IP Law Daily, PATENT—Fed. Cir.: PTAB properly found Samsung failed to show obviousness of claims for magnetic stripe emulators, (Aug 2, 2022)

By Kevin M. Finson, J.D.

The Board’s findings of non-obviousness were upheld because they contained no legal error and the factual findings were supported by substantial evidence.

Samsung failed to show that that the Patent Trial and Appeal Board erred in determining following inter partes review that certain patent claims a patent relating to magnetic stripe emulators were not obvious in light of the prior art, the U.S. Court of Appeals for the Federal Circuit has held. The PTAB’s findings of non-obviousness were supported by substantial evidence and Samsung failed to explain why a skilled artisan would combine disparate parts of prior art (Samsung Electronics Co., Ltd. v. Dynamics Inc., August 2, 2022, Moore, K.).

Dynamics, Inc. was the owner of U.S. Patent No. 8,127,153 (the ’153 patent), which was directed at magnetic stripe emulators, which were devices used to generate electromagnetic fields to communicate directly with the read-heads of conventional magnetic-stripe credit card readers. Samsung Electronics Co., Ltd (Samsung) brought a petition for inter partes review of claims 1 and 5-8 of the ’153 patent on the ground of obviousness in light of two different prior art combinations. The PTAB instituted review and found that one of the combinations asserted by Samsung did not fulfill the limitation at issue, and that there was no motivation to combine the other references. Samsung appealed.

Administrative Procedure Act. Samsung argued that the Board failed to comply with the Administrative Procedure Act because it did not address one of Samsung’s arguments regarding whether a prior art reference taught a card emulating the same track data regardless of directionality. The court reviewed the Board’s decision and pointed out where the Board had expressly addressed that contention and rejected it. When pressed on this issue at oral argument, Samsung had further argued that the Board’s analysis of the issue was insufficiently clear, but the court held that this argument was not raised in the briefs and had therefore been waived.

Motivation to combine. Samsung argued that the Board erred in finding that a skilled artisan would not have been motivated to combine two prior art references. One reference disclosed a device capable of retrieving data from memory and the other disclosed a plurality of digital representations, including directional representations. Samsung argued that the two together disclosed a key claim of the ’153 patent, but the Board held that there was not a motivation to combine the two because such combination would not improve the functioning of either prior art reference. The Federal Circuit agreed with the Board that Samsung was simply combining disparate parts of prior art without providing sufficient explanation as to why a skilled artisan would have done so.

The Federal Circuit affirmed the findings of the PTAB.

The Case is No. 21-2352.

Attorneys: John C. O'Quinn (Kirkland & Ellis LLP) for Samsung Electronics Co., Ltd. Robert William Morris (Eckert Seamans Cherin & Mellott, LLC) for Dynamics Inc.

Companies: Samsung Electronics Co., Ltd.; Dynamics Inc.

Cases: Patent FedCirNews