FACEBOOK, INC., Appellant v. WINDY CITY INNOVATIONS, LLC, Cross-Appellant
2018-1400, 2018-1401, 2018-1402, 2018-1403, 2018-1537, 2018-1540, 2018-1541
United States Court of Appeals for the Federal Circuit
March 18, 2020
Appeals from the United States Patent and Trademark Office, Patent Trial and Appeal Board in Nos. IPR2016-01156, IPR2016-01157, IPR2016-01158, IPR2016-01159, IPR2017-00659, IPR2017-00709.
HEIDI LYN KEEFE, Cooley LLP, Palo Alto, CA, argued for appellant. Also represented by ANDREW CARTER MACE, LOWELL D. MEAD, MARK R. WEINSTEIN. Also argued by PHILLIP EDWARD MORTON, Washington, DC.
VINCENT J. RUBINO, III, Brown Rudnick, LLP, New York, NY, argued for cross-appellant. Also represented by ALFRED ROSS FABRICANT, ENRIQUE WILLIAM ITURRALDE, PETER LAMBRIANAKOS.
JEREMY COOPER DOERRE, Tillman Wright PLLC, Charlotte, NC, as amicus curiae, pro se.
JEFFREY ERIC SANDBERG, Appellate Staff, Civil Division, United States Department of Justice, Washington, DC, for amicus curiae United States. Also represented by SCOTT R. MCINTOSH, JOSEPH H. HUNT; THOMAS W. KRAUSE, JOSEPH MATAL, FARHEENA YASMEEN RASHEED, MOLLY R. SILFEN, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA.
DAVID E. BOUNDY, Cambridge Technology Law LLC, Newton, MA, as amicus curiae, pro se.
Before PROST, Chief Judge, PLAGER and O‘MALLEY, Circuit Judges.
Opinion for the court filed by Chief Judge PROST, in which PLAGER and O‘MALLEY, Circuit Judges, join.
Additional views filed by Chief Judge PROST and Circuit Judges PLAGER and O‘MALLEY.
PROST,
Windy City Innovations, LLC (“Windy City“) filed a complaint accusing Facebook, Inc. (“Facebook“) of infringing U.S. Patent Nos. 8,458,245 (“the ‘245 patent“); 8,694,657 (“the ‘657 patent“); 8,473,552 (“the ‘552 patent“); and 8,407,356 (“the ‘356 patent“). In June 2016, exactly one year after being served with Windy City‘s complaint, Facebook timely petitioned for inter partes review (“IPR“) of several claims of each patent. At that time, Windy City had not yet identified the specific claims it was asserting in the district court proceeding. The Patent Trial and Appeal Board (“Board“) instituted IPR of each patent. In January 2017, after Windy City had identified the claims it was asserting in the district court litigation, Facebook filed two additional petitions for IPR of additional claims of the ‘245 and ‘657 patents, along with motions for joinder to the already instituted IPRs on those patents. By the time of that filing, the one-year time bar of
In the final written decisions, the Board delivered a mixed result, holding that Facebook had shown by a preponderance of the evidence that some of the challenged claims are unpatentable as obvious but had failed to show that others were unpatentable as obvious. Importantly, many of the claims the Board found unpatentable were claims only challenged in the later-joined proceedings.
For the reasons explained below, we hold that the Board erred in allowing Facebook to join itself to a proceeding in which it was already a party, and also erred in allowing Facebook to add new claims to the IPRs through that joinder. We also hold that the Board‘s obviousness determinations on the originally instituted claims are supported by substantial evidence. We therefore affirm-in-part and vacate-in-part the Board‘s final written decisions on the ‘245 and ‘657 patents, affirm the Board‘s final written decision on the ‘552 patent, and affirm-in-part the Board‘s final written decision on the ‘356 patent. We dismiss as moot Facebook‘s appeal of the Board‘s final written decision on the ‘356 patent with respect to claims 14 and 33.
I
A
The ‘245, ‘657, ‘552, and ‘356 patents share a common specification and claim priority to a patent application filed on April 1, 1996.1 The patents are generally related to methods for communicating over a computer-based network. The specification discloses a system with a “controller computer [1],” a plurality of “participator computers 5,” and a “connection 13,” linking the controller computer with each of the participator computers, as shown in Figure 1 below.
FIG. 1
‘245 patent at col. 4 l. 65–col. 5 l. 18, fig. 1. The specification describes “provid[ing] a chat capability suitable for handling graphical, textual, and multimedia information.” Id. at col. 2 ll. 15–17.
Two features described in the specification are relevant to this appeal: (1) the
B
On June 2, 2015, Windy City filed a complaint against Facebook alleging infringement of the ‘245, ‘657, ‘552, and ‘356 patents (“the asserted patents“) in the U.S. District Court for the Western District of North Carolina. Windy City‘s complaint did not specify which claims of the four asserted patents (collectively having a total of 830 claims) Facebook allegedly infringed. See J.A. 7996–8006 (alleging infringement of “claims of the patents-in-suit“). Facebook was served with the complaint on June 3, 2015, starting the statutory one-year clock for Facebook to file petitions for IPR of the asserted patents. See
On July 24, 2015, Facebook filed a motion to dismiss, arguing that the complaint did not provide adequate notice of Windy City‘s infringement allegations because it did not identify which claims were asserted against which Facebook products. On August 25, 2015, Facebook filed a motion to transfer the case to the U.S. District Court for the Northern District of California. The North Carolina district court did not rule on either motion for several months. On March 16, 2016, the North Carolina district court granted Facebook‘s motion to transfer but did not rule on Facebook‘s motion to dismiss.
Upon transfer to the Northern District of California, the district court issued a scheduling order on April 6, 2016, setting a case management conference for July 7, 2016.2 Under Northern District of California Patent Local Rule 3-1, Windy City would be required to identify its asserted claims 14 days later—more than one month after the expiration of the one-year time bar to file petitions for IPR of the asserted patents. On May 4, 2016, with the one-year bar date approaching, Facebook filed a motion asking the district court to order Windy City to identify no more than 40 asserted claims by May 16, 2016. The district court denied the motion on May 17, 2016.
