PTAB reversed in Hulu matter: To bar Hulu from pressing an argument it raised in a ground the Board found “redundant” and that it expressly incorporated into other proposed grounds of unpatentability on which the Board instituted would not only unfairly prejudice Hulu, ...

The decision was a mixture:


Today we decide three appeals in companion cases
from final written decisions of the United States Patent
and Trademark Office (“PTO”) Patent Trial and Appeal
Board’s (“Board”) inter partes reviews (“IPRs”) of U.S.
Patent No. 7,191,233 (“the ’233 patent”), owned by CRFD
Research, Inc. (“CRFD”). Iron Dome LLC v. CRFD Research,
Inc., No. IPR2015-00055, 2016 Pat. App. LEXIS
6855 (P.T.A.B. Apr. 22, 2016) (hereinafter “Iron Dome
Final Written Decision,” Appeal No. 16-2198); DISH
Network Corp. v. CRFD Research, Inc., No. IPR2015-
00627, 2016 Pat. App. LEXIS 7567 (P.T.A.B. June 1,
2016) (hereinafter “DISH Final Written Decision,” Appeal
No. 16-2298); Hulu, LLC v. CRFD Research, Inc., No.
IPR2015-00259, 2016 Pat. App. LEXIS 4340 (P.T.A.B.
June 1, 2016) (hereinafter “Hulu Final Written Decision,”
Appeal No. 16-2437). For the reasons stated below, we
affirm the Iron Dome and DISH Final Written Decisions,

but we reverse the Board’s determination on obviousness
in the Hulu Final Written Decision.



As to review:


We review the Board’s factual findings for substantial
evidence and its legal conclusions de novo. In re Gartside,
203 F.3d 1305, 1315–16 (Fed. Cir. 2000). “Substantial
evidence is something less than the weight of the evidence
but more than a mere scintilla of evidence.” In re Mouttet,
686 F.3d 1322, 1331 (Fed. Cir. 2012) (citing Gartside, 203
F.3d at 1312). It is “such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion.”
In re Applied Materials, Inc., 692 F.3d 1289, 1294
(Fed. Cir. 2012) (quoting Consol. Edison Co. of N.Y. v.
NLRB, 305 U.S. 197, 229 (1938)). We have jurisdiction
over these appeals under 28 U.S.C. § 1295(a)(4).



Of Hulu:


Hulu appeals the Board’s determination in the Hulu
Final Written Decision that (1) claims 1–3, 23, and 24 are
not anticipated by Bates, (2) claims 1–6, 8–11, 23–25, and
29–31 would not have been obvious over Bates and Chan;
(3) claims 13, 14, 34, and 35 would not have been obvious
over Bates and Zou; and (4) claims 15, 17–20, 36, and 38–
41 would not have been obvious over Bates, Zou, and
Chan. For the reasons stated below, we reverse the
Board’s determinations of nonobviousness, ...

Hulu challenges the Board’s determination that various
claims of the ’233 patent would not have been obvious
on the grounds on which the Board instituted review. On
appeal, the only claim limitation in dispute for these
grounds is “transmitting a session history of said first
device from said first device to a session transfer module
after said session is discontinued on said first device.”
’233 patent, col. 9, ll. 35–37 (emphasis added). We conclude
that the Board erred, both in how it performed its
obviousness analysis and in the merits of its determination
of nonobviousness.
Hulu first contends the Board failed to conduct a separate
analysis on obviousness as to each of the instituted
grounds. Instead, according to Hulu, the Board improperly
relied on its finding that Bates did not anticipate
various asserted claims of the ’233 patent to support its
finding of nonobviousness without considering whether
Bates suggests transmission of session history after
discontinuation.
We agree that the Board legally erred in its treatment
of Hulu’s obviousness challenge. Although Hulu raised
separate arguments as to the obviousness of certain
claims, the Board performed limited fact-finding in its
obviousness inquiry, only examining the level of ordinary
skill in the art and then relying primarily on its determination
that Bates did not anticipate the challenged
claims. Hulu Final Written Decision, at *28–31. But
“[t]he tests for anticipation and obviousness are different.”
Cohesive Techs., Inc. v. Waters Corp., 543 F.3d 1351, 1364
(Fed. Cir. 2008). As noted, anticipation is a question of
fact, while obviousness is a question of law based on
underlying factual findings. Kennametal, Inc. v. Ingersoll
Cutting Tool Co., 780 F.3d 1376, 1381 (Fed. Cir. 2015).





AND



We agree with Hulu that the Board erred on this
point, as Hulu expressly incorporated this argument as
part of other grounds of unpatentability on which the
Board instituted trial.7 Hulu relies solely on the teachings
of Bates to satisfy the transmitting limitation as to
all asserted claims. The Board, in its discretion, elected
to not institute review on Bates alone for redundancy
reasons, but instituted review on obviousness grounds
that include the only reference—Bates—cited in that
ground. To bar Hulu from pressing an argument it raised
in a ground the Board found “redundant” and that it
expressly incorporated into other proposed grounds of
unpatentability on which the Board instituted would not
only unfairly prejudice Hulu, but would also raise questions
about the propriety of the Board’s redundancy
decision. As the parties agree, our obviousness analysis
on this limitation is controlled by the teachings and
suggestions of Bates, and the Board’s decision to not
review the obviousness ground of Bates alone for redundancy
reasons cannot control the breadth of the obviousness
inquiry it took below, and that we must review here.