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DSS Technology Management, Inc. v. Apple Inc.

United States Court of Appeals, Federal Circuit

March 23, 2018

DSS TECHNOLOGY MANAGEMENT, INC., Appellant
v.
APPLE INC., Appellee

          Appeals from the United States Patent and Trademark Office, Patent Trial and Appeal Board in Nos. IPR2015-00369, IPR2015-00373.

          Eric William Buether, Buether Joe & Carpenter LLC, Dallas, TX, argued for appellant. Also represented by Brian Andrew Carpenter; Andriy Lytvyn, Smith & Hopen, PA, Oldsmar, FL.

          Jon Wright, Sterne Kessler Goldstein & Fox, PLLC, Washington, DC, argued for appellee. Also represented by David K.S. Cornwell, Jason A. Fitzsimmons.

          Before Newman, O'Malley, and Reyna, Circuit Judges.

          OPINION

          O'Malley, Circuit Judge

         In response to two petitions for inter partes review filed by Appellee Apple Inc. ("Apple"), the Patent Trial and Appeal Board ("Board") issued a pair of final written decisions finding claims 1-4 and 9-10 of U.S. Patent No. 6, 128, 290 ("the '290 patent"), owned by Appellant DSS Technology Management, Inc. ("DSS"), unpatentable as obvious. Apple Inc. v. DSS Tech. Mgmt., Inc., No. IPR2015-00369, 2016 WL 3382361 (P.T.A.B. June 17, 2016) (Apple I); Apple Inc. v. DSS Tech. Mgmt., Inc., No. IPR2015-00373, 2016 WL 3382464 (P.T.A.B. June 17, 2016) (Apple II). Because we find that the Board did not provide a sufficient explanation for its conclusions, and because we cannot glean any such explanation from the record, we reverse.

         I. Background

         A. The '290 patent

         The '290 patent, which issued in 2000 and is assigned to DSS, is directed to a wireless communication network for a single host device and multiple peripheral devices. The '290 patent discloses a data network for bidirectional wireless data communications between a host or server microcomputer-described in the specification as a personal digital assistant or "PDA"-and a plurality of peripheral devices that the specification refers to as personal electronic accessories or "PEAs." '290 patent, col. 1, ll. 11-20, col. 2, ll. 15-18. According to the '290 patent, this data network provides "highly reliable" communication, "requires extremely low power consumption, particularly for the peripheral units, " "avoids interference from nearby similar systems, " and "is of relatively simple and inexpensive construction." Id. at col. 1, ll. 33- 47. Figure 1 of the '290 patent illustrates an embodiment of this wireless data network:

         Image Omitted

         Id. at Fig. 1. This figure depicts a server microcomputer, shown as PDA 11, and a plurality of peripheral units 21 to 29. Id. at col. 2, 11. 42-44, col. 2, 1. 66-col. 3, 1. 15.

         The '290 patent teaches that the transmitters within the host or server microcomputer and the peripheral units in the data network operate in a "low duty cycle pulsed mode of operation." Id. at col. 1, ll. 57-59. In such a mode of operation, each peripheral unit is allocated a subset of available time slots in which it receives or transmits data from or to the server microcomputer in radio frequency (i.e., wireless) bursts. Id. at col. 3, 1. 57-col. 4, 1. 6. These time slots are determined in relation to synchronizing information initially transmitted from the server microcomputer. Id. at col. 2, ll. 35-39. In the time slots when a peripheral unit is neither receiving nor transmitting, its reception and transmission circuitry may be powered down. Id. at col. 4, ll. 6-8. "The low duty cycle pulsed operation both substantially reduces power consumption and facilitates the rejection of interfering signals." Id. at col. 1, ll. 59-61.

         The '290 patent contains 11 apparatus claims, six of which-claims 1-4 and 9-10-are relevant to this appeal. Because the parties dispute only a single claim limitation recited in independent claim 1, they agree that claim 1 is representative. Claim 1 recites:

A data network system for effecting coordinated operation of a plurality of electronic devices, said system comprising:
a server microcomputer unit;
a plurality of peripheral units which are battery powered and portable, which provide either input information from the user or output information to the user, and which are adapted to operate within short range of said server unit; said server microcomputer incorporating an RF [radio frequency] transmitter for sending commands and synchronizing information to said peripheral units;
said peripheral units each including an RF receiver for detecting said commands and synchronizing information and including also an RF transmitter for sending input information from the user to said server microcomputer;
said server microcomputer including a receiver for receiving input information transmitted from said peripheral units;
said server and peripheral transmitters being energized in low duty cycle RF bursts at intervals determined by a code sequence which is timed in relation to said synchronizing information.

'290 patent, col. 11, l. 62-col. 12, l. 18 (emphasis added).

         The only disputed limitation of claim 1 pertains to the "low duty cycle RF bursts" referenced above. Claim 1 requires both the server microcomputer and each of the peripheral units to comprise transmitters. According to the claim, the server microcomputer's transmitter is used "for sending commands and synchronizing information to said peripheral units, " while the peripheral unit's transmitters are used "for sending input information from the user to said server microcomputer." Id. at col. 12, ll. 4-11. The transmitters on both the server microcomputer and the peripheral units must be "energized in low duty cycle RF bursts." Id. at col. 12, ll. 15-18. This limitation was the focus of the IPR proceedings below, and it is at the center of the single dispute on appeal.

