CAFC to PTAB in Icon v. Strava: Attorney argument is not evidence or explanation in support of a conclusion.

The issues:


Icon presents two arguments on appeal. First, Icon
contends that “[t]he principal error affecting all aspects of
the reexamination proceedings is Strava’s use of an expert
to supply legal conclusions of obviousness” and the
PTAB’s reliance on those conclusions. Appellant’s Br. 10.
Second, Icon avers that the PTAB erred in affirming the
Examiner’s rejection of the Asserted Claims, either for
lack of substantial evidence or for legal error in the conclusion
of obviousness. Id. at 17–35.



Of the first argument:


Icon’s arguments ignore the standard against which
we review PTAB determinations. “We review the PTAB’s
factual findings for substantial evidence and its legal
conclusions de novo.” Redline, 811 F.3d at 449 (citation
omitted). To the extent Icon challenges the PTAB’s
factual findings, as adopted from the Examiner, the PTAB
is permitted to weigh expert testimony and other record
evidence and, in so doing, rely on certain portions of an
expert’s declaration while disregarding others. See Velander
v. Garner, 348 F.3d 1359, 1371 (Fed. Cir. 2003)
(“[W]hat the [PTAB] consistently did was accord little
weight to broad conclusory statements that it determined
were unsupported by corroborating references. It is
within the discretion of the trier of fact to give each item
of evidence such weight as it feels appropriate.” (citation
omitted)); see also In re Am. Acad. of Sci. Tech Ctr., 367
F.3d 1359, 1368 (Fed. Cir. 2004) (“[T]he [PTAB] is entitled
to weigh the declarations and conclude that the lack of
factual corroboration warrants discounting the opinions
expressed in the declarations . . . .” (citations omitted)).
To the extent Icon makes a legal argument, there is
no per se prohibition against relying on an expert’s declaration
in support of factual findings underlying a legal
conclusion of obviousness solely because the declaration
states that something “would have been obvious.”

Indeed,
we frequently have affirmed PTAB determinations on
obviousness that rely on expert declarations that include
such statements, so long as other aspects of the declarations
contain statements related to factual findings. See
Veritas Techs. LLC v. Veeam Software Corp., 835 F.3d
1406, 1413 (Fed. Cir. 2016) (affirming the PTAB’s conclusion
of obviousness that relied on, inter alia, an expert’s
statements that “it would have been obvious that” a prior
art reference discloses a limitation in the disputed patent
application (emphasis added) (internal quotation marks
and citation omitted)); MCM Portfolio LLC v. HewlettPackard
Co., 812 F.3d 1284, 1293 (Fed. Cir. 2015) (affirming
the PTAB’s conclusion of obviousness that was based,
in part, upon an expert’s statement that “it would have
been obvious . . . to incorporate” a prior art reference’s
capabilities into another prior art reference (emphasis
added) (citation omitted)).




Of the second argument:



To determine whether the PTAB made the necessary
factual findings with an adequate evidentiary basis, we
must determine whether the PTAB incorporated by
reference the Examiner’s factual findings and whether
those findings were adequate, as Strava alleges. Appellees’
Br. 24. The PTAB rejected Icon’s arguments as to
claims 57–62 and 65 by asserting only that Icon “merely
restates previous arguments regarding contacts of the
cradle as discussed above.” Strava, 2015 WL 5723014, at
*11. But, as Strava admits, the PTAB had never actually
addressed those arguments above. Oral Argument,
14:26–14:55, http://oralarguments.cafc.uscourts.gov/defau
lt.aspx?fl=2016-1475.mp3. In fact, that one sentence is
the PTAB’s only reference to the “cradle,” “contacts,” or
“electrical” limitations recited in claims 57–62 and 65.
See generally Strava, 2015 WL 5723014. The PTAB’s
Decision on Appeal thus contains no substantive discussion
of the limitations at issue for claims 57–62 and 65.

