CAFC Decision Faults 103 Analysis on Reviewability Grounds
Last week, in In re Nuvasive, the Federal Circuit vacated the PTAB’s Final Written Decision from IPR2013-0056 involving Medtronic, Inc and NuVasive, Inc. (“NuVasive”) and remanded the case “for additional findings and explanations regarding the PHOSITA’s motivation to combine the prior art references.” (2015-1670, at 13 (Dec. 7, 2016)).
In its decision (here), the Court found that the PTAB failed to articulate a motivation to combine the prior art references. In particular, in reaching the conclusion that it would have been obvious to combine, “the PTAB failed to explain the reason why a PHOSITA would have been motivated to modify [the prior art references]” to achieve that which the challenged patent teaches. The PTAB relied on only one conclusory statement by the petitioner’s expert that the modification would provide “additional information.” The Court explained “the PTAB never articulated why the additional information would benefit a PHOSITA” when implementing the methods taught by the prior art reference. Furthermore, the Court pointed out that the PTAB “also failed to explain the type of additional information a PHOSITA would obtain or how the PHOSITA would use that information.”
Yet, the Court was not advocating a rigid and mandatory obviousness formula, but rather that the Board explain its rationale as opposed to conclusory statements; summaries of arguments simply followed by their rejection “without an explanation for why the PTAB accepts the prevailing argument[;]” and reliance “solely on common knowledge or common sense to support its findings.”
This explanation enables the court to exercise its duty to review the PTAB’s decisions to assess whether those decisions are “arbitrary, capricious, an abuse of discretion, or . . . unsupported by substantial evidence . . . .” 5 U.S.C. § 706(2)(A)–(E) (2012); see Dickinson v. Zurko, 527 U.S. 150, 152 (1999) (holding that § 706 governs our reviews of the USPTO’s findings of fact and providing the framework for this review). We “cannot exercise [our] duty of review unless [we] are advised of the considerations underlying the action under review.” SEC v. Chenery Corp., 318 U.S. 80, 94 (1943). Indeed, “the orderly functioning of the process of review requires that the grounds upon which the [PTAB] acted be clearly disclosed and adequately sustained.” Id. Although we do not require perfect explanations, we may affirm the PTAB’s findings “if we may reasonably discern that it followed a proper path, even if that path is less than perfectly clear.” Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359, 1365 (Fed. Cir. 2015) (citation omitted).
Thus, while it may very well be common sense to add radiopaque markers to provide more information to medical professionals, something more is needed in terms of explanation. Presumably such an explanation might be satisfied in a sentence or two, but for reviewability purposes, that rationale is necessary for all but the most trivial of technologies, and modifications.
As AIA trial practices mature, the APA is becoming increasingly prominent in assessing/reviewing Board trial mechanisms and determinations.