By Andrew Williams —

For only the second time, the Patent Trial and Appeals Board ("PTAB" or "Board") granted a motion to amend claims.  However, even though these two current motions were only granted-in-part, the fact that some claim amendments were accepted while others were denied can shed even more light on the Board's requirement for such motions.  Indeed, this was the first time that the Board provided a real-world example of a claim-amendment hypothetical described in the June 11, 2013 decision from the Idle Free Systems, Inc. v. Bergstrom, Inc. case (IPR2012-00027) (Paper 26) – that of obtaining a claim set with a hierarchy of different scope.  The Idle Free opinion posited that if a patent owner moved to substitute three claims (one independent and two dependent), the two dependent claims should (at least facially) not be able to contain any additional new features beyond the independent claim.  The reason provided was that these new features would not be responsive to an alleged ground of unpatentability, which would be in violation of 37 C.F.R. § 42.121(a)(2)(i)).  Moreover, according to Idle Free, unless the patent owner can show a patentable distinction between the dependent claims and the independent claims, there would be no "meaningful reason" to add the new feature, which is inconsistent with the statutory requirement that "[f]or each challenged claim" a "reasonable number of substitute claims" may be proposed.  35 U.S.C. § 316(d)(1)(B).  It is these present two cases that first showed how this theory works in practice.

In actuality, this case involved two separate IPRs to two patents that are continuations of each other.  One IPR, Riverbed Technology, Inc. v. Silver Peak Systems, Inc., IPR2013-00402, involved U.S. Patent 8,312, 226, which was a continuation of U.S. Patent 8,370,583 (the subject of the second proceeding, IPR2013-00403).  Because the reasoning for both granting and denying the various claim amendments was very similar for both of the cases, we will focus on IPR2013-00402.  These cases were unique in that the patent owner did not file either a Patent Owner Preliminary Response or a Patent Owner Response.  Instead, the patent owner only filed a motion to amend, seeking to cancel claims 1-12 (3 sets of 4 claims) and substitute claims 13-18 (2 claims for each set).  And, unlike the case for the granted motion to amend in International Flavors & Fragrances Inc. v. The United States of America (IPR2013-00124), the petitioner in these cases opposed the motion.  But, despite this opposition, the Board found that the patent owner had met its burden with respect to substitute claims 13 and 15, and granted-in-part the motion.  The patent owner, on the other hand, did not meet its burden with respect to the other claims.

The technology at issue in these cases related to network memory systems.  And, whereas that portion of our readership that tends to be more life-sciences orientated might not have sufficient interest in the specifics, it is important to have at least a basic understanding of the technology at issue.  The issue addressed by the patents involved the use of distributed servers instead of centralized servers.  The advantage of keeping the information on a centralized server was that it is easier to synchronize the data (think jointly editing a document with several other people on different computers versus a network), but "bandwidth bottleneck" can occur when multiple computers attempt to access data.  On the other hand, several distributed servers can be used by remote computers to cut down on this bottleneck, but the procedures to ensure synchronization of data are more complex.  Moreover, even though caching can be used by the remote computers in the centralized system, caching is binary, and therefore even a small change to a document will prevent caching from being utilized.

The patentees developed a system that reduced network traffic by using "appliances" linked to the servers and remote computers to determine whether even a portion of the requested data was accessible locally.  If a portion of the data was not locally accessible, that portion could be accessed from the central server, with instructions to subsequently store the data with the updated portion on the locally accessible machine.  This was accomplished, in part, by the calculation of a hash and the use of both a fine and a course filter, and comparing it to a corresponding signature hash table.  For those not familiar with the term, a hash is calculated using a hash function, which converts any piece of data into a digital signature, and can be used to determine if two pieces of data are identical.  The patentees developed a way to identify "sync points" by determining the hash values for locations down to the byte level, and performing forward and backward memory comparison to identify the optimum length of matching data.  This was advantageous over the prior art, according to the patentees, because the prior art used "pre-segmented data," which was inflexible and did not allow for the identification of very small changes.  As a rough analogy to molecular biology, this would be akin to the difference between screening DNA with a hybridization probe that could only identify whether the DNA stretches were identical, and alternatively being able to pinpoint ever base substitution present in the DNA.

To provide a sense of the scope of the amendments made to the "independent" parent claim, claim 13 follows as exemplary:

