With an unusual fact pattern, and a Federal Circuit opinion that touches on standing to appeal, joinder of parties, and agency obligations, Fitbit, Inc. v. Valencell, Inc., 964 F.3d 1112 (Fed. Cir. 2020), seems closer to a law school teaching aid than an actual inter partes review (“IPR”) appeal. Without addressing the asserted grounds of unpatentability, the Patent Trial and Appeal Board (“the Board”) issued a Final Written Decision finding no unpatentability, resulting in a petitioner appealing claims its IPR petition never challenged.
At the PTAB
Valencell, Inc. owns U.S. Patent No. 8,923,941 (“the ’941 patent”) directed to systems for obtaining and monitoring information such as blood oxygen level, heart rate, and physical activity. Apple, Inc. challenged the validity of claims 1–13 of the ’941 patent by IPR in IPR2017-00319. On June 6, 2017, the Board instituted the IPR of the ’941 patent on claims 1, 2, and 6–13. After institution Fitbit, Inc. filed its own IPR petition challenging claim 1, 2, and 6–13 of the ’941 patent, along with a motion to grant joinder to the instituted Apple IPR. The Board granted the motion and joined Fitbit as a party.
Between the time of the PTAB trial and the Board’s Final Written Decision, the Supreme Court decided SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348 (2018), holding all patent claims challenged in an IPR petition must be reviewed by the Board. The Board re-instituted the IPR, adding claims 3–5 of the ’941 patent. In its Final Written Decision, the Board found claims 1, 2, and 6–13 unpatentable, and claims 3–5 not unpatentable. Following the decision, Apple withdrew from the proceeding and Fitbit appealed the decision on claims 3–5.
Appeal to the Federal Circuit
At the Federal Circuit, Fitbit found itself in the unusual position of appealing the Board’s decision on three claims that it did not challenge in its IPR petition. This provided the basis for Valencell’s challenge to Fitbit’s standing to appeal. According to Valencell, Fitbit only sought IPR for claims 1, 2, and 6–13, and therefore, Fitbit did not have standing to challenge the Board’s decision that relates to claims 3–5.
The Federal Circuit rejected the lack of standing argument based on the statutory language granting the right to appeal. Under 35 U.S.C. § 315(c), the Board exercised its discretion to “join as a party to that inter partes review any person who properly files a petition…” when it joined Fitbit to Apple’s IPR. Similarly, “[a] party dissatisfied with the final written decision” may appeal it in accordance with 35 U.S.C. § 319. The court rejected Valencell’s arguments, noting Fitbit’s rights as a joined party applies to the entirety of the proceedings, including the right of appeal.
On the merits of the appeal, the Federal Circuit vacated and remanded the Board’s decision on claims 3–5 because the Board performed an incomplete analysis. For claim 3, the Board rejected Fitbit’s proposed claim construction and deemed the patentability inquiry over based on its construction. The Federal Circuit remanded for the Board to fulfill its duty to address the asserted grounds of obviousness after claim construction.
The court held the Board similarly erred when it failed to apply the cited prior art references to claims 4 and 5. For these claims, the Board declined to analyze the prior art because it could not determine the meanings of the claims when one of the claim terms lacked antecedent basis. Both Fitbit and Valencell agreed that there was an error in claim dependency during an amendment in the prosecution of the patent that neither the examiner nor patentee had noticed. The Board declined to accept the parties’ shared view of the correct antecedent.
The Federal Circuit found error with the Board’s refusal to accept the parties’ uniform position, a position that was not subject to reasonable debate. The court noted there is authority for the Board to correct errors and that the Board is the preferable agency to resolve the merits of patentability. On remand, the Board should seek a reasonable resolution that comports with the agency’s assignment to resolve patentability issues.