PersonalWeb Techs., LLC v. Apple, Inc.

PersonalWeb Techs., LLC v. Apple, Inc.

848 F.3d 987 (Fed. Cir. 2017)

Authored by Cem Islikci

Statement of Facts: Apple Inc. (“Apple”) petitioned for inter partes review of certain claims of PersonalWeb Technologies, LLC’s (“PersonalWeb”) U.S. Patent No. 7,802,310 (“the ’310 Patent”), specifically claims 24, 32, 70, 81, 82, and 86. In short, the ’310 Patent generates an identifier for the data file based on the file’s content, to locate and control access to data. PersonalWeb Technologies., LLC v. Apple, Inc., 848 F.3d 987, 989 (Fed. Cir. 2017).

Apple argued that under 35 U.S.C. § 103, these claims are unpatentable for obviousness based on a combination of the Woodhill reference (U.S. Patent No. 5,649,196) and the Stefik reference (U.S. Patent No. 7,359,881). The Woodhill reference “focuses on a system for backing up or restoring data.” PersonalWeb Techs., 848 F.3d at 989. It shows “a system for using content-based identifiers in performing file management functions, such as backing up files.” Id. Stefik focuses on “an authentication system designed to control access to digital works stored in a repository.” Id. Under this system, a paid user receives a digital ticket, which gives the user access to the specific digital file.

On March 25, 2015, the Patent Trial and Appeal Board (“PTAB”) issued its Final Written Decision, which held claims 24, 32, 70, 81, 82, and 86 unpatentable because the patent “at issue would have been obvious to a relevant skilled artisan over a combination of Woodhill and Stefik” Id. at 991. In its Final Written Decision, the PTAB used the broadest-reasonable-interpretation standard to explain what content-dependent name, content-based identifier, and digital identifier (“content-dependent name”) meant. Under this standard, the PTAB found that content-dependent name is “an identifier for a data item being based, at least in part, on a given function of at least some of the bits in the particular sequence of bits of the particular data item.” Id. at 990 (quoting Apple Inc. v. PersonalWeb Technologies, LLC, IPR2013-00596, 2015 WL 1777147, at *4, *5 (P.T.A.B. Mar. 25, 2015)).

Procedural History: On March 26, 2014, the PTAB instituted review on Apple Inc. v. PersonalWeb Technologies. On March 25, 2015, the PTAB issued its Final Written Decision. It held that the claims 24, 32, 70, 81, 82, and 86 are unpatentable. On April 24, 2015, PersonalWeb filed a motion seeking a rehearing. On August 3, 2015, the PTAB denied the motion. PersonalWeb appealed the decision to the Federal Circuit.

PersonalWeb argued that the PTAB was mistaken in using the broadest-reasonable-interpretation when constructing these claims. Furthermore, it argued that, under its interpretation, the terms require the identifier to rely on “all of the data in the data item”. Id. PersonalWeb also challenged “the adequacy of the Board’s findings and explanations in concluding that the claims of the ’310 Patent at issue would have been obvious to a relevant skilled artisan over a combination of Woodhill and Stefik.” Id. at 991.

Questions Presented: (1) Whether the PTAB was correct in construing the terms to mean “an identifier for a data item being based, at least in part, on a given function of at least some of the bits in the particular sequence of bits of the particular data item.” Id. at 990. (2) Whether the PTAB had adequate findings and explanations in concluding that the claims of the “’310 patent here at issue would have been obvious to a relevant skilled artisan over a combination of Woodhill and Stefik.” Id. at 991.

Holdings: Affirmed in part, vacated and remanded in part. (1) Under de novo review, the Federal Circuit affirmed the PTAB’s claim construction method. More specifically, it affirmed that “the content-based identifier need not be generated from ‘all’ of the information in a data item.” Id. at 990-91. (2) Agreeing with PersonalWeb, the Federal Circuit found that the PTAB did not have adequate findings and explanations in concluding that the claims of the ’310 patent would have been obvious to a relevant skilled artisan over a combination of Woodhill and Stefik. The Federal Circuit vacated the PTAB’s obviousness determination of the appealed claims because the PTAB did not adequately support its findings. The Federal Circuit remanded the case “for the Board to reconsider the merits of the obviousness challenge, within proper procedural constraints.” Id. at 994.

Reasoning: After determining that claim construction is a legal issue under de novo review the court found that the PTAB was correct in finding that the content-based identifier need not be generated from all of the information in a data item. In reaching its conclusion for the first issue, the court used an example from one of the claims at issue. In claim 24, the content-dependent name is “‘based, at least in part, on at least a function of the data in the particular data item’ and ‘the data used by the function to determine the content-dependent name comprises at least some of the contents of the particular data item.’” Id. at 991 (quoting ‘310 patent, col. 40, lines 7–12.). By adopting the plain meaning of the language, the Federal Circuit found that the term at least some must mean that it is not possible to interpret the terms at issue to require use of all of the data.

For the second issue, the court found that the PTAB did not do enough to support its conclusion that that the inventions in the patent would have been obvious based on combination of Woodhill and Stefik references. The determination of obviousness is reviewed under de novo standard. Under the obviousness theory, the PTAB had to make findings on two points: finding all of the elements of the ’310 patent claims at issue in Woodhill and Stefik and finding that “a person of ordinary skill in the art would have been motivated to combine the prior art in the way claimed by the ’310 patent claims at issue and had a reasonable expectation of success in doing so.” Id. Furthermore the PTAB had to support its findings with adequate evidence and explanation. The Federal Circuit stated under each obviousness analysis, the amount of explanation should vary based on the complexity of the matter.

Furthermore the Federal Circuit reinforced its requirement of explanation for the obviousness theory with administrative law. The court explained that these requirements are there to ensure that an administrative agency does not act arbitrary and capricious. Using the analysis made in the Supreme Court case, SEC v. Chenery Corp., 318 U.S. 80 (1943), the Federal Circuit found that this support is necessary to (a) allow the courts to exercise their duty of review by understanding agency’s actions, and (b) to prevent judicial intrusion on agency authority.

Here the PTAB did not provide adequate explanation for its two findings. The Federal Circuit used multiple examples to show this inadequacy. For example, the PTAB found that Woodhill and Stefik disclose all of the elements recited in the challenged claims. For claim 24, the PTAB used solely Stefik to explain its reasoning. However Apple’s brief stated that Apple solely relied on Woodhill on this issue. Despite this, the PTAB did not reference Woodhill in its explanation.  By referencing inconsistencies such as this one, the court found that the PTAB’s decision on obviousness theory was not adequately supported by evidence. Therefore, the court remanded the case to allow the PTAB to “reconsider the merits of the obviousness challenge, within proper procedural constraints.” PersonalWeb Techs., 848 F.3d at 994.

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