Welcome
to
2025,
which
I
hope
will
be
a
year
of
accomplishment
and
good
health
for
the
entire
ATL
readership.
As
patent
litigation
aficionados,
is
there
a
better
way
to
start
the
year
than
to
take
a
close
look
at
the
first
Federal
Circuit
decision
released?
I
can’t
think
of
one,
especially
when
the
decision
in
question
was
deemed
precedential
—
and
had
a
dissenting
opinion
as
well.
Add
in
that
the
decision
reiterated
some
important
considerations
on
one
of
patent
law’s
cardinal
issues,
obviousness,
and
it
is
clear
that
this
first
effort
from
the
CAFC
in
2025
is
worth
our
attention.
So
let’s
dive
in.
To
start,
it
helps
to
know
the
backstory
of
the
patent
that
the
CAFC
considered
on
appeal.
The
patent
owner
and
appellee,
3G
Licensing
S.A.,
is
a
subsidiary
of
Sisvel,
a
well-known
player
in
the
patent
monetization
space.
While
the
“3G
Joint
Licensing
Programme”
that
3G
Licensing
managed
“is
no
longer
active”
according
to
Sisvel’s
website,
Sisvel
claims
to
still
have
over
a
dozen
“active
licensing
programmes”
and
over
1,500
patents
owned.
At
issue
in
the
appeal
was
the
PTAB’s
2022
decision
upholding
the
validity
of
3G’s
‘718
patent,
which
3G
had
acquired
from
LG
Electronics
in
February
2020.
As
is
often
the
case
with
experienced
patent
monetization
outfits,
that
acquisition
was
swiftly
followed
by
assertion,
in
the
form
of
a
May
2020
complaint
against
Honeywell.
In
response,
Honeywell
and
other
3G
licensing
targets
filed
an
IPR
against
the
‘718
patent,
arguing
that
there
was
“nothing
inventive
about
the
encoding
scheme
claimed
in
the
’718
patent;
rather,
the
basis
sequences
and
mathematical
operations
claimed
by
LGE
are
a
trivial,
and
obvious,
modification
of
a
prior
art
proposal
by
Koninklijke
Philips
N.V.”
According
to
the
IPR
petition,
“the
only
difference
between
the
prior
art
and
the
’718
patent
is
that
the
last
two
bits
of
the
last
row
of
the
basis
sequences
are
flip-flopped,”
so
that
98
out
of
100
bits
were
identical
between
the
basis
sequences
disclosed
in
the
prior
art
and
the
‘718
patent.
Still,
the
PTAB
refused
to
find
the
‘718
patent
obvious,
leading
to
the
CAFC
appeal
under
discussion.
As
characterized
by
the
majority,
the
thrust
of
the
‘718
patent
involved
methods
for
optimizing
the
accuracy
of
the
information
based
from
a
cellphone
to
a
base
station
regarding
signal
strength,
characterized
in
the
art
as
the
Channel
Quality
Indicator
or
CQI.
The
more
accurate
the
CQI
information,
the
better
the
performance
of
the
communication
system.
As
with
many
other
aspects
of
wireless
communication,
a
standard
formed
around
CQI
transmission.
In
support
of
that
effort,
a
decision
was
taken
to
extend
the
encoder
length
by
four
bits,
raising
the
question
of
how
best
to
handle
that
extension
in
a
way
that
“would
reduce
the
probability
that
transmission
errors
would
result
in
large
errors
in
the
received
channel
quality
value.”
The
initial
solution
to
the
question
of
how
to
avoid
errors
in
CQI
transmission
was
suggested
by
Philips,
whose
submitted
proposal
became
the
key
prior
art
reference
to
the
‘718
patent.
For
its
part,
LG
filed
a
Korean
application
that
led
to
the
‘718
patent
shortly
after
the
publication
of
the
Philips
reference,
whereby
LG,
“two
days
after
filing
the
Korean
patent
application
…
proposed
a
modification
to
the
Philips
reference
flipping
the
last
two
digits
in
the
table,
as
disclosed
in
the
Korean
patent
application.”
That
proposal
was
approved,
so
that
the
‘718
patent
“effectively
claimed
the
TGPP
standard
for
encoding
CQI.”
Needless
to
say,
patents
that
claim
standards
are
valuable,
unless
they
are
invalid.
With
that
background,
the
majority
turned
to
its
review
of
the
PTAB’s
decision
upholding
the
‘718
patent’s
validity,
even
as
it
“acknowledged
that
the
only
difference
between
the
Philips
reference
and
the
claim
1
was
that
the
1
and
0
in
the
last
row
of
the
basis
sequences
table
were
switched.”
