The Federal Circuit’s holding in United Servs. Auto. Ass’n v. PNC Bank N.A., No. 2023-2171, 2025 WL 339662 (Fed. Cir. Jan. 30, 2025) reversed a Patent Trial and Appeal Board (“PTAB”) decision finding no motivation to combine.  The opinion is nonprecedential, but the Federal Circuit’s analysis of the facts in light of recent precedent is instructive for patent practitioners. 

On May 11, 2022, the PTAB granted PNC Bank N.A.’s (“PNC”) petition for inter partes review (“IPR”) of claims 1-20 of U.S. Patent No. 10,769,598 (“the ’598 patent”).  The ’598 patent is directed to remote check deposit technology and owned by the United Services Automobile Association (“USAA”).  In its final written decision, the PTAB found claims 1 and 8-20 obvious over a combination of three prior art references but declined to find dependent claims 2-7 obvious over the same combination.

Dependent claims 2-7 of the ’598 patent require an error processing step to verify that the image of a to-be-deposited check meets certain criteria, i.e., the check is legible, appropriately sized, correctly oriented, etc.  Crucially, claims 2-7 require that an error processing step occurs on the client’s mobile device, before the image is relayed to the bank’s server.

In the IPR, PNC pointed to a client-side error processing step disclosed in one of the three prior art references it successfully asserted in combination against claim 1, arguing that one of ordinary skill in the art would have been motivated to include in the combination “a thin client” that “‘detect[s] whether the check is endorsed’ and ‘check[s] for an imprint image, a scanned serial number, and the like, to indicate that the check had been properly scanned’ before uploading the check image to the payee bank.”  See PNC Bank N.A. v. United Servs. Auto. Ass’n, No. IPR2022-00076, at 58 (P.T.A.B. May 10, 2023) (citing the prior art).  As the PTAB wrote, “Petitioner contends that an ordinary artisan would have been motivated to include Byrne’s error checking in the mobile device of the Garcia-Byrne-Singfield combination.”  Id.

The PTAB disagreed with PNC: “Even if an ordinary artisan could have made the proposed combination, we are not persuaded that Petitioner has sufficiently shown that he would have been motivated to do so.”  Id. at 59 (emphasis original).  The PTAB gave significant weight to USAA’s argument that “there would be substantial reason not to [use client-side error processing].”  Id. at 58.  PNC presented known advantages of incorporating client-side error processing, but the PTAB found that PNC’s expert testimony undercut its argument when they admitted “[t]here are tradeoffs associated with doing the verification processing on either the client or the server.”  Id. at 61 (internal cite omitted).  The PTAB ruled that it could not find a motivation to combine under a preponderance of the evidence.  PNC cross-appealed the ruling on claims 2-7.  USAA appealed the ruling on claims 1 and 8-20.

On appeal, the Federal Circuit affirmed the PTAB’s obviousness ruling on claims 1 and 8-20.  For claims 2-7, the Federal Circuit held that “the Board erred in rejecting PNC’s motivation to combine solely because this alternative arrangement also had claimed benefits.”  United Servs. Auto. Ass’n v. PNC Bank N.A., No. 2023-2171, 2025 WL 339662, at 9 (Fed. Cir. Jan. 30, 2025).  “The Board’s preoccupation with the benefits associated with server-side error processing led it to ignore the undisputed benefits of [client-side error processing].”  Id. at 10.

The Federal Circuit considered recent precedent in articulating a standard for motivation to combine.  “The combination does not need to be the best or preferred approach but need only be ‘desirable in light of the prior art.’”  Id. at 9-10 (quoting Honeywell Int’l Inc. v. 3G Licensing, S.A., 124 F.4th 1345, 1356 (Fed. Cir 2025) (emphasis added).  “[T]he relevant inquiry is simply whether skilled artisan would have been motivated to modify the prior art as claimed.”  Id. at 9 (citing Intel Corp. v. Qualcomm Inc., 21 F.4th 784, 797 (Fed. Cir. 2021) and Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064, 1073 (Fed. Cir. 2015)) (emphasis added).

When applying the law to the facts, the Federal Circuit stated that this is “the precise situation where a person of ordinary skill in the art is ‘left with two design choices,’ in which case we have explained that ‘[e]ach of these two design choices is an obvious combination of prior art elements.’”  Id. (quoting ACCO Brands Corp. v. Fellowes, Inc., 813 F.3d 1361, 1367 (Fed. Cir. 2016)).

Considering the PTAB’s overwhelmingly positive record of affirms on appeal, patent practitioners should pay close attention to the Federal Circuit when it decides to step in.  Here, in reversing the PTAB’s determination, the Federal Circuit provides several articulations of the standard for motivation to combine.  PTAB practitioners should craft their arguments around the Federal Circuit’s preferred language to optimize their chances on appeals and best protect their clients’ interests.

SOURCES

PNC Bank N.A. v. United Servs. Auto. Ass’n, No. IPR2022-00076 (P.T.A.B. May 10, 2023)

United Servs. Auto. Ass’n v. PNC Bank N.A., No. 2023-2171, 2025 WL 339662 (Fed. Cir. Jan. 30, 2025)