IP Law Daily, PATENT—Fed. Cir.: Findings of invalidity of interactive voice system claims on obviousness grounds affirmed, (Jun 12, 2023)

By Thomas Long, J.D.

PTAB did not err in disregarding evidence that a cited patent did not qualify as prior art, or by analyzing other prior art regarding compliance with written description requirements.

Challenged claims of two patents directed to an interactive voice system that allows a user to request information from a voice web browser were unpatentable as obvious, the U.S. Court of Appeals for the Federal Circuit has held. The court affirmed decisions of the Patent Trial and Appeal Board in inter partes reviews brought by Google Samsung, and LG Electronics. The Board did not abuse its discretion by declining to consider arguments and evidence submitted by the patent owner due to failure to comply with procedural rules. The patent owner failed to properly support its contention that an earlier patent did not qualify as prior art. Nor did the Board err in deciding that certain challenged claims were not entitled to the priority date of a previous patent application, due to failure to meet the written description requirements of Section 112 of the Patent Act (Parus Holdings, Inc. v. Google LLC, June 12, 2023, Lourie, A.).

Patents-in-suit. Parus Holdings, Inc., owned the patents-in-suit, U.S. Patent No. 7,076,431 (“the ’431 patent”) and U.S. Patent 9,451,084 (“the ’084 patent”). Directed to an interactive voice system that allows a user to request information from a voice web browser, the patents shared a specification that disclosed two preferred embodiments: (1) a voice-based web browser system and (2) a voice-activated device controller. The patents were continuations of and claimed priority from an application filed on February 4, 2000, which eventually was published as U.S. Published Patent Application 2001/0047262 (“Kurganov-262”).

Review proceedings. Google LLC, Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., LG Electronics Inc., and LG Electronics USA, Inc., petitioned for inter partes review of the ’431 and ’084 patents, asserting that nine laims of the ’431 patent and eight claims of the ’084 patent would have been obvious in light of prior art, including a patent issued by the World Intellectual Property Organization, WO 01/050453 to Kovatch (“Kovatch”), as well as Kurganov-262. Kovatch described an interactive voice response system for accessing information from a computer network via remote telephony devices. The interactive voice response system analyzed utterances spoken by users and matches the utterances with an index of destinations.

Prior art—Kovatch. The parties disputed whether Kovatch qualified as prior art. Kovatch was filed on July 12, 2001, and had an earliest possible priority date of January 4, 2000. According to Parus, the claimed inventions of its patents were conceived at least by July 12, 1999, and reduced to practice at least by December 31, 1999, meaning that Kovatch was not prior art. Parus submitted exhibits and claim charts as evidence of its contention, but as the Federal Circuit explained, “Parus only minimally cited small portions of that material in its briefs without meaningful explanation.” After determining that Parus failed to comply with rules prohibiting incorporation by reference, the Board declined to consider Parus’s arguments and evidence. According to the Board, Parus made its arguments in several declarations and improperly incorporated those arguments by reference into its response and surreply to the review petitions. In particular, Parus did not explain the basis for its conclusion or cite any evidence to support it in those filings. Accordingly, the Board concluded that Kovatch was prior art to the challenged patents.

Prior art—Kurganov-262. The review petitioners also argued that Kurganov-262 was prior art because the common specification failed to provide written description support for all the challenged claims of the ’084 patent and claim 9 of the ’431 patent, and, therefore, those claims were not entitled to the earlier effective filing date. Parus contented that the claims were fully described in Kurganov-262 and were entitled to its February 4, 2000, priority date. The Board found that Kurganov-262 qualified as prior art because claim limitations requiring a computing device “configured to periodically search via one or more networks to identify new web sites and to add the new web sites to the plurality of web sites” were not supported by the earlier application. Although the common specification disclosed a device browsing server that operated similarly to the web browsing server, and it disclosed that the device browsing server could detect and incorporate new devices, in the Board’s view, that teaching was inapplicable to the web browsing server because the specification “indicates that the devices ‘appear as “web sites”’ connected to the network,” but were not “web sites,” and the teachings were not interchangeable.

