Board erroneously excluded Apple’s reply arguments as new, not presented in IPR petition

Apple Inc. v. Andrea Electronics Corporation
Docket No. 2018-2382, -2383 (IPR2017-00626, -00627)
DYK, PLAGER, STOLL
February 7, 2020

Brief Summary: Board erroneously excluded Apple’s IPR reply arguments as new as compared to IPR petition (‘626 remanded), and no anticipation or obviousness finding affirmed (‘627).

Summary: Apple appealed two IPR final written decisions (‘626 FWD and ‘627 FWD) regarding Andrea’s US 6,363,345 relating to digital audio processing (“[a]n apparatus for cancelling noise” using a “threshold detector”). Apple challenged ‘345 patent claims 1-25 and 38-47 but this appeal relates to claims 6-9.
Regarding the ‘626 FWD, Apple challenged claims 6-9 as obvious over the Hirsch and Martin references and appealed “the Board’s conclusion that claims 6-9 are surviving claims, arguing that had the Board properly considered its reply brief arguments, that would not have been the outcome.” Replying to Andrea’s arguments, Apple argued “Andrea mischaracterized Martin and read non-existent limitations into the claims” and submitted a reply expert declaration but the Board found that “Apple’s reply raised new arguments that were not otherwise discussed in the petition” (“raised a new theory of unpatentability for the first time in its reply brief”). The FC panel reviewed this conclusion “for abuse of discretion” (Ericsson, FC 2018), explaining that under 37 CFR § 42.23(b) “[a] reply may only respond to arguments raised in the corresponding opposition, patent owner preliminary response, or patent owner response”. The FC panel disagreed with the Board, finding that Apple still asserted the same obviousness ground in its reply and “does not cite any new evidence or ‘unidentified portions’ of the Martin reference” but “merely demonstrates another example of the same algorithm to further explain why” the reference met the disputed limitations (unlike Ariosa, FC 2015 (“discussed ‘previously unidentified portions of a prior-art reference”) or Intell. Bio-Sys., FC 2016 (“cited several new…references”)). The FC panel also explained that Apple’s reply was “a legitimate reply to evidence introduced by the patent owner” (Anacor, FC 2018). Thus, the FC panel found the Board’s decision to be an abuse of discretion.

The FC panel agreed with the Board’s construction of “periodically” as “at regular intervals of time’ rather than ‘from time to time’” (as argued by Apple) as it is supported by the specification and expert declarations (Pacing Techs., FC 2015 (“[when] the patent describes multiple embodiments, every claim does not need to cover every embodiment”); Phillips, FC 2005 (“establish…a particular meaning in the pertinent field”)).

Regarding the ‘627 FWD, Apple alleged claims 6-9 were anticipated by the Helf reference or obvious over Helf and the Martin reference, and appealed the Board decision that invalidity was not shown. In making its decision, the Board concluded that Apple failed to prove that” the cited prior art “discloses the ‘periodically’ limitation as required by claims 6-9”. Based in part on the construction of “periodically”, the FC panel found substantial evidence supported the Board’s finding of no invalidity.