Arthrex, Inc. v. Smith & Nephew, Inc., Appeal No. 2018-1584 (Fed. Cir. Aug. 21, 2019)

In this week’s Case of the Week, the Federal Circuit affirmed an inter partes review decision of the Patent Trial and Appeal Board, finding the Board did not violate the Administrative Procedures Act when it re-phrased the petitioner’s explanation of a motivation to combine the prior art.  While the APA does not permit the Board to change theories without giving patent owners reasonable notice of the change and an opportunity to respond, the Court found that the Board’s describing a disclosed method as “preferred”—rather than as “well-known” or “accepted” as described in the Petition—did not amount to changing theories in a manner inconsistent with the APA or applicable precedent.

The Court also affirmed the Board’s decision on the merits, which invalidated each of two claims on grounds that they were obvious over two references and anticipated by a third.  The Court affirmed the Board’s decision on one claim as to obviousness, finding motivation to combine supported by substantial evidence notwithstanding that some evidence cut the other way, and therefore declined to reach the anticipation ground for that claim.  As for the second claim, the Court affirmed on the anticipation ground, finding the Board’s claim constructions to be correct, and declined to reach the obviousness ground for that claim.

Finally, the Court exercised its discretion to review appellant’s challenge to the constitutionality of the IPRs as applied to pre-AIA patents, notwithstanding it was not presented to the Board.  However, the Court found that it need not reach the merits of the challenge where the patent issued in 2014 (after the AIA was passed and IPRs began), since the legal regime governing a patent depends on the law at the patent’s issuance, not at the time its application is filed.  The Court otherwise pointed to its recent decision in Celgene Corp. v. Peter, No. 18-1167 (Fed. Cir. 2019), for which our write-up is available here.

The opinion can be found here.

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The Chamberlain Group., Inc. v. Techtronic Industries, Co., Appeal Nos. 2018-2103, -2228 (Fed. Cir. Aug. 21, 2019)

In an appeal from a district court decision finding patents not patent ineligible as abstract ideas, the Federal Circuit reversed.  The patent concerns “movable barriers” such as garage doors.  In particular, the claims recite “A movable barrier operator” comprising certain wireless features.  The district court found that the claims were not directed to an abstract idea.  The Federal Circuit held that the claims are “directed to wirelessly communicating status information about a system.”  Such an idea, it held, is similar to ideas it has held abstract in other cases, and that there was no “inventive concept” sufficient to rescue the claims in Step 2 of the Alice analysis.  Accordingly, the claims were held ineligible. 

With respect to a second patent, the Court addressed a situation where two embodiments in a single prior art reference were used to argue anticipation.  The Court reinforced that such embodiments in a single prior art reference can support an anticipation finding where a person of ordinary skill “would at once envisage the claimed arrangement or combination.”  In this case, the district court’s analysis was found to be faulty, but was found to be harmless error because no objection was raised concerning jury instructions.  An award of enhanced damages was vacated in light of the reversal concerning the ineligible patent.

The opinion can be found here.