PGS GEOPHYSICAL AS v. IANCU
891 F.3d 1354
| Fed. Cir. | 2018Background
- PGS Geophysical owns U.S. Patent No. 6,906,981 claiming methods/systems for marine seismic surveying using multiple towed sources with short, variable time delays to encode shots and allow post‑processing separation and stacking.
- WesternGeco petitioned for three inter partes reviews (IPRs) challenging claims 1–38 of the ’981 patent (three petitions, same three grounds).
- The PTAB instituted each IPR only in part: it reviewed some (but not all) challenged claims and declined to institute on one of the three grounds in each petition.
- In three final written decisions the Board found some claims unpatentable (anticipation and obviousness over Beasley and Edington); PGS appealed only the obviousness rulings as to certain claims.
- After appeal was filed, WesternGeco settled and withdrew; the Director intervened to defend the Board.
- The Court addressed (1) whether it had jurisdiction to decide appeals given the Board’s partial institutions in light of SAS Institute v. Iancu and whether it should sua sponte revive non‑instituted claims/grounds, and (2) the merits of the Board’s obviousness determinations (motivation to combine and smearing issue).
Issues
| Issue | PGS's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether appellate jurisdiction exists and the Court may decide instituted claims despite PTAB’s partial institution (SAS issue) | SAS error deprives finality/jurisdiction or requires reopening; court should not proceed without addressing non‑instituted claims | Board’s partial institution was erroneous under SAS but final written decisions plus institution determinations produce final agency action; the error is waivable and not fatal to jurisdiction | Court has jurisdiction; will decide appeals on instituted claims and will not sua sponte revive non‑instituted claims/grounds because no party sought SAS relief |
| Whether the court must sua sponte remand/revive non‑instituted claims and grounds omitted by PTAB | Court should reopen IPRs or decline review because PTAB could not lawfully institute partially under SAS | No authority requires sua sponte relief; SAS error is addressed under APA harmless‑error principles and is waivable; finality and expedition favor deciding instituted issues | Court will not sua sponte reopen or revive non‑instituted claims/grounds absent a request for relief |
| Whether Beasley and Edington provided motivation to combine (obviousness) | PGS: an ordinarily skilled artisan would not be motivated to combine; Board failed to make proper motivation finding | WesternGeco/Director: Beasley’s express suggestion to use "other types of encoding" (including time delays) supplies motivation; record supports Board’s factual finding | Substantial evidence supports Board’s motivation‑to‑combine finding; affirmed |
| Whether spatial "smearing" teaches away from combining Beasley with Edington’s time‑delay encoding | PGS: smearing (loss of spatial resolution) would deter combination; expert testimony shows severe resolution loss | Board: Beasley contemplates near‑simultaneous activation and nonzero small delays; small delays mitigate smearing; combination need not slavishly adopt Edington’s exact parameters | Board reasonably found smearing would not teach away; affirmed |
Key Cases Cited
- SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018) (PTAB must institute on all claims and grounds in a petition or none)
- KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398 (2007) (obviousness framework for combining familiar elements)
- Arthrex, Inc. v. Smith & Nephew, Inc., 880 F.3d 1345 (2018) (IPR finality and termination of proceedings)
- Insite Vision Inc. v. Sandoz, Inc., 783 F.3d 853 (2015) (motivation to combine and reasonable expectation of success standard)
- City of Arlington v. FCC, 569 U.S. 290 (2013) (agency jurisdictional labels and deference principles)
- Shinseki v. Sanders, 556 U.S. 396 (2009) (harmless‑error and burden to show prejudice)
- Bowman Transp., Inc. v. Arkansas‑Best Freight Sys., Inc., 419 U.S. 281 (1974) (upholding agency decisions of less than ideal clarity if path can be reasonably discerned)