Thursday, September 30, 2021

CAFC in AMC Multi-Cinema. The matter of claim 7 of U.S. Patent No. 9,454,748

The outcome:

Fall Line Patents, LLC owns U.S. Patent No. 9,454,748, entitled “System and Method for Data Management.” The appellants (collectively, AMC) challenged various claims of the ’748 patent in an inter partes review in the Patent and Trademark Office. The Office’s Patent Trial and Appeal Board held all challenged claims unpatentable for obviousness, except for independent claim 7. For claim 7, the Board deemed AMC’s petition for inter partes review insufficient regarding the prior art’s teaching of a required claim limitation, making AMC’s reply elaboration and evidence impermissible, and also deemed that reply material insufficient on its merits. American Multi-Cinema, Inc. v. Fall Line Patents, LLC, 2020 WL 4530148, at *19–26 (P.T.A.B. Aug. 5, 2020) (Final Written Decision). AMC appeals. We hold that, as to AMC’s petition, the Board abused its discretion in its reading of one short, integrated, uninterrupted passage about the disputed limitation of claim 7—which, we conclude, fairly stated in terse form why the limitation was met by the prior art and sufficed to permit AMC to submit, in reply, further evidence that explained, without materially altering, that point. We also hold that the Board gave an inadequate explanation of why the AMC reply material was unpersuasive on the merits of that point. For those reasons, while we affirm the Board’s rejection of certain contentions by AMC, we vacate the Board’s decision as to claim 7 and remand for further proceedings.


For the foregoing reasons, we affirm the Board’s rejection of AMC’s contentions regarding claim 7’s limitation (b) except for AMC’s reliance on the teaching of Barbosa; we vacate the Board’s decision rejecting AMC’s unpatentability challenge to claim 7 based on Barbosa combined with Falls; and we remand for further proceedings consistent with this opinion.


The Board did not address such material. Nor did it explain what “executable” means in this setting—a term about which AMC’s counsel offered somewhat restrictive views in this court. See Oral Arg. at 17:03–20:42, 42:50– 47:25, x?fl=21-1051_08312021.mp3. The Board seems to have assumed that the reply-cited passages did disclose an automatic transfer of something, but it did not provide an explanation, considering all the material properly before it, why what was automatically transferred in those passages, e.g., the passages involving Java applets, did not meet the requirement of being executable. The Board’s analysis leaves us unable adequately to discern the basis of its rejection of AMC’s reply analysis on its merits or ultimately to determine its soundness under the applicable standard of review. See Intelligent Bio-Systems, 821 F.3d at 1366 (“Substantial evidence review asks ‘whether a reasonable fact finder could have arrived at the agency’s decision’ and requires examination of the ‘record as a whole, taking into account evidence that both justifies and detracts from an agency's decision.’” (quoting In re Gartside, 203 F.3d 1305, 1312 (Fed. Cir. 2000))); Icon Health & Fitness, Inc. v. Strava, Inc., 849 F.3d 1034, 1043–44 (Fed. Cir. 2017). This


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