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An Odyssey of Timeliness: Appointments Clause Arguments Must Be Preserved

Citing forfeiture, the US Court of Appeals for the Federal Circuit upheld the dismissal of a complaint against the US Patent & Trademark Office (PTO). The complaint sought director review of a 2018 Patent Trial & Appeal Board decision that affirmed a rejection of claims in the subject patent application. In the initial appeal, no “appointments clause” argument was raised. Odyssey Logistics & Technology Corp. v. Stewart, Case No. 2023-2077 (Fed. Cir. Mar. 6, 2025) (Dyk, Reyna, Stoll, JJ.)

Background

In 2020, the Federal Circuit upheld a 2018 Board decision rejecting claims in a patent application owned by Odyssey Logistics. At that time, Odyssey did not raise an Appointments Clause challenge. However, following the Supreme Court’s 2021 ruling in United States v. Arthrex, Odyssey filed a request for PTO Director review of the 2018 Board decision, arguing that the decision was invalid under Arthrex. After its request was denied, Odyssey filed a district court complaint seeking to compel director review.

Arthrex addressed the Appointments Clause of the US Constitution, which provides that “Officers of the United States” must be appointed by the President with the advice and consent of the Senate, while Congress may permit the appointment of “inferior Officers” by the President, courts, or department heads. In that case, the plaintiff argued that the Board’s administrative judges were principal officers (rather than inferior) and should have been appointed by the President and confirmed by the Senate.

In 2019, the Federal Circuit ruled that there had been an appointments clause violation in Arthrex (coincidentally, this was during the time of Odyssey’s initial appeal to the Federal Circuit). In 2020, the Supreme Court agreed with the Federal Circuit’s ruling but provided a different remedy, holding that the Director “may review final PTAB decisions and, upon review, may issue decisions himself on behalf of the Board.”

Appeal

After Odyssey sought review of the 2018 decision, the PTO responded that it does not accept requests for Director review of ex parte appeal decisions. Odyssey then filed a district court complaint that was dismissed for lack of subject matter jurisdiction. The district court explained that judicial review of a decision committed to agency discretion was improper. Odyssey appealed.

The Federal Circuit affirmed the district court, not on the grounds of lack of jurisdiction but for failure to state a claim. The Federal Circuit ruled that the PTO did not abuse its discretion in denying review. Under Federal Rule of Civil Procedure 60(b), a district court can relieve a party from a final judgment even after an appeal mandate, as long as the relief sought does not fall within the scope of that mandate. The principles underlying this rule provide guidance for agencies regarding reconsideration of prior agency decisions.

Odyssey did not raise its Appointments Clause argument in its appeal of the 2018 Board decision. The Federal Circuit has consistently held that “a party’s failure to raise an Appointments Clause challenge in its opening brief constitutes forfeiture even when the argument was [...]

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PTO Reverts to Prior Post-Grant Guidelines for Cases Involving Parallel District Court Litigation

On February 28, 2025, the acting director of the US Patent & Trademark Office (PTO) announced that the agency will revert to previous guidelines for discretionary denials of petitions for post-grant proceedings where there is ongoing district court litigation.

This announcement rescinds the PTO’s June 21, 2022, memorandum entitled “Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation.” The memorandum stated that the Patent Trial & Appeal Board “will not deny institution of an IPR or PGR under Fintiv (i) when a petition presents compelling evidence of unpatentability; (ii) when a request for denial under Fintiv is based on a parallel ITC proceeding; or (iii) where a petitioner stipulates not to pursue in a parallel district court proceeding the same grounds as in the petition or any grounds that could have reasonably been raised in the petition.” The memorandum effectively limited the discretion granted in Fintiv, which outlined six factors for the Board to consider when making decisions on post-grant proceedings involving parallel district court litigation.

Now that the 2022 memorandum has been rescinded, parties to post-grant proceedings should refer to Board precedent, including Fintiv and Sotera Wireless v. Masimo, for guidance when there are parallel district court proceedings. In accordance with prior guidelines, the PTO’s objective is to achieve greater consistency in its decision-making processes, especially in situations where patent validity is contested both in the courts and before the Board. The PTO emphasized that any portions of future Board decisions that rely on the 2022 memorandum will not be binding or persuasive.