         B. Relevant Prior Art

         The Board relied on two pieces of prior art in the IPR proceedings: U.S. Patent No. 5, 241, 542 to Natarajan et al. ("Natarajan"), and U.S. Patent No. 4, 887, 266 to Neve et al. ("Neve"). In its final written decisions, the Board found that the combination of Natarajan and Neve rendered obvious all of the challenged claims of the '290 patent. Apple I, 2016 WL 3382361, at *1, *19; Apple II, 2016 WL 3382464, at *1, *19. Of the two prior art references, only Natarajan is relevant to this appeal.

         As the Board described it, "Natarajan is directed to power conservation in wireless communication, particularly battery efficient operation of wireless link adapters of mobile computers (also referred to, inter alia, as battery powered computers, hand held or laptop computers, mobile units, and mobile stations) as controlled by multiaccess protocols used in wireless communication." Apple I, 2016 WL 3382361, at *8. Figure 2 of Natarajan depicts this system:

         Image Omitted

          Natarajan, Fig. 2. This block diagram shows mobile stations 10, 12, 14, and 16, which communicate via wireless transceivers within transceiver adapters 44 and 36 with base stations 26 and 28, which are in turn connected to server 18. Id. at col. 2, ll. 32-39, 51-52, 58-59, 65-67.

         According to Natarajan, "the main idea for minimizing battery power consumed by wireless link adapters at the mobile units" depends on the "scheduled access multiaccess protocol" through which the mobile units communicate with the base station. Id. at col. 3, l. 59-col. 4, l. 6, col. 4, ll. 20-23. These protocols "can be implemented to effectively conserve battery power by suitable control of the state of transmitter and receiver units at the portable units (i.e., by scheduling when they should be turned ON or OFF)." Id. at col. 3, l. 66-col. 4, l. 3. "A desirable solution is one in which the transmitter (or receiver) consumes power only when it is actively transmitting a message (or actively receiving a message)." Id. at col. 4, ll. 3-6.

         Natarajan's scheduled multi-access protocol achieves this goal by dividing time into fixed-length frames, which are themselves divided into slots. Id. at col. 4, ll. 20-23. Figure 4 of Natarajan shows an exemplary frame:

         Image Omitted

         The frame is divided into three subframes: A, B, and C. Id. at col. 4, ll. 28-38. The first subframe, period A, is used "for broadcast of [data] packets from base station to mobile units (outbound traffic)." Id. at col. 4, ll. 30-32. The second subframe, period B, is used for "contention-free transfer of all traffic from mobile units to base station (inbound traffic)." Id. at col. 4, ll. 33-35. The third sub-frame, period C, is "for the transfer of all bursty data traffic in a contention mode from mobile units to base station (inbound traffic)." Id. at col. 4, ll. 36-38. Each of subframes A and B in this example is associated with a header, AH and BH, respectively, that is broadcast by the base station to all mobile stations at the start of the subframe. Id. at col. 4, ll. 30-35. Using these headers, each mobile unit can compute exactly when it should be ready to receive data from the base station and when it should begin transmitting data to the base station. Id. at col. 4, 1. 67-col. 5, 1. 2; id. at col. 5, ll. 20-22. The mobile unit can turn its receiver or transmitter off to save power during those time slots in which the mobile unit is not receiving or transmitting data. Id. at col. 5, ll. 2-6, 23-29.

         C. Procedural History

         Apple concurrently filed two IPR petitions related to the '290 patent on December 4, 2014. Apple's first petition challenged the validity of claims 1-4 of the '290 patent, and the second challenged the validity of claims 6, 7, 9, and 10. The Board instituted two IPRs on June 25, 2015, as IPR2015-00369 and IPR2015-00373, respectively. It instituted the first IPR to determine whether claims 1 to 4 were obvious over Natarajan and Neve. The Board instituted the second IPR on the same basis, as well as on the ground that claims 6 and 7 allegedly were obvious over U.S. Patent No. 5, 696, 903 to Mahany. DSS later disclaimed claims 6 and 7 of the '290 patent.

         The Board issued its final written decisions in both IPRs on June 17, 2016. The Board found that all remaining challenged claims-claims 1-4, 9, and 10-were invalid as obvious over Natarajan in view of Neve. Apple I, 2016 WL 3382361, at *1, *19; Apple II, 2016 WL 3382464, at *1, *19.[1] DSS conceded that all but one limitation in each of these claims was disclosed in Nata-rajan and Neve. Apple I, 2016 WL 3382361, at *10-11. But DSS disputed that either reference disclosed the limitation "said server . . . transmitter[] being energized in low duty cycle RF bursts." Id. at *11.

         The Board construed the term "energized in low duty cycle RF bursts" as "energized, in short periods of intense RF transmission activity on an otherwise quiet data channel, only to the extent required to satisfy the data transmission needs over the course of a communication cycle." Id. at *4-7. The Board explained that it "un-derst[oo]d the 'duty cycle' of a transmitter to be the average ratio of the durations during which the transmitter is energized to the [total] duration of communication cycles over the course of network operation." Id. at *6.

         The Board then turned to the question of obviousness. Apple argued that, because the mobile unit transmitters in Natarajan operated in "low duty cycle RF bursts, " "it would have been plainly obvious to a [person of ordinary skill in the art] to have the base station operate in an analogous manner." Id. at *13 (alteration in original). Apple explained that, because the "low duty cycle RF bursts" limitation was not novel and because "the base and mobile stations have the same physical structure, " it "would have been no more than using a known technique to improve similar devices in the same way." Id.

         Although DSS admitted that Natarajan discloses a system for reducing power consumption in mobile units, DSS argued that Natarajan says nothing about doing the same for the base station transmitter. Id. at *12. DSS noted that the stated goal of the Natarajan reference is to provide energy savings for the mobile units, not the base station. Id. DSS also observed that the base station in Natarajan uses a different communications scheme than the mobile units, where the base station transmits ...


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