Two opinions that came down this month illustrate the CAFC’s close scrutiny of potential legal errors in PTAB Final Written Decisions. These decisions underline the benefits of appellants focusing their arguments on legal errors—or even legal ambiguities—in PTAB decisions.
Belden v. Berk-Tek (Fed. Cir. Nov. 5, 2015) involved a patent directed to a method for making a communications cable. The PTAB instituted an IPR for claims 1-6, but ultimately invalidated only claims 1-4. For claims 5 and 6, the Board faulted Berk-Tek for giving no apparent reason to combine known elements of two references. On appeal, Berk-Tek argued that a person of ordinary skill in the art seeking to manufacture cables disclosed in the first references—with four insulated twisted pairs and a separator—would have been motivated to use the method of the second reference. The CAFC noted that it owes deference to the PTAB’s factual findings, but found that the PTAB’s upholding the validity of claims 5 and 6 “rests on legal errors.” The CAFC analyzed the evidence and found that the “evidence points clearly toward a motivation of skilled artisan to arrive at the method claims 5 and 6 based on” the two references. The CAFC then walked through the PTAB’s reasons for finding otherwise and found that none “withstands scrutiny through the lens of governing law.” As a result, the CAFC reversed the Board’s determination that claims 5 and 6 would not have been obvious.
Ariosa Diagnostics v. Verinata Health (Fed. Cir. Nov. 16, 2015) involved a patent directed to methods of noninvasive prenatal testing for the presence of fetal chromosomal abnormalities. The PTAB instituted a pair of IPRs challenging claims 1-18 and 19-30, respectively, of the patent. After a complete record was developed, however, the PTAB determined that Ariosa failed to prove that the claims were obvious. Ariosa argued on appeal that it was legal error for the PTAB to decline to consider Exhibit 1010. Exhibit 1010 was attached to a declaration submitted with Ariosa’s petition, but it was relied on only to show the knowledge in the art and not as the basis for an obviousness combination. The CAFC first analyzed the legal issue and determined that, given “references in the Petitions and supporting declarations, Exhibit 1010 had to be considered by the Board even though it was not one of the three pieces of prior art presented as the basis for obviousness.” The CAFC then analyzed the PTAB’s less-than-clear treatment of Exhibit 1010 in its decision. On the one hand, the CAFC agreed with Ariosa that “the language of the Board regarding Exhibit 1010 is readily susceptible of being read to rest on an incorrect legal proposition.” On the other hand, the “Board might have been saying only that the development of the argument invoking Exhibit 1010 in the Petition was not adequate.” Given the potential legal error and ambiguity in the decision, the CAFC vacated the decision and, because the matter is not purely legal, remanded to the Board.
One takeaway from these two decisions is that practitioners are well advised to analyze PTAB decisions for legal errors when determining issues to argue on appeal. While the CAFC will give some deference to the PTAB’s factual findings under the substantial-evidence standard of review, it has shown a willingness to scrutinize the details of PTAB decisions and reverse or remand where it finds potential legal error.
These two decisions also provide important procedural guidance—Belden on the permissible scope of rebuttal evidence submitted with a Petitioner’s reply and Ariosa on the how the PTAB should handle the remand.