Practice Note: Because of this action, the Board will now enjoy greater discretion when ruling on post-grant petitions, which may result in an increase of discretionary denials.




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Validity Analysis for Product-by-Process Claim Focuses on Product

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board patentability finding, explaining that an anticipation analysis for a product-by-process claim focuses on the product and not the process. Restem, LLC v. Jadi Cell, LLC, Case No. 23-2054 (Fed. Cir. Mar. 4, 2025) (Moore, Schall, Taranto, JJ.)

Jadi Cell owns a patent directed to stem cells that have specific cell markers expressed. These stem cells are obtained from the subepithelial layer of mammalian umbilical cord tissue by first placing the layer in contact with a tissue culture growth substrate and then culturing the layer. The claims of the patent are product-by-process claims. Restem challenged certain claims of the patent in an inter partes review (IPR) petition as being anticipated by the Majore reference or obvious in view of Majore in combination with other references. The Board found that none of the challenged claims were shown to be unpatentable. Restem appealed.

The Board construed the claim term “placing a subepithelial layer of a mammalian umbilical cord tissue in direct contact with a growth substrate” to mean “to intentionally place umbilical cord tissue comprising the subepithelial layer so that it touches a growth substrate to permit cell culture.” The Board found that while the prior art references disclosed the two-step process in the claims, the references failed to disclose the claimed cells because the references did not necessarily produce cells with the claimed cell marker expression profile. Restem argued that the Board erred by construing the claims to require steps beyond the claimed two-step process. The Federal Circuit rejected that argument, finding that the Board had made underlying factual findings that supported its anticipation analysis in construing the “placing” step and therefore did not err.

In the underlying proceeding, the Board declined to construe “isolated cell” but construed “expresses/does not express” to mean that “the marker is confirmed present/absent relative to a control sample,” consistent with its interpretation of isolated cell to indicate a cell population. In construing this claim, the Board relied on extrinsic evidence to assess how a person of ordinary skill in the art would determine whether the cell markers were expressed. The Board found that both parties’ experts agreed that cell marker analysis was done at the cell population level at the time of invention. Restem argued that the Board erred in implicitly construing “isolated cell” contrary to the express definition in the challenged patent. However, the Federal Circuit upheld that implicit construction as supported by the intrinsic evidence because the specification consistently described the claimed invention as a cell population and the prosecution history indicated that the examiner only allowed the patentee to claim a cell population.

As for the Board’s finding that the Majore reference did not inherently or expressly anticipate the challenged claims, the Federal Circuit affirmed. The Board found that the cell marker expression profile distinguished the claimed cells from other stem cells and was therefore limiting, and that Majore did not expressly disclose the nonexpression limitations included [...]

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Collateral Estoppel Doesn’t Apply to Unchallenged IPR Claims

The US Court Appeals for the Federal Circuit found that despite a Patent Trial & Appeal Board determination that certain challenged patent claims were unpatentable based on a preponderance of the evidence standard, the patent owner is not collaterally estopped from asserting other, unreviewed claims of that patent in district court litigation. Kroy IP Holdings, LLC v. Groupon, Inc., Case No. 23-1359 (Fed. Cir. Feb. 10, 2025) (Prost, Reyna, Taranto JJ.)

Kroy sued Groupon for patent infringement. In response, Groupon filed two inter partes review (IPR) petitions challenging 21 claims of the patent at issue. After Groupon’s IPR deadline passed, Kroy amended its complaint to add additional claims from the challenged patent. The Board found all 21 challenged claims unpatentable. Kroy amended its complaint again, this time removing the 21 unpatentable claims and including only claims that were not at issue in the IPR proceedings.

In response, Groupon moved to dismiss the complaint, arguing that the Board’s prior IPR rulings on the unpatentable claims collaterally estopped Kroy from asserting the new claims. The district court agreed, finding that if the Board issues final judgment that a patent claim is unpatentable and another claim is immaterially different, then collateral estoppel applies to that other claim for purposes of invalidity. Applying that standard, the district court determined that the new claims were not materially different from the unpatentable claims in terms of invalidity and granted Groupon’s motion to dismiss with prejudice. Kroy appealed.

