Friday, December 21, 2018

Vivent loses at CAFC, with the CAFC noting: the Board is not bound by any findings made in its Institution Decision

The outcome of the CAFC case was bad for the patentee Vivent:

Vivint now appeals the Board’s decision invalidating
its claims. cross-appeals, arguing that the
surviving claims should also be invalidated. Because the
Board did not err in invalidating the patent claims at
issue in Vivint’s appeal, we affirm. With respect to’s cross-appeal, we conclude that the Board’s
construction of “communication device identification
codes” is not consistent with the broadest reasonable
interpretation of the relevant claims. We therefore reverse
its construction, vacate its related conclusions, and
remand for further consideration. We affirm the Board’s
decision on the claims at issue in the cross-appeal in all
other respects.

The technology:

The patents at issue describe systems and methods
for remotely monitoring equipment, such as a heating,
ventilating, and cooling system (“HVAC system”). See,
e.g., ’601 patent, col. 1, ll. 10–14.2 These systems and
methods work by using a centralized server to communicate
with monitored equipment so that a user, e.g. a
property owner or contractor, is contacted if the equipment encounters problems.

The matter of "substantial evidence" was discussed:

Substantial evidence is “such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.” Arendi S.A.R.L.
v. Apple Inc., 832 F.3d 1355, 1361 (Fed. Cir.
2016); see also Consol. Edison Co. of New York v.
N.L.R.B., 305 U.S. 197, 229 (1938).


The Board’s construction of
“communication device identification codes” is therefore
not entitled to deference. Teva Pharm. USA, Inc. v.
Sandoz, Inc., 135 S. Ct. 831, 841 (2015) (“As all parties
agree, when the district court reviews only evidence
intrinsic to the patent . . . the judge’s determination will
amount solely to a determination of law, and the Court of
Appeals will review that construction de novo.”).

The problem with the Board's interpretation:

And yet, the Board
decided that “communication device identification codes”
must refer to something “capable of uniquely identifying
communication devices.” ’601 Decision at 20; ’123 Decision at 20 (same).
Even assuming this is correct, however, the Board’s conclusion that a phone number or email
address cannot uniquely identify a communication device
defies the patents’ teachings. For example, both patents
explain that a mobile identification number refers to a
device in the same way that a phone number refers to a
cellular phone, i.e. a communication device. ’601 patent,
col. 6, ll. 61–65 (“Every interface unit 10 is provided, like
a cellular telephone, with an electronic serial number
(ESN, to identify the specific interface unit sending the
message) and a mobile identification number (MIN,
similar to a cellular telephone’s phone number).”); ’123
patent, col. 10, ll. 38–42 (same).4 But the Board’s construction suggests the opposite.

The CAFC made reference to oral argument:

If there is no satisfactory
response, then the central alarm monitoring station
follows up with further error checking to detect a compromised
communication path.” (emphasis added)). But
Britton’s status messages do not confirm that equipment,
sensors, or interfaces are functioning properly. See Oral
Arg. at 34:18–34:30, available at
17-2218.mp3 (“[Court:] But isn’t the problem that you
could get that message in Britton, saying that the telephone
connection is okay, but still have an underlying
problem with the system. [Counsel for] That
certainly is the issue the Board identified . . . .”). By
contrast, the patents at issue explain that normal status
messages convey information, directly or indirectly, about
monitored equipment, e.g. sensors, interfaces, or other

Motivation is discussed:

Cf. Belden Inc. v.
Berk-Tek LLC, 805 F.3d 1064, 1073 (Fed. Cir. 2015)
(“[O]bviousness concerns whether a skilled artisan not
only could have made but would have been motivated to
make the combinations or modifications of prior art to
arrive at the claimed invention.”).

The relevance of institution material is discussed:

To the extent invites us to reverse because the Board
acknowledged a possible motivation in its
Institution Decision or found a motivation with respect to
different claims, we decline to do so. See Trivascular, Inc.
v. Samuels, 812 F.3d 1056, 1068 (Fed. Cir. 2016) (“Contrary
to TriVascular’s assertions, the Board is not bound
by any findings made in its Institution Decision. At that
point, the Board is considering the matter preliminarily
without the benefit of a full record. The Board is free to
change its view of the merits after further development of
the record and should do so if convinced its initial inclinations
were wrong.” (emphasis in original)); Oral Arg. at
31:30–32:40, available at
17-2218.mp3 (discussing motivation to combine with
respect to claim 19).


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