Dell Inc. v. Acceleron, LLC. ( 2016 )

United States Court of Appeals
for the Federal Circuit
______________________
DELL INC.,
Appellant
v.
ACCELERON, LLC,
Cross-Appellant
______________________
2015-1513, -1514
______________________
Appeals from the United States Patent and Trade-
mark Office, Patent Trial and Appeal Board in No.
IPR2013-00440.
______________________
Decided: March 15, 2016
______________________
PAULA HEYMAN, Baker Botts, LLP, Austin, TX, argued
for appellant. Also represented by KEVIN J. MEEK,
CATHERINE GARZA, BRETT J. THOMPSEN.
NORMAN ANDREW CRAIN, Thomas|Horstemeyer LLC,
Atlanta, GA, argued for cross-appellant. Also represented
by ROBERT GRAVOIS, KENNETH ANTHONY KNOX.
______________________
Before MOORE, TARANTO, and HUGHES, Circuit Judges.
2 DELL INC. v. ACCELERON, LLC
TARANTO, Circuit Judge.
Acceleron, LLC owns U.S. Patent No. 6,948,021,
which discloses a computer-network appliance containing
several hardware modules that can be removed and
replaced while the appliance remains on. The Patent
Trial and Appeal Board of the Patent and Trademark
Office instituted inter partes review of the ’021 patent
based on Dell Inc.’s petition under 35 U.S.C. § 311 et seq.
After conducting the review, the Board confirmed the
validity of claims 14–17 and 34–36. Dell appeals those
rulings, primarily challenging the Board’s finding that the
key prior-art reference fails to disclose a particular claim
element. Acceleron, for its part, appeals the Board’s
cancellation of claims 3 and 20 as anticipated. As to claim
20, Acceleron challenges the Board’s claim construction,
and as to claim 3, Acceleron challenges as procedurally
improper the Board’s reliance on a basis first raised
during the oral argument before the Board.
We affirm the Board’s confirmation of claims 14–17
and 34–36. We vacate the Board’s cancellation of claim
20 and remand for reconsideration of anticipation under
the correct claim construction. We vacate the cancellation
of claim 3 and remand for reconsideration of anticipation
as appropriate.
BACKGROUND
The ’021 patent discloses a computer-network appli-
ance containing a number of hot-swappable components,
meaning that those components can be removed and
replaced without turning off or resetting the computer
system as a whole. ’021 patent, col. 1, lines 13–16, 26–28.
Figure 1 is illustrative:
DELL INC. v. ACCELERON, LLC 3
FIG. 1 (’021 PATENT)
As shown in Figure 1, the hot-swappable components
disclosed in the ’021 patent include central-processing-
unit (CPU) modules 102(a)–(e), a power module 106, a
microcontroller module 108, and an ethernet switch
module 110. Each of those modules is connected to a
common backplane board 104. A chassis 150 encloses the
board and collection of modules. The chassis may also
contain caddies 152 that hold the modules while providing
air flow from the front to the rear of the chassis. Id., col.
2, lines 5–6; id., col. 3, lines 32–34.
Claim 20, one of the claims at issue here, reads:
20. A computer network appliance comprising:
a hot-swappable CPU module;
a hot-swappable power module;
a hot-swappable ethernet switch module; and
a backplane board having a plurality of hot swap
mating connectors; and
4 DELL INC. v. ACCELERON, LLC
a microcontroller module and a dedicated ethernet
path, wherein the dedicated ethernet path is
separate from a switched fast ethernet connec-
tion and provides the microcontroller module
with a connection to remotely poll the CPU
module, the power module and the ethernet
switch module;
wherein each of the CPU module, the power mod-
ule and the ethernet switