In CRFD Research Ltd. v. Matal, No. 2016-2198 (Fed. Cir. Dec. 5, 2017), the Federal Circuit determined that the PTAB erred in its obviousness analysis, in part by failing to consider an argument the IPR petitioner made in a ground that the PTAB determined was "redundant" to the instituted grounds.
Petitioner Hulu, LLC, challenged claims of CRFD Research Ltd.'s patent directed to methods of transferring an ongoing software-based session from one device to another, allowing the user to begin a session on one device, such as a cell phone, and then transferring the session to another device, such as a laptop computer. The PTAB instituted review based on four grounds, one ground for anticipation by the "Bates" reference and three grounds for obviousness based on Bates in combination with other references. The petition also included a ground of obviousness based on Bates alone, but the PTAB determined that this ground was redundant and therefore did not institute review on that ground.
The PTAB construed "session" as a series of information transactions between communicating devices, and the parties agreed that the claims require a session to be discontinued before a session history is transmitted to another device. The PTAB found that Bates did not anticipate the claims because in Bates transmission of the session history occurs during the session, not after the session is discontinued as the claims require.
In its analysis of the obviousness grounds, the PTAB determined that Hulu relied on Bates to teach the step of transmitting a session history after the session. Although Hulu argued in the non-instituted ground that this step was obvious in view of Bates, the PTAB found that Hulu failed to make this argument in the context of the instituted grounds. The PTAB erred in its analysis, according to the court, because Hulu expressly incorporated this argument in the instituted grounds, and the court determined that to refuse to consider this argument "would also raise questions about the propriety of the Board's redundancy decision."
The PTAB failed to consider whether Bates suggests transmitting a session history after discontinuation of a session. But the court determined that, based on the PTAB's own findings, a person of ordinary skill would have been motivated by Bates to transfer the session history after the session is discontinued. In particular, the PTAB found that Bates expressed a goal of preserving the status of a browsing session by transmitting the browser information. Given this expressed goal, a person of ordinary skill would have been motivated to transfer the entire session history, which would have to occur after the session was terminated. Accordingly, the court reversed the PTAB's decision and determined that the challenged claims were unpatentable for obviousness.
The court's decision is a reminder that petitions should be drafted such that each ground is supported by all necessary arguments and evidence; Hulu may not have been successful in the appeal if it did not expressly incorporate into each ground a key argument for obviousness raised in a non-instituted ground.
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