Federal Circuit holds that applicant admitted prior art in a challenged patent may not form the basis of a ground to institute an inter partes review, but may be considered as evidenceMarch 14, 2022

On February 2, 2022, in Qualcomm Incorporated v. Apple Inc., the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) dismissed Qualcomm’s  appeal of two related inter partes review (“IPR”) decisions of the Patent Trial and Appeal Board (“PTAB”). The PTAB held several claims of a patent owned by Qualcomm to be unpatentable. Upon appeal, the Federal Circuit vacated the PTAB’s decision and remanded the case for further proceedings while holding that applicant admitted prior art (“AAPA”) does not constitute “prior art consisting of patents and printed publications” as recited in 35 U.S.C. § 311(b)  which governs the scope of IPR petitions.

Qualcomm US Patent No. 8,063,674  is directed to “integrated circuit devices with power detection circuits for systems with multiple supply voltages.” The ‘674 patent describes a problem in the prior art related to integrated circuits containing multiple networks operating at different supply voltage levels. “For example, a core logic network may operate at a lower voltage, and an input/output network may simultaneously operate at a higher voltage … Such a system can save power by allowing the broader circuit to power down a network, like the core logic network, when it is not needed.” The ‘674 patent goes on to describe the problem in the prior art related to issues in communication between the input/output devices and the core devices. If and when the core devices are powered down, the connection between the core devices and the input/output devices can cause problems such as “stray currents” resulting in “erroneous output signals from the circuit”. The Background section of the ‘674 patent describes a solution in the prior art to remedy this issue that involves power-up/down detectors used to generate a power-on/off-control (“POC”) signal “that instructs the input/output devices when the core devices are shut down.” Figure 1 of the ‘674 patent depicts a prior art POC system that includes a power-up/down detector. However, the ’674 patent asserts that there are problems with the prior art solution depicted in Figure 1. Namely, the prior art solution can, at times, result in “a significant amount of current to flow from … [the power supply] to ground.” The ‘674 patent fixes this issue by including a feedback network.

Apple Inc. (“Apple”) filed two IPR petitions that challenged different sets of claims of the ‘674 patent. The first petition challenged several claims as unpatentable in view of two patents and a printed publication. The PTAB found that Apple had not proven unpatentability of the challenged claims in the first IPR petition. Apple’s second petition to institute IPR challenged several claims of the ‘674 patent in view of AAPA, namely Qualcomm’s description of the prior art solution recited in the ‘674 patent which included Figure 1, as well as a published patent application. Qualcomm conceded that each element of the challenged claims was taught by the combination of Qualcomm’s AAPA and the published patent application. However, Qualcomm argued that AAPA cannot be used to challenge the validity of patent claims in an IPR proceeding. The PTAB disagreed, noting that AAPA contained in a challenged patent, as was the case here, falls under the category of “prior art consisting of patents or printed publications” as the scope of IPR petitions is defined in § 311(b), because it is prior art contained in a patent. Thus, the PTAB found the use of AAPA to be permissible and, therefore, held the challenged claims to be unpatentable.

Qualcomm appealed the PTAB’s decision to the Federal Circuit. After initially arguing that AAPA could not be considered at all in IPR proceedings, Qualcomm altered its stance a bit in arguing that general knowledge such as AAPA “may have a role to play in IPR proceedings”, but that “AAPA may not form ‘the basis’ of a ground in an IPR.” Apple argued that any prior art “that is contained in any patent or printed publication, regardless of whether the document itself is prior art, can be used as a basis for a challenge in [IPR].” The United States Patent and Trademark Office (“USPTO”) also took a stance in the appeal proceedings. The USPTO asked the Federal Circuit to remand the case to the PTAB so the PTAB could apply the Director’s guidance on the “Treatment of Statements of the Applicant in the Challenged Patent in Inter Partes Reviews Under § 311(b)” (“Guidance”). The Guidance is in agreement with Qualcomm that AAPA does not fall under “prior art consisting of patents or printed publications”, however, the Guidance also holds that Federal Circuit case law allows the use of AAPA in IPR proceedings “as evidence of the general knowledge of a skilled artisan.” The USPTO declined to comment on whether Apple’s use of AAPA was permissible in this case due to it possibly forming the basis of the ground based on its significance in the validity challenge.

