Koninklijke Philips loses at CAFC

The outcome was that the appellant Koninklijke Philips lost:



Koninklijke Philips N.V. (“Philips”) appeals the decision of the Patent Trial and Appeal Board (“Board”) in an
inter partes review of U.S. Patent No. 7,529,806 (“the ’806
patent”), in which the Board found that claims 1–11 were
unpatentable as obvious. For the reasons below, we affirm


The arguments of appellant:


First, Philips argues that the Board erred by instituting inter
partes review on the ground that the claims would have
been obvious over SMIL 1.0 in light of Hua because Google
did not advance that combination of prior art in its petition.

Second, Philips contends that the Board erred in finding
that the claims would have been obvious in view of SMIL
1.0 because the Board impermissibly relied on “general
knowledge” to supply a missing claim limitation.

Third, Philips argues that even if we reject one or both of Philips’s
first two arguments, the Board’s obviousness findings are
nevertheless unsupported by substantial evidence.



Of the first argument:


We hold that the Board erred by instituting inter
partes review based on a combination of prior art references not advanced in Google’s petition. Under 35 U.S.C.
§ 311(a), a party may seek inter partes review by filing “a
petition to institute an inter partes review.” The Supreme
Court has explained that this language does not “contemplate a petition that asks the Director to initiate whatever
kind of inter partes review he might choose.” SAS Inst. Inc.
v. Iancu, 138 S. Ct. 1348, 1355 (2018). Rather, “[f]rom the
outset, we see that Congress chose to structure a process in
which it’s the petitioner, not the Director, who gets to define the contours of the proceeding.” Id. More specifically,
“the statute envisions that a petitioner will seek an inter
partes review of a particular kind—one guided by a petition
describing ‘each claim challenged’ and ‘the grounds on
which the challenge to each claim is based.’” Id. (quoting
35 U.S.C. § 312(a)(3)); see also id. (“[R]ather than create
(another) agency-led, inquisitorial process for reconsidering patents, Congress opted for a party-directed, adversarial process.”)
(...)
In sum, we conclude that the Board erred by instituting
inter partes review of claims 1–11 of the ’806 patent based
on obviousness over SMIL 1.0 and Hua because Google did
not advance such a combination of references in its petition


Of the second argument:


Although the prior art that can be considered in inter
partes reviews is limited to patents and printed publications, it does not follow that we ignore the skilled artisan’s
knowledge when determining whether it would have been
obvious to modify the prior art. Indeed, under 35 U.S.C.
§ 103, the obviousness inquiry turns not only on the prior
art, but whether “the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious . . . to a person
having ordinary skill in the art to which the claimed invention pertains.” 35 U.S.C. § 103. Regardless of the tribunal,
the inquiry into whether any “differences” between the invention and the prior art would have rendered the invention obvious to a skilled artisan necessarily depends on
such artisan’s knowledge. Dow Jones & Co. v. Ablaise Ltd.,
606 F.3d 1338, 1349, 1353 (Fed. Cir. 2010) (affirming the
district court’s grant of summary judgment of invalidity on
“grounds of obviousness under [a single prior art reference]
in view of general knowledge in the field,” in part because
the obviousness “analysis requires an assessment of the ‘. . .
background knowledge possessed by a person having ordinary skill in the art’” (emphasis added) (quoting KSR Int’l
Co. v. Teleflex, Inc., 550 U.S. 398, 401 (2007))); see also Arendi S.A.R.L. v. Apple Inc., 832 F.3d 1355, 1361 (Fed. Cir.
2016) (in an inter partes review, acknowledging that common sense and common knowledge can, under certain circumstances, be used to supply a missing limitation);
Randall Mfg. v. Rea, 733 F.3d 1355, 1362–63 (Fed. Cir.
2013) (in an ex parte reexamination, in which the applicable prior art is similarly limited to patents and printed publications, determining that “[a]s KSR established, the
knowledge of such an artisan is part of the store of public
knowledge that must be consulted when considering
whether a claimed invention would have been obvious”).



AND


Philips argues that even if the Board is permitted to rely on general knowledge to supply a missing claim
limitation in an inter partes review, doing so in this case
violates Arendi. In Arendi, we cautioned that although
“common sense and common knowledge have their proper
place in the obviousness inquiry,” (a) invoking “common
sense . . . to supply a limitation that was admittedly missing from the prior art” should generally only be done when
“the [missing] limitation in question [is] unusually simple
and the technology particularly straightforward;” and
(b) references to common sense “cannot be used as a wholesale substitute for reasoned analysis and evidentiary support.” 832 F.3d at 1361–62. We concluded in Arendi that
the Board erred in relying on common sense because such
reliance was based merely upon “conclusory statements
and unspecific expert testimony.” Id. at 1366.
Philips argues that this case is analogous to Arendi.
We disagree. In Arendi, the Board relied on nothing more
than “conclusory statements and unspecific expert testimony” in finding that it would have been “common
sense . . . to supply a limitation that was admittedly missing from the prior art,” id. at 1362, 1366 (emphasis added).
Conversely, here the Board relied on expert evidence,
which was corroborated by Hua, in concluding that pipelining was not only in the prior art, but also within the general
knowledge of a skilled artisan. M



Of the third argument:


The Board’s reliance on the ’806 patent’s disclosure was
proper. As an initial matter, it is appropriate to rely on
admissions in a patent’s specification when assessing
whether that patent’s claims would have been obvious.
See, e.g., PharmaStem Therapeutics, Inc. v. ViaCell, Inc.,
491 F.3d 1342, 1362 (Fed. Cir. 2007) (“Admissions in the
specification regarding the prior art are binding on the patentee for purposes of a later inquiry into obviousness.”).
What matters is that substantial evidence supports the
findings and inferences made based on those admissions.
Here, the Board properly relied on this disclosure as evidence that it would have been within a skilled artisan’s
abilities to take advantage of multithreaded environments
to develop a simultaneous download and playback application. See J.A. 202–203. The Board supported its additional
findings—including that a skilled artisan would have been
motivated to combine SMIL 1.0 with pipelining to achieve
the claimed invention and would have had a reasonable expectation of success in doing so—with, for example, citations to an expert declaration as well as the Hua reference.
See, e.g., Final Written Decision, at 22–23; see also J.A. 315;
J.A. 199–200 (¶ 202).
Accordingly, we determine that the Board’s factual
findings underlying its obviousness determination are supported by substantial evidence