Kroy argued that collateral estoppel should not apply because the burden of proof for invalidity in an IPR proceeding (preponderance of the evidence) is lower than in the district court (clear and convincing). The Federal Circuit noted that this case presents a distinct question of collateral estoppel law; that is, whether a prior final written decision of the Board that certain patent claims are unpatentable precludes a patentee from asserting other claims from the same patent, even assuming the asserted claims are immaterially different from the unpatentable claims for purposes of invalidity.

Referring to its recent 2024 decision in ParkerVision v. Qualcomm, the Federal Circuit clarified that collateral estoppel does not apply to new claims that have not yet been adjudicated. The Court explained that Groupon must prove the invalidity of these new claims in the district court by clear and convincing evidence. The Court dismissed Groupon’s reliance on the 2013 Ohio Willow Wood decision, noting that this case addressed whether a prior district court’s invalidity ruling estopped the patentee from asserting claims in the district court that are immaterially different for purposes of invalidity. On the other hand, the Ohio Willow Wood estoppel scenario occurred in district courts involving the same burden of proof. Because the Board determined unpatentability on separate patent claims based on a preponderance of the evidence standard, courts cannot collaterally estop a patentee from asserting other, unadjudicated patent claims in district court litigation.




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It’s Obvious: Erroneous Claim Construction Can Be Harmless

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board obviousness determination even though it found the Board had improperly construed a claim term, because the Court found the error harmless in the context of the prior art. HD Silicon Solutions LLC v. Microchip Technology Inc., Case No. 23-1397 (Fed. Cir. Feb. 6, 2025) (Lourie, Stoll, Cunningham, JJ.)

During a 2022 inter partes review (IPR), the Board determined that all but one of the 17 challenged patent claims were unpatentable as obvious in light of a prior patent (Trivedi) and other secondary prior art. The patent described methods of creating “a local interconnect layer in an integrated circuit” using two films. The independent claim recited a first film composed of titanium nitride and a second film as “comprising tungsten.” The Board construed “comprising tungsten” to include either elemental tungsten or tungsten-based compounds. The Board also found that the Trivedi patent disclosed films comprising either elemental tungsten or tungsten compounds. Thus, the Board held that all claims except one were obvious in light of Trivedi and that a person of ordinary skill in the art would have been motivated to combine Trivedi with other prior art. The patent owner appealed, arguing that the Board’s obviousness finding was dependent on the Board’s incorrect construction of the phrase “comprising tungsten.”

The Federal Circuit agreed that the Board’s claim construction was erroneous, because the term “comprising tungsten” required elemental tungsten. The Court explained that the claims explicitly used compound names when referring to compounds, such as “titanium nitride.” Thus, when the drafters wrote “comprising tungsten” without more, they clearly intended to exclude non-elemental tungsten options. The Court also noted that the patent specification used “tungsten” to reference only elemental tungsten and used the word “based” to encompass both elements and their compounds. For example, the patent discussed “chlorine-based” and “fluorine-based” components. Thus, the Court concluded that the claim drafters knew how to delineate when terms should include compounds, and that there was no such delineation in the term “comprising tungsten.”

The Board relied on a single sentence in the patent that stated: “the second film may comprise tungsten, for example,” to support its construction. The Federal Circuit rejected such a broad reading of this language, explaining that it only provided for impurities mixed among the elemental tungsten in the second film, rather than the film comprising a tungsten compound. The Board also cited a European Union (EU) patent in support of the construction that “comprising tungsten” explicitly included tungsten compounds. The Court stated that such extrinsic evidence was insufficient to overcome the asserted patent’s intrinsic teachings.

The Federal Circuit analyzed whether the Board’s obviousness holding could stand given its erroneous construction. The Court found that because the Board determined that Trivedi disclosed layers made of a tungsten compound and elemental tungsten, the patent claims were obvious when the disputed term was properly construed to be limited to elemental tungsten. Thus, the Board’s error was harmless.




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A Lynk to the Past: Published Applications Are Prior Art as of Filing Date

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board decision finding challenged claims invalid based on a published patent application that, in an inter partes review (IPR) proceeding, was found to be prior art as of its filing date rather than its publication date. Lynk Labs, Inc. v. Samsung Electronics Co., Ltd., Case No. 23-2346 (Fed. Cir. Jan. 14, 2025) (Prost, Lourie, Stark, JJ.)