The Federal Circuit held that AAPA does not constitute “‘prior art consisting of patents or printed publications under §311(b) such that it may form the ‘the basis’ of a ground in [IPR].” The Federal Circuit concludes that the “patents or printed publications” that form “the basis” of a ground for IPR, as required by § 311(b), “must themselves be prior art to the challenged patent.” Thus, descriptions of the prior art contained in the challenged patent is excluded from forming the basis of a ground for IPR. The Federal Circuit noted that this holding “is consistent with prior judicial interpretations of the statute and represents a more natural reading of § 311(b).” The Federal Circuit cited several decisions, made by both the Federal Circuit and the Supreme Court that point to the fact that “patents and printed publications”, as recited in § 311(b), must themselves be prior art to the challenged patent. The Federal Circuit also noted that this interpretation is consistent with other sections of the United States Code relating to patents, including 35 U.S.C. §301(a). Thus, the Federal Circuit concluded that because the AAPA in this case “is not contained in a document that is a prior art patent or prior art printed publication,” the AAPA is not permissible to form a basis of a ground in an IPR.

The Federal Circuit further noted that “it does not follow that AAPA is categorically excluded from an [IPR].” The Federal Circuit asserted that evidence beyond prior art documents may be relied upon in an IPR, “even if such evidence itself may not qualify as the ‘basis’ for a ground set forth in a petition.” The Federal Circuit cited several statutes supporting this assertion. For example, the Federal Circuit cited 35 U.S.C. § 312(a)(3)(B), which allows the use of “affidavits or declarations of supporting evidence and opinions” to be included as evidence that supports the grounds to challenge patent claims in an IPR petition. The Court also cited 35 U.S.C. § 316(a)(3), which requires the USPTO Director to establish “procedures for the submission of supplemental information after the petition is filed.” The Court noted that “the assessment of a claim’s patentability is inextricably tied to a skilled artisan’s knowledge and skill level.” Further, since “a patentee’s admissions about the scope and content of the prior art provide a factual foundation as to what a skilled artisan would have known at the time of invention … it follows that AAPA may be used … in an [IPR].” The Court concluded that even though evidence such as AAPA is not itself prior art, it is “permissible evidence in an [IPR] for establishing the background knowledge possessed by a person of ordinary skill in the art.” The Federal Circuit further reasoned that the use of AAPA in an IPR is consistent with Congress’ intent when creating IPR proceedings. The Court noted that the reason for restricting the scope of IPR petitions to patents and printed publications was “to provide a cheaper and less time-consuming alternative to challenge patent validity on certain issues.” (citing Quad Envtl. Techs. Corp. v. Union Sanitary Dist., 946 F.2d 870, n.7 (Fed. Cir. 1991) (citing H.R. Rep. No. 1307 at 4)). The Federal Circuit noted that allowing AAPA contained within the challenged patent does not “implicate the type of fact-intensive inquiries Congress was seeking to avoid.”

The Federal Circuit concluded that the PTAB erred in holding AAPA contained in a challenged patent to fall under “prior art consisting of patent or printed publication” under § 311(b) but that AAPA contained in a challenged patent can be permissible evidence in an IPR. The Federal Circuit did not address the issue of whether Qualcomm’s AAPA “improperly formed the ‘basis’ of Apple’s challenge.” Thus, the Federal Circuit vacated the PTAB’s conclusion of unpatentability and remanded the case to the PTAB to address this question of whether Qualcomm’s AAPA formed the basis of Apple’s challenge.

Additionally, the Federal Circuit affirmed the PTAB’s decision in the first IPR petition holding that Apple did not prove the challenged claims to be unpatentable in view of two patents and a printed publication.

This decision by the Federal Circuit clarifies the scope of documents that can be submitted with an IPR petition to form the basis of a ground to challenge patent claims as well as what types of evidence may be considered in an IPR to establish background knowledge possessed by a person of ordinary skill in the art.

Joseph M. Hallman is a Patent Attorney in the Mechanical and Electrical Patent Practice Group at McKee, Voorhees & Sease, PLC. For additional information please visit www.ipmvs.com or contact Joseph directly via email at joseph.hallman@ipmvs.com 

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