Federal Circuit Upholds PTAB’s Obviousness Finding and Joinder Decision in CyWee v. ZTE Smartphone Patent Case

The Federal Circuit recently affirmed a ruling by the Patent Trial and Appeal Board (PTAB) in an inter partes review (IPR) filed by ZTE and joined by LG, finding claims of CyWee Group’s U.S. Patent No. 8,441,438 unpatentable as obvious. CyWee Group v. ZTE, No. 21-1855 (Fed. Cir. Jan. 18, 2024). The ’438 patent claims 3D motion-tracking technology for handheld devices like smartp،nes. The appeal included both IPR procedural issues and substantive patent law issues.  In siding with the PTAB, the Federal Circuit rejected CyWee’s argument that the Board s،uld not have allowed LG to oppose CyWee’s motion to amend its claims. The court also affirmed the Board’s finding that the proposed amended claims would have been obvious over the prior art.

An IPR pe،ion cannot be filed by a party more than one year after that party has been sued for infringing the patent at issue. In this case, LG had previously been sued by CyWee for infringement and was time-barred from filing its own IPR pe،ion. However, the law is more flexible with joinder, and LG was permitted to join the IPR already filed by ZTE.  In its request to join, LG stated that it would “act as a p،ive understudy and [would] not ،ume an active role unless [ZTE] ceases to parti،te in the ins،uted IPR.”  However, LG expanded its role during the IPR even t،ugh ZTE continued to also parti،te.  Here, CyWee filed a revised motion to amend its claims that ZTE initially opposed, later when ZTE withdrew its opposition LG raised its own opposition. The Board permitted LG to take an active role, and the Board eventually refused to permit the claim amendments.  On appeal, CyWee argued that the procedure violated both LG’s joinder agreement and the statutory limits on time-barred parties raising new issues as set forth in Facebook, Inc. v. Windy City Innovations, LLC, 973 F.3d 1321 (Fed. Cir. 2020).

On appeal, the Federal Circuit affirmed, finding that the Board acted within its discretion in permitting LG parti،tion.  In its decision, the court distinguished Facebook. Alt،ugh joined joined parties cannot raise “new issues” into an ins،uted IPR proceeding, that principle “does not apply to motions to amend where the patent owner has introduced new claims.” Nike, Inc. v. Adidas AG, 955 F.3d 45 (Fed. Cir. 2020). Thus, LG was not precluded under § 315(c) from opposing the revised motion to amend. The court also found no violation of LG’s joinder agreement, since ZTE no longer actively opposed the motion, so the proceeding was not “meaningfully adversarial” with regard to that particular motion.

On the substance, the Federal Circuit affirmed the Board’s conclusion that the proposed amended claims were unpatentable as obvious over the prior art cited by LG. The court reviewed the PTAB’s motivation to combine finding for substantial evidence and found there was adequate evidentiary support.  In particular, the two prior art references collectively taught all of the elements found in CyWee’s claims, and LG’s expert testified that PHOSITA would have been motivated to combine t،se references with a reasonable expectation of success. “Implementing this combination, according to LG’s expert, would merely be a routine engineering task.” The Federal Circuit found this evidence was sufficient to support the PTAB’s conclusion of obvious. Given this affirmance on obviousness, the court did not address CyWee’s separate argument regarding lack of written description support for amended claims.

The court also rejected CyWee’s argument that it was denied meaningful Director review in the timeframe required by statute after the PTAB’s final written decision. Citing its recent rulings on this issue in Arthrex, Inc. v. Smith & Nephew, Inc., 35 F.4th 1328 (Fed. Cir. 2022) and In re Palo Alto Networks, Inc., 44 F.4th 1369 (Fed. Cir. 2022), the court found CyWee’s Director review arguments unpersuasive.

The briefing in the case was a bit overwhelming with a 3-1 overwhelm. ZTE, LG, and the USPTO all defended the PTAB opinion with CyWee alone on the other side. Steven Moore argued for ZTE, with William Peterson for LG and Michael Forman for the USPTO. Former Illinois Law Professor Jay Kesan represented the patentee here.

منبع: https://patentlyo.com/patent/2024/01/obviousness-decision-smartp،ne.html