In In Re: IPR Licensing, Inc., Appeal Nos. IPR2014-00525, IPR2015-00074 (Fed. Cir. Nov. 22, 2019), the Federal Circuit vacated the Patent Trial and Appeal Board’s decision that a claim was invalid as obvious.  The claim had previously been in front of the Federal Circuit in an appeal in which Federal Circuit found insufficient record support for the Board’s conclusion that the claim was obvious and that there would have been a motivation to combine relevant prior art references.  In this appeal, the Federal Circuit determined that the only additional evidence that the Board cited on remand to support the conclusion that there would have been a motivation to combine the relevant prior art references was not part of the record before the Board.  Specifically,  the Federal Circuit determined that the Board improperly relied upon a reference relating solely to an issue on which the Board did not institute review.  The decision highlights an auxiliary benefit to having all grounds of invalidity instituted.

The challenged patent concerns wireless networks and includes method claims for allowing users to access the same network.  The petition for inter partes review (IPR) of the patent at issue challenged claims on three grounds.  The Board instituted review on the first ground only and, in a first decision, concluded that all challenged claims were obvious based on the three references combined in the first ground.  In a first appeal, the Federal Circuit affirmed the Board’s conclusions as to all claims except one method claim, for which the Federal Circuit  determined that the Board did not provide evidentiary support for a motivation to combine the three references.  The Federal Circuit remanded for the Board to assess whether there was substantial evidence to support the conclusion that one of skill in the art would have had a motivation to combine the three references from ground one.  On remand, the Board again found the claim obvious and relied upon a reference asserted only in the non-instituted third ground of the IPR petition for the motivation to combine.

In a second appeal, the Federal Circuit explained that the Board could not rely on the reference asserted only in the non-instituted third ground for the motivation to combine because doing so would be prejudicial to the patent owner.  A patent owner’s response to an IPR petition may address only grounds for unpatentability not already denied.  The Board’s regulations explicitly state that an issue upon which the Board does not institute review is not part of the ensuing IPR proceeding.  The patent owner therefore lacks both notice that the Board might rely on a reference from a non-instituted ground and an opportunity to respond to such a reference.

The petitioner attempted to justify and minimize the Board’s reliance on the reference from the third ground without success. The petitioner also argued that the matter should be remanded as to the two non-instituted grounds under SAS, which would have made the reference from the third ground available to provide evidentiary support for the motivation to combine.  Although the Federal Circuit determined that it had the authority to remand as to the non-instituted grounds despite the petitioner’s failure to file a cross-appeal, the Federal Circuit determined that the petitioner’s withdrawal from the appeal pursuant to a settlement agreement constituted a waiver of its request to institute an IPR on the non-instituted grounds.

In light of the decision, in situations where an IPR was instituted on only one of multiple proposed grounds, petitioners would be wise to ensure that, on the basis of SAS Institute, Inc. v. Iancu (discussed here), the Board institutes on all invalidity grounds.  Doing so may allow the references from all grounds to be available to the Board to demonstrate the knowledge and motivations of one skilled in the art at the time of the invention.