On June 3, 2016, the last day of the one-year window, Facebook filed a petition for IPR of each of the four asserted patents. The petitions challenged some, but not all, of the claims of each patent. Specifically, Facebook challenged claims 1–15, 17, and 18 of the ‘245 patent; claims 189, 334, 342, 348, 465, 580, 584, and 592 of the ‘657 patent; claims 1–61 and 64 of the ‘552 patent; and claims 1–9, 12, 14–28, 31, and 33–37 of the ‘356 patent. The Board instituted review of all of the challenged claims and grounds in the petitions, except for claims 60 and 61 of the ‘552 patent.3
The Board granted Facebook‘s motions for joinder and allowed the newly challenged claims to be added to the proceedings. See J.A. 7385–402, 8162–76. In considering whether to grant the motions for joinder, the Board reasoned that “although the newly challenged claims are not identical” to those challenged in the original petitions, “the substance is very similar such that the addition of [the new] claims . . . is not likely to affect the scope of the trial significantly.” J.A. 7393; see also J.A. 8168–69. The Board also noted that joinder would not significantly disrupt the trial schedule, briefing, or discovery. J.A. 7394, 8169. In addition, the Board determined that Facebook did not unduly delay in challenging the new claims in the second petitions filed with the motions for joinder. J.A. 7394–97, 8169–71. The Board agreed with Facebook that Windy City‘s district court complaint generally asserting the “claims” of the asserted patents “cannot reasonably be considered an allegation that Petitioner infringes all 830 claims of the several patents asserted.” J.A. 7395; see also J.A. 8170. The Board therefore found that Facebook could not have reasonably determined which claims were asserted against it within the one-year time bar. See J.A. 7395–96, 8170. Once Windy City identified the asserted claims after the one-year time bar, the Board found that Facebook did not delay in challenging the newly asserted claims by filing the second petitions with the motions for joinder. J.A. 7397, 8170. For each new petition, the Board held that Facebook “has established good cause for joining this proceeding with the [existing] IPR.” J.A. 8172. Accordingly, the Board ordered that each new IPR “is hereby joined with” the corresponding existing IPR.
Two Administrative Patent Judges (“APJs“) on the panels joined concurring opinions, raising “concerns with permitting a party to, essentially, join to itself.” J.A. 7400; see also J.A. 8173. In their view, ”
In its final written decision on the ‘245 patent (which considered the claims challenged in the original petition as well as the second petition filed with the motion for joinder), the Board held that Facebook had failed to show by a preponderance of the evidence that claims 1–15, 17–19, and 22–25 are unpatentable as obvious. Facebook, Inc. v. Windy City Innovations, LLC, No. IPR2016-01156, Paper 52, at 34 (P.T.A.B. Dec. 6, 2017) (“‘245 Final Written Decision“).
In its final written decision on the ‘657 patent (which also considered the claims challenged in both the original petition and the second petition), the Board held that Facebook had shown by a preponderance of the evidence that claims 189, 334, 342, 348, 465, 477, 482, 487, 492, 580, 584, and 592 are unpatentable as obvious but had failed to show that claims 203, 209, 215, and 221 are unpatentable as obvious. Facebook, Inc. v. Windy City Innovations, LLC, No. IPR2016-01159, Paper 52, at 56 (P.T.A.B. Dec. 6, 2017) (“‘657 Final Written Decision“).
In its final written decision on the ‘552 patent, the Board held that Facebook had shown by a preponderance of the evidence that claims 2, 3, 5, 7, 10–17, 59, and 64 are unpatentable as obvious but had failed to show that claims 1, 4, 6, 8, 9, and 18–58 are unpatentable as obvious. Facebook, Inc. v. Windy City Innovations, LLC, No. IPR2016-01158, Paper 47, at 59 (P.T.A.B. Dec. 6, 2017) (“‘552 Final Written Decision“).
In its final written decision on the ‘356 patent, the Board held that Facebook had shown by a preponderance of the evidence that claims 1–9, 12, 15–28, 31, and 34–37 are unpatentable as obvious but had failed to show that claims 14 and 33 are unpatentable as obvious. Facebook, Inc. v. Windy City Innovations, LLC, No. IPR2016-01157, Paper 47, at 59 (P.T.A.B. Dec. 6, 2017) (“‘356 Final Written Decision“).
Facebook timely appealed, and Windy City cross-appealed. We have jurisdiction pursuant to
II
On appeal, Facebook argues that the Board erred in finding that Facebook failed to prove that claims 1–15, 17–19, and 22–25 of the ‘245 patent; claims 203, 209, 215, and 221 of the ‘657 patent; claims 1, 4, 6, 8, 9, and 18–58 of the ‘552 patent; and claims 14 and 33 of the ‘356 patent are unpatentable as obvious over the instituted grounds.
In its cross-appeal, Windy City argues that the Board erred in finding that a person of ordinary skill in the art would have been motivated to combine the prior art references in each IPR. Windy City also argues that joinder was improper because
We begin by addressing the joinder issue raised in Windy City‘s cross-appeal then turn to the technical merits presented in Facebook‘s appeal and Windy City‘s cross-appeal.
A
In its cross-appeal, Windy City argues that the Board‘s decisions granting joinder were improper and should be reversed. Windy City presents two issues of statutory interpretation: whether
1
Statutory interpretation is an issue of law that we review de novo. Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 1379 (Fed. Cir. 2016). “In statutory construction, we begin ‘with the language of the statute.‘” Kingdomware Techs., Inc. v. United States, 136 S. Ct. 1969, 1976 (2016) (quoting Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450 (2002)). Our “first step ‘is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case.‘” Barnhart, 534 U.S. at 450
2
(b) Patent Owner‘s Action.—An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in
interest, or privy of the petitioner is served with a complaint alleging infringement of the patent. The time limitation set forth in the preceding sentence shall not apply to a request for joinder under subsection (c). (c) Joinder.—If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.
