Realtime Data, LLC, v. Iancu: No Requirement to Make Any Finding of a Motivation to Combine Two References When a Claim is Invalid as Being Obvious Over a Single Reference

February 5, 2019 – Article

The Federal Circuit affirmed the Patent and Trademark Appeal Board’s (PTAB) determination that all of the challenged claims of Realtime’s U.S. Patent 6,597,812 (“the ‘812 patent”) would have been obvious over the prior art.

The ‘812 patent discloses and claims systems and methods “for providing lossless data compression and decompression.” Claim 1 reads as follows:

 

1. A method for compressing input data comprising a plurality of data blocks, the method comprising the steps of:

            detecting if the input data comprises a run-length sequence of data blocks;

            outputting an encoded run-length sequence, if a run-length sequence of data blocks is detected;

            maintaining a dictionary comprising a plurality of code words, wherein each code word in the dictionary is associated with a unique data block string;

            building a data block string from at least one data block in the input data that is not part of a run-length sequence;

            searching for a code word in the dictionary having a unique data block string associated therewith that matches the built data block string; and

            outputting the code word representing the built data block string.

Claim 4 further limits the “maintaining a dictionary” step to comprise the step of “dynamically generating a new code word corresponding to a built data block string, match a unique data block string in the dictionary; and adding the new code word in the dictionary.”

Hewlett Packard Enterprise Co. and others (collectively “HP”) petitioned for inter partes review of the ‘812 patent, alleging that claims 1-4, 8, 14-17, 21, and 28 would have been obvious over O’Brien (U.S. 4,929,946), in view of Nelson (a data compression textbook) and further Welch (U.S. 4,558,302).

HP argued that O’Brien disclosed the preamble and multiple steps, and that O’Brien and Nelson both individually disclosed the “maintaining” and other steps. For the “maintaining” and “searching” steps, HP clarified that even though O’Brien did not use the specific claim term “dictionary,” a skilled in the art “would have recognized this and known, as taught in Nelson, that O’Brien’s string compression is a dictionary algorithm.”

In response, Realtime conceded that O’Brien’s string compression was, in fact, dictionary encoding as required by the claims. Instead of challenging O’Brien’s teaching of the dictionary encoding, Realtime focused on the “maintaining” step and argued that O’Brien did not disclose “maintaining a dictionary” because O’Brien generated a new dictionary for each data segment, while the ’812 patent processed an input data stream through a single dictionary that resets to its initial state only when it is full. Realtime also argued that HP presented insufficient evidence of a

motivation to combine O’Brien and Nelson, and that HP attempted instead to sidestep this requirement by arguing Nelson as an alternative to O’Brien. Realtime noted, “[i]ndeed, Petitioner and its declarant allege O’Brien in fact discloses all of the limitations of all claims

challenged in Ground 1.”

The Board agreed that O’Brien discloses the “maintaining a dictionary” limitation and every other limitation in claim 1. While recognizing that there was a dispute as to the construction of the phrase “maintaining a dictionary,” the Board determined that no construction was necessary, as O’Brien taught every step for “maintaining a dictionary” identified in dependent claim 4.

The Board next addressed why “a person having ordinary skill in the art would have had to turn to Nelson after reading O’Brien when O’Brien allegedly teaches all the limitations of all claims challenged in Ground 1.” The Board noted that HP’s primary obviousness argument established only that “Nelson makes clear that O’Brien’s string encoding . . . is dictionary-based encoding” without using Nelson for the disclosure of a particular claim limitation.  According to the Board, HP’s other argument (that it would have been obvious to a person of ordinary skill in the art to substitute Nelson’s dictionary compression techniques with O’Brien’s string compression) was an argument in the alternative.

Even though the Board agreed with HP’s primary obviousness argument that O’Brien alone teaches every limitation in claims 1–4, 8, and 28, the Board addressed the question of “motivation to combine” O’Brien in view of Nelson. The Board compared the compression techniques in O’Brien and Nelson and found that they “share striking similarities.” The Board also found that O’Brien “suggests that a wide variety of adaptive compression algorithms could be used and encourages a person having ordinary skill in the art to turn to ‘well known’ algorithms such as Nelson’s algorithms” which could be used in O’Brien’s system and would be “a simple substitution yielding predictable results.” Thus, the Board concluded that “[p]etitioner has established by a preponderance of the evidence that a person having ordinary skill in the art would have been motivated to turn to Nelson after reading O’Brien even though O’Brien teaches all the limitations of all claims challenged in Ground 1.”

            Thus, the Board held that claims 1–4, 8, and 28 would have been unpatentable under

35 U.S.C. § 103 in view of O’Brien alone, or alternatively, in view of Nelson, and claims 14–17 and 21 would have been unpatentable under 35 U.S.C. § 103 in view of O’Brien, Nelson, and Welch. Realtime appealed.

            Realtime made two primary arguments on appeal:

            (1) that the Board erred in its determination that a person of ordinary skill in the art would have been motivated to combine the teachings of O’Brien and Nelson; and

            (2) that the Board erred by failing to construe the “maintaining a dictionary” limitation and in finding that O’Brien disclosed the “maintaining a dictionary” limitation.

            The Federal Circuit (“the Court”) noted that HP’s primary argument to the Board was that all of the elements of claims 1–4, 8, and 28 were disclosed in O’Brien, a single reference. HP relied on Nelson simply to demonstrate that a person of ordinary skill in the art would have understood that the string compression disclosed in O’Brien was, in fact, a type of dictionary encoder, the terminology used in the ’812 patent. The Court concluded that the Board was not required to make any finding regarding a “motivation to combine” given its reliance on O’Brien alone. Had the Board relied on HP’s alternative argument, HP would have been required to demonstrate a sufficient motivation to combine the two references. However, HP relied on Nelson merely to explain that O’Brien’s encoder is a type of dictionary encoder.