Samsung filed a petition for IPR challenging claims of a Lynk Labs patent. Samsung’s challenge relied on a patent application filed before the priority date of the challenged patent. However, the application was not published until after the priority date of the challenged patent. The Board rejected Lynk Labs’ argument that the application could not serve as prior art and determined the challenged claims to be unpatentable. Lynk Labs appealed to the Federal Circuit, raising three arguments.

Lynk Labs’ first argument was that the application could not serve as prior art because the publication date meant that it was not publicly available until after the priority date of the challenged patent. Pre-America Invents Act (AIA) law applied. Lynk Labs cited 35 U.S.C. § 311(b), restricting IPR petitioners to challenges “on the basis of prior art consisting of patents or printed publications.” While Lynk Labs admitted that the published application was a printed application, it denied that it was a prior art printed publication.

The Federal Circuit reviewed the issue de novo as a question of statutory interpretation. The Court noted that §§ 102(e)(1) and (2) carve out a different rule for published patent applications than the test for §§ 102(a) and (b) prior art. Under the statute, a patent application filed in the United States before an invention claimed in a later filed application qualifies as prior art if the application is published or a patent is granted on it.

Lynk Labs did not dispute that, under § 102(e)(2), an application resulting in an issued patent can be prior art, even if the patent is granted after an invention’s priority date, as long as the application is filed before the challenged invention priority date. However, Lynk Labs took issue with the fact that the Board applied the same principle, under § 102(e)(1), to applications that are published but do not become patents.

The Federal Circuit explained that the plain language of the statute permitted IPR challenges based on such applications and rejected Lynk Labs’ arguments that the statute should be interpreted differently. Lynk Labs argued that when Congress enacted § 311(b), it transplanted the term “printed publications” from case law, along with that case law’s “old soil” that established that the application would not be prior art.

In support of its argument, Lynk Labs cited case law that in its view suggested that patent applications are never prior art printed publications. However, the Federal Circuit distinguished those cases on the basis they were decided at a time before applications were published and therefore did not address published applications. Lynk [...]

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Bit Swap: Motivation to Modify Prior Art Needn’t Be Inventor’s Motivation

Addressing the issue of obviousness, the US Court of Appeals for the Federal Circuit reversed a Patent Trial & Appeal Board decision, finding that the challenged patent claims were obvious because a person of ordinary skill in the art (POSITA) would have been motivated to switch two specific information bits in a 20-bit codeword to improve performance. Honeywell Int’l Inc. v. 3G Licensing, S.A., Case Nos. 23-1354; -1384; -1407 (Fed. Cir. Jan. 2, 2025) (Dyk, Chen, JJ.) (Stoll, J., dissenting).

3G Licensing owns a patent concerning a coding method for transmitting a channel quality indicator (CQI) in mobile communication systems. The CQI, a five-bit binary integer (0 to 30) is sent from user equipment, such as a cell phone, to a base station to indicate cellular connection quality. Base stations adjust data rates using adaptive modulation and coding, assigning higher rates to strong signals and lower rates to weaker ones. CQI accuracy is critical for maximizing data transmission efficiency and ensuring recovery of the original message despite transmission errors.

The challenged claims of the 3G patent relate to a CQI code designed to maximize protection of the most significant bit (MSB) to reduce the impact of transmission errors. The prior art disclosed a method and a basis sequence table that provided additional protection to the MSB, minimizing root-mean-square error. However, the claimed invention differed in that it required swapping the last two bits of the basis sequence table. The Board found that a skilled artisan would not have been motivated to make this modification to enhance MSB protection, nor would a skilled artisan have deemed it desirable. Honeywell appealed.

The Federal Circuit reversed, finding the claims obvious for four primary reasons. First, the Court determined that the Board incorrectly concluded that a POSITA would not have been motivated to swap the last two bits to improve MSB protection. The Court emphasized that the motivation to modify prior art does not need to align with the inventor’s motivation. As a result, the Board’s reasoning that minimizing root-mean-square error was not the patent’s primary purpose should not have been a primary consideration.

