PTAB Erred in Instituting Inter Partes Review on Ground Not Asserted by Petitioners

Last week, the Court of Appeals for the Federal Circuit released a precedential decision holding, inter alia, that the USPTO Patent Trial and Appeal Board (“PTAB”) “erred by instituting inter partes review based on a combination of prior art references not advanced in [petitioner’s] petition.”¹  In Koninklijke Philips N.V. v. Google LLC, the Court noted that “it is the petition, not the [PTAB’s] ‘discretion,’ that defines the metes and bounds of an inter partes review.”² 

Background

Koninklijke Philips N.V. (“Philips”) is the owner of U.S. Patent No. 7,529,806 (“the ’806 patent”), of which claims 1–11 are directed to a method of forming a media presentation that for delivering digital content for playback on a client device.  Petitioners Google and Microsoft petitioned the PTAB for inter partes review of the ’806 patent, asserting that (1) claims 1–7 and 9–11 of the ’806 patent are anticipated by a first prior art reference,³ and (2) claims 1–11 of the ’806 patent are obvious over the first prior art reference in view of a skilled artisan’s general knowledge, including, inter alia, a second prior art reference.  Notably, this second ground asserted that claims 1–11 of the ’806 patent are obvious over the first prior art reference alone.  The second prior art reference was not cited by petitioners as being combined with the first reference, but merely as authority for a teaching of general knowledge asserted by petitioners.  

In addition to instituting review on both grounds raised by petitioners, the PTAB instituted on a third ground not raised by petitioners:  “[W]e exercise our discretion and institute an inter partes review on the additional ground that claims 1-11 would have been obvious over [the first and second prior art references] based on the arguments and evidence presented in the Petition.”⁴  That is, the third ground on which the PTAB instituted review was a combination of the first and second prior art references; this combination was not advanced by petitioners in their petition.

At the conclusion of the review, the PTAB determined that the challenged claims were unpatentable based on the second and third grounds.

Discretion Limited

The Court held that the PTAB erred by instituting review based on a combination of references not relied upon by petitioners.  Citing to the Supreme Court’s decision in SAS Institute v. Iancu for support, the Court noted that the language of 35 U.S.C. § 311(a), under which a party may request inter partes review, “does not ‘contemplate a petition that asks the Director to initiate whatever kind of inter partes review he might choose.’”⁵ Indeed, it is the petitioner’s petition, the Court noted, and not the Director’s discretion, that “is supposed to guide the life of the litigation.”⁶

Outcome

Though the Court held that the PTAB erred in instituting review on a ground not raised by petitioners, the Court nevertheless affirmed the PTAB’s determination that the challenged claims were obvious based on the second ground—which had been raised by petitioners.

Takeaway

Prospective petitioners should take care to ensure that the appropriate grounds are raised in the petition since the PTAB may not exercise discretion and raise a new ground sua sponte.  Likewise, patent owners against whom petitions have been filed should take care to ensure that the PTAB does not institute on grounds not raised by petitioners.

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Sources

1. Koninklijke Philips N.V. v. Google LLC, No. 2019-1177, slip op. at *9 (Fed. Cir. Jan. 31, 2020).
2. Id. at *10 (citing SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1355-56 (2018)).
3. The first and second prior art references cited by petitioners are, respectively, Synchronized Multimedia Integration Language 1.0 Specification and Kien A. Hua et al., 2PSM: An Efficient Framework for Searching Video Information in a Limited-Bandwidth Environment, 7 Multimedia Systems 396 (1999).
4. Koninklijke Philips N.V. v. Google LLC, No. 2019-1177, slip op. at *6-7 (Fed. Cir. Jan. 31, 2020) (quoting Google Inc. v. Koninklijke Philips N.V., No. IPR2017-00447, Paper 7, at 18 (P.T.A.B. June 8, 2017)).
5. Id. at *9 (quoting SAS Inst., 138 S. Ct. at 1355).
6. Id. at *10 (quoting SAS Inst., 138 S. Ct. at 1356).