Based on its conclusions on the prior art references, the Board decided that the challenged claims were invalid for obviousness. Parus appealed to the Federal Circuit.

Arguments on appeal. Before the Federal Circuit, Parus argued that: (1) the Board erred in holding that Kovatch qualified as prior art because it improperly declined to consider Parus’s arguments and evidence regarding antedating, and (2) the Board erred in holding that the challenged claims lacked written description support and were therefore not entitled to their earlier priority date.

Submission of evidence. Parus did not dispute that it incorporated arguments by reference and therefore violated the relevant rule prohibiting incorporations by reference, 37 C.F.R. § 42.6(a)(3). “For that reason alone, the Board’s disregarding of Parus’s arguments found to be in violation of the rule cannot be an abuse of discretion,” said the court. However, Parus argued the Board abused its discretion and violated the Administrative Procedure Act (APA) by disregarding the evidence it submitted.

The Federal Circuit disagreed. First, while there is no procedural requirement for patent owners to respond to review petitions, Parus chose to do so and therefore took on the administrative burden to prove that it was the first to make its claimed inventions. “Once Parus chose to submit a response and assume that burden, it bore the responsibilities that came with it—including submitting a response that complied with the rules and regulations of the USPTO,” the court said. That burden included complying with the rule against incorporation by reference, as well as the requirement to submit “a detailed explanation of the significance of the evidence including material facts.”

Second, the court rejected Parus’s contention that the burden of persuasion had improperly been placed on it, explaining that Parus only had the burden of production, with the petitioners retaining the ultimate burden of persuasion on invalidity. Parus failed to meet its burden. “The burden of production cannot be met simply by throwing mountains of evidence at the Board without explanation or identification of the relevant portions of that evidence,” the court said. “One cannot reasonably expect the Board to sift through hundreds of documents, thousands of pages, to find the relevant facts.” Although Parus contended that the APA required the Board to review the entirety of the record, precedent did not mandate “that the Board review evidence and issues introduced by a party in violation of its rules or not introduced at all.” The Federal Circuit also noted that Parus’s response was almost 3,000 words short of the length limitation, so it had plenty of room to explain its position; moreover, it could have sought leave to exceed the word count, if necessary.

The Federal Circuit accordingly affirmed the Board’s determination that Kovatch was prior art, as well as its conclusion that the challenged claims of the ’431 patent were unpatentable.

Written description. The court explained that for a claim to be entitled to the filing date of an earlier application, each application in the chain leading back to the earlier application must comply with the written description requirement of 35 U.S.C. § 112. Parus argued that the Board exceeded its authority regarding the scope of inter partes reviews because such reviews are only to be based on the grounds of anticipation (Section 102) or obviousness (Section 103), and not Section 112. In the court’s view, Parus waived the argument by raising it in its preliminary response but not in its response. But even if it hadn’t waived it, the argument failed because the Federal Circuit had previously held that Section 311(a), which places the limits on the scope of review, “merely dictates the grounds on which an IPR petition may be based, not the issues that the Board may consider to resolve those grounds.” The petitioners asserted grounds for review under Section 103. Because Parus contended that Kurganov-262 did not qualify as prior art, it was necessary for the Board to determine whether the challenged claims satisfied the written description requirement. “The Board therefore did not exceed its statutory authority,” the court said.

Furthermore, the Board did not err in finding that the challenged claims lacked the requisite written description support. While the first embodiment in the shared specification related to actual websites but did not add “new websites,” the second embodiment relates to adding “new devices,” which may “appear as ‘websites’” but are not websites. The court agreed with the Board and the petitioners that these teachings may not be combined. “The Board’s finding was not an unreasonable assessment of the evidence before it, particularly in light of the plain text of the specification itself,” the Federal Circuit said, and it affirmed the Board’s invalidity decisions.

The case is Nos. 2022-1269 and 2022-1270.

Attorneys: Joel Lance Thollander (McKool Smith, P.C.) for Parus Holdings, Inc. Nathan R. Speed (Wolf Greenfield & Sacks, P.C.) for Google LLC.

Companies: Parus Holdings, Inc.; Google LLC

Cases: Patent FedCirNews GCNNews