Emc Corporation v. Clouding Corp.
686 F. App'x 857
| Fed. Cir. | 2017Background
- Clouding Corp. owns U.S. Patent No. 5,944,839, which claims a method for diagnosing/solving computer-system problems using sensors, a case/knowledge database, and an AI engine; claim 6 (independent) includes step 5: “when a likely solution cannot be determined, saving a state of the computer system.”
- EMC petitioned for inter partes review (IPR) arguing claims 6, 8, and 14 are obvious over Barnett in view of Allen (Allen ’664); Barnett supplied the diagnostic AI/rules-system teachings and Allen supplied the teaching to create/save a case when no match (no likely solution) exists.
- The PTAB instituted the IPR on the Barnett+Allen obviousness ground but in its Final Written Decision found EMC failed to show unpatentability, focusing on step 5 and treating its two halves separately: (a) the condition “when a likely solution cannot be determined,” and (b) that the likely solution is “to a problem in the computer system” and the saving of a system state.
- The Board concluded EMC had not argued Allen teaches the first half and that, to the extent EMC had relied on Allen for that half, EMC withdrew that reliance during oral argument; the Board therefore evaluated only Barnett as to the first half and found Barnett insufficient.
- On appeal, the Federal Circuit held the Board erred twice: (1) EMC did in fact argue in its petition and reply that Allen (in combination with Barnett) teaches the condition “when a likely solution cannot be determined,” and Clouding conceded Allen teaches that condition; and (2) EMC’s oral concessions were narrow (Allen is silent about treating a ‘‘computer system’’ specifically) and did not amount to withdrawing reliance on Allen for that limitation when combined with Barnett.
- Because the Board never adjudicated whether the Barnett+Allen combination teaches the second half of step 5 (“saving a state of the computer system”), the Federal Circuit vacated and remanded for the Board to decide that remaining question.
Issues
| Issue | Plaintiff's Argument (EMC) | Defendant's Argument (Clouding) | Held |
|---|---|---|---|
| Whether EMC argued Allen teaches the condition “when a likely solution cannot be determined” | EMC argued in its petition and reply Allen teaches creating/saving a case when no good match/likely solution exists; relied on Allen + Barnett for context | Clouding pointed to Barnett’s silence on outcomes and argued the combination would not yield saving the computer-system state | Court: EMC did argue this; Board erred in finding no such argument |
| Whether EMC withdrew reliance on Allen at oral argument | EMC’s oral statements acknowledged Allen doesn’t exemplify diagnosing a computer system, but EMC maintained reliance on Allen combined with Barnett | Clouding and Board treated EMC’s concession as withdrawal of reliance on Allen for the limitation | Court: EMC’s concession was narrow and did not constitute withdrawal of reliance; Board erred |
| Whether the Board properly reached the ultimate obviousness question (does Barnett+Allen teach saving a system state) | EMC urged the combination teaches saving a state when no likely solution exists (Allen teaches saving a case; Barnett supplies computer-system context) | Clouding conceded combining references but argued the combination does not suggest saving the computer-system state | Court: Board never reached this issue due to its errors; remanded for Board to decide |
| Standard of review for Board factfinding and legal error | EMC relied on record arguments, expert declarations, and concessions; asked Board to apply preponderance standard in IPR | Clouding relied on Board’s factual findings and oral argument record | Court: Remanded—vacated decision due to Board’s legal error in failing to consider EMC’s arguments; Board to apply proper analysis under IPR standards |
Key Cases Cited
- None with an official reporter citation included in the opinion (decision primarily reviews PTAB IPR record and reasoning).