ARTHREX, INC. V. SMITH & NEPHEW ET AL.

Before Dyk, Chen, and Stoll.  Appeal from the U.S. Patent and Trademark Office

Summary:  The Board’s invalidity decision does not need to track the exact wording in the IPR petition so long as the Board’s characterization of the invalidity theory is consistent with the theory presented in the petition.

Smith & Nephew filed an IPR petition challenging a patent owned by Arthrex.  In the petition, Smith & Nephew argued that a POSITA would have combined two references because the combined feature was made using a “well-known technique [whose use] would have been a simple design choice.”  The petition relied on a reference passage describing the claimed technique as well as describing a second technique in the alternative.  The Board agreed with Smith & Nephew and pointed to the same reference passage, but the Board characterized the first technique as the “preferred option.”  The Federal Circuit warned that the PTAB may not change invalidity theories mid-stream without giving respondents an opportunity to argue under the new theory.  But here the Federal Circuit determined that Board did not change the invalidity theory presented in the petition.  Although Smith & Nephew did not characterize the claimed technique as the “preferred option,” this did not raise a new issue or theory of invalidity, because (1) the Board relied on the same portion of the reference as the petition, (2) the Board ruled on the same combination of features as presented in the petition, and (3) the Board “ruled on the same theory of obviousness presented in the petition”—that the combination was a “simple design choice.”  Thus, “the mere fact that the Board did not use the exact language of the petition” did not result in an APA violation under existing law.