Second, the Federal Circuit found that prior art explicitly taught the importance of protecting the MSB through redundancy. A skilled artisan would have understood that swapping the two bits, as claimed, would add redundancy and enhance protection. Honeywell’s expert testimony further supported the conclusion that the prior art would have provided the requisite motivation to arrive at the claimed invention, and 3G’s expert did not dispute that the swap increased MSB protection.

Third, the Federal Circuit concluded that the Board improperly conflated obviousness with anticipation by requiring that the prior art disclose swapping the two bits. Anticipation requires the prior art to specifically disclose the claimed modification, but obviousness does not. The Court found that the Board erroneously treated the two standards as interchangeable.

Finally, the Federal Circuit found that the Board wrongly required that the claimed basis sequence table represent the preferred or most optimal combination. As the Court [...]

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Motivation MIA? Federal Circuit Sends IPR Back to the Drawing Board

The US Court of Appeals for the Federal Circuit vacated and remanded a Patent Trial & Appeal Board decision, finding that the Board erred by failing to explain its holding and reasoning regarding a motivation to combine prior art references. Palo Alto Networks, Inc. v. Centripetal Networks, LLC, Case No. 23-1636 (Fed. Cir. Dec. 16, 2024) (Stoll, Dyk, Stark, JJ.)

Centripetal Networks owns a patent directed to correlating packets in communications networks, introducing an innovative system designed to enhance network security. The patent focuses on packets (small data segments that collectively form larger communications) and their correlation across network boundaries.

Palo Alto Networks challenged the patent’s validity in an inter partes review (IPR) and argued its obviousness based on three prior art references. The first reference described a system using hashing techniques to identify packets traversing network address translation boundaries and teaching how to correlate packets across such boundaries to identify hosts transmitting or receiving them. The second reference detailed methods for detecting unauthorized traffic directed to unused IP addresses, notifying administrators of potential threats, and enabling automated responses, such as blocking or filtering malicious traffic. The reference taught notifying administrators how to manage packets involved in malicious activity after they crossed a network boundary.

Palo Alto argued that combining the packet correlation techniques of the first reference with the notification mechanisms of the second addressed a key claim limitation of the challenged patent. Palo Alto contended that transmitting an indication of a malicious host, as taught by the second reference, naturally followed from the correlation system described in the first. However, the Board found that Palo Alto failed to provide sufficient evidence or argument to show that a person of ordinary skill in the art (POSITA) would recognize the claimed responsiveness between the first reference’s packet correlation and the second reference’s notification mechanisms. Palo Alto appealed.

The Federal Circuit vacated and remanded the Board’s decision, finding that the Board erred by failing to clearly articulate its rationale regarding the motivation to combine the prior art references and whether their combination satisfied the critical limitation of the challenged patent claim. The Court emphasized that the proper inquiry in an obviousness analysis is not whether each reference individually discloses all claim elements but whether their combination would have rendered the invention obvious to a POSITA.

Palo Alto maintained that the Board did not dispute the existence of a motivation to combine and improperly searched for a “bridge” solely within the two references. Centripetal countered that Palo Alto had not established a motivation or provided evidence of a necessary connection – or “bridge” – between the prior art and the claimed invention.

The Federal Circuit determined that the Board’s decision lacked a definitive finding on whether a POSITA would have been motivated to combine the first reference’s correlation techniques with the second reference’s notification step. The Court noted that Palo Alto presented logical and evidentiary support as to why such a combination would make sense, arguing that without a notification step, the [...]

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Chromatographic Clash: When Is a Lead Compound Analysis Even Necessary?

The US Court of Appeals for the Federal Circuit affirmed the Patent Trial & Appeal Board’s determination that 79 challenged composition claims across three related patents were unpatentable but reversed the Board’s determination that four challenged process claims were not unpatentable. Cytiva Bioprocess R&D v. JSR Corp., et al., Case Nos. 23-2074; -2075; -2191; -2192; -2193; -2194; -2239; -2252; -2253; -2255 (Fed. Cir. Dec. 4, 2024) (Prost, Taranto, Hughes, JJ.)

The patents in question pertain to chromatography matrices used in affinity chromatography for isolating antibodies. Their primary focus was on the G29A mutation in SPA IgG binding domains, which enhances stability in alkaline environments. The Board upheld the patentability of the process claims while invalidating the composition claims. Cytiva appealed, arguing that the Board erred in its lead compound analysis. JSR cross-appealed on the Board’s finding that the challenged process claim were not unpatentable.