Windy City argues that
We agree with Windy City on both points. The clear and unambiguous text of
Beginning with the statutory language,
The joinder provision,
3
We first address whether the language of
The difference between joining two proceedings and joining a person “as a party” is a matter of the plain meaning of familiar legal terms. Courts construe legal terms in a statute to have their customary, ordinary meaning in law unless there is a strong reason to infer a departure from that meaning. See, e.g., Microsoft Corp. v. i4i Ltd. Partnership, 564 U.S. 91, 101 (2011) (“where Congress uses a common-law term in a statute, we assume the ‘term . . . comes with a common law meaning, absent anything pointing another way.‘“). Facebook has not identified any customary, ordinary usage of “joining a person as a party to a proceeding” as referring to combining the proceedings, or any indication of a congressional intent to depart from the normal usage that keeps these things distinct. Indeed, the statute recognizes the difference by addressing joinder in
We recognize that, notwithstanding the language it used, the Board may have been intending to convey that it was joining Facebook as a party to its previously instituted IPRs, and not joining the IPR proceedings themselves. In their concurrence, for example, APJs McKone and Lee referred to the majority opinion as “permitting a party to, essentially, join to itself.” J.A. 7400. The parties themselves appear to have interpreted the Board‘s decision this way, and have conducted this appeal accordingly. See, e.g., Cross-Appellant‘s Response Br. 16 (“the Board . . . allowed Facebook to join its own previously-filed IPRs“); Appellant‘s Reply and Response Br. 31 (“the Board . . . join[ed] Facebook to the previously-instituted IPRs . . . so called ‘same-party’ joinder“).
Assuming that the Board in fact joined Facebook “as a party” to its existing IPRs, the question before us is whether
We recognize that the Board‘s Precedential Opinion Panel analyzed this issue in Proppant Express Investments, LLC v. Oren Technologies, LLC, No. IPR2018-00914, Paper 38 (P.T.A.B. Mar. 13, 2019), and came to the opposite conclusion. Id. at 5 (”
Accordingly, we hold that the clear and unambiguous meaning of
4
The Board‘s interpretation of
The strongest case that Facebook can make is that the statute does not expressly prohibit the introduction of new issues in the joined proceedings. Appellant‘s Reply and Response Br. 28 (“The statute . . . does not prohibit the consideration of new claims or issues in the joined proceedings.“); id. (“Nothing in this text states or implies that when a person joins an instituted IPR, that person cannot address any new claims or issues beyond the already-instituted IPR.“).
The lack of an express prohibition, however, does not make
Our interpretation of
[D]uring the pendency of an inter partes review, if another proceeding or matter involving the patent is before the Office, the Director may determine the manner in which the inter partes review or other proceeding or matter may proceed, including providing for . . . consolidation . . . of any such matter or proceeding.
Our interpretation is further supported by the legislative history of
Facebook too relies on the legislative history, arguing that the following statement from Senator Kyl, particularly the final sentence in the excerpt below, shows that
Sections 315(c) and 325(c) allow joinder of inter partes and post-grant reviews. The Office anticipates that joinder will be allowed as of right—if an inter partes review is instituted on the basis of a petition, for example, a party that files an identical petition will be joined to that proceeding, and thus allowed to file its own briefs and make its own arguments. If a party seeking joinder also
presents additional challenges to validity that satisfy the threshold for instituting a proceeding, the Office will either join that party and its new arguments to the existing proceeding, or institute a second proceeding for the patent.
157 Cong. Rec. S1360, S1376 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl). We disagree for at least three reasons.
First, the scenario described by Senator Kyl does not apply to the situation at hand. One option described in the final sentence is “to institute a second proceeding for the patent,” which would require the second petition to be timely filed. The scenario Senator Kyl describes therefore assumes two timely-filed petitions.5 Because Senator Kyl‘s statement refers to two timely-filed petitions, we do not find it instructive for understanding Congress’ intent about whether to allow joinder of new issues from a time-barred petition.
Second, it is unclear which portions of Senator Kyl‘s statement refer to
Third, this single, ambiguous comment from one senator cannot override the final committee report, much less the plain statutory language. See Garcia v. United States, 469 U.S. 70, 76 (1984) (“In surveying legislative history we have repeatedly stated that the authoritative source for finding the Legislature‘s intent lies in the Committee Re-
ports on the bill, which ‘represen[t] the considered and collective understanding of those Congressmen involved in drafting and studying proposed legislation.’ We have eschewed reliance on the passing comments of one Member.” (alteration in original) (citation omitted) (quoting Zuber v. Allen, 396 U.S. 168, 186 (1969))); Milner v. Dep‘t of Navy, 562 U.S. 562, 572 (2011) (“We will not . . . allow[] ambiguous legislative history to muddy clear statutory language.“).
Finally, Facebook argues that there are important policy rationales that run counter to our interpretation. Appellant‘s Reply and Response Br. 37–38. Specifically, Facebook argues that it was appropriate for the Board to permit joinder given the unique facts of this case, where at the end of the one-year time bar Windy City had not yet identified which of the 830 claims of four patents it was asserting against Facebook. Facebook submits that the view we adopt today leaves a dangerous incentive for patent owners to file suit on patents containing hundreds of claims and then “steadfastly delay[] the litigation through various stalling tactics [and] . . . ‘run out the clock’ on the one year bar under
We do not disagree with Facebook that the result in this particular case may seem in tension with one of the AIA‘s objectives for IPRs “to provide ‘quick and cost effective alternatives’ to litigation in the courts.” PPC Broadband, Inc. v. Corning Optical Commc‘ns RF, LLC, 815 F.3d 734, 741 (Fed. Cir. 2016) (emphasis added) (quoting H.R. Rep. No. 112-98, pt. 1, at 48 (2011), as reprinted in 2011 U.S.C.C.A.N. 67, 78). Indeed, it is fair to assume that when Congress imposed the one-year time bar of
Petitioners who, like Facebook, are faced with an enormous number of asserted claims on the eve of the IPR filing deadline, are not without options. As a protective measure, filing petitions challenging hundreds of claims remains an available option for accused infringers who want to ensure that their IPRs will challenge each of the eventually asserted claims. An accused infringer is also not obligated to challenge every, or any, claim in an IPR. Accused infringers who are unable or unwilling to challenge every claim in petitions retain the ability to challenge the validity of the claims that are ultimately asserted in the district court. Accused infringers who wish to protect their option of proceeding with an IPR may, moreover, make different strategy choices in federal court so as to force an earlier narrowing or identification of asserted claims. Finally, no matter how valid, “policy considerations cannot create an ambiguity when the words on the page are clear.” SAS, 138 S. Ct. at 1358. That job is left to Congress and not to the courts. See Lamie v. U.S. Tr., 540 U.S. 526, 542 (2004) (“If Congress enacted into law something different from what it intended, then it should amend the statute to conform it to its intent.“). In the meantime, we must abide by the clear and unambiguous statutory language.6
In sum, we conclude that the clear and unambiguous language of
5
We now turn to the question of what, if any, deference is owed to the PTO‘s interpretation of
6
In light of the foregoing, we hold that the Board‘s joinder decisions, which allowed
B
We now turn to the technical merits of this appeal and review the Board‘s obviousness determinations that are not vacated based on our holding on joinder.
1
Obviousness is a question of law based on underlying factual determinations. Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064, 1073 (Fed. Cir. 2015). We review the Board‘s ultimate obviousness determination de novo and underlying factual findings for substantial evidence. Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1363 (Fed. Cir. 2016). Substantial evidence is “more than a mere scintilla” and means “‘such relevant evidence as a reasonable mindmight accept as adequate to support a conclusion.‘” Biestek v. Berryhill, 139 S. Ct. 1148, 1154 (2019) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). We review the Board‘s determination of the broadest reasonable interpretation of the claim language de novo. Straight Path IP Grp., Inc. v. Sipnet EU S.R.O., 806 F.3d 1356, 1360 (Fed. Cir. 2015).8
2
We begin with the ‘245 patent. As mentioned above, the disputed claims of the ‘245 patent relate to the ability to handle “out-of-band” information (i.e., information that a participator computer may not be able to present on its own).
In its original, timely petition for IPR of the ‘245 patent, Facebook challenged claims 1–15, 17, and 18. The Board instituted review of claims 1–5, 7, and 9–14 based on obviousness over Roseman,9 Rissanen,10 Vetter,11Pike,12 and Westaway;13 and instituted review of claims
In its final written decision on the ‘245 patent, the Board held that Facebook had failed to show by a preponderance of the evidence that claims 1–15, 17–19, and 22–25 are unpatentable as obvious. ‘245 Final Written Decision, at 34. Facebook appeals the Board‘s determination that these claims are not unpatentable as obvious. As previously discussed, joinder of claims 19 and 22–25 was improper, so the final written decision is vacated with respect to those claims. Here, we address remaining claims 1–15, 17, and 18.
The disputed limitation of claim 1 of the ‘245 patent is:
the second of said participator computers internally determines whether or not the second of the participator computers can present the communication, if it is determined that the second of the participator computers can not present the communication then obtaining an agent with an ability to present the communication, and otherwise presenting the communication independent of the first of the independent participator computers and the computer.
‘245 patent at claim 1. Independent claim 7 recites substantially the same limitation as claim 1. See id. at claim7. All of the remaining claims at issue depend from claim 1 or 7.
Facebook conceded before the Board that the primary reference, Roseman, does not disclose the disputed limitation. ‘245 Final Written Decision, at 29 (“Indeed, Petitioner admits that ‘Roseman does not appear to contemplate the scenario in which the second participant computer internally determines that it cannot present the communication.‘” (emphasis in original) (quoting J.A. 457 (Petition))). Facebook relied on Pike or, alternatively, Westaway to satisfy this limitation. Pike describes a system where a user can manually search for and install software to open a specific file type, and Westaway describes a program that automatically obtains a software to present a communication if the program determines that it cannot. See id. at 18–19.
The Board determined that Facebook failed to explain “why a skilled artisan would have incorporated this feature into Roseman‘s local computers (participator computers) in light of Roseman‘s system, which processes images at the host, not the local computers.” Id. at 29 (emphasis added). The Board reasoned that:
The most logical reading of Roseman is that its local computers already have software sufficient to render the common image that the host provides to them. Thus, Petitioner‘s argument that Pike and Westaway would have been applied because of the possibility that a meeting participant would place a document on the table that other participants would not have the correct software to view is not applicable to Roseman. Petitioner has not explained why, in the case where the host is unable to present a communication received from a local computer as part of its common image, a local computer would make an internal determination to that effect, or why users at the local computerswould seek out software to present the communication.
Id. at 29–30 (citation omitted). In reaching this conclusion, the Board considered Facebook‘s expert‘s testimony but determined
On appeal, Facebook argues that the Board‘s underlying understanding of Roseman (that it processes images at the host, not the local computers) was incorrect. As explained below, substantial evidence supports the Board‘s understanding of Roseman, which in turn supports its determination that claim 1 would not have been obvious over the asserted prior art.
Facebook argues that there are at least two instances where Roseman processes images at the local participant computers—the “note passing” feature and the “document sharing” feature. Appellant‘s Opening Br. 29–35. The note-passing feature in Roseman allows a conference participant to send a private note to another participant, which only the recipient can view. Roseman explains that “[w]hen the other party [recipient] sees the note on his picture, as in FIG. 12, he can drag it to a private viewing area, double-click it, and read it. No other people are aware of the passed note.” J.A. 1223, col. 9 ll. 28–31 (emphasis added). The document sharing feature allows a participant to drag a data file from outside the conference room window onto the table of the conference room to share it with other participants who can open it. These two features, Facebookargues, show that Roseman generates images at the local participant computers.
Facebook‘s argument requires us to agree that the area outside the virtual conference room of Roseman is outside the software system of Roseman entirely, rather than just outside the virtual meeting room. Referring to Figure 10 of Roseman below, Facebook‘s position is that the area outside of the meeting room (everything except the box in the bottom left corner) is outside of the Roseman software entirely and is on the participants’ local desktops:
FIG. 10
Appellant‘s Opening Br. 29–30 (citing J.A. 1204, fig. 10). Facebook cites no evidence supporting this position. Without any citation or support, Facebook simply equates the area outside of the conference room
As Windy City notes, there is substantial evidence to support the understanding that the entire area shown in Figure 10 is within the Roseman software system, with the box in the bottom left corresponding to a specific meeting room within the system. See Cross-Appellant‘s Response Br. 21–22. Roseman does not state that the area outside of the meeting room in Figure 10 is “outside the system” or “outside the software.” Roseman refers to this area outside the meeting room as a “private viewing area.” J.A. 1223, col. 9 ll. 28–31 (explaining that once “the other party seesthe note on his picture, as in FIG. 12, he can drag it to a private viewing area, double-click it, and read it“). Referring to this area as the “private viewing area” suggests that this is still part of the Roseman system and that the host can create the images seen in this private area rather than the images being created locally.
Facebook‘s position, which is based on attorney argument rather than evidence in the record, does not persuade us that the Board‘s understanding of Roseman‘s system is incorrect. It also does not undermine the substantial evidence that supports the Board‘s finding that claim 1 would not have been obvious over the prior art of record. We therefore affirm the Board‘s holding that claims 1–15, 17, and 18 of the ‘245 patent are not unpatentable as obvious over the asserted prior art.
The final written decision on the ‘245 patent is therefore affirmed-in-part (claims 1–15, 17, and 18) and vacated-in-part (claims 19 and 22–25).
3
We now turn to the ‘657 patent. As mentioned above, the ‘657 patent relates generally to the “censorship” features that control the dissemination of information among participator computers.
In its original, timely petition for IPR of the ‘657 patent, Facebook challenged claims 189, 334, 342, 348, 465, 580, 584, and 592. The Board instituted review of all of the challenged claims based on obviousness over Roseman, Rissanen, Vetter, Pike, and Lichty. As discussed above, claims 203, 209, 215, 221, 477, 482, 487, and 492 were improperly added through joinder.
In its final written decision on the ‘657 patent, the Board held that Facebook had shown by a preponderance of the evidence that claims 189, 334, 342, 348, 465, 477, 482, 487, 492, 580, 584, and 592 are unpatentable as obvious but had failed to show that claims 203, 209, 215, and221 are unpatentable as obvious. ‘657 Final Written Decision, at 56.
Facebook appeals the Board‘s determination that claims 203, 209, 215, and 221 are not unpatentable as obvious. As previously discussed, joinder of each of these claims was improper, so the final written decision is vacated with respect to those claims. We therefore do not address the technical merits of Facebook‘s appeal of these claims.
Windy City‘s cross-appeal challenges the Board‘s determination that claims 189, 334, 342, 348, 465, 477, 482, 487, 492, 580, 584, and 592 are unpatentable as obvious. As previously discussed, joinder of claims 477, 482, 487, and 492 was improper, so the final written decision is vacated with respect to those claims. Here, we address remaining claims 189, 334, 342, 348, 465, 580, 584, and 592.
The claims at issue recite a “database” that stores “tokens” (e.g., user identity information). Roseman teaches the use of “keys” provided to users that enable users to access a conference “room” through a “door” (i.e., using the key to “open the door“). J.A. 1223, col. 9 ll. 34–48, 54–55, col. 10 ll. 61–64. Roseman describes
In its cross-appeal, Windy City argues that the Board erred in finding that it would have been obvious to combine Roseman and Rissanen. Windy City argues that the Board‘s analysis was infected by hindsight and that it did not adequately explain how someone skilled in the art would build the combined Roseman and Rissanen system. Cross-Appellant‘s Response Br. 35–39; see also id. at 36 (arguing that carrying out the combination “would take substantial creativity“); id. at 38 (arguing that the Board “does not address the difficulty” of making this combination). We find no legal error in these aspects of the Board‘s obviousness analysis.
As an initial matter, “[a] person of ordinary skill is also a person of ordinary creativity, not an automaton,” so the fact that it would take some creativity to carry out the combination does not defeat a finding of obviousness. KSR Int‘l Co. v. Teleflex Inc., 550 U.S. 398, 421 (2007); see also ClassCo, Inc. v. Apple, Inc., 838 F.3d 1214, 1219 (Fed. Cir. 2016) (“The rationale of KSR does not support [the] theory that a person of ordinary skill can only perform combinations of a puzzle element A with a perfectly fitting puzzle element B.“). The Board also correctly rejected Windy City‘s argument about the difficulty of physically creating the combination, noting that Facebook was not arguing that Rissanen‘s database would be bodily incorporated into Roseman‘s system. ‘657 Final Written Decision, at 35. Regardless, “[t]he test for obviousness is not whether the features of a secondary reference may be bodily incorporated into the structure of the primary reference.” Allied Erecting & Dismantling Co. v. Genesis Attachments, LLC, 825 F.3d1373, 1381 (Fed. Cir. 2016) (quoting In re Keller, 642 F.2d 413, 425 (C.C.P.A. 1981)).
The only remaining issue is whether the Board‘s factual findings underpinning its determination are supported by substantial evidence. We hold that they are. There is substantial evidence of record supporting the Board‘s finding that the use of a database “would be a straightforward and predictable choice for storing Roseman‘s keys.” ‘657 Final Written Decision, at 31. For example, Facebook‘s expert Dr. Lavian testified that “[d]atabase technologies predated the [challenged patents] by decades, and it was known to use databases to store user identity and authentication information (‘tokens‘).” J.A. 6249, ¶ 51. Dr. Lavian also explained why a person of skill in the art would have been motivated to combine Roseman with Rissanen, specifically that “[a] skilled artisan would understand that the user identity and password information in Rissanen is analogous to the ‘keys’ in Roseman, and would be motivated to make this combination.” J.A. 6250, ¶ 52. Substantial evidence supports the Board‘s determination that it would have been obvious
The final written decision on the ‘657 patent is therefore affirmed-in-part (claims 189, 334, 342, 348, 465, 580, 584, and 592) and vacated-in-part (claims 203, 209, 215, 221, 477, 482, 487, and 492).
4
We next address the ‘552 patent, which also relates generally to “censorship” features.
