In Microsoft Corp. v. Biscotti, Inc., 878 F.3d 1052 (Fed. Cir. 2017), the Federal Circuit considered the issue of whether a prior art reference may anticipate a claim under § 102 if the claimed elements are found in several distinct teachings in that reference. 878 F.3d 1052 (Fed. Cir. 2017). In that case, the court reiterated that anticipation cannot be proven merely by multiple, distinct teachings in a single prior art document that a skilled artisan might somehow combine to achieve the claimed invention. Id. at 1069. Instead, a reference may anticipate only if a skilled artisan, reading the reference, would at once envisage the claimed arrangement. Id. at 1068. The Federal Circuit also clarified that anticipation is a question of fact, which is reviewed for substantial evidence, even when it is based on a prior art patent. Id. at 1067. This case reminds those challenging the validity of a patent that they should consider both anticipation and obviousness arguments even where the former is available.
Biscotti sued Microsoft in the Eastern District of Texas for infringing U.S. Patent No. 8,144,182 (“the ’182 Patent”), which is directed to real-time video conferencing. Microsoft then filed three IPRs, challenging multiple patent claims of the ’182 Patent based on anticipation and obviousness over U.S. Patent No. 7,907,164 (“Kenoyer”). Id. at 1062, 1054. The Board instituted review of independent claims 6 and 69 on anticipation grounds and of claims that depended from claims 6 and 69 on anticipation and obviousness grounds. Id. at 1062. In each IPR, the Board concluded that Microsoft improperly combined multiple, distinct teachings of Kenoyer and therefore failed to prove by a preponderance of the evidence that Kenoyer anticipated the challenged claims or rendered them obvious. Id. at 1064-67.
On appeal, Microsoft argued that the Board had applied an unduly narrow standard for anticipation, because the it required that to anticipate, Kenoyer “disclose all aspects of the claim limitation . . . identically, in the same relationship as in the [challenged] claim.” Id. at 1068-69. Microsoft also argued in its briefs, but not at the oral argument, that the Board’s decision on anticipation was not a finding of fact and should be reviewed without deference, as it was based on the interpretation of a prior art patent. Id. at 1067-68.
The legal standard for anticipation. The Federal Circuit reiterated that although anticipation cannot be proven merely “by multiple, distinct teachings that the artisan might somehow combine to achieve the claimed invention,” a reference may anticipate a claim “even if it does not expressly spell out all the limitations arranged or combined as in the claim, if a person reading the art, reading the reference, would at once envisage the claimed arrangement or combination.” Id. at 1068-69. The Federal Circuit noted that while the Board’s use of words such as “identically” may be inapposite, the Board had otherwise articulated and applied the correct standard. Id. at 1069. The Federal Circuit also reiterated that anticipation is a question of fact that is reviewed for substantial evidence on appeal, even when it is based on a prior art patent. Id. at 1067-68.
With respect to claim 6, the Federal Circuit noted that the parties disputed whether a key sentence in the Kenoyer specification related only to the figure described immediately above the sentence or to all preceding figures and embodiments in the specification. Id. at 1070. The Board had found that the key sentence only referred to the immediately preceding figure and accordingly, a person of ordinary skill would not at once envisage the claimed elements. Id. at 1072. While acknowledging that the parties’ arguments presented the Board with a “close question,” the Federal Circuit concluded that in light of the evidence before the Board and its underlying factual findings, the Board’s decision was supported by substantial evidence. Id. at 1072-73.
Similarly, with respect to claim 69, the Federal Circuit concluded that the Board’s findings were supported by substantial evidence and any new arguments seeking to refute the Board’s findings had been waived, because “the general rule is that any argument not raised before the Board is waived on appeal.” Id. at 1075.
Obviousness analysis. The Board had found that because Kenoyer failed to teach the claim limitations and Microsoft did not separately address whether Kenoyer rendered the limitations obvious based on Kenoyer’s distinct teachings, Microsoft failed to meet its burden of proving obviousness. Id. at 1064-67. The Federal Circuit affirmed the Board’s obviousness holding since Microsoft failed to point to any errors in the Board’s obviousness analysis beyond those it had identified in the Board’s anticipation analysis, which the Federal Circuit concluded was supported by substantial evidence. Id. at 1077.
Dissent. Circuit Judge Pauline Newman concluded that claims 6 and 69 were anticipated by Kenoyer “under the most rigorous application of the law of anticipation”—because Kenoyer expressly disclosed each of the claimed elements and in the claimed order. Id. at 1077. Judge Newman went through a detailed analysis of Kenoyer and each element of the claims, finding that Kenoyer did in fact teach the claimed combination of elements in view of its “entire disclosure”. Id. at 1078-84. Judge Newman criticized the majority for faulting Microsoft for not “explain[ing] how a computer, especially the computer in Kenoyer, would receive broadcast, cable, or satellite television signals” when Biscotti itself did not explain how the computer in the ’182 Patent would provide those functions. Id. at 1085. Judge Newman disagreed with the majority’s implication that “known technical information must be presented in full scientific detail,” contrary to prior Federal Circuit precedent. Id. at 1085 n.1.
Practice Tips. If a prior art reference discloses multiple, distinct embodiments that must be combined to anticipate the claimed combination, then defendants and petitioners should consider arguing, at least in the alternative, obviousness. This may be particularly important in inter partes review (IPR) proceedings where the PTAB may be reluctant to institute on anticipation grounds if the petitioner fails to meet the standard reiterated in this case. While the PTAB has declined to consider duplicative grounds of review in some cases, raising both anticipation and obviousness as to a single reference may be the safest strategy to increase the likelihood that the PTAB institutes on a reference that relies on distinct teachings in a single reference. Moreover, defendants and petitioners should fully support their obviousness theories in these instances, and not merely assume that distinct teachings in a single reference would be obvious to combine.
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