Microsoft Corp. v. Biscotti, Inc., Nos. 2016-2080, 2016-2082, 2016-2083, (Fed. Cir. Dec. 28, 2017) (Before Newman, O’Malley, and Reyna, J.) (Opinion for the court, O’Malley, J.) (Dissenting opinion, Newman, J.)
After Biscotti, Inc. (“Biscotti”) sued Microsoft Corp. (“Microsoft”) for patent infringement, Microsoft filed three unsuccessful inter partes reviews (“IPR”) challenging certain claims of U.S. Patent No. 8,144,182 (“the ‘182 patent”) as anticipated or obvious. The ‘182 patent relates to tools and techniques for providing video calling solutions. The IPRs focused on independent claims 6 and 69, and their dependent claims.
On appeal Microsoft challenged the Board’s standard of review. The Federal Circuit reiterated that anticipation is a question of fact subject to substantial evidence review, that ultimate claim construction and claim construction relying solely on intrinsic evidence is subject to de novo review, and subsidiary factual findings based on extrinsic evidence are reviewed for substantial evidence.
Microsoft argued the Kenoyer reference anticipated claim 6 of the ‘182 patent by disclosing all of the claimed elements, including the “storage medium,” found in the statement: “[e]mbodiments of a subset or all (and portions or all) of the above may be implemented by program instructions stored in a memory medium or carrier medium and executed by a processor.” Microsoft also argued that this language referred to using computer programs to implement the codec and other functionalities of the patent. In response, Biscotti pointed to language concerning Figure 22 that stated, “embodiments of the methods described below” and “embodiments of a subset or all (and portions or all) of the above” to demonstrate that the “storage” language applied only to Figure 22.
The Federal Circuit noted that the standard for anticipation requires a prior art reference to provide every element of the claimed invention as arranged in the claim, although a reference need not spell out the claimed arrangement if a person of skill in the art (“POSA”) would at once envisage that arrangement. Microsoft bore the burden of proving beyond a preponderance of the evidence that Kenoyer anticipated the ‘182 patent’s claims. Because the Board correctly articulated the anticipation standard and the strength of the opposing arguments were similar, the Board’s findings were supported by substantial evidence. Consequently, Kenoyer did not anticipate claim 6.
At issue in claim 69 was whether Kenoyer taught the limitation: “receiving, on the audiovisual input interface, a set-top box audiovisual stream from a set-top box, the set-top box audiovisual stream comprising a set-top box video stream and a set-top box audio stream.” Microsoft’s arguments proved unpersuasive because it failed to explain how the interface of Figure 5 of the ‘182 patent would be compatible with a set-top box and codec as described in Kenoyer. Further, Biscotti introduced evidence that cast substantial doubt regarding whether a POSA would have considered Kenner’s interface connections appropriate for connecting with a set top box. As a result, the Board’s finding that Kenoyer did not anticipate claim 69 is supported by substantial evidence and was affirmed.
Microsoft argued that the Board erred by not using the broadest reasonable construction of the term “set-top box.” A narrower definition from Kenoyer was adopted, rather than the broader definition in the ‘182 patent, which described a “set-top box” as “any device that can provide video tuning, decryption and/or decoding functionality, especially as that functionality relates to reception of broadcast, cable, and/or satellite television signals.” According to Microsoft, Kenoyer would anticipate claim 6 under the broader definition, even if the “storage” language (above) referred only to Figure 22. However, Microsoft’s argument was unpersuasive because it failed to explain how a computer would receive broadcast, cable, or satellite television signals. Further, the Board’s decision did not depend on the construction of “set-top box.”
Obviousness of the Dependent Claims
Because Microsoft’s obviousness and anticipation arguments were based on the same reasoning, the Court affirmed the Board’s decision in relation to the claims that depend from claims 6 and 69. The Court further affirmed the Board’s decision that Microsoft failed to prove invalidity by a preponderance of the evidence in each of the IPRs on appeal.
Judge Newman’s Dissent
Judge Newman dissented with the majority’s finding that the Kenoyer reference neither anticipated nor obviated the ‘182 patent. After performing a clause-by-clause review of claim 6, she argued that Figure 1 of Kenoyer discloses all of the elements of claim 6 and, thus, anticipates claim 6.
Further and in opposition to the majority’s view that Kenoyer presents “multiple, distinct teachings that the artisan might somehow combine to achieve the claimed invention,” she argued that the Kenoyer reference explicitly combines the limitations to provide the same conferencing system as in claim 6. Finally, she argued that the majority’s statement that “Microsoft fails to explain how a computer, especially the computer in Kenoyer, would receive broadcast, cable, or satellite television signals” was baseless because Biscotti does not provide an explanation and both Kenoyer and the ‘182 patent treat such signals as known technology.
For a reference to anticipate a claim, its disclosure of each and every element of the claim may be insufficient if a POSA cannot at once envisage the claimed arrangement or combination from among multiple combinations or independent examples.
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3 comments so far.
Dan HansonJanuary 5, 2018 08:39 pm
As the Microsoft opinion notes, the parties there agreed that the anticipation and obviousness arguments rise and fall together.
In the Monsanto decision issued just a few hours ago, the Federal Circuit addressed similar issues. At one point, the Court observed, “Monsanto has not separately argued the patentability of the remaining Asserted Claims, so all Asserted Claims rise and fall with claim 1.” The Court noted that claim 2 would be treated separately, but when discussing claim 2, the Court said: “Our findings with respect to anticipation apply equally here [with regard to obviousness],” even though claim 2 had not been rejected on grounds of anticipation. That said, the anticipation analysis related to whether claim limitations were disclosed, but did not have a bearing upon whether there would have been a motivation to modify the invention to arrive at the claimed subject matter; so motivation was a separate patentability issue that the Court treated separately.
Whether a reference discloses a claim limitation is one of the issues where a finding as to anticipation may be applied to an obviousness analysis. Another such issue is evidence. In connection with whether certain evidence was properly relied upon, the Court also observed, “Monsanto makes the same argument with respect to the PTAB’s obviousness findings [as it made with respect to anticipation]. Our finding that the PTAB properly looked to the Kinney Declarations in its anticipation analysis applies equally to the PTAB’s obviousness findings.”
To similar effect is the CFRD case from a month ago. “CRFD has not raised nonobviousness arguments separate from the anticipation arguments we have rejected,” the Court said, and then gave the nonobviousness arguments short shrift, referring the reader to “the reasons stated above.”
The practice point is: if you want the claims treated as separately patentable, then argue separate independent issues.
AnonJanuary 5, 2018 05:54 pm
Your comment of “and no separate legal analysis of obviousness issues was needed.” contradicts your earlier statement of “different statutory bases and different legal tests.”
Overlap or no – a separate legal analysis of obviousness should have been given (even if that separate legal analysis merely summarized that the facts were as provided in the legal analysis for anticipation. As you yourself pointed out: “A claim can be obvious but not anticipated, and it is also possible a claim can be anticipated but not obvious” – thus lacking ANY separate legal analysis, we have the courts leaving question marks where they should not.
Dan HansonJanuary 5, 2018 12:39 pm
There is an interesting practice point here. A claim can be obvious but not anticipated, and it is also possible a claim can be anticipated but not obvious. Anticipation and obviousness have different statutory bases and different legal tests, so the issues may be argued and decided separately. That said, anticipation and obviousness have a lot of overlap of legal and factual issues, and many of the arguments applicable to one are equally applicable to the other.
In this case, Microsoft made identical arguments with respect to anticipation and obviousness, so the decision as to obviousness followed the decision as to anticipation, and no separate legal analysis of obviousness issues was needed.