Federal Circuit Reinstates Patent Claims Previously Found Obvious by Patent Trial and Appeal BoardAugust 12, 2020

On July 31, 2020, in the precedential opinion Alacritech, Inc. v. Intel Corp., the United States Court of Appeals for the Federal Circuit (hereinafter the “Federal Circuit”) reinstated three claims of Alacritech’s patent, holding that the Patent Trial and Appeal Board (hereinafter the “Board”) did not adequately support its finding that the asserted prior art combination teaches or suggests a limitation recited in the three claims and remanded for further proceedings. The Federal Circuit affirmed the Board’s decisions in all other respects of the appeal.

The patent at issue relates to offloading certain network-related processing tasks from a host computer’s CPU to an intelligent network interface card, which improves performance by accelerating network communications while at the same time freeing the CPU to focus on other tasks. One of the tasks that can be offloaded to the intelligent network interface card is the reassembly of data from packets received by the host computer from the network. Intel Corporation, Cavium, LLC and Dell Inc. (hereinafter “Intel”) petitioned for inter partes review of the patent asserting that the challenged claims would have been obvious over two prior art documents, and the Board agreed. Alacritech appealed, arguing that the Board’s analysis was inadequate to support its finding that the asserted prior art teaches or suggests the limitations of three particular claims.

The Federal Circuit found that the Board’s analysis falls short of the requirement that the Board’s explanation be sufficient for the Federal Circuit “to see that agency has done its job.” Instead, the Federal Circuit described the Board’s analysis and explanation as “briefly reciting some of the parties’ arguments in two terse paragraphs” and then merely concluding that reassembly occurs in both the claims and the prior art. The Board did not explain how the prior art teaches or suggests reassembly in the network interface, and therefore the Federal Circuit was unable to discern whether the Board followed a proper path in determining that the subject matter of the claims would have been obvious.

Intel argued that the Board adopted Intel’s extensive discussion of the reassembly limitations. The Federal Circuit did not find this argument persuasive because although the Board cited relevant portions of Intel’s petition, the Board did not endorse, adopt, or suggest that it was persuaded by those arguments. Intel also argued that the Board “soundly rejected” Alacritech’s interpretation of the prior art. The Federal Circuit rejected this argument, stating that the Board’s rejection of certain arguments made by Alacritech does not mean that the Board necessarily adopted Intel’s position.

Additionally, Intel insisted that the substantial evidence standard requires the Federal Circuit to affirm “so long as there is evidentiary support in the record, even if the support was not specifically cited by the Board.” The Federal Circuit called this a “fundamentally incorrect statement of the law” and reiterated that the Federal Circuit’s review of patentability “is confined to the grounds upon which the Board actually relied,” and that the Board is “obligated to articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.”

Therefore, the Federal Circuit vacated the Board’s obviousness finding as to three claims in the patent at issue and remanded for the Board to reconsider whether the asserted prior art teaches or suggests the limitations of the claims.

Julie L. Spieker is an Intellectual Property Attorney in the MVS  Biotechnology & Chemical Practice Group as well as the Mechanical  and Electrical Practice Group. To learn more, visit our MVS website , or contact Julie directly via email .