Petition for En Banc Review Asks Federal Circuit for Clarity on Single Reference Obviousness

Plano, TX-based patent owner American Vehicular Sciences LLC recently filed a petition for rehearing en banc with the Court of Appeals for the Federal Circuit. The petition relates to its appeal of inter partes review (IPR) proceedings conducted at the Patent Trial and Appeal Board (PTAB), which initiated as the result of a petition filed by Unified Patents. In the petition for rehearing, American Vehicular Sciences argues that the original panel’s Rule 36 affirmation of the PTAB’s decision runs contrary to precedent set by a series of Federal Circuit cases, thus requiring consideration by the full appellate court to maintain uniformity in its decisions. The focus of the appeal is the need for clarity with respect to hopelessly irreconcilable caselaw on the issue of single reference obviousness. 

Rule 36

Why the Federal Circuit affirmed the PTAB is a mystery. A Rule 36 affirmance provides no reasoning or rationale, instead simply stating in one line: “AFFIRMED. See Fed. Cir. R. 36.” The judges on the original panel were Chief Judge Sharon Prost, and Circuit Judges Pauline Newman and Jimmie Reyna.

Rule 36, by its express terms, is only appropriate to affirm an agency decision (i.e., decision of the PTAB) when a written opinion would not have precedential value and the decision of an administrative agency warrants affirmance under the standard of review in the statute authorizing the petition for review. It seems relatively clear that the use of Rule 36 to affirm PTAB decisions that have invalidated claims (i.e., taken rights away from the patent owner) is inappropriate under the explicit terms of Rule 36. A decision of the PTAB to invalidate one or more claims unquestionably carries precedential value because the claim(s) are lost and cannot be enforced against anyone moving forward, and a decision of the Federal Circuit affirming such PTAB decision precedential PTAB decision.

Ironically, a win by the patent owner could be ratified by the Federal Circuit under Rule 36 because a win by the patent owner does not carry any precedential value. If a challenger prevails one or more claims are lost, period. If the patent owner prevails the patent owner only prevails against the party who brought the challenge and those in privy with those who brought the challenge, which means the patent claim(s) can be challenged again and again. We have seen precisely this happen — witness Finjan, for example.

American Vehicular Sciences argues that the Rule 36 affirmance without opinion doesn’t detract from the need for en banc review. The Rule 36 affirmance in this particular case shows that the Federal Circuit has chosen to not issue an opinion even when presented with a conflict in its own precedents, the petition argues, which results in examiners, PTAB judges and district court judges making obviousness decisions without proper guidance.

Single Reference Obviousness

“Federal Circuit jurisprudence concerning single-reference obviousness is in conflict,” wrote Robert Greenspoon, attorney for American Vehicular Sciences’ in the petition for rehearing. “This is a recurring and important issue badly in need of en banc resolution.”

Indeed, the focus of American Vehicular Sciences’ petition is that conflicting jurisprudence within the Federal Circuit on the issue of single-reference obviousness. “It is difficult if not impossible to reconcile these decisions to distill a unitary legal standard,” Greenspoon wrote.

Although the PTAB invalidated the patent-in-suit based on combinations of prior art presented by Unified Patents, the petitioner conceded a single reference modification theory before the Federal Circuit. Prior art asserted by Unified Patents did not disclose a side curtain airbag as claimed by American Vehicular Sciences’ patents so Unified Patents argued that the prior art it submitted provided motivation for the side curtain airbag because the prior art stated that passengers in the second row of seating should also be protected by an airbag. Because neither of the two prior art references offered by Unified Patents included a side curtain airbag even when viewed in combination, its argument was considered to be based on a single reference.

American Vehicular Sciences notes that various cases decided by the Federal Circuit in recent years have created a conflict in how single-reference obviousness theories are applied. In cases like 2016’s Arendi S.A.R.L. v. Apple et. al., the idea that a single reference could render an invention obvious was rejected. However, in cases such as 2009’s Perfect Web Technologies, Inc. v. InfoUSA, Inc., the Federal Circuit accepted arguments that a single reference could prove obviousness.

