Tuesday, May 29, 2018

CAFC tackles "substantial evidence" in Ericsson v. Intellectual Ventures; PTAB reversed

The primary legal issue in Ericsson v. Intellectual Ventures [IV] involved the meaning of the substantial evidence
standard. As to "what patents are involved", footnote 3 is useful:

The ’480 patent [prior art in the IPR], the ’408 patent [challenged in the IPR], and the ’435 patent
all originated with Airnet Communications Corporation,
and are now owned by IV.

Procedurally, this was an appeal to the CAFC of a PTAB decision in an inter partes review, which PTAB decision
had favored the patentee, Intellectual Ventures. This outcome did not survive the CAFC. In a 2-1 vote, the majority
opinion written by Judge Pauline Newman, began:

Ericsson Incorporated and Telefonaktiebolaget LM
Ericsson (collectively, “Ericsson”) appeal the decision of
the Patent Trial and Appeal Board (“PTAB”) on inter
partes review, in which Ericsson is the Petitioner and
Intellectual Ventures I LLC (“IV”) is the Patent Owner.
The PTAB sustained the patentability of claims 1–16 of
U.S. Patent No. 6,952,408 (“the ’408 patent”).1
We conclude that the PTAB erred in its decision with
respect to claim 1, the only claim whose patentability was
analyzed by the PTAB. We reverse as to claim 1, vacate
as to claims 2–16, and remand for determination of patentability
of claims 2–16.

Relevant prior art was US 6,952,408, which had claim 1, which began

1. A method for frequency hopping in a cellular
communications system having multiple mobile
subscribers communicating on a plurality of different
physical RF channels on any time division
multiplexed scheme with a basestation having a
broadband transceiver, said method comprising
the steps of:

Yes, if frequency hopping rings a patent history bell, think
Hedy Lamarr and World War II. From wikipedia:

During World War II, Lamarr learned that radio-controlled torpedoes,
an emerging technology in naval war, could easily be jammed and set off course.
She thought of creating a frequency-hopping signal that could not be tracked or jammed.
She contacted her friend, composer and pianist George Antheil, to help her develop a device
for doing that, and he succeeded by synchronizing a miniaturized player-piano mechanism with
radio signals. They drafted designs for the frequency-hopping system, which they patented.
[US 2,292,387]

Note also the 2008 post of IPBiz
August 11: anniversary of Hedy Lamarr's patent

As to this case, Ericsson's argument is summarized:

In brief, Ericsson argues that claim 1 is a “generic”
statement of the known method of frequency hopping
implemented at broadband basestations. Ericsson states
that all the limitations of claim 1 are shown in the ’480
patent, and that claim 1 is no more than a broad recitation
of the general method of frequency hopping in mobile
communications, as disclosed in the ’480 patent in general
terms. Ericsson states that if any additional content in
the ’408 specification may serve to distinguish the ’480
patent, such content is not present as a limitation to
claim 1. Thus Ericsson argues that claim 1 is anticipated
by the ’480 patent or is obvious from the ’480 patent in
combination with the GSM reference


Ericsson does not disagree that the ’408 patent specification
describes additional components used in frequency
hopping. The PTAB stated, “comparing Figure 3 of the
’480 patent with Figure 8 of the ’408 patent, the two
patents describe bus drivers with similar components.
Nevertheless, Figure 3 of the ’480 patent lacks the DP
RAM FHOP 312, Comparator 206, control processor 300,
and RX Ping/PONG 304 components shown in Figure 8 of
the ’408 patent.” PTAB Dec. 11–12. The PTAB found
that these components “implement[] a frequency hopping
functionality” in the ’408 patent. Id. at 12. Ericsson’s
position is that claim 1 of the ’408 patent claims the
general method for frequency hopping in a cellular communication
system on a broadband basestation, and that
this general method is disclosed in the ’480 patent reference.

Judge Newman recited the standards of review:

PTAB decisions are reviewed in accordance with the
Administrative Procedure Act, 5 U.S.C. § 706(2). Agency
findings of fact are reviewed for support by substantial
evidence in the agency record, and agency rulings of law
are reviewed for correctness in accordance with law. See
In re Gartside, 203 F.3d 1305, 1316 (Fed. Cir. 2000).

An important part of Judge Newman's opinion:

IV argued before the PTAB that there are differences
in details and in performance; for example, IV’s expert
stated that the method described in the ’480 patent cannot
remap the incoming data fast enough to support
frequency hopping. J.A. 403–08; J.A. 3365 (¶101). This
contradicts the statement in the ’480 patent that the GSM
frequency hopping standard may be used. ’480 patent,
col. 5, ll. 4–17.

To contradict a reference, an unsupported opinion is
not substantial evidence.
See Homeland Housewares,
LLC v. Whirlpool Corp., 865 F.3d 1372, 1378 (Fed. Cir.
2017) (“[W]e must disregard the testimony of an expert
that is plainly inconsistent with the record, or based on an
incorrect understanding of the claim[s].” (citations and
internal quotation marks omitted) (second alteration in
original)). Although the PTAB adopted the opinion of IV’s
expert and stated on rehearing that it found Ericsson’s
expert lacking in credibility, this is not a matter of credibility
but of technological evidence.

