The Board’s Reliance on Expert’s Conclusory Statements May Not Meet Substantial Evidence for Motivation to Combine

In a recent precedential decision, TQ Delta, LLC v. Cisco Systems, Inc., the Federal Circuit reversed a pair of USPTO inter partes review proceedings that invalidated all claims of two related U.S. patents because “the Board’s factfinding [was] based on conclusory [expert] testimony and [was] therefore unsupported by substantial evidence.”[i]

The challenged patents, U.S. Patent Nos. 9,014,243 (“the ’243 patent”) and 8,718,158 (“the ’158 patent”), are directed to improvements to electronic communications systems that lowered the peak-to-average power ratio (PAR) of the transmitted signals. PAR is the ratio of the maximum value of a parameter (e.g., voltage) to the time-averaged value of that parameter. Lowering the PAR of a communications system is desirable because it reduces power consumption and the likelihood of transmission errors.

In the proceedings, the Petitioner sought to combine two references to meet the recited claim features. Neither reference mentions the PAR or clipping feature.[ii] The Petitioner relied on two paragraphs of its declarant’s declaration to provide the missing features and to fill-in a missing link between the cited references and the ’243 and ’158 patents.

The Federal Circuit reviewed the Board’s obviousness determinations de novo and its underlying factual determinations for substantial evidence.[iii] The substantial evidence standard asks “whether a reasonable fact finder could have arrived at the agency’s decision,” and “involves examination of the record as a whole, taking into account evidence that both justifies and detracts from an agency’s decision.”[iv] The Court held that conclusory expert testimony does not qualify as substantial evidence.[v] Rejections on obviousness grounds “cannot be sustained by mere conclusory statements; instead, there must be some articulated reasoning with some rational underpinning to support the legal conclusion of obviousness.”[vi]

In the instant appeal, the Petitioner’s conclusions, and those of its Declarant, were found to be “[u]ntethered to any supporting evidence, much less any contemporaneous evidence.” The Federal Circuit also found that Petitioner and its Declarant failed “to provide any meaningful explanation for why one of ordinary skill in the art would be motivated to combine these references at the time of this invention.”

Upon determining that the Board “expressly adopted as its own findings and conclusions [Petitioner’s] evidence and argument regarding motivation to combine,” the Federal Circuit found that “the Board’s obviousness determinations are not supported by substantial evidence.” Consequently, the Federal Circuit reversed the PTAB’s decision.

The Court’s decision underscores the requirement for petitioners to provide corroborating evidence and not just blanket expert opinion to support petition arguments.

[i] TQ Delta, LLC v. Cisco Systems, Inc., Appeal Nos.: 2018-1766 and 2018-1767 (Fed. Cir. 2019).

[ii] See TQ Delta at 5.

[iii] TQ Delta at 7-8 (citing Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064, 1073 (Fed. Cir. 2015)).

[iv] Intelligent Bio-Sys., Inc. v. Illumina Cambridge Ltd., 821 F.3d 1359, 1369 (Fed. Cir. 2016) (quoting 35 U.S.C. § 312(a)(3))

[v] TQ Delta at 10.

[vi] Id. (citing KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418–19 (2007)).

PTAB and the district courts.

This article appeared in the November 2019 issue of PTAB Strategies and Insights. To view our past issues, as well as other firm newsletters, please click here.