Facebook‘s petition for IPR challenged claims 1–61 and 64 of the ‘552 patent. The Board instituted review of claims1–59 and 64 based on obviousness over Roseman, Rissanen, Vetter, Pike, and Lichty. The Board did not institute review of claims 60 and 61.15
In its final written decision on the ‘552 patent, the Board held that Facebook had shown by a preponderance of the evidence that claims 2, 3, 5, 7, 10–17, 59, and 64 are unpatentable as obvious but had failed to show that claims 1, 4, 6, 8, 9, and 18–58 are unpatentable as obvious. ‘552 Final Written Decision, at 59.
Facebook appeals the Board‘s determination that claims 1, 4, 6, 8, 9, and 18–58 are not unpatentable as obvious. Facebook‘s argument focuses on the following “authorization step” of claim 1:
the controller computer system controlling real-time communications by:
storing each said user identity and a respective authorization to send multimedia data, the multimedia data comprising graphical data; and
if permitted by the user identity corresponding to one of the participator computers, allowing the one of the participator computers to send multimedia data to another of the participator computers.
‘552 patent at claim 1.
Before the Board, Facebook argued that these authorization limitations were satisfied by Roseman, which describes using stored keys, associated with user identities, for controlling admission to a particular conference. ‘552 Final Written Decision, at 53. Facebook argued that the authorization limitation was satisfied by Roseman because a user who is not authorized to access a room could not send multimedia data to conference room participants.The Board rejected this argument and determined that Roseman only describes a key granting a user admission to a virtual conference room and does not describe keys as determining what a user can do in a conference room once admitted. Id. The Board reasoned that “it does not follow that the key [of Roseman] provides permissions for behavior within a conference room, such as authorization to send multimedia data.” Id.; see also id. (“We are not persuaded that such a key [granting access to a conference room] constitutes stored authorization to engage in certain activities once admitted.“).On appeal, Facebook argues that the Board erred by narrowly construing the authorization limitations to require determining what a user can do in a conference room, not just whether they should be admitted. Appellant‘s Opening Br. 42–44. We do not think the Board erred in its claim construction. Most importantly, the Board‘s construction is supported by the intrinsic evidence, including Figure 3 (below), which describes checking the user‘s permission prior to authorizing the user to send multimedia data.
FIG. 3
‘552 patent at
Under the Board‘s construction, which we think is correct, the Board‘s determination that Roseman does not satisfy this limitation is supported by substantial evidence. As described above, the Board considered and rejected Facebook‘s arguments and determined that Roseman only describes a key granting a user admission to a virtual conference room and did not describe keys as determining what a user can do in a conference room once admitted. ‘552 Final Written Decision, at 53. This determination is supported by substantial evidence, including the disclosure of Roseman itself. See id. (citing J.A. 1223 col. 9 ll. 34–55, col. 10 ll. 61–65). And, like the Board, we are also not persuaded that a key that grants admission also includes an authorization to send multimedia data in a conference room. See id. We therefore affirm the Board‘s holding that claims 1, 4, 6, 8, 9 and 18–58 of the ‘552 patent are not unpatentable as obvious over the asserted prior art.
Windy City‘s cross-appeal challenges the Board‘s determination that claims 2, 3, 5, 7, 10–17, 59, and 64 are unpatentable as obvious. Windy City makes the same argument it made for
The final written decision on the ‘552 patent is therefore affirmed.
5
Finally, we address the ‘356 patent, which also relates generally to “censorship” features.
Facebook‘s petition for IPR challenged claims 1–9, 12, 14–28, 31, and 33–37 of the ‘356 patent. The Board instituted review of claims 1–5, 8, 9, 12, 14–16, 19–24, 27, 28, 31, 33–35, and 37 based on obviousness over Roseman, Rissanen, and Vetter; claims 6, 7, 17, 26, and 36 based on obviousness over Roseman, Rissanen, Vetter, and Pike; claims 18 and 25 based on obviousness over Westaway; and claims 6, 8, 15, 17, and 18 based on obviousness Roseman, Rissanen, Vetter, and Gosling.16
In its final written decision on the ‘356 patent, the Board held that Facebook had shown by a preponderance of the evidence that claims 1–9, 12, 15–28, 31, and 34–37 are unpatentable as obvious but had failed to show that claims 14 and 33 are unpatentable as obvious. ‘356 Final Written Decision, at 59.
Facebook appealed the Board‘s determination that claims 14 and 33 were not unpatentable as obvious. However, claims 14 and 33 were found unpatentable by the Board in a separate IPR from which Windy City voluntarily dismissed its appeal. See Windy City Innovations, LLC v. Facebook Inc., No. 18-1543, ECF No. 24, at 1–2 (Fed. Cir. May 14, 2018) (dismissing appeal of No. IPR2016-01067). Windy City argued that Facebook‘s appeal regarding claims 14 and 33 of the ‘356 patent is moot. Cross-Appellant‘s Response Br. 5 n.1. Facebook agreed. Appellant‘s Reply and Response Br. 20 (“Facebook concurs that its appeal on claims 14 and 33 of the ‘356 patent is moot becausethose claims are finally invalid.“). We agree that Facebook‘s appeal of the final written decision on the ‘356 patent is moot, dismiss that portion of Facebook‘s appeal, and therefore do not address claims 14 and 33.
Windy City‘s cross-appeal challenges the Board‘s determination that claims 1–9, 12, 15–28, 31, and 34–37 are unpatentable as obvious. Windy City makes the same argument it made for the ‘657 patent—that it would not have been obvious to combine Roseman and Rissanen. For the same reasons explained above with respect to the ‘657 patent, substantial evidence supports the Board‘s finding that it would have been obvious to combine Roseman and Rissanen to arrive at the claimed invention of the ‘356 patent. We therefore affirm the Board‘s holding that claims 1–9, 12, 15–28, 31, and 34–37 of the ‘356 patent are unpatentable as obvious over the asserted prior art.
The final written decision on the ‘356 patent is therefore affirmed-in-part (claims 1–9, 12, 15–28, 31, and 34–37).
6
We have considered the parties’ remaining arguments on the technical merits of
III
We hold that the clear and unambiguous language of
AFFIRMED-IN-PART, VACATED-IN-PART, DISMISSED-IN-PART
COSTS
The parties shall bear their own costs.
Additional views by PROST, Chief Judge, PLAGER and O’MALLEY, Circuit Judges.