Ericsson agrees that there are differences in the disclosures,
in that the ’408 specification describes “an added
memory and supporting components shown in the ’408
patent’s Figure 8 (corresponding to ’480 Patent Figure 3).”
Ericsson Br. 2–3, 19. Ericsson points out that this added
memory, DP RAM FHOP 312, is not required by any of
the claims. Ericsson states that the PTAB appears to
have misunderstood the technology.

IV argues that even if the PTAB misunderstood the
technology, the PTAB result is correct. But the specification
of the ’480 patent teaches that frequency hopping
may be used, and “each and every element” of claim 1 of
the ’408 patent is disclosed in the ’480 patent, “arranged
or combined in the same way as in the claim.” Blue
Calypso, 815 F.3d at 1341 (quoting In re Gleave, 560 F.3d
at 1334). We conclude that substantial evidence does not
support the PTAB’s decision
, and that claim 1 is anticipated
by the disclosure in the ’480 patent.

The dissent by Judge Wallach brings up a feature of the
"substantial evidence" standard that may not be appreciated by
the lay public:

The Supreme Court has made clear that “[a] court reviewing
an agency’s adjudicative action should accept the
agency’s factual findings if those findings are supported
by substantial evidence . . . . The court should not supplant
the agency’s findings merely by identifying alternative
findings that could be supported by substantial
evidence.” Arkansas v. Oklahoma, 503 U.S. 91, 113
(1992) (citation omitted); see, e.g., Consolo v. Fed. Mar.
Comm’n, 383 U.S. 607, 620 (1966) (explaining that, under
substantial evidence review, “the possibility of drawing
two inconsistent conclusions from the evidence does not
prevent an administrative agency’s finding from being
supported by substantial evidence”
(citations omitted)).

Judge Wallach does not believe the prior art reference
described frequency hopping:

The majority errs by conducting a more exacting review
than substantial evidence requires. In support of its
conclusion, the majority cites Carney’s specification’s
reference to “frequency hopping standards such as the
[Groupe Spéciale Mobile (‘GSM’)], personal communication
network (PCN) standards, and the like.” Carney
col. 5 ll. 14–17; see Maj. Op. 14–15. However, the PTAB
thoroughly considered this passage from Carney, as well
as Ericsson’s expert’s testimony regarding how a person
having ordinary skill in the art (“PHOSITA”) would have
understood it, and found that it did not disclose frequency
hopping. See J.A. 13–18. Specifically, the PTAB found
that “this passage states, at most, that the system described
in [Carney] supports the modulation specified by
the GSM standard,” J.A. 17, but that Carney “does not
state, explicitly or implicitly, that the described system
implements the optional frequency hopping functionality
of GSM,” J.A. 18. As the PTAB explained, see J.A. 17,
when read in context, Carney refers to the GSM standard’s
modulation functionality, see Carney col. 5 ll. 6–17
(stating that “[t]he RF carrier signals are modulated with
voice and/or data (channel) signals” and that “[t]he particular
modulation in use[] may be any one of a number of
different wireless . . . standards . . . , frequency hopping
standards such as the [GSM] . . . , and the like” (emphases

Judge Wallach views the majority's analysis as a re-weighing of evidence:

The majority does not explain why this evidence is insufficient
to support the PTAB’s finding. See Maj. Op. 12–
17. Instead, it “reweigh[s] th[e] evidence,” In re Warsaw
Orthopedic, Inc., 832 F.3d 1327, 1333 (Fed. Cir. 2016),
and “identif[ies] alternative findings that could be supported
by substantial evidence,” Arkansas, 503 U.S. at
113; see Maj. Op. 13–15 (stating that “[e]ach term of claim
1 . . . is recited in [Carney],” summarizing the evidence
that purportedly supports its conclusion, and stating that
the PTAB’s opposite conclusion is “contrary to the evidence”).
Because “[t]his court does not reweigh evidence
on appeal, but rather determines whether substantial
evidence supports the [PTAB]’s fact findings,” In re NTP,
Inc., 654 F.3d 1279, 1292 (Fed. Cir. 2011), I would affirm
the PTAB’s finding that Carney does not anticipate the
Challenged Claims as supported by substantial evidence.

Thus, in this case, the majority asserts as a factual matter
that the prior art patent did disclose the concept of frequency
hopping, at least to the extent of the elements of the claim 1
of the challenged patent:

But the specification
of the ’480 patent teaches that frequency hopping
may be used, and “each and every element” of claim 1 of
the ’408 patent is disclosed in the ’480 patent, “arranged
or combined in the same way as in the claim.” Blue
Calypso, 815 F.3d at 1341 (quoting In re Gleave, 560 F.3d
at 1334).

In Dickinson v. Zurko, 527 U.S. 150; 119 S. Ct. 1816; 144 L. Ed. 2d 143 (1999), the
Supreme Court noted:

This Court has described the APA court/agency "substantial evidence" standard as
requiring a court to ask whether a "reasonable mind might accept" a particular evidentiary
record as "adequate to support a conclusion." Consolidated Edison, 305 U.S. at 229.

[See also:
Summary judgment of non-infringement affirmed by CAFC in Red Dog v. KAT

In this case, one asks if a reasonable mind might accept that the prior art did NOT disclose
the claim elements, thus supporting a legal conclusion of "not invalid for anticipation."


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