Those familiar with Arendi will, however, recall the Federal Circuit in that case carefully cabined Perfect Web. Writing for the panel in Arendi, Judge O’Malley recognized explained that Perfect Web did authorize the use of common sense to supply a missing claim limitation, but also pointed out that this was the only case where the Federal Circuit had ever allowed common sense to supply a missing claim limitation. O’Malley further explained that in Perfect Web that which was missing was “unusually simple and the technology particularly straightforward.” In fact, in Perfect Web, dealt with sending e-mail to an e-mail list, and the missing claim limitation was nothing more than merely repeating the step of resending e-mails in accordance with the claim. Thus, O’Malley explained that Perfect Web is properly considered a very rare exception to allowing common sense to supply a missing claim limitation, rather than the rule. Unfortunately, that is not how Perfect Web is understood by many who choose to simply ignore the holding of Arendi and act as if Arendi is the exception and Perfect Web is the rule, which is exactly backwards. See Misapplication of Obviousness.

The petition argues that the question on single-reference obviousness was correctly decided by the Federal Circuit in its 2014 decision in K/S HIMPP v. Hear-Wear Techs., LLC, which rejected the argument that requiring documentary evidence conflicted with U.S. Supreme Court precedence in KSR International Co. v. Teleflex Inc. (2007). In Hear-Wear, the Federal Circuit noted KSR’s criticism of “a rigid approach to determining obviousness based on the disclosures of individual prior art references that were already on the record,” and yet the appeals court upheld challenged patent claims despite an obviousness challenge involving “a conclusory assertion from a third party about general knowledge in the art without evidence on the record, particularly where it is an important structural limitation that is not evidently and indisputably within the common knowledge of those skilled in the art.”

Yet decisions from the Federal Circuit have created an irreconcilable split within the Federal Circuit itself regarding the proper approach to obviousness determinations, American Vehicular Sciences argues. Indeed, many commentators (ourselves included) have noticed that now more than ever on a variety of issues the outcome of a decision at the Federal Circuit is completely dependent on the panel assigned to the case. While that has been a criticism of the Federal Circuit for some time, it increasingly seems outcomes are arbitrary, capricious and wholly unpredictable— at least until you know who the judges are who will decide the case.

This irreconcilable split regarding obviousness is exemplified by the different decisions in Hear-Wear and 2006’s Ormco Corporation v. Align Technology, Inc., in which a conclusion based on general knowledge about packaging items in a way which is convenient for the consumer rendered obvious patent claims covering a particular way of packaging an orthodontic kit despite an absence of documentary information of the particular packaging configuration. The petition explains:

“Patent examiners, Board judges, litigants and the lower courts are now lost at sea when it comes to single-reference obviousness determinations. In a particular case, one cannot predict whether the obviousness decision will turn on the principles announced in Hear-Wear (i.e., forbidding reliance on uncorroborated basic knowledge or common sense to come up with core structural limitations in a claim) or in Ormco (i.e., inviting reliance on uncorroborated basic knowledge and wellknown practices). An en banc determination will resolve the conflict.”

Further, determining obviousness in a way that obviates the need for contemporaneous documentary evidence puts the Federal Circuit in conflict with the patentability standard established by the Supreme Court in 1966’s Graham v. John Deere Co., which clarified obviousness under Section 103 of the Patent Act. Graham, which was left intact by KSR, reinforced a framework for obviousness, which is evidentiary in nature and not speculative, and thus the invocation of basic knowledge to supply a claim limitation missing from the prior art to determine obviousness conflicts with Supreme Court case law as well.



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Join the Discussion

6 comments so far.

  • [Avatar for Anon]
    August 20, 2018 12:46 pm


    I feel your pain (I really do).

  • [Avatar for B]
    August 20, 2018 11:00 am

    @ Curious “From where I sit, I believe the issue all comes down to what is enough to constitute substantial evidence when it comes down to the Graham findings of fact.”

    Let me assure you. I’ve been Rule 36’ed when there was ZERO evidence to support a factual conclusion by the PTAB. The USPTO even admitted it. I filed for an en banc rehearing and lost.

  • [Avatar for Judge Rich's Ghost]
    Judge Rich’s Ghost
    August 19, 2018 10:27 pm

    Although intriguing, the petition resists on the unsupportable proposition that every piece of evidence relating to obviousness must be in the form of some reference. That view might hold more weight in ex parte prosecution, but it’s less applicable in contested cases where a witness, usually an expert witness, can testify about a missing element or motivation to modify the prior art.

  • [Avatar for Anon]
    August 19, 2018 12:13 pm

    To the point of Curious at 1, judicial notice from the judicial branch and Official Notice from the executive branch are simply not the same.

    Then take the extra step and realize that within the executive branch, the particular administrative agency has set rules for itself – binding on examiners – as to when (and how) it is proper to take Official Notice, including importantly that Official Notice – in and of itself – may NOT serve as the distinguishing point of the state of prior art.

