Last week, the U.S. Court of Appeals for the Federal Circuit issued a precedential opinion in ZyXEL Communication Corp. v. UNM Rainforest Innovations, No. 2023-1272 (July 22, 2024), reversing-in-part, affirming-in-part, and remanding for further consideration of UNM’s substitute claims.
ZyXEL initiated an inter partes review proceeding for U.S. Patent No. 8,265,096 (the “’096 Patent”), which is owned by UNM. The claims of the ’096 Patent relate to methods of organizing information being transmitted across time and frequency to “allow simultaneous transmission of data from different users without interference from one [an]other.” In addition to opposing ZyXEL’s arguments, UNM presented substitute claims via a motion to amend, and sought preliminary guidance from the PTAB pursuant to the Motion to Amend Pilot Program. The motion to amend identified written description support for the new limitations but did not address written description support for the original ones. The PTAB issued preliminary guidance identifying this deficiency. UNM filed a reply identifying the written description support for the original limitations.
In a final written decision, the PTAB cancelled all challenged claims on grounds of obviousness except for Claim 8. As to Claim 8, the PTAB found ZyXEL failed to show sufficient motivation to combine the asserted prior art references. The PTAB also granted UNM’s motion to amend. ZyXEL appealed, and UNM cross-appealed.
On ZyXEL’s appeal, the Federal Circuit reversed as to Claim 8 and affirmed the PTAB’s ruling on the motion to amend. Specifically, the Court found the ruling on Claim 8 was not supported by substantial evidence because the motivation to combine was present in the prior art references themselves. As to the substitute claims, the Court rejected ZyXEL’s argument that the PTAB improperly allowed UNM to identify written description support in a reply brief. The Court explained that the very purpose of the MTA Pilot Program is to provide preliminary guidance to patent owners so errors in the original motion may be corrected. Additionally, ZyXEL had failed to establish prejudice. Based on its ruling that Claim 8 is invalid as obvious, however, the Court remanded the matter to the PTAB to determine whether the substitute claims are invalid as obvious on grounds of collateral estoppel or by exercise of the PTAB’s discretion to reassess the issue. On UNM’s cross-appeal, the Court affirmed the PTAB’s ruling that the challenged claims are invalid as obvious.
Coauthored by Marra Clay & Jack Goldberg.
