Federal Circuit Remands Because PTAB Failed to Explain How Its Decision Addressed the Core Issue Under Dispute

In Alacritech, Inc. v. Intel Corp, Judge Stoll held that under the Administrative Procedure Act (APA) “[the Federal Circuit’s] review of a patentability determination is confined to ‘the grounds upon which the Board actually relied.’”[i] And that under the APA “the agency [has an]… obligation to develop an evidentiary basis for its findings.”[ii] Here, the Patent Trial and Appeal Board’s (“PTAB” or “Board”) final written decision (FWD) was vacated and remanded because it did not “articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.”[iii]

Petitioner Intel Corporation, Cavium, LLC, and Dell Inc. (collectively, “Intel”) petitioned for inter partes review of certain claims of Alacritech’s U.S. Patent No. 8,131,880 (the ’880 patent). The entire case hinged on whether the prior art taught a data packet reassembly that takes place in a “network interface,” as opposed to a “central processor.” By the oral hearing stage no one disputed the prior art taught the data packet reassembly.

Yet, although this issue was crystalized in the briefing, the Board’s FWD failed to address whether or not the prior art taught reassembly at the network interface. Acknowledging this failure, Judge Stoll explained that the Federal Circuit “cannot reasonably discern whether the Board followed a proper path in determining that the asserted prior art teaches or suggests the reassembly limitations.”[iv] And the Court held that while the FWD generally addressed the parties arguments and even “favorably” cited petitioner’s arguments and rejected patent owner’s arguments, the Board “did not endorse, adopt, or otherwise suggest that it was persuaded by those arguments, much less explain why it found those arguments persuasive [or not].”[v]

In the end, the Court held that the Board is obligated to “articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made,” and it did not meet that obligation here.[vi] The only remedy was to remand for the Board to reconsider whether the asserted prior art teaches or suggests the requirement that reassembly takes place in the network interface.”[vii]

Practice Tip: Parties need to critically study the FWD and ensure the Board actually addressed the issue under dispute, and not just generally addressed all the arguments and evidence. And when the Board does not address the issue under dispute, make sure to focus the Court on the prejudice of this failure during the appeal.

[i] Alacritech, Inc. v. Intel Corp., Appeal Nos. 2019-1467 and 2019-1468, slip op. 9 (Fed. Cir. 2020) (citing TQ Delta v. Cisco Sys., Inc., 942 F.3d 1352, 1358 (Fed. Cir. 2019) (quoting Power Integrations, Inc. v. Lee, 797 F.3d 1318, 1326 (Fed. Cir. 2015)).

[ii] Id. (quoting Lee, 277 F.3d at 1344).

[iii] Id. at 9-10 (citing In re NuVasive, Inc., 842 F.3d 1376, 1382 (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

[iv] Id. at 7.

[v] Id. (citing Pers. Web Techs., LLC v. Apple, Inc., 848 F.3d 987, 993 (Fed. Cir. 2017) (rejecting Board’s analysis as “inadequate” where it did not “cite, let alone explain or analyze or adopt” the relevant portion of the petition).

[vi] Id. at 9 (citing NuVasive, 1382).
[vii] Id. at 10.

This article appeared in the August 2020 issue of PTAB Strategies and Insights. To view our past issues, as well as other firm newsletters, please click here.