While Realtime agreed that the use of O’Brien as a single anticipatory reference would have been more properly raised under § 102, it is well settled that “a disclosure that anticipates under § 102 also renders the claim invalid under § 103, for ‘anticipation is the epitome of bviousness.’” Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1548 (Fed. Cir. 1983). The Court concluded that the Board did not err that claim 1 was invalid under § 103 based on O’Brien alone.

The Court further stated that even if the Board were required to make a finding regarding a motivation to combine O’Brien with Nelson, its finding in this case was supported by substantial evidence. The Board found that a person of ordinary skill in the art would have looked to Nelson because Nelson is “well known,” the compression techniques taught in Nelson that were described as dictionary encoders “share striking similarities” to O’Brien’s compression techniques, and O’Brien itself “suggests that a wide variety of adaptive compression algorithms could be used and encourages a person having ordinary skill in the art to turn to ‘well known’ algorithms such as Nelson’s.” This is enough evidence to support a finding that a person of ordinary skill in the art would have turned to Nelson, a well-known data compression textbook, to better understand or interpret O’Brien’s compression algorithms. Thus, the Court held that the Board had no obligation to find a motivation to combine the two cited references because the Board did not rely on Nelson for the disclosure of a particular element or teaching, instead finding that O’Brien alone disclosed all claim elements. HP’s primary argument relied on Nelson merely to explain that O’Brien’s algorithm was a dictionary algorithm, which Realtime conceded was correct. Thus, the Board is not required to make any finding regarding a motivation to combine two references when it finds that a claim is invalid as being obvious in view of a single reference.

The Court then considered the question whether the Board erred in finding that O’Brien disclosed the “maintaining a dictionary” limitation in independent claim 1. Realtime argued that

the Board erroneously failed to construe the term “maintaining a dictionary” to include the requirement that the dictionary be retained during the entirety of the data compression unless and until the number of entries in the dictionary exceeds a predetermined threshold, in which case the dictionary is reset. The Court reiterated that while the words of a claim “are generally given their ordinary and customary meaning,” a claim term is read “not only in the context of the particular

claim in which the disputed term appears, but in the context of the entire patent, including the specification.” Phillips v. AWH Corp., 415 F.3d 1303, 1312–13 (Fed. Cir. 2005) (en banc). Those claim construction principles are important even in an inter partes review proceeding and here, the Board properly used the “broadest reasonable interpretation” consistent with the specification.

The Court noted that the Board did not expressly construe the phrase “maintaining a dictionary,” but found that O’Brien satisfied this limitation because it disclosed all of the steps in dependent claim 4. In other words, the Board found that the steps of dependent claim 4 were sufficient to satisfy the “maintaining a dictionary” limitation in independent claim 1. The Board’s interpretation was supported by both the claim language and the specification. The term

“maintaining a dictionary” is not defined in claim 1, and dependent claim 4 is the first of the claims to provide meaning to the phrase. Also, the language of claim 4 directly mimics the portion of the specification. The Court agreed that the specific passage from the specification strongly suggested that the steps of claim 4 were one way of “maintaining a dictionary,” as the Board concluded.

Realtime did not contest that O’Brien disclosed these steps, but instead argues that because the claim recites the word “comprising,” it does not foreclose the possibility of additional unstated limitations in the interpretation of “maintaining a dictionary.” Realtime argued that the Board erred by failing to consider its proposed construction, which would add further requirements to

satisfy the “maintaining a dictionary” limitation. In response, the Court reminded that the word “‘comprising’ does not mean that the claim can be read to require additional unstated elements, only that adding other elements to the device or method is not incompatible with the claim” (citing Genentech, Inc. v. Chiron Corp., 112 F.3d 495, 501 (Fed. Cir. 1997)). The Court continued that Realtime did not point to any law undermining the Board’s view in this case that the claim elements introduced in dependent claim 4 with “comprising” language are properly understood as giving details sufficient to constitute a particular embodiment of the more general “maintaining a dictionary” term of independent claim 1. That view was strongly supported by the specification.

At the Board, Realtime argued that the specification contemplated initializing (starting a new dictionary) only as a possible embodiment. In response, the Court pointed out that the specification does not state or imply that this step is a mandatory part of the step of

“maintaining a dictionary” and that this is confirmed by dependent claim 5, which depend upon claim 4 and further requires that “the step of maintaining the dictionary further comprises the

step of initializing the dictionary if the number of code words exceeds a predetermined threshold.” The Court stated that the fact that claim 5 “further” adds this step indicated that this step was neither a necessary element of claim 4 nor required in the step of “maintaining a dictionary” in independent claim 1. The Court concluded that “[b]ecause the intrinsic evidence does not support Realtime’s proposed construction, Realtime has not demonstrated that the Board committed legal error by failing to adopt it.” Thus, the Court rejected Realtime’s construction of the term “maintaining the dictionary,” where it attempted to add unstated elements to the term.

The Federal Circuit Court concluded that (1) the Board did not err in concluding that the claims would have been obvious in view of a single reference, and that (2) the Board did not err in finding that O’Brien disclosed the “maintaining a dictionary” limitation in independent claim 1.

Realtime Data, LLC, v. Iancu, No. 2018-1154 (Fed. Cir., January 10, 2019).