Federal Circuit Report

• Publication year: 2019
• Author: Rex Hwang

Federal Circuit Report

Rex Hwang
Jeffer Mangels Butler & Mitchell LLP

Shenel Ozisik
Jeffer Mangels Butler & Mitchell LLP

INTRODUCTION

In the Summer 2019 column, we will take a look at the Federal Circuit's recent decision in PersonalWeb Technologies, LLC v. Apple, Inc.¹ In PersonalWeb, the Federal Circuit reversed the Patent Trial and Appeals Board's (the "Board") cancellation of U.S. Patent No. 7,802,310 (the "'310 patent") based on inherent obviousness. Another in a rising number of reversals by the Federal Circuit of improper inherent obviousness findings, PersonalWeb illustrates a discrepancy between the Federal Circuit's articulation of inherent obviousness on one hand, and the Board's and district courts' applications of the doctrine on the other hand. Although the Federal Circuit has cautioned that inherent obviousness is a narrow doctrine, lingering uncertainty about its precise scope has led to its persistent misuse.

INHERENT OBVIOUSNESS

To be eligible for patent protection, a claimed invention must be nonobvious as defined in 35 U.S.C. § 103. An obviousness analysis is geared to the knowledge of a person with ordinary skill in the art to which the claimed invention pertains, measured at the time the invention was made.² Courts recognize that the doctrine of inherency, or "[t]he inherent teaching of a prior art reference,"³ may supply a missing claim limitation in an obviousness analysis.⁴ However, the Federal Circuit has warned that the use of inherency, a doctrine originally rooted in anticipation, must be "carefully circumscribed" in the context of obviousness.⁵ The Federal Circuit has described the proper role of inherency in an obviousness analysis as follows:

Inherency, however, may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient. If, however, the disclosure is sufficient to show that the natural result flowing from the operation as taught would result in the performance of the questioned function, it seems to be well settled that the disclosure should be regarded as sufficient.⁶

PERSONALWEB TECHNOLOGIES, LLC V. APPLE, INC.

PersonalWeb Technologies, LLC ("PersonalWeb") is the owner of U.S. Patent No. 7,802,310 (the "'310 patent"). According to the '310 patent, in conventional data processing systems data items are usually identified by their pathname, location, or user-created name.⁷ However, these traditional naming conventions often prove problematic. If one device transfers a data item to another device using only the name associated with the data item, that data item may already exist on the transferee device, and a duplicate will be created.⁸ The '310 patent contemplates a resolution of such problems by creating a substantially unique identifier for each data item in a data processing system that is based on the content of the data item, rather than its pathname, location, or user-created name.⁹ The processing system employs a cryptographic hash function to produce and assign a content-based identifier, which is "virtually guaranteed" to be unique to the data item.¹⁰ The content-based identifier is used to ascertain whether a specific data item is present on the system. If the contents of a data item change, the data item's identifier also changes.¹¹ The content-based identifiers can be used to identify data items in a table that lists the content-based identifiers along with the corresponding authorized users.¹²

[Page 12]

In September 2013, Apple, Inc. ("Apple") filed a petition requesting an inter partes review of the '310 patent on multiple grounds.¹³ The Board instituted review in March 2014, finding that Apple's petition raised a reasonable likelihood that the challenged claims were unpat-entable based on obviousness. In March 2015, the Board determined that Apple had proved by a preponderance of the evidence that the challenged claims were unpatentable as obvious in view of two prior art references—U.S. Patent No. 5,649,196 (Woodhill) and U.S. Patent No. 7,359,881 (Stefik). Woodhill discloses a distributed management system for backing up and restoring data files.¹⁴ The system divides files into 1 MB binary objects, assigns each object a "Binary Object Identifier" that corresponds to the object's contents, and records the name and backup information in a Binary Object Identification Record. The critical feature of the Binary Object Identifier is that, since it is based on the contents of the binary object, the identifier changes when the contents of the binary object change. This allows duplicate binary objects to be recognized by their identical Binary Object Identifiers, even if they reside on different types of computers within the same network.¹⁵ Stefik discloses an authentication system for controlling access to digital works by storing in a repository each digital work's unique identifier and associated usage rights. A digital work is accessed over a network using a "digital ticket," which grants its holder usage rights associated with the work.¹⁶

PersonalWeb appealed the Board's 2015 decision. In February 2017, the Federal Circuit affirmed the Board's claim construction but vacated and remanded its obviousness determination.¹⁷ None of the parties disagreed that Woodhills Binary Object Identifier corresponded to the claimed content-based identifier of the '310 patent.¹⁸ Yet, the Federal Circuit concluded that the Board's obviousness analysis was inadequate as to whether Woodhill and Stefik disclosed all of the elements recited in the challenged claims and whether a skilled artisan would have been motivated to combine them as recited in the '310 patent.¹⁹ The main element in dispute was claim 24's "causing the content-dependent name of the particular data item to be compared to a plurality of values."²⁰ The Federal Circuit disagreed with the Board's reliance on Stefik for this element, and instructed the Board to determine whether the portion of Woodhill cited in Apple's petition taught this element.²¹ Further, the Federal Circuit took issue with the Board's motivation-to-combine...