In CyWee Group LTD. V. ZTE (USA), Inc., No. 21-1855 (Fed. Cir. 2024), ZTE filed an IPR petition against U.S. Patent No. 8,441,438 (the ’438 patent) owned by CyWee, which the Patent Trial and Appeals Board (“the Board”) instituted. LG later filed a separate IPR petition also challenging the ’438 patent and moved to join ZTE’s IPR. LG acknowledged that its IPR petition was untimely under 35 U.S.C. § 315(b) because CyWee sued LG more than a year before LG filed its petition. LG premised its request for joinder on several limitations, the most relevant of which was that LG would act only as a passive understudy and not assume an active role in the IPR unless ZTE ceased to participate in the instituted IPR.

While the joinder request was pending, CyWee moved to amend its claims, and put forth proposed claims 20-24 contingent on cancellation of the original claims of the ’438 patent. The Board issued preliminary guidance on the motion finding that the proposed claims lacked written description and introduced new matter, and that proposed claim 23 was invalid over the asserted prior art. The Board then granted LG’s motion requesting joinder subject to the proposed limitations which left LG as a passive understudy not to take an active role unless ZTE ceased to participate. Afterwards, CyWee filed a revised motion to amend that included proposed revised claims 20-24. ZTE indicated that it did not oppose CyWee’s revised motion to amend. LG moved for leave to oppose the revised motion to amend arguing that ZTE was no longer an active participant in the IPR. The Board initially denied LG’s motion, but LG sought rehearing. The Board ultimately granted LG’s motion finding that while ZTE was still an active participant as to the original claims it no longer appeared to be “meaningfully adversarial” as to CyWee’s revised motion to amend.

In its opposition to the revised motion to amend LG argued that proposed revised claims 20-24 would have been obvious over the prior art which included, among others, Withanawasam, Bachmann, and Bachmann2. Withanawasam had not originally been cited by ZTE in opposition to CyWee’s initial motion to amend. The Board issued its final written decision determining that the challenged claims were unpatentable as obvious over the combination put forth by LG of Withanawasam, Bachmann, and Bachmann2 and that CyWee lacked written description for claims 21 and 24. CyWee sought Director review regarding primarily LG’s opposition to the revised motion to amend. At that time the USPTO did not have an appointed Director, so instead the Commissioner of Patents reviewed and rejected CyWee’s request for Director review. CyWee timely appealed to the Federal Circuit.

Issues

The Federal Circuit considered several issues on appeal:

1. Did the Board err by allowing LG to oppose CyWee’s revised motion to amend and cite Withanawasam?
2.  Did the Board err by denying the revised motion to amend?
3. Did lack of opportunity for meaningful Director review mandate dismissal of the IPR?

Holdings and Reasoning

1. The Board did not err by allowing LG to oppose CyWee’s revised motion to amend or by allowing LG to cite Withanawasam.

The Federal Circuit reviewed the Board’s application of the Board’s own procedures for abuse of discretion. The Federal Circuit found that the Board did not abuse its direction by allowing LG to oppose CyWee’s revised motion to amend because while ZTE was still a participant in the IPR the proceeding “no longer appeared to be meaningfully adversarial.” The Federal Circuit found that because of the importance of a motion to amend in the context of an IPR the Board did not err in allowing LG to oppose CyWee’s revised motion to amend.

Relatedly, the Federal Circuit addressed CyWee’s argument that LG could not raise Withanawasam in opposing CyWee’s revised motion to amend because ZTE did not raise Withanawasam in opposition to the initial motion to amend. CyWee’s argument was two-fold: (1) that the IPR statutory provisions prohibit LG (an otherwise time-barred party) from introducing new issues into the proceeding, and (2) that the procedures governing a revised motion to amend prohibit LG from raising arguments in opposition to a revised motion to amend.

In response to the first part of this argument, the Federal Circuit found CyWee’s argument unpersuasive. CyWee cited previous Federal Circuit precedent to argue that35 U.S.C. § 315(c) does not authorize a joined party to bring new issues into an already ongoing IPR proceeding. The Federal Circuit found that § 315(c) exists, in part, to confine a joined party to the claims and grounds challenged contained in an already-instituted IPR. However, the Federal Circuit found that this limitation does not apply to the context of motions to amend where the patent owner has introduced new claims into the proceedings.

In the second part of this argument, CyWee argued that the relevant procedures prohibited LG from making arguments in its opposition to CyWee’s revised motion to amend that were not made by ZTE in its opposition to the initial motion to amend. In particular, CyWee point to language stating that both an opposition and reply to a motion to amend may be accompanied by new evidence that responds to issues raised in either preliminary guidance, a corresponding revised motion to amend, or an opposition to a motion to amend. The Federal Circuit found this argument unpersuasive, and did not see how this language that permitted the citation of new evidence in opposition to a revised motion to amend limited the scope of that evidence. CyWee also pointed to other regulations and Board decisions to make this argument. The Federal Circuit found that the cited regulations and decisions only addressed the scope of the evidence that may be raised in a reply brief, not in an opposition to a revised motion to amend. Thus, CyWee identified nothing in the Board’s current procedures that prohibited LG from raising Withanawasam in its opposition to CyWee’s revised motion to amend.

Lastly, CyWee argued that LG could not raise Withanawasam to demonstrate revised claim 22 was unpatentable because CyWee did not modify claim 22 between the initial and revised motion to amend. However, because CyWee failed to raise this argument before the Board the Federal Circuit did not address it.

2. The Board did not err in denying CyWee’s revised motion to amend.

CyWee also challenged the Board’s denial of the revised motion to amend, arguing it erred in finding a motivation-to-combine the prior art. The Federal Circuit affirmed the Board’s finding. The Federal Circuit viewed expert testimony from LG’s expert as support for the Board’s motivation-to-combine finding. Specifically, the testimony showed that there is a known technique to address a known problem that uses the prior art elements in accordance with their established function. CyWee argued further that it was not allowed the opportunity to submit new evidence in reply to LG’s opposition based on the new prior art combination that included Withanawasam. The Federal Circuit rejected this argument pointing to the relevant procedures regarding IPRs and the Board’s orders in this particular IPR which showed CyWee did have the opportunity to submit new evidence and was informed of that opportunity. CyWee also argued that the Board erred in finding a lack of written description, however, having affirmed the Board’s obviousness conclusion the Federal Circuit did not see the need to address CyWee’s written description argument.

3. There was no lack of meaningful Director review.

CyWee’s final argument was that it was denied meaningful Director review in the time required by the statute and that this denial mandated vacating the Board’s final written decision and dismissing the IPR petition. The Federal Circuit summarily denied this argument because it had previously considered and rejected these arguments in prior Federal Circuit precedent.

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