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Personal Web Technologies, LLC v. Apple, Inc.

United States Court of Appeals, Federal Circuit

February 14, 2017

PERSONAL WEB TECHNOLOGIES, LLC, Appellant
v.
APPLE, INC., Appellee

         Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. IPR2013-00596.

          Lawrence Milton Hadley, McKool Smith Hennigan, PC, Los Angeles, CA, argued for appellant. Also represented by Phillip Lee; Joel Lance Thollander, Austin, TX.

          Michael Jay, Boies, Schiller & Flexner LLP, Santa Monica, CA, argued for appellee. Also represented by Donald William Ward, Joseph E. Lasher; William A. Isaacson, Washington, DC.

          Joseph Matal, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, argued for intervenor Michelle K. Lee. Also represented by Thomas W. Krause, Scott Weidenfeller, Kakoli Caprihan.

          Before Taranto, Chen, and Stoll, Circuit Judges.

          Taranto, Circuit Judge.

         Apple Inc. petitioned for inter partes review of various claims of PersonalWeb Technologies, LLC's U.S. Patent No. 7, 802, 310, asserting unpatentability for obviousness based on two prior-art references. After instituting review, the Patent Trial and Appeal Board reviewed the claims and agreed with Apple. PersonalWeb appeals the Board's construction of certain claim terms and the ultimate obviousness determination. We affirm the Board's claim construction. We vacate the Board's obviousness determination as to the appealed claims, because the Board did not adequately support its findings that the prior art disclosed all elements of the challenged claims and that a relevant skilled artisan would have had a motivation to combine the prior-art references to produce the claimed '310 inventions with a reasonable expectation of success. We remand for further proceedings.

         I

         The '310 patent describes and claims methods (or devices for carrying out methods) of locating data and controlling access to data by giving a data file a substantially unique name that depends on the file's content-a so-called "True Name." '310 patent, col. 3, lines 50-62; id., col. 6, lines 20-23; id., col. 37, lines 44-64. The patent describes generating a True Name using mathematical algorithms (called "hash functions" in the abstract and some claims) that use contents of the file to generate a comparatively small-size identifier for the file. Id., col. 12, line 21, through col. 13, line 9. As relevant here, the patent calls for comparing that name with a plurality of values in a network, determining whether a user is authorized to access the data, and providing or denying access to the data based on that determination. See, e.g., id., col. 3, line 50, through col. 4, line 52; id., col. 37, lines 44-62.

         Apple petitioned for inter partes review (IPR) of claims 24, 32, 70, 81, 82, and 86, arguing unpatentability, under 35 U.S.C. § 103, for obviousness based on a combination of the Woodhill reference (U.S. Patent No. 5, 649, 196) and the Stefik reference (U.S. Patent No. 7, 359, 881). Woodhill focuses on a system for backing up or restoring data. Stefik focuses on a system for managing rights to access data.

         More specifically, Woodhill discloses a system for using content-based identifiers in performing file-management functions, such as backing up files. It includes a distributed storage system that identifies data items (called "binary objects") using content-based identifiers (called "binary object identifiers"). '196 patent, col. 1, line 66, through col. 2, line 11. A binary object identifier is calculated using the contents of a data item. Id., col 8, lines 38-42. Each binary object identifier is stored (with certain other information) in a binary object identification record. Id., col. 7, line 60-64. Woodhill uses its content-based binary object identifiers for file-management purposes, including in a backup/restore system, which checks to see if binary objects have changed since the system's most recent backup. Id., col. 2, lines 11-46.

         Stefik discloses an authentication system designed to control access to digital works stored in a repository. Each digital work is assigned a "unique identifier." '881 patent, col. 9, lines 47-50, 56-59. Each digital work also has associated usage rights that control access to the work. Id., col. 9, lines 52-53; id., col. 3, lines 58-65. A user demonstrates authorization to access a digital work through a "digital ticket, " which identifies the ticket holder as having access to the digital file because the holder has paid for access or is otherwise entitled to access. Id., col. 3, lines 58-65.

         The Board instituted review on March 26, 2014. Apple Inc. v. PersonalWeb Technologies, LLC, IPR2013-00596, 2014 WL 1477691 (PTAB Mar. 26, 2014). On March 25, 2015, after conducting the review, the Board issued its Final Written Decision, holding claims 24, 32, 70, 81, 82, and 86 unpatentable as obvious based on a combination of the Woodhill and Stefik references. Apple Inc. v. PersonalWeb Technologies, LLC, IPR2013-00596, 2015 WL 1777147 (PTAB Mar. 25, 2015), at *7-13 (hereafter "Apple v. PersonalWeb"). In doing so, the Board applied the broadest-reasonable-interpretation standard in construing several phrases referring to content-based identifiers. Id. at *4. On April 24, 2015, thirteen days after the '310 patent expired, PersonalWeb sought rehearing, but the Board denied the motion on August 3, 2015.

         PersonalWeb appeals the Final Written Decision, under 35 U.S.C. §§ 141(c), 319, except as to claim 70. We have ...


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