PTAB obviousness ruling over dissent reversed by CAFC majority but rule 36 issues persist for CPC patent

PTAB obviousness ruling over dissent reversed by CAFC majority but rule 36 issues persist for CPC patent

On appeal, the Federal Circuit agreed with CPC Patent that Hsu’s ‘to associate with’ disclosure does not reach what the ‘039 patent’s claims require in setting or establishing the memory location that stores biometric data.

A nonprecedential ruling has been issued by the U.S. Court of Appeals for the Federal Circuit (CAFC) in CPC Patent Technologies Pty Ltd versus ASSA ABLOY AB reversing an obviousness determination by the Patent Trial and Appeal Board (PTAB) over a dissent by Circuit Judge Evan Wallach from the majority’s analysis of the PTAB’s factual findings on prior art disclosures.

Although CPC Patent gets another opportunity to save patent claims to biometric card security systems due to the reversal, the CAFC also issued a Rule 36 summary affirmance affirming the invalidity of other claims from the patent-at-issue, while the U.S. Supreme Court denied cert to a CPC Patent petition challenging the CAFC’s Rule 36 practice in separate PTAB appeals.

ASSA ABLOY, global security manufacturer, filed two petitions for inter partes review to challenge claims from CPC Patent’s US Patent number 8620039, Card Device Security using Biometrics. Representative claim 1 of the ‘039 patent discloses a method of enrolling in a biometric card pointer system that includes a step by which the method defines a memory location in a local memory external to the card where card information is to be stored is disclosed by representative claim 1 of the 039 patent discloses.

The PTAB construed the Defining Limitation such that “defining” meant “setting” or “establishing,” such that once card and fingerprint information are received, the card information contains the memory address where fingerprint data is stored. The Board under this construction, determined that prior art reference European patent number 924655 (Hsu) met the Defining Limitation because it associated fingerprint data with corresponding user numbers, which was adequate to meet the requirement that the card data must define the biometric data’s memory location.

On appeal, the Federal Circuit agreed with CPC Patent that Hsu’s ‘to associate with’ disclosure does not reach what the ‘039 patent’s claims require in setting or establishing the memory location that stores biometric data. What the PTAB inferred that Hsu simultaneously discloses the different actions of ‘associat[ing]’ and ‘establishing’ was problematic, the CAFC found, as associating two sets of data does not necessarily mean that one data set establishes the location of the other. Although Hsu must set a memory location, “the Board did not meaningfully grapple with the ‘039 patent’s additional constraint” that the memory location is determined by the card information, the CAFC found.

The appellate court’s finding undercut ASSA ABLOY’s argument on appeal that the PTAB did not equate ‘associat[ing]’ with ‘setting’ or ‘establishing’ but rather found that the effect of Hsu’s association reached the ‘039 patent’s Defining Limitation.

Furthermore, the majority appellate panel of Circuit Judges Sharon Prost and Raymond Chen found testimony from ASSA’s expert witness to be conclusory of the petitioner’s arguments that Hsu disclosed the Defining Limitation. The Federal Circuit found the remaining arguments unpersuasive and reversed the PTAB’s obviousness determinations and remanded for further consideration of other unpatentability grounds not reached by the Board.

Circuit Judge Wallach in his dissension accused the panel majority of substituting its own findings of fact for those of the PTAB, pointing out two instances where the appellate majority blundered in this manner. First, by finding that the effect of Hsu was association and nothing more, Judge Wallach argued that the majority mistakenly restricted Hsu’s disclosure to the literal meaning of the words contrary to the statutory person of ordinary skill standard, a rigid interpretation that belied the majority’s paraphrasing of the Defining Limitation. Second, Wallach argued that the testimony was reduced by the CAFC majority from ASSA’s expert to fractions that sound conclusory contrary to the Federal Circuit’s standard of review for substantial evidence.

The ASSA ABLOY ruling of the Federal Circuit was limited to the PTAB’s invalidation of claims 3 through 18 of the ‘039 patent. The CAFC in a footnote acknowledged that the PTAB’s invalidation of claims 1, 2, 19 and 20 of the ‘039 patent was upheld in a separate ruling involving consumer electronics giant Apple as IPR petitioner. The Federal Circuit in that decision issued a Rule 36 one-word summary affirmance of the PTAB’s ruling, which proposed CPC Patent’s appeal as to those claims in ASSA ABLOY.