Federal Circuit to PTAB: Explain Yourself

On January 22, 2016, the Federal Circuit vacated and remanded a decision by the United States Patent and Trademark Office, Patent Trial and Appeal Board (the “Board”) in an America Invents Act review, after ruling that the PTAB did not adequately describe its reasons for finding a Cutsforth Inc. brush holder patent invalid.

This case stems from an inter partes review (“IPR”) of U.S. Patent No. 7,990,018 (“the ’018 patent”), owned by Cutsforth, Inc. The claims of the ’018 patent are directed to brush holder assemblies that allow a current to pass from a stationary device to a moving contact. The stationary device could be a brush made of conductive material, with a brush holder that would allow a continuous contact with the moving conductive surface to generate an electrical current. According to the ’018 specification, this technology can be used in electrical devices such as electrical generators, electrical motors of all size, and slip ring assemblies on a rotating machine, e.g., a rotating crane. Additionally, the claimed brush holder assembly allows for easier removal, allowing for brush replacement during operation.

MotivePower filed five IPR petitions directed to the ’018 patent and related patents – all petitions were instituted. The result was that no challenged claim survived either due to voluntary cancellation or a finding of unpatentability by the Board. Three of the five decisions were appealed, and were consolidated for the purposes of oral argument. However, the Federal Circuit’s January 22 opinion appears to only address the IPR2013-00274, directed to the ’018 patent.

In its October 30, 2014 33 page decision, the challenged claims of the ’018 patent were found to be obvious over three prior art references. In its decision, the Board’s analysis of independent claim 1 begins by summarizing Petitioner MotivePower’s obviousness assertions: “Petitioner contends that Bissett discloses a brush holder component (brush assembly 12) adapted for removably mounting to the mounting block (dovetails 18) by providing a channel for receiving a portion of the mounting block (dovetails 18).” IPR2013-00274, Paper No. 31 (PTAB Oct. 30, 2014) at p. 19. The Board then “explained” and rejected the response of Patent Owner Cutsforth, Inc.

However, the Board’s explanation was insufficient for the Federal Circuit. Instead, the Federal Circuit required that the reasoning for the rejection/cancellation must have been articulated: “the Board stated no independent reasons for why claim 1 is obvious nor did it formally adopt MotivePower’s arguments as its own reasoning.” The Federal Circuit further stated that the Board’s basis for finding dependent claims 5 and 8 obvious lacked a clear explanation: “conclusory statements do not give adequate justification for why a claim is obvious.” Indeed, the Federal Circuit stated, “this Court cannot properly review whether there is substantial evidence to support the underlying factual findings of the Board’s determination.” Lastly, the Federal Circuit reminded the Board, “[w]hen the Board determines that modifications and combinations of the prior art render a claimed invention obvious, the Board must fully explain why a person of ordinary skill in the art would find such changes obvious.”

The Federal Circuit, like patent practitioners, need more from the Board than determinations of unpatentability. An opinion without articulated reasoning to back it up is just that, an opinion.

Samuel H. Megerditchian is a Director in the Gibbons Intellectual Property Department.
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