The Federal Circuit disagreed with Cytiva’s argument that a lead compound analysis was necessary. A lead compound analysis is an obviousness framework that involves a two-part inquiry: whether a skilled person in the art would have selected the compound as a starting point for research, and whether the prior art would have motivated the skilled person to modify the compound into the claimed invention. The Federal Circuit noted that lead compound analyses are not always required in chemical patent cases where the prior art references expressly suggest the proposed modification, which was the case here. The Court also explained that even though a lead compound analysis was used here, in this case the claimed compounds could all be lead compounds, and the prior art expressly suggested the G29A modification of the claimed compound.

The Federal Circuit also addressed whether a claim limitation that merely recites an inherent property of an otherwise obvious combination requires additional analysis to demonstrate that a person of ordinary skill in the art would have a reasonable expectation of success. The Court found that additional analysis was unnecessary because “the sole disputed limitation was an inherent property of the claimed composition already determined to be obvious.” The Court found that the Fab binding property of the chromatography matrices was inherent and thus did not require a separate reasonable expectation of success analysis.

As for the process claims that the Board found not unpatentable, the Federal Circuit determined that the composition and process claims were “nearly identical and contain[ed] no substantive distinction relevant to th[e] appeal.” Therefore, the Court held that the Board erred in separating the composition and process claims and found “no basis for treating the claims differently.” The Federal Circuit reversed the Board’s “not unpatentable” determination on those claims and held all challenged patent claims obvious and therefore unpatentable.




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Plausible Alternative Understanding of Prior Art? So What?

Affirming the Patent Trial & Appeal Board’s final determination that three claims were invalid for obviousness, the US Court of Appeals for the Federal Circuit ruled that a “plausible alternative understanding” of the prior art did not compel a reversal under the substantial evidence review standard. Koninklijke KPN N.V. v. Vidal, Case No. 19-2447 (Fed. Cir. Dec. 2, 2024) (Prost, Reyna, Chen, JJ.)

Three computer networking companies filed a petition for inter partes review (IPR) to challenge the patentability of claims of a patent for regulating access to a telecommunications network owned by Koninklijke. The challenged claims included limitations concerning devices, identified by a controller with a unique identifier, that requested access to a network. The controller allowed each device network access based on a “grant access time interval.” The petitioners argued that the challenged claims were unpatentable as obvious in view of three prior art references: Obhan, Shatzkamer, and Budka.

After considering the parties’ argument over what was disclosed by the references, the Board found that Obhan disclosed an admission control system for a wireless network that included assigning devices a “good till time.” The Board found that Shatzkamer disclosed managing a wireless network using a system to identify specific devices, add those devices to a “blacklist,” and deny network access to the blacklisted devices. The Board determined that the combination of Obhan, Shatzkamer, and Budka taught the limitations of the challenged claims. Koninklijke appealed.

Koninklijke argued that the Board erred in its determination that the prior art references taught certain claim limitations and provided motivation to combine the references.

Koninklijke first argued that substantial evidence did not support the Board’s finding that Obhan disclosed the access request limitations of the challenged claims. Koninklijke also argued that Obhan did not teach consulting a “good till time” to determine whether to allow a device to access the network. The Federal Circuit disagreed, finding that Koninklijke’s argument merely presented “a plausible alternative understanding of Obhan.” The Court explained that under the substantial evidence standard of review, this was not enough to conclude that the Board’s decision was unsupported by substantial evidence. The Court declined to reweigh the evidence or make factual findings of its own.

Second, Koninklijke argued that the Board’s determination was not supported by substantial evidence because the Board misread and misstated one of the challenged claims. An exemplary claim of the challenged patents recited “an access operation to deny access for the terminal if the access request is received within the time period,” whereas another recited “denying the terminal access to the telecommunications network responsive to the access request being received within the time period defined by the accessed identification of at least one associated deny access time interval.” In its decision, the Board stated that second claim “requires only that the access request be denied if it is received within the time period during which access is denied.” Koninklijke faulted the Board for using the term “if” instead of “responsive to.”

The Federal Circuit did not find [...]

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