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Leave No Stone Unturned – Microsoft Corp. v. Parallel Networks

The Federal Circuit, as an appellate court, defers to the findings of the Patent and Trial Appeal Board (the “Board”).  But that deference only goes so far.  The Federal Circuit’s December 1, 2017, non-precedential opinion in Microsoft Corporation v. Parallel Networks Licensing, LLC, is another example of the Federal Circuit requiring the Board to address the arguments raised before it and provide a reasoned basis for its conclusions.  In Parallel Networks, the Federal Circuit concluded that the Board came up short in two respects.

Briefly, Parallel Networks involved “U.S. Patents 5,894,554 and 6,415,335 (the Parallel Patents), which describe and claim systems for managing the handling of requests for World Wide Web pages having dynamic (changing) content.”  Slip Op. at 1.  Microsoft filed four inter partes review petitions with respect to the Parallel Patents, resulting in two instituted consolidated proceedings.  IBM filed four similar petitions, and those were likewise consolidated.  Ultimately, though, the Board found that the petitioners had failed to carry their burden.  Petitioners appealed.

The Federal Circuit first dismissed Petitioners claim construction argument.  Next, Petitioners argued that the Board failed to address one of their stated grounds for anticipation.  The Federal Circuit agreed.  Although the Board had addressed one anticipation argument with respect to the art in question, the Board apparently failed to address a second, independent, ground for anticipation within the same art.  Accordingly, the Federal Circuit instructed the Board to address the argument on remand.

Finally, Petitioners argued that the Board incorrectly concluded that they had failed to establish a reason “why a person of ordinary skill in the art would have modified” the main obviousness reference.  Slip Op. at 14.  Interestingly, the Court quoted, in full, two pages from the Petitioner’s expert.  The Court found that the Board’s reasons for dismissing this analysis were “inadequate.”  Therefore, the Federal Circuit remanded for “reconsideration of obviousness.”

For Petitioners that believe the Board gave their argument short shrift (or no analysis at all), Parallel Networks is another opinion to be used in the quest for appellate relief.  Yet as in Parallel Networks itself, this does not guarantee ultimate success; only the ability to fight another day.