The majority opinion concludes that the clear and unambiguous language of
Contrary to our conclusions, however, both parties contend that a proper reading of
Facebook argues that the POP opinion in Proppant deserves Chevron deference, see Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984), or at least Skidmore deference, see Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944), and that we should, thus, defer to the conclusion in the opinion that joinders like those at issue in this case are permissible. The government, following oral argument in this case and upon our request for its views, filed a brief likewise arguing for Chevron, or at least Skidmore, deference for the Board’s interpretation of
I
At the time of the principal briefing in this appeal, different panels of the Board had issued conflicting nonprecedential decisions on the proper interpretation of
In its principal briefing in this appeal, Facebook asked us to give Chevron deference to the Board’s interpretation of
In September 2018, while this appeal was pending, the Director outlined new procedures to create and govern the POP. The POP’s purpose is to “establish binding agency authority concerning major policy or procedural issues, or other issues of exceptional importance in the limited situations where it is appropriate to create such binding agency authority through adjudication before the Board.” Patent Trial and Appeal Board, Standard Operating Procedure 2 (Rev. 10), at 3 (Sept. 20, 2018) (hereinafter “SOP 2”), https://www.uspto.gov/sites/default/files/documents/SOP2%20R10%20FINAL.pdf.1
After the principal briefing was completed, but before we heard oral argument in this appeal, the Director convened a POP in Proppant to address the following issues:
- Under
35 U.S.C. § 315(c) may a petitioner be joined to a proceeding in which it is already a party? - Does
35 U.S.C. § 315(c) permit joinder of new issues into an existing proceeding? -
Does the existence of a time bar under 35 U.S.C. § 315(b) , or any other relevant facts, have any impact on the first two questions?
Proppant Express Invs., LLC v. Oren Techs., LLC, No. IPR2018-00914, Paper 24, at 2 (P.T.A.B. Dec. 3, 2018). In Proppant, the POP held that
Following Proppant, Facebook filed a notice of supplemental authority identifying the POP opinion and arguing that it deserved Chevron deference. Facebook, Inc. v. Windy City Innovations, LLC, No. 18-1400, ECF No. 56, at 1–2 (Fed. Cir. Mar. 20, 2019) (“The PTO’s precedential statutory interpretation of
After oral argument in this appeal, we invited the Director, who had not intervened in the case, to file a brief expressing his views on “what, if any, deference should be afforded to decisions of a Patent Trial and Appeal Board Precedential Opinion Panel (‘POP’), and specifically to the POP opinion in Proppant Express Investments, LLC v. Oren Technologies, LLC, No. IPR2018-00914, Paper 38 (P.T.A.B. Mar. 13, 2019).” Facebook, Inc. v. Windy City Innovations, LLC, No. 18-1400, ECF No. 64, at 1–2 (Fed. Cir. Aug. 12, 2019) (per curiam). The government filed a brief in response, both Facebook and Windy City replied, and two amici filed briefs on the issue. Facebook, Inc. v. Windy City Innovations, LLC, No. 18-1400, ECF Nos. 76 (government), 79, 90 (amici), 91 (Facebook), 92 (Windy City).
In its response, the government argued that POP opinions interpreting the AIA, including Proppant, are entitled to Chevron, or at least Skidmore, deference. Facebook agreed with the government’s position on deference. Windy City argued that POP opinions, including Proppant, are not entitled to any deference, as did the non-government Amici.
II
We apply Chevron deference to an agency’s implementation of a particular statutory provision only “when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority.” Mead, 533 U.S. at 226–27. The Supreme Court has stated that “a very good indicator of delegation meriting Chevron treatment in [sic, *is] express congressional authorizations to engage in the process of rulemaking or adjudication that produces regulations or rulings for which deference is claimed.” Id. at 229.
In the AIA, Congress delegated certain rulemaking authority to the Director. Notably, such delegation specifically provides that the Director shall “prescribe regulations.”
The express delegation of rulemaking authority, thus, is for the Director to promulgate regulations governing the conduct of IPRs. “[W]hen Congress expressly delegates to the Director the ability to adopt legal standards and procedures by prescribing regulations, the Director can only obtain Chevron deference if it adopts such standards and procedures by prescribing regulations.” See, e.g., Aqua Prods., Inc. v. Matal, 872 F.3d 1290, 1334 (Fed. Cir. 2017) (en banc) (Moore, J., concurring); see id. (“The Board may adopt a legal standard through a precedential decision in an individual case, but that legal standard will not receive Chevron deference when Congress only authorized the agency to prescribe regulations.”). There is no indication in the statute that Congress either intended to delegate broad substantive rulemaking authority to the Director to interpret statutory provisions through POP opinions or intended him to engage in any rulemaking other than through the mechanism of prescribing regulations.
The AIA also includes an express delegation to the Board to “conduct each inter partes review instituted under this chapter.”
Notably absent from the AIA, accordingly, is any congressional authorization, for either the Director or the Board, to undertake statutory interpretation through POP opinions. Thus, just as we give no deference to nonprecedential Board decisions, we see no reason to afford deference to POP opinions.
According to the government, POP opinions are comparable to processes employed by other adjudicative bodies with rulemaking authority to which the Supreme Court has afforded Chevron deference. But in each of the examples cited by the government, the statutory delegation of authority is not analogous to the authority delegated by the AIA. For example, in the context of the Board of Immigration Appeals, Congress has charged the Attorney General with administering the Immigration and Nationality Act. The statute specifically provides that “a ‘ruling by the Attorney General with respect to all questions of law shall be controlling.’” See Negusie v. Holder, 555 U.S. 511, 516–17 (2009) (quoting
The government’s other examples also include broader delegations of authority from Congress to the agency than the AIA affords. See, e.g., Suprema, Inc. v. Int’l Trade Comm’n, 796 F.3d 1338, 1345 (Fed. Cir. 2015) (noting that “[t]here is no dispute that Congress has delegated authority to the Commission to resolve ambiguity in Section 337 if the Commission does so through formal adjudicative procedures”); Holly Farms Corp. v. NLRB, 517 U.S. 392, 398–99 (1996) (statutory grant in the National Labor Relations Act,
The organization of the PTO is not analogous to the agencies in the examples cited by the government. Unlike those examples, which have a single delegee with both rulemaking and adjudicatory powers, Congress organized the PTO with certain powers delegated to the Director, and others delegated to the Board. See, e.g.,
[I]n traditional agencies—that is, agencies possessing a unitary structure—adjudication operates as an appropriate mechanism not only for factfinding, but also for the exercise of delegated lawmaking powers, including lawmaking by interpretation. . . . because the unitary agencies in question also had been delegated the power to make law and policy through rulemaking.
