The Software IP Report

Federal Circuit Vacates PTAB Written Decision in IPR For Inadequate Explanation of Invalidity Holding

In a non-precedential opinion, Cutsforth, Inc. v. MotivePower, Inc., No. 15-1316 (Fed. Cir. Jan. 22, 2015), the Federal Circuit criticized the Patent Trial and Appeal Board (PTAB) for failing to explain its obviousness rejection of U.S. Patent No. 7,990,018, which is directed to a removable brush holder. The Federal Circuit vacated and remanded the decision back to the PTAB for a more thorough analysis and explanation.

The facts are pretty straightforward. The PTAB instituted review of all of the claims of the ‘018 patent following an obviousness challenge. The PTAB concluded that the claims were obvious in its final written decision.

The problem with the written decision, according to the Federal Circuit, is that the PTAB formed conclusions without articulating any reasons for those conclusions.

For example, the PTAB never explained why various proposed modifications of the references would have been obvious to one skilled in the art. Rather, the PTAB simply stated that it agreed with the petitioner’s conclusions concerning obviousness despite the patent owner’s evidence to the contrary.

While it may appear that the PTAB implicitly adopted the petitioner’s arguments and conclusions, the PTAB’s written decision only restated the petitioner’s conclusions without presenting any reasoning or evidence—provided by the petitioner or otherwise—to support those conclusions.

This was especially egregious to the Federal Circuit because the patent owner provided evidence to challenge those conclusory statements. The Federal Circuit reiterated that an obviousness rejection requires some findings relative to the level of ordinary skill in the art. Those findings must be supported by evidence. Because conclusory statements are not evidence, the PTAB cannot rely only upon conclusory statements, as it did here, to rebut evidence provided by the opposing party.

Interestingly, the petitioner did not submit much evidence to the PTAB prior to the written decision. The petitioner deposed owner’s expert and submitted the deposition transcripts to the PTAB. The petitioner also served a deposition notice on the inventor. It’s unclear from the public record what, if any, other evidence the petitioner relied upon to support its obviousness challenge.