-1160), the petitioner challenged a claim only on obviousness grounds. Despite this, the PTAB found that that claim was invalid as anticipated by the prior art. The PTAB reasoned that a disclosure that anticipates a claim also renders it obvious, because “anticipation is the epitome of obviousness.”

At the Federal Circuit, the patent owner argued that this was an error, because they had been deprived of notice of the anticipation argument. The petitioner responded that the patent owner was not deprived of notice, because the same prior art used to invalidate the claim was also used to invalidate other claims. Petitioner argued that the Board’s anticipation analysis was merely a simpler path to invalidity than the one obviousness argument they had made.

The Federal Circuit was not convinced that the PTAB could, in this case, change the petitioner’s obviousness ground to a finding of anticipation. The anticipation finding was not inherent in the obviousness argument. In fact, petitioner had expressly stated that the prior art reference did not disclose a particular limitation in the relevant claim. Because of this, it only made obviousness arguments for that claim, in contrast to its arguments for other claims, which it argued were anticipated due to the same prior art reference.

The Court thus concluded that the patent owner had not been put on notice of the anticipation argument. While the patent owner was aware of the prior art, it was not aware that the Board could use that sole prior art reference to invalidate the patent, since it has not been raised in the petition. Thus, it had no opportunity to challenge this argument, and the Board’s finding that the patent was invalidated as anticipated was an impermissible deviation.

Takeaway

• Petitioners should be aware that the arguments they make in a petition will limit what arguments the patent owner is put on notice of, and thus what arguments the PTAB can address – the PTAB;s role is not to create arguments where they were not made.