In a precedential opinion, the Court of Appeals for the Federal Circuit vacated a final written decision in which the Patent Trial and Appeal Board (“PTAB”) found that Apple had failed to meet its burden of showing unpatentability due to an error in its expert declaration. Apple Inc. v. Corephotonics, Ltd., Nos. 2022-1350, 2022-1351 (Fed. Cir. Sep. 11, 2023). The Federal Circuit held that the PTAB’s decision violated the Administrative Procedure Act (“APA”) because the decision was based on a ground not raised by any party.
Apple had filed a petition for inter partes review challenging the patentability of certain claims of U.S. Patent No. 10,225,479. The ’479 patent relates to a dual-aperture digital camera that combines images taken from two different lenses to create a single image. The challenged claims included limitations relating to certain camera parameters, such as track length, focal length, and pixel size. Apple’s petition contended that the claims were obvious in view of two prior art references that, when combined, allegedly disclosed the claimed camera parameters. Apple supported its petition with a declaration from an expert, Dr. Sasián.
In the Background section of its Patent Owner Response, Corephotonics noted a typographical error in Dr. Sasián’s declaration that resulted in inaccurate calculations for his field curvature, distortion, and optical path difference (“OPD”) fan plots. Based on the error in Dr. Sasián’s declaration, the PTAB found that Apple failed to meet its burden to show that the challenged claims were unpatentable.
The Federal Circuit held that the PTAB’s focus on the typographical error violated the notice requirement of the APA. Corephotonics only briefly mentioned the error in the Background section of its Patent Owner Response. Corephotonics did not rely on the error in any of its substantive arguments in which it contended that the challenged claims were obvious. Indeed, as the Federal Circuit noted, the typographical error could not have formed a basis for a substantive challenge as Corephotonics only stated that the error affected the calculations for field curvature, distortion, and OPD fan plots – none of which were claimed or affect the camera parameters that were claimed.
As the Patent Owner never identified the error as a dispositive issue, the Federal Circuit found that Apple was not provided with fair notice and an opportunity to be heard on the issue.
A passing reference to an issue in the Background section of a party’s filing may not provide a sufficient basis to support a PTAB determination. Both Petitioners and Patent Owners should be sure to present in detail any arguments on which they want the PTAB to base its decision.