(...)
As an initial matter, the PTAB was authorized to incorporate
the Examiner’s findings. “It is commonplace in
administrative law for a reviewing body within an agency
to adopt a fact-finding body’s findings. On judicial review,
the adopted material is treated as if it were part of the
reviewing body’s opinion.” In re Cree, Inc., 818 F.3d 694,
698 n.2 (Fed. Cir. 2016) (emphases added) (citations
omitted). The PTAB is no exception. See In re Brana, 51
F.3d 1560, 1564 n.13 (Fed. Cir. 1995) (upholding the
PTAB’s findings, although it “did not expressly make any
independent factual determinations or legal conclusions,”
because it had “expressly adopted” the examiner’s findings
by stating that it “agree[d] with the examiner’s well
reasoned, well stated[,] and fully supported by citation”
findings (alterations modified) (internal quotation marks
and citation omitted)). Therefore, the PTAB was authorized
to adopt the Examiner’s findings in the Right of
Appeal Notice.

(...)

Nevertheless, the PTAB’s incorporation by reference
of the Examiner’s factual findings as to claims 57–62 and
65 gives us considerable pause. The PTAB purported to
incorporate portions of the Examiner’s Right of Appeal
Notice that address these claims. Strava, 2015 WL
5723014, at *9. In the Right of Appeal Notice, however,
the Examiner only stated that it “agree[d] with” and
“incorporated by reference” Strava’s November 2013
Comments as to claims 57–62 and 65. J.A. 1643. Neither
the PTAB nor the Examiner made any factual findings;
instead, both purported to incorporate by reference arguments
drafted by Strava’s attorneys. See Strava, 2015
WL 5723014, at *9 (citing Strava’s PTAB Response Brief
(J.A. 2591–98) and Examiner’s Right of Appeal Notice
(J.A. 1641–56), the latter of which cites Strava’s November
2013 Comments (J.A. 1541–42)).

Attorney argument is not evidence. See, e.g., Gemtron
Corp. v. Saint-Gobain Corp., 572 F.3d 1371, 1380 (Fed.
Cir. 2009) (“[U]nsworn attorney argument . . . is not
evidence and cannot rebut . . . other admitted evidence
. . . .”); see also Manual of Patent Examining Procedure
§ 2145 (9th ed. Nov. 2015) (“Attorney argument is
not evidence unless it is an admission, in which case, an
examiner may use the admission in making a rejection.”).
Neither the PTAB’s adoption of Strava’s PTAB Response
Brief nor the Examiner’s adoption of Strava’s November
2013 Comments transform Strava’s attorney argument
into factual findings or supply the requisite explanation
that must accompany such findings. As we recently
explained,
[t]wo distinct yet related principles are relevant to
our review. First, the PTAB must make the necessary
findings and have an adequate evidentiary
basis for its findings. . . . Second, the PTAB must
examine the relevant data and articulate a satisfactory
explanation for its action including a rational
connection between the facts found and the
choice made. . . .
This explanation enables the court to exercise its
duty to review the PTAB’s decision to assess
whether those decisions are arbitrary, capricious,
an abuse of discretion, or . . . unsupported by substantial
evidence . . . .
NuVasive, 842 F.3d at 1382 (internal quotation marks
and citations omitted). Because the PTAB failed to comport
with what these principles demand, the PTAB’s
rejection of these claims must be vacated and the case
remanded for additional PTAB findings and explanation.
See, e.g., In re Van Os, 844 F.3d 1359, 1362 (Fed. Cir.
2017) (explaining that the court vacates and remands
when additional fact finding and explanation is warranted).



Elsewhere


To the extent that the PTAB adopted the Examiner’s
determination as to claims 46 and 74, we find it similarly
inadequate. In contrast to its discussion of claim 86, the
Examiner never made a factual finding based on record
evidence and failed to explain its reasoning for rendering
claims 46 and 74 unpatentable. Instead, the Examiner
stated only that he “agree[d] with” and “incorporated by
reference” Strava’s November 2013 Comments regarding
the voice activated controller limitation in claims 46 and
74. J.A. 1643. Attorney argument is not evidence or
explanation in support of a conclusion. See, e.g., Gemtron,
572 F.3d at 1380; see also NuVasive, 842 F.3d at 1383
(providing that the fact finder must explain it why accepts
the prevailing argument).




Elsewhere



Although the PTAB
made a factual finding, this finding did not have an
adequate basis in the record, and the PTAB did not adequately
explain its reasoning. Thus, we vacate and remand
for additional PTAB findings and explanation. See
Van Os, 844 F.3d at 1362.


Elsewhere



Once again,
the Examiner stated only that it “agree[d] with” and
“incorporated by reference” Strava’s November 2013
Comments, J.A. 1654, but attorney argument is not
evidence, see, e.g., Gemtron, 572 F.3d at 1380.