Recently, the U.S. Court of Appeals for the Federal Circuit issued an opinion in CyWee Grp. Ltd. v. ZTE (USA), Inc., No. 2021-1855 (Jan. 18, 2024).
CyWee asserted U.S. Patent No. 8,441,438 against several large companies, including ZTE and LG Electronics, Inc. ZTE responded with an IPR petition asserting that certain claims of the ’438 Patent were unpatentable. Thereafter, and more than a year after being sued by CyWee, LG filed an IPR petition challenging the ’438 Patent and moved to join ZTE’s ongoing IPR. The Board granted LG’s motion to join but placed several restrictions on LG’s participation, requiring it to allow ZTE to take the lead. However, after ZTE failed to oppose a revised motion to amend by CyWee seeking to add new claims, LG sought and was granted an opportunity to respond. LG argued the proposed new claims were obvious in view of a combination of prior art references, one of which had not been cited by ZTE in its prior filings. Subsequently, the Board issued a final written decision finding the proposed new claims unpatentable as obvious based on the combination urged by LG and denying the motion to amend. CyWee appealed.
The Federal Circuit affirmed. CyWee’s principal argument on appeal was that the Board erred in allowing LG to oppose CyWee’s motion and to raise a new prior art reference in that opposition. On the issue of allowing LG to oppose, the Court explained that the Board’s restrictions on LG’s participation were contingent on ZTE remaining an active participant in the IPR. When ZTE agreed not to oppose CyWee’s revised motion to amend, it was not error for the Board to permit LG to respond. On the issue of the new prior art reference, the Court explained that, although 35 U.S.C. § 315(c) “does not authorize [a] joined party to bring new issues . . . into [an] existing proceeding,” a motion to amend is different. A motion to amend necessarily alters the grounds on which the IPR is based because the patent owner has introduced new claims into the proceeding. Accordingly, the Court found no error in the Board’s consideration of the new prior art reference raised by LG in deciding CyWee’s revised motion to amend. The Court further rejected CyWee’s challenge to the Board’s finding that the proposed new claims were obvious, holding substantial evidence supported the Board’s determination.