Id. at 154 (emphasis added). Conversely, in agencies where Congress has not expressly delegated both rulemaking and adjudicative authority to a single delegee, as in the PTO, adjudication may not operate as an appropriate mechanism for the exercise of rulemaking. See id. at 154–55.
In light of the limited authority delegated by the AIA, we decline to defer to the POP opinion on this issue of statutory interpretation—a pure question of law that is not within the specific expertise of the agency.3 Aqua Prods., 872 F.3d at 1320 (plurality opinion) (“Because Chevron deference displaces judicial discretion to engage in statutory interpretation, it requires a relatively formal expression of administrative intent, one with the force and effect of law.”); see also id. at 1324 (Moore, J., concurring) (“The point of Chevron is to encourage courts to defer to agencies on issues that ‘implicate[] agency expertise in a meaningful way.’” (quoting Sandoval v. Reno, 166 F.3d 225, 239 (3d Cir. 1999) (alteration in original)))); see also Kisor v. Wilkie, 139 S. Ct. 2400, 2414 (2019) (explaining that deference is unwarranted “when a court concludes that an interpretation does not reflect an agency’s authoritative, expertise-based, ‘fair[, or] considered judgment.’” (alteration in original) (emphasis added) (quoting Auer v. Robbins, 519 U.S. 452, 462 (1997) (citing Mead, 533 U.S. at 229–31). The interpretation of
entitled to Chevron deference.”). In our view, this is no small matter.
Facebook also argues that the POP opinion in Proppant is entitled to Chevron deference because it was “provided after notice, public comment, and hearing.” Facebook, Inc. v. Windy City Innovations, LLC, No. 18-1400, ECF No. 56, at 2. The government elaborates on this point, contending that the interpretation rendered in the POP opinion in Proppant resulted from a “highly structured process,” “following notice to the public; . . . further written briefing by the parties and six amici; and an oral hearing.” Facebook, Inc. v. Windy City Innovations, LLC, No. 18-1400, ECF No. 76, at 6.
To the extent that Facebook or the government argues that this is comparable to notice-and-comment rulemaking, we disagree. While the POP in Proppant issued an order listing the issues it intended to review, solicited briefs from the parties and amici, and held an oral hearing, the POP procedure falls short of traditional notice-and-comment rulemaking that could receive Chevron deference.
For example, the announcement that a POP has been convened and the issues it will review is not published in the Federal Register. Instead, it is issued as an order in the docket of the case. See SOP 2, at 7 (“[T]he Precedential Opinion Panel will enter an order notifying the parties and the public when the Precedential Opinion Panel has been designated and assigned to a particular Board case. The order will further identify the issues the Precedential Opinion Panel intends to resolve and the composition of the panel.”).4 There is no formal opportunity for public
comment. In fact, while the parties and amici were invited to file briefs in Proppant, the POP is not required to invite either. Id. (“[T]he Precedential Opinion Panel may request additional briefing on identified issues, and, in appropriate circumstances, may further authorize the filing of amicus briefs.” (emphases added)).
Finally, POP opinions, once decided, are not published in the Federal Register. Instead, they are “posted to the Board’s Precedential Decisions Web page.” Id. at 8. As a result, unlike final rules published in the Federal Register that may be challenged by interested parties in court, see
Issuing an order that a POP panel has been convened in a particular case and soliciting amicus briefs is not equivalent in form or substance to traditional notice-and-comment rulemaking. See, e.g., Mead, 533 U.S. at 231, 233 (denying Chevron deference to Customs’ Classifications rulings, in which Customs “does not generally engage in notice-and-comment practice when issuing them,” and describing Customs’ practice in making them as “present[ing] a case far removed . . . from notice-and-comment process”). It is, instead, similar to what courts regularly do when seeking input which may help inform their adjudicatory function. Nor is the precedential value of POP opinions a sufficient reason to afford Chevron deference. Id. at 232 (“[P]recedential value alone does not add up to Chevron entitlement.”). The fact that legal determinations may be binding on future Board panels does not enhance the standing of that determination when reviewed on appeal.
The law has long been clear that the Director has no substantive rule making authority with respect to interpretations of the Patent Act. Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1336 (Fed. Cir. 2008). The Board, similarly, historically has been given adjudicatory authority—similar to that given to courts—to decide the issues presented to it. The Director’s new delegation of authority in the AIA to establish procedures by regulation for the conduct of IPRs does not confer new statutory interpretive authority to the Board or
III
In just three sentences at the end of its brief, the government asks for Skidmore deference if we do not apply Chevron deference. The government articulates the Skidmore standard and includes a single sentence of explanation of why it should apply. As an initial matter, such a conclusory assertion with no analysis is insufficient to develop and preserve the issue. See Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1378, 1385 (Fed. Cir. 2019) (citing United States v. Great Am. Ins. Co. of N.Y., 738 F.3d 1320, 1328 (Fed. Cir. 2013) (“It is well established that arguments that are not appropriately developed in a party’s briefing may be deemed waived.”)).
Nevertheless, in our view, Skidmore deference does not apply. Under Skidmore, “‘[t]he weight [accorded to an administrative] judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.” Mead, 533 U.S. at 228 (second alteration in original) (quoting Skidmore, 323 U.S. at 140). The considerations listed in Skidmore weigh against affording deference here. For example, as explained in the majority opinion, we find the Director’s interpretation of
IV
In sum, even if
Notes
(b) Request for joinder. Joinder may be requested by a patent owner or petitioner. Any request for joinder must be filed, as a motion under § 42.22, no later than one month after the institution date of any inter partes review for which joinder is requested. The time period set forth in § 42.101(b) shall not apply when the petition is accompanied by a request for joinder.