Déjà vu at the Federal Circuit: Personal Web Technologies, LLC, v. Apple, Inc.

There is a scene in the Big Lebowski where the Dude complains about the lousy day he just had as he tosses down some snacks at a bowling alley bar.  In answer, the Stranger (played by Sam Elliot) offers the above advice as to the Dude’s existential situation.  It didn’t help.  One can almost imagine a similar response from Apple following the Federal Circuit’s decision in Personal Web Technologies, LLC, v. Apple, Inc., 2018-1599 (Fed. Cir. March 8, 2019), since it marked the second time in two years they had won at the Board, only to be disappointed at the Federal Circuit on the same patent, PWT’s 7,802,310 (‘310 Patent)[1].  While the Federal Circuit’s analysis in both cases was nominally different, the underlying theme in both was the need for a proper motivation-to-combine analysis.

The ‘310 Patent generally relates to locating data and controlling access to the data by giving a data file a substantially unique name that depends on the file’s content.  Claim 24 is representative.

Previously, in the initial Board decision, the claims of the ‘310 Patent were found obvious over Woodhill, which disclosed a system for backing up and restoring data with content-based identifiers in view of Stefik, which disclosed a system for managing the rights to access data.  In both appeals, the disputed claim term was “causing the content-dependent name of the particular data item to be compared to a plurality of values.”[2]  The Federal Circuit noted that in its first decision the Board found this element in Stefik, although in their petition Apple had found it only in Woodhill.[3]  Further, they criticized the Board’s analysis as flawed in that it simply adopted Apple’s arguments, and amounted to an explanation of how the two references could be combined rather than how the combination of the references was supposed to work.[4]  The Federal Circuit remanded the case to the Board to review the obviousness question.[5]

On remand, the Board again found the claims obvious.[6]  It changed its analysis by relying on Woodhill rather than Stefik for the disputed element (b)(i) in claim 24.[7]  It also changed its reasoning regarding motivation-to-combine the references.  Unfortunately, the new argument again relied on Apple’s petition and their expert’s theory in what amounted to an inherency rationale, where Woodhill would necessarily compare the content-based identifier with other values in searching for a match.[8]  On appeal, Federal Circuit again found the claims patentable, dismissing the Board’s inherency argument as lacking substantial evidence, and noting that PWT had suggested an even more plausible understanding of Woodhill.

Inherency … may not be established by probabilities or possibilities.  PAR Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186, 1195 (Fed. Cir. 2014).  “The mere fact that a certain thing may result from a given set of circumstances is not sufficient.” Id. (emphasis added).  Rather, a party must “show that the natural result flowing from the operation as taught would result in the performance of the questioned function.”  Id. (emphasis in original).[9]

Reading the second PWT v. Apple decision, it is difficult to ignore the Federal Circuit’s allusion to the Board’s reliance on arguments contained in Apple’s petition.  This of course had been a prominent aspect of the earlier decision, where the Board was chastised for appearing to merely adopt Apple’s arguments.  The Federal Circuit had obviously desired a thorough motivation-to-combine analysis on remand.  What it received, however, was an inherency argument, where motivation-to-combine was not so much extensively discussed as deemed necessarily present.  Perhaps the Board did not sufficiently consider the lesson from the first appeal.  More to the point, the Board would have been better served considering Outdry Technologies Corporation v. Geox S.P.A.[10]  This case, decided just a few months after the first PWT v. Apple decision, teaches that there is nothing wrong per se with crediting the arguments of one of the parties, as long as there is an accompanying explanation of its own reasons for crediting their own arguments.  Those arguments must be present and meet the threshold of providing a “rational underpinning” of combining references.

-William Reid

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