Docket No. 2015-1894 (IPR2014-00090)
LOURIE, O’MALLEY, TARANTO
August 30, 2016
Brief Summary: PTAB claim construction and conclusion of obviousness affirmed for certain claims but denial of motion to amend by introducing new claims vacated “as arbitrary and capricious”.
Summary: Veritas appealed PTAB decision following IPR of US 7,024,527 regarding computer data restoration systems and methods. The PTAB concluded “that the claims were not limited to file-level background restoration processes, but could reasonably be read as also covering block-level restoration processes” (“broadest-reasonable-interpretation” (Cuozzo, US 2016)) and, “[b]ased on that construction,…rejected all of the challenged claims for obviousness” (“reasonable likelihood that the system and method…would have been obvious”). It “also denied Veritas’s motion to amend, though without making an evidentiary determination of patentability of the proposed claims 26 and 27”, concluding “only that Veritas (and its expert declarant) had failed to address…whether each newly added feature in each proposed claim, as distinct from the claimed combination of features, was independently known in the prior art.” The FC panel agreed with the PTAB’s claim construction (e.g., “nothing in the claims or the specification explains why it makes a material difference-e.g., to the challenges assertedly overcome by the invention-whether the background restore application does file- or block-level restoration”) and its obviousness analysis and conclusions. The FC panel also considered the rejection of Veritas’s motion to amend. The opinion explains that under the APA, it will “set aside the Board’s actions if it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” (5 USC § 706(2)(A)). It also explained that “[t]he Board concluded that [Veritas’s] motion and the declaration of Veritas’s expert…do not discuss the features [of claims 26 and 27] separately but discuss only ‘the newly added feature in combination with other known features” and that this was “the sole basis for denying the motion”. The FC panel concluded this was “unreasonable and hence must be set aside as arbitrary and capricious”, noting that “[t]he Board quoted statements in Veritas’s motion that on their face satisfy the requirement of discussing whether the newly added features are in the prior art”, Veritas’s motion and Dr. Levy’s declation also discuss the absence of newly added features in the two key prior-art references”, and it cannot “see how the Board could reasonably demand more from Veritas in this case” (“[W]e have been shown no reason to doube that it is only the combination that was the ‘new feature’” and “fail to see how describing the combination is meaningfully different from describing what is new about the proposed claims, even in comparison to the unamended claims.”) The opinion also noted that “[t]he Board’s rationale here is erroneous independently of any resolution of this court’s recently initiated en banc proceeding in In re Aqua Products, Inc.” (in which “the Board’s evaluation of Aqua’s motion to amend was limited to considering only those arguments that Aqua actually raised”).