13. (proposed substitute for claim 4) The source-site appliance of claim 1, wherein the processor is configured to determine whether the transmitted data corresponds to locally accessible data via a process comprising:
    identifying sync points in the transmitted data having matches in the locally accessible data by (i) determining hash values corresponding to different byte locations of the transmitted data, (ii) finely filtering the hash values using a fine filter to determine a finely filtered set of the hash values corresponding to fine sync points, and coarsely filtering the hash values using a coarse filter to determine a coarsely filtered set of the hash values corresponding to coarse sync points, and  (iii) determining from the finely filtered set of the hash values and the coarsely filtered set of the hash values, a plurality of hash values matching hash values of the locally accessible data; and
    performing for byte locations with matching hash values, a forward and backward memory comparison between the transmitted data and data representing the locally accessible data, the forward and backward comparison to identify a size of a matching region of the transmitted data with the data representing the locally accessible data, and performing based on results of the forward and backward memory comparison, a determination of a locally accessible portion of the transmitted data corresponding to the matching region that is locally accessible at the destination-site appliance and a non-locally accessible portion of the transmitted data that is not locally accessible at the destination-site appliance; and
    wherein the instruction comprises a retrieve instruction and a store instruction, the retrieve instruction indicating to the destination-site appliance to retrieve the locally accessible portion of the transmitted data corresponding to the matching region from storage locally accessible to the destination-site appliance, and the store instruction indicating to the destination-site appliance to store the non-locally accessible portion of the transmitted data; and
    wherein the processor is further configured to send [a] the non-locally accessible portion of the transmitted data over the wide area network to the destination-site appliance.

Of course, this claim is written in dependent form, but is essentially independent because claim 1 will be canceled.  The proposed substitute dependent claims contained additional features beyond changing which claim from which it depends.  Claim 14 is exemplary:

14. (proposed substitute for claim 3) The source-site appliance of claim [1] 13 wherein the store instruction further indicates to the destination-site appliance to store another copy of the locally accessible portion of the transmitted data together with the non-locally accessible portion of the data at an index in a database in the storage locally accessible to the destination-site appliance.

The analysis began, as always, by determining whether there was any broadening of claim scope.  The PTAB found that each proposed substitute claim contained all of the limitations of the corresponding claim in the original patent, and that no limitations were removed.  The petitioner did not challenge the patent owner's assertion regarding claim scope.  Next, the Board looked to determine if there was written description support in the original disclosure.  Again, petitioner did not challenge this, and the Board concluded that the patent owner made a significant showing that there was written description support.  With regard to the interpretations of the new claim terms, the patent owner provided constructions and support for "sync point," "fine sync point," and "course sync point," which the petitioner did not challenge.  The Board agreed that these constructions provided the broadest reasonable interpretation of the claims.

Having made these determinations, the Board looked to whether the patent owner met its burden of proof to demonstrate patentability over the prior art.  A problem faced by other patent owners in previous IPRs was that they did not demonstrate that the prior art included more than the cited art, but rather included prior art not of record but known to the patent owner.  Silver Peak met its burden by providing a "story" of what the prior taught, citing to both art of record and otherwise, and explaining why its proposed substitute claims described "a very different approach."  For example, the Silver Peak explained that "pre-existing data de-duplication systems reduced network traffic by dividing data into 'segments' (or 'chunks') and transmitting a 'reference' (or 'token'), rather than the data segment itself, when the destination device already had a copy of the data segment."  In contrast, instead of this inflexible approach of searching through all data segments, the patentees developed the method described by the claims.  This method of describing the prior art "problem" and the patentees "solution" was deemed to be persuasive by the Board.

The petitioner, in additional to challenging (unsuccessfully) the patent owners characterization of the prior art, alleged that the patent holder did not distinguish the invention over all of the prior art of which it was aware.  The Board disagreed with petitioner based on the facts of the case.  Moreover, the petitioner argued that the substitution motions were defective because they did not include the testimony of a technical expert.  The Board, however, pointed out that even though experts can be helpful, they are not a prerequisite.  Each case depends on its facts.  As a result, the Board grated the motions to the extent they requested substitution of two of these "independent" claims per patent.

Even though it is certainly instructive to learn what the Board considered to be a sufficient explanation of the prior art such that the burden of proof to amend the claims was met, it is the distinction between the claims that were granted and those that were denied that has additional value.  As mentioned above, it was the failure of the patent owner to propose a reasonable number of substituted claims that caused the rejection of these claims.  However, the "reasonable number" did not correspond to a one-for-one substitution.  Indeed, Silver Peak was proposing one-third less claims than in the original patent.  Instead, the patent owner ran afoul of this requirement because it added additional new features to the dependent claims.  And, according to Idle Free, when seeking such claims, the patent holder must "establish a special circumstance for adding those features."  This amounts to demonstrating why the dependent claims would be patentable over the prior art and the parent (independent) claims.  And, as the Board concluded, in part, the "Patent Owner does not explain sufficiently why storing an additional copy would have been non-obvious," when the parent claims included its own storing of a copy of the data.

The Board has explained that it does not want to address such claims of differing scope because the PTAB is more of an adjudicatory than examinational body.  In fact, if the patent owner truly wanted such claims, the PTAB explained in Idle Free that the patent owner could utilize some other type of proceeding at the office, such as ex parte reexamination.  Interestingly, according to Idle Free,if the patent owner had not sought to add the additional limitations to the dependent claims, but rather only amended the claim on which it depended, those claims would have survived.  This is true, even though such claims would be broader in scope than those being sought by the patent holder.  It is possible that Silver Peak had a strategic reason for adding such limitations, such as concern that invalidating prior art to the broader claims may have been identified in the future.  In such a scenario, adding these limitations may have allowed these narrower claims to survive.