Federal Circuit Says PTAB Failed to Provide Proper Notice to IPR Respondent of Anticipation Theory

By Eileen McDermott
February 3, 2021

“Despite Samsung’s argument that the PTAB’s analysis was merely ‘a simpler path to invalidating claim 3’ that ‘was inherent in Samsung’s obviousness theory,’ the Federal Circuit said that the holding represented ‘a marked deviation’ from ‘the evidence and theories presented by the petition or institution decision, creating unfair surprise.’”

Federal CircuitThe U.S. Court of Appeals for the Federal Circuit (CAFC) on February 1 held in part that the United States Patent and Trademark Office’s (UPSTO) Patent Trial and Appeal Board (PTAB) erred in finding a claim anticipated when the petition for inter partes review (IPR) had only asserted obviousness as to the claim. M&K Holdings, Inc. v. Samsung Electronics Co. Ltd. (CAFC, Feb 1, 2020). The CAFC vacated the PTAB’s decision on that claim but affirmed the holding of unpatentability as to the rest of the asserted claims.

The patent at issue is M&K Holdings, Inc.’s U.S. Patent No. 9,113,163 (“the ’163 patent”), which is directed to “an efficient method for compressing video files.” Samsung Electronics filed for inter partes review (IPR) challenging all claims of the patent as unpatentable, and specifically said that  “claims 1, 5, and 6 were anticipated by a reference known as ‘WD4-v3’”; “claim 2…was both anticipated by WD4-v3 and rendered obvious by the combination of WD4-v3 and a paper by Park et al. [and] claims 3 and 4…were rendered obvious by the combination of WD4-v3, Park, and a paper by Minhua Zhou.”


Public Accessibility Analysis

M&K argued that the references Samsung relied on did not constitute printed publications under 35 U.S.C. § 102. Specifically, M&K said that “none of the three references were publicly accessible, i.e., that interested persons of ordinary skill could not have accessed any of those references by exercising reasonable diligence.” The PTAB disagreed, finding that all of the references were publicly accessible, discussed at industry meetings, and posted on the Joint Collaborative Team on Video Coding (JCT-VC) website, which is a joint task force to establish industry standards for high-efficiency video coding.

M&K felt that, in order to find the references on the website, users must have known the date, title and number of the papers, cutting against a finding of truly public accessibility. However, the CAFC said that the Board’s holding that “interested users of the JCT-VC website could have located Park and Zhou through reasonable diligence” was supported by substantial evidence and thus affirmed that aspect of the PTAB decision. “The law regarding public accessibility is not as restrictive as M&K suggests—a website’s landing page is not required to have search functionality,” explained the CAFC.

Proper Notice

However, in its ultimate ruling on the unpatentability of the claims, the PTAB held that “claims 1, 2, 5, and 6 were anticipated by WD4-v3, and that claim 4 was rendered obvious by the combination of WD4-v3, Park, and Zhou, as alleged in Samsung’s petition [and that] that claim 3 was anticipated by WD4-v3, although Samsung’s petition had asserted only obviousness as to that claim.”

Explaining that the Administrative Procedure Act “imposes particular procedural requirements on the Board” that mandate the PTAB must “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,” the CAFC agreed with M&K that “the Board deviated impermissibly from the invalidity theory set forth in Samsung’s petition when it held that claim 3 was anticipated by WD4-v3.” Despite Samsung’s argument that the PTAB’s analysis was merely “a simpler path to invalidating claim 3” that “was inherent in Samsung’s obviousness theory,” the CAFC said that the holding represented “a marked deviation” from “the evidence and theories presented by the petition or institution decision, creating unfair surprise.” Arthrex, Inc. v. Smith & Nephew, Inc., 935 F.3d 1319, 1328 (Fed. Cir. 2019). The court added:

Although M&K was aware of the prior art used to invalidate claim 3 given the obviousness combination asserted against that claim, M&K was not put on notice that the Board might find that WD4-v3 disclosed all of the limitations in claim 3 and might invalidate claim 3 based on anticipation.

The PTAB’s decision was thus vacated as to the unpatentability of claim 3 and remanded for further analysis consistent with the court’s opinion.


The Author

Eileen McDermott

Eileen McDermott is the Editor-in-Chief of IPWatchdog.com. Eileen is a veteran IP and legal journalist, and no stranger to the intellectual property world, having held editorial and managerial positions at several publications and industry organizations. She has acted as editorial consultant for the International Trademark Association (INTA), chiefly overseeing the editorial process for the Association’s twice-monthly newsletter, the INTA Bulletin. Eileen has also served as a freelance editor for the World Intellectual Property Organization (WIPO); as senior consulting editor for the Intellectual Property Owners Association (IPO) from 2015 to 2017; as Managing Editor and Editor-in-Chief at INTA from 2013 to 2016; and was Americas Editor for Managing Intellectual Property magazine from 2007 to 2013.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 5 Comments comments.

  1. Anon February 3, 2021 2:38 pm

    Was there not a recent case, specifically to post grant mechanisms of the AIA, that dictated that it was the petitioner’s legal arguments that served as the “offense” before a neutral body of the PTAB?

    Would it not be a violation of that case (as well as a violation of just what the POST-GRANT body is and is not supposed to be; to wit, supposed to be a neutral arbitrator, and is NOT supposed to be standing in the shoes of one of the two adversarial parties) for the PTAB to revert back to the ‘olden days’ when the APL’s were considered to be ‘super examiners?’

    This decision misses that point.

  2. ipguy February 3, 2021 2:49 pm

    It be great if the USPTO made PTAB decisions searchable by PTAB judge or Examiner.

  3. AAA JJ February 3, 2021 4:04 pm

    “It be great if the USPTO made PTAB decisions searchable by PTAB judge or Examiner.”

    I’d be happy for PAIR, either public or private, to work at least 50% of the time.

    Baby steps.

  4. Anon February 3, 2021 6:25 pm

    … as a reminder to the (supposed?) neutrality of the PTAB for post grant reviews, Congress was explicit as this being a viable alternative to the Article III path, and the notion of a neutral between two adversaries was meant to maintain the fairness outside of the Article III forum (even if one of the adversaries need not have Article III standing for the first portion of the AIA set-up).

  5. ipguy February 3, 2021 7:28 pm

    “Baby steps.”

    ‘Shoot for the moon. Even if you miss, you’ll land among the stars.’
    -Norman Vincent Peale