Dss Technology Management v. Apple Inc., 885 F.3d 1367

DSS owns U.S. Patent No. 6,128,290, directed to a wireless data network where a server (PDA) and multiple battery-powered peripherals communicate in low-duty-cycle RF bursts to save power.
Independent claim 1 requires both server and peripheral transmitters to be "energized in low duty cycle RF bursts." The parties agreed claim 1 is representative and only this limitation was disputed.
Apple petitioned for inter partes review, relying principally on Natarajan (and Neve), which discloses a scheduled multiaccess protocol dividing time into frames/subframes and letting mobile units power down when not transmitting or receiving.
The PTAB found claims 1–4 and 9–10 obvious over Natarajan in view of Neve, adopting Apple’s expert evidence and reasoning that the base (server) transmitter could be modified to operate in the same low-duty fashion as the mobile units.
On appeal the Federal Circuit majority reversed, holding the PTAB’s explanation was insufficient: it relied on a generalized ‘ordinary creativity’/common-sense gap-filler and unspecific expert testimony without a reasoned analysis showing the base transmitter would meet the claim construction for "short periods" on an "otherwise quiet data channel."
Judge Newman dissented, arguing the PTAB adequately articulated record support and that, if explanation were insufficient, the proper remedy is remand rather than reversal on the merits.

Issue	Plaintiff's Argument (Apple)	Defendant's Argument (DSS)	Held
Whether it would have been obvious to modify Natarajan's base/server transmitter to be "energized in low duty cycle RF bursts"	Natarajan teaches power-conserving, scheduled multiaccess; mobile and base have similar physical structure; expert testimony shows base would be inactive most of the time, so it would operate in short RF bursts	Natarajan focuses battery savings on mobile units; base station in Natarajan transmits continuously during outbound periods (Period A) and uses HDLC framing with idle words, so the base transmitter is not shown to operate in short bursts	Reversed PTAB: Board failed to give sufficient, reasoned explanation and substantial evidence tying Natarajan to the claimed "short periods on an otherwise quiet data channel" limitation; expert testimony was conclusory and PTAB relied on "ordinary creativity" as gap-filler
Appropriate appellate remedy when agency explanation is inadequate	N/A (Apple argued PTAB decision sufficient)	PTAB decision is adequate or, if inadequate, should be remanded for further explanation (not reversed to final judgment)	Majority reversed on the merits; dissent (Newman) argued reversal was improper and the correct remedy would be vacatur and remand for further explanation

KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398 (2007) (common-sense creativity can inform obviousness but cannot replace reasoned analysis)
Arendi S.A.R.L. v. Apple Inc., 832 F.3d 1355 (Fed. Cir. 2016) (common-sense limitations require specific, searching reasoning; courts require a reasoned basis when filling missing claim limitations)
SEC v. Chenery Corp., 332 U.S. 194 (1947) (appellate review must be based on the agency’s stated grounds)
Dickinson v. Zurko, 527 U.S. 150 (1999) (APA standard: review for arbitrariness; factual findings reviewed for substantial evidence)
Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359 (Fed. Cir. 2015) (agency rulings may be affirmed if a proper path can reasonably be discerned)
In re Kubin, 561 F.3d 1351 (Fed. Cir. 2009) (obviousness is a legal conclusion based on subsidiary facts)