Addressing whether the Patent Trial and Appeal Board (PTAB) exceeded its authority and deprived the patent owner of due process by belatedly considering a non-instituted ground in an inter partes review (IPR) proceeding, the US Court of Appeals for the Federal Circuit found that the PTAB was required to consider all grounds raised in the petition, and it would be error to consider anything less. AC Techs. S.A. v. Amazon.com, Inc., Case No. 18-1433 (Fed. Cir. Jan. 9, 2019) (Stoll, J). The Court explained that Supreme Court of the United States precedent “mandates” that the PTAB consider all grounds raised in an instituted petition.

AC Techs owns a patent directed to data access and management, where “computer units” store data in, or request data stored in, clusters composed of one or more cells, via a network. Amazon filed a petition for IPR challenging claims of the patent on three grounds, which all used the same prior art reference. On ground 1, if the claimed “computer unit” were construed narrowly, and if the prior art’s disclosure of a “client” were mapped to the “computer unit,” the prior art reference would render all of the challenged claims obvious. In the alternative, if “computer unit” were construed broadly, and if the prior art’s “host” were mapped to the “computer unit,” the reference would anticipate some claims (ground 2) and render obvious the remaining claims (ground 3).

The PTAB instituted IPR proceedings on grounds 1 and 2, and stated that under its construction, ground 3 was “moot.” In its final decision, the PTAB mapped the prior art’s “host” to the claimed “computer unit” and found that the claims challenged in ground 2 were anticipated. If, on the other hand, the prior art’s “client” were mapped to the claimed “computer unit,” as was presented in ground 1, the PTAB found that the prior art did not render the remaining claims obvious. Amazon sought reconsideration for the PTAB to reach ground 3. The PTAB allowed the parties to submit additional arguments, expert declaration and supporting exhibits with respect to ground 3. Without holding a hearing on ground 3, the PTAB granted Amazon’s motion for reconsideration, finding the remaining claims obvious on ground 3. AC Techs appealed.

On appeal, the Federal Circuit determined that the PTAB had not exceeded its authority when it agreed to hear the previously non-instituted ground, finding that “it would have violated the statutory scheme had the Board not done so.” The Federal Circuit explained that the PTAB provided due process for ground 3 because the parties had adequate notice of the issues the PTAB decided and the parties had an opportunity to be heard on all those issues. The Court noted that even though the PTAB did not hold a hearing for ground 3, the parties never requested one. After finding that the PTAB did not exceed its authority to reach ground 3, the Federal Circuit affirmed the PTAB’s claim construction and its obviousness and anticipation determinations.