Federal Circuit Review - Issue 286

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286-1. Federal Circuit Upholds PTAB's Printed Publication Prior Art Analysis but Vacates Claim Invalidation Based on Unasserted Anticipation Theory

The United States Court of Appeals for the Federal Circuit recently affirmed in part and vacated in part M&K Holdings' appeal of an inter partes review decision by the Patent Trial and Appeal Board in which the Board held all claims of their patent unpatentable. The Federal Circuit agreed with the Board's prior art analysis regarding printed publications but vacated an invalidity finding based on an unasserted anticipation theory. See M&K Holdings, Inc., v. Samsung Elecs. Co., No. 2020-1160, 2021 U.S. App. LEXIS 2690 (Fed. Cir. Feb. 1, 2021) (Before Moore, Bryson, and Chen, Circuit Judges) (Opinion for the Court, Bryson, Circuit Judge).

M&K Holdings, Inc., is the owner of U.S. Patent No. 9,113,163 (the '163 patent) which relates to high-efficiency video coding. Samsung Electronics Co. challenged the validity of the '163 patent in an inter partes review (IPR) proceeding. After the Board found all claims were unpatentable, M&K appealed the decision and argued that: (1) the Board erred in relying on references that do not qualify as prior art printed publications under 35 U.S.C. § 102; and (2) the Board erred in finding Claim 3 anticipated when Samsung asserted only obviousness.

The first issue the Federal Circuit addressed was whether the prior art cited by the Board constitutes a printed publication under 35 U.S.C. § 102. Specifically, M&K challenged three references relied upon in Samsung's petition that were related to the work of a joint task force created to establish industry standards for high-efficiency video coding. These references were discussed at the task force's quarterly meetings and uploaded to their website prior to the priority date of the '163 patent. M&K contended that the documents were not publicly available because "interested persons of ordinary skill could not have accessed any of those references by exercising reasonable diligence. The Federal Circuit rejected M&K's argument and upheld the Board's finding that the references in question did qualify as a printed publication.

Determining whether a reference qualifies as a printed publication requires a case-by-case inquiry focusing on whether the reference was publicly accessible. The standard for this inquiry is reasonable diligence. The Federal Circuit noted that "[a] reference will be considered publicly accessible if it was 'disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art exercising reasonable diligence, can locate it.'" Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1348 (Fed. Cir. 2016) (quoting Kyocera Wireless Corp. v. Int'l Trade Comm'n, 545 F.3d 1340, 1350 (Fed. Cir. 2008)). This prior art determination is a legal question that is reviewed for substantial evidence on appeal.

In its analysis, the Federal Circuit first looked at a number of relevant factors that weighed in favor of finding that the references qualified as prior art printed publications. These included: (1) the lack of confidentiality in the discussions or online posting of the references; (2) the posting of the references on a publicly accessible website; (3) the search capabilities of the website; and (4) the fact that the conferences and website were well known to those skilled in the art.

The Federal Circuit then specifically rejected each of M&K's arguments that the prior art documents could not be accessed with reasonable diligence. First, M&K argued that some of the documents were not prominent on the website. The Federal Circuit rejected this argument as it misstates the law. "The relevant inquiry is whether the channel through which the references were publicized is prominent." Here, the joint task force and their website were prominent in the industry. Next, the Federal Circuit rejected M&K's argument that the limited searching capabilities of the website cut against finding public accessibility. The Federal Circuit noted that the law does not require a website to be fully searchable, instead a relevant factor for document repositories is whether "a repository indexes its documents or otherwise categorizes them by subject matter. See Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1349 (Fed. Cir. 2016). The dispositive question again is whether interested users could locate the references through reasonable diligence. Here, the Federal Circuit held that a skilled artisan would know how to navigate this website and find the document they were looking for because the documents had searchable descriptive titles. Finally, the Federal Circuit rejected M&K's argument that Samsung was required to show that the documents were orally presented or actually accessed through the website. The Federal Circuit held that Samsung was not required to prove that the information was orally disclosed because all references were also uploaded online to a document repository. Samsung also was not required to show that interested artisans actually accessed the documents on the website. The relevant inquiry was just whether a "persons of ordinary skill in video-coding technology could have accessed [the references] with reasonable diligence." Based on these findings the Federal Circuit upheld the Board's decision as to the prior art printed publications, holding that substantial evidence supported the decision.

The second issue the Federal Circuit addressed was whether the Board erred in finding a claim unpatentable based on anticipation when Samsung asserted only obviousness. The Administrative Procedure Act (APA) imposes procedural requirement on formal adjudications including IPRs. Here the APA required the Board to "timely inform the patent owner of 'the matters of fact and law asserted'" and "give all interested parties the opportunity to submit and consider facts and arguments." M&K argued that it was denied the notice it was due under the APA when the Board found Claim 3 of the '163 patent to be anticipated. Samsung asserted that Claim 3 was obvious but had not at any point asserted that the claim was anticipated. On appeal Samsung argued that anticipation of the claim was inherent in their obviousness theory and that M&K was on notice of the prior art used to anticipate the claim. The Federal Circuit rejected these arguments and found that, although M&K was aware of the prior art used to invalidate Claim 3, the Board had "deviated impermissibly from the invalidity theory set forth in Samsung's petition." Holding that the lack of notice that the claim might be anticipated amounts to marked deviation in violation of the APA even when the patentee is aware of the prior art used. Accordingly, the Federal Circuit vacated the Board's finding that Claim 3 was unpatentable, holding that the Board had violated the APA by failing to provide notice which deprived M&K of the opportunity to challenge the anticipation theory.

In so holding, the Court affirmed the Board's holding as to the prior art references being printed publications, vacated the holding of anticipation, and remanded the case for further consideration of patentability.

First, what qualifies as a prior art printed publication is extensive especially when the reference is posted to a publicly accessible website. Factors to look for include confidentiality, search functionality, indexing of documents, and prominence of the website or organization in the industry. The standard for this inquiry is whether a person of ordinary skill in the art could access the reference through reasonable diligence.

Second, a finding that a claim is anticipated is not inherent in an asserted obviousness theory. Parties challenging a claim's validity should assert anticipation and obviousness as alternative theories if possible.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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