    This of course also extends to the 101 question (thanks to the Supreme Court for inserting notions of timing into the timeless eligibility evaluation). As has been pointed out with the Berkheimer memo, any such “Official Notice” goes “bye-bye” with the mere challenge of the applicant. That this challenge even need be made is a distasteful reflection of the administrative agency not reflecting on its own set limitations.

  • [Avatar for Jianqing Wu]
    Jianqing Wu
    August 19, 2018 11:55 am

    I have troubles to reconcile any rule 36-like ruling with the justice balance imagine. Why does the court use this rule? When technologies and business methods have become so complex with tens of dimensions of properties and a huge number of gray areas or uncertainties, “AFFIRMED. See Fed. Cir. R. 36.” is the only way to free judges’ burdens. This is one more piece of evidence of failure of the enforcement model.

    When the common law’s all-or-nothing rule is used in such a bizarre way, political view, personal incompetence, or ignorance must be determinant factors for giving justice or injustice. Most patents worth only about $100 K, but could consume several millions ($4 million) to decide the winner. It will NOT work. When corporations, inventors, and the public (largely uninformed public members) are fighting, inventors are destined to lose. This means inventors, corporations, and the public all will lose, eventually. I predict that even those anti-patent-companies will soon have nothing to do.

    I noted that a large number of appeal cases are now disposed of by using a line like “AFFIRMED” without opinions. This becomes the worse sign of failure of justice. This kind of ruling belittles the justice balance imagine. THEY DISPOSE OF APPEALS. This common judicial practice has become the most powerful tool for ruling against self-represented persons, small companies, independent inventors….

    Slowly, I found out that one real reason is that the judges just could NOT perform their tasks. How can they handle the massive number of conflicts. If they make superman efforts to clarify all potential conflicts, I am sure that their own works will create more new conflicts. They might be able to clarify the rules in wording to some extend, but will create more new conflicts. The reason is any rule can be very close to tens to hundreds of other rules in seemingly different dimensions. However, they collide because the facts cannot be measured in required precision. Even worse, new conflicts will be created as a result of application of rules. Due to small factual differences, many cases will hop among different rules to achieve different results. The end result depends upon selection of rules and is still failure of justice.

    While clarifying the single reference obviousness rule is necessary for now, a super majority of judicial problems cannot be fixed by patches and fixes by judges. Harvard, Yale and Stanford law schools need to conduct systematic study to identify all fatal flaws in the enforcement model. Nearly all presumptions and all assumptions that were ported into the judicial are clearly wrong. This is a real problem that severely restricts national productivity and has gained an absolute force to ruin everything.

    In patent litigation, a final patent validity determination should be measured by comparing claimed inventions against statutory language directly, and all uncertainties between infringing devices and patent claims should be settled by apportionment. Patent litigation spending needs to dramatically reduced for the patent system to thrive. Congress needs to establish a commission to find new methods outside common law thinking. Tens of new things could be used to encourage future inventors.

  • [Avatar for Curious]
    August 19, 2018 10:52 am

    As soon as I saw the Title of this article, my first thoughts went to Arendi, and I was not surprised to see Arendi discussed.

    From where I sit, I believe the issue all comes down to what is enough to constitute substantial evidence when it comes down to the Graham findings of fact (e.g., determining the scope and content of the prior art; ascertaining the differences between the claimed invention and the prior art; and resolving the level of ordinary skill in the pertinent art). In most instances, the relevant question involves the first and second inquiries regarding the scope and content of the prior art and how the prior art differences differ from the claimed invention.

    In a single reference obviousness rejection, the fact finder is admitting that at least one limitation is not disclosed but is finding this missing limitation from something else. Personally, I cannot see how this missing limitation can relied upon to establish that the claimed invention, as a whole, was obvious obvious unless there is factual support (supported by substantial evidence) for the existence of this missing limitation at the time of the invention.

    If something is “indisputably within the common knowledge of those skilled in the art,” then it shouldn’t be hard to find a reference to say exactly that. The lack of a reference is an indication that it is disputable whether something is common knowledge. As such, I don’t believe it is appropriate to make a single reference obviousness rejection. Mere opinion by an Examiner or the Board as to what is common knowledge shouldn’t be substantial evidence.

    In a litigation setting, one might argue that judges have a greater leeway to take judicial notice of certain things, which perhaps justifies the difference between Perfect Web (coming out of the District Court) and Arendi (coming out of the USPTO). That being said, I believe Perfect Web was decided on Summary Judgement, and to me, it was inappropriate to rely upon judicial notice (either explicitly relied upon or not) for a missing limitation during Summary Judgement.