Federal Circuit Affirms Partial Win for Patent Owner Against Apple

The U.S. Court of Appeals for the Federal Circuit (CAFC) today in a precedential decision upheld a mixed Patent Trial and Appeal Board (PTAB) ruling that found some claims of Gesture Technology’s patent on camera sensing technology for handheld gaming and other devices to be unpatentable, but others not proven unpatentable. The inter partes review (IPR) was brought by Apple, Inc., which appealed the Board’s partial finding of unpatentability.

U.S. Patent No. 7,933,431 is titled “Camera Based Sensing in Handheld, Mobile, Gaming, or Other Devices.” The PTAB held claims 1–10, 12, and 14–31 unpatentable and claims 11 and 13 not shown to be unpatentable. Apple appealed and Gesture cross-appealed. Apple argued that the Board used the wrong legal standard for obviousness and ignored Apple’s arguments, while Gesture argued in part that Apple had no standing to appeal due to estoppel arising from a previous IPR brought by Unified Patents against the same claims.

The CAFC opinion first referred to Acoustic Tech., Inc. v. Itron Networked Sols., Inc. as support for its determination that Gesture had forfeited its estoppel argument because it failed to raise a real party in interest/ privy argument before the Board in the earlier Unified Patents case. It did not, however, decide the question whether Apple actually was a real party in interest or privy of Unified Patents.

Turning to Apple’s appeal of the decision on claims 11 and 13, the court rejected Apple’s arguments that the Board misapplied “the legal standard for obviousness by only looking to the explicit disclosures” of the relevant prior art reference instead of the prior art “in view of the knowledge of a person of ordinary skill in the art; and said the PTAB failed to “engage in reasoned decision making in violation of the Administrative Procedure Act (‘APA’).”

The CAFC said the Board in part relied on the petition’s “lack of analysis” about how the prior art “(with or without the knowledge of a person of ordinary skill in the art) would apply to the claim construction that Apple had advocated for” and also disagreed with Apple’s argument that the Board violated the APA by ignoring much of Apple’s evidence. The opinion explained that “Apple overstates what the Board ignored,” and said “it applied a reasoned analysis for rejecting [Apple’s] arguments.” The court conceded that “the Board did not expressly explain its thoughts on the relevance of low-cost communications,” but said “there is no requirement that the Board expressly discuss each and every negative and positive piece of evidence lurking in the record to evaluate a cursory argument,” citing Novartis AG v. Torrent Pharms. Ltd., 853 F.3d 1316, 1328 (Fed. Cir. 2017); and Yeda Rsch. and Dev. Co. v. Mylan Pharms. Inc., 906 F.3d 1031, 1046 (Fed. Cir. 2018).

With respect to Gesture’s cross-appeal that the Board’s decision finding claims 1, 7, 12, and 14 were unpatentable was not supported by substantial evidence, however, the CAFC rejected Gesture’s arguments and ultimately affirmed the finding of obviousness.