In
reversing
the
PTAB,
the
majority
identified
“multiple
legal
errors”
starting
with
the
conclusion
that
one
of
skill
in
the
art
“would
not
have
been
motivated
to
modify
the
Philips
reference
to
swap
the
bits
to
improve
protection
for
the
MSB
because
the
’718
patent’s
main
objective
was
to
maximize
entire
system
throughput.”
Citing
the
seminal
obviousness
decision,
KSR,
the
majority
upbraided
the
PTAB
for
forgetting
“that
the
motivation
to
modify
a
prior
art
reference
to
arrive
at
the
claimed
invention
need
not
be
the
same
motivation
that
the
patentee
had.”
Next,
the
majority
focused
on
the
fact
that
even
3G’s
expert
“did
not
dispute
that
swapping
the
last-row
digits
would
increase
protection
to
the
MSB
and
instead
simply
disputed
whether
it
was
understood
that
doing
so
would
have
been
desirable.”
As
a
result,
the
majority
found
that
the
PTAB’s
decision
was
“not
supported
by
substantial
evidence”
as
it
ignored
the
unrebutted
expert
opinion
“that
swapping
the
two
digits
in
the
basis
sequence
would
repeat
the
MSB
an
additional
time
and
provide
increased
protection
to
the
MSB.”
In
addition,
the
majority
took
issue
with
the
fact
that
the
PTAB
appeared
to
apply
the
stricter
anticipation
invalidity
standard
to
the
petition,
rather
than
considering
the
arguments
based
on
the
obviousness
standard
that
was
actually
argued.
Likewise,
the
majority
also
criticized
the
PTAB’s
decision
upholding
validity
to
the
the
extent
that
it
failed
to
“recognize
that
the
claimed
modification
needed
only
to
be
desirable
in
light
of
the
prior
art
and
not
the
‘best’
or
‘preferred’
approach”
—
with
the
Philips
reference
itself
disclosing
the
motivation
for
the
modification
claimed
in
the
‘718
patent.
In
dissent,
Judge
Stoll
agreed
with
the
majority
that
the
PTAB
“erroneously
conflated
obviousness
with
anticipation”
in
evaluating
the
import
of
the
Philips
reference’s
failure
to
propose
the
two-bit
swap
disclosed
in
the
‘718
patent.
For
Stoll,
the
proper
disposition
of
the
appeal
would
have
been
a
remand
to
the
PTAB,
not
the
reversal
entered
by
the
majority.
In
her
view,
the
majority’s
reversal
overstepped
the
role
of
the
appellate
court,
as
the
underlying
case
“presents
a
close
factual
dispute
of
whether
Honeywell
proved
by
preponderant
evidence
that
a
skilled
artisan
would
have
been
motivated
to
swap
the
last
two
bits
in
Philips’
basis
sequence
table
without
making
other
changes
to
the
table”
—
and
the
CAFC
is
not
a
fact
finder.
Instead,
it
is
the
job
of
the
PTAB
“to
make
fact
findings
about
what
a
person
of
ordinary
skill
in
art
would
understand
a
prior
art
reference
to
teach
in
this
case”
—
a
mandate
that
the
majority
took
away
with
its
reversal.
Ultimately,
this
decision
highlights
the
continued
importance
of
the
CAFC
in
terms
of
policing
the
PTAB
and
making
sure
that
its
precedents
are
being
followed
on
key
issues
like
obviousness.
At
the
same
time,
the
dissent
raises
the
question
—
not
for
the
first
time,
as
any
CAFC
watcher
knows
—
of
whether
CAFC
panels
are
too
quick
to
make
factual
findings
that
support
their
desired
conclusions,
even
when
those
actions
conflict
with
principles
of
appellate
review.
We
are
just
getting
started
in
2025
and
there
is
already
a
strong
example
of
obvious
disagreement
to
digest.
Please
feel
free
to
send
comments
or
questions
to
me
at
[email protected]
or
via
Twitter:
@gkroub.
Any
topic
suggestions
or
thoughts
are
most
welcome.
Gaston
Kroub
lives
in
Brooklyn
and
is
a
founding
partner
of
Kroub,
Silbersher
&
Kolmykov
PLLC,
an
intellectual
property
litigation
boutique,
and Markman
Advisors
LLC,
a
leading
consultancy
on
patent
issues
for
the
investment
community.
Gaston’s
practice
focuses
on
intellectual
property
litigation
and
related
counseling,
with
a
strong
focus
on
patent
matters.
You
can
reach
him
at [email protected] or
follow
him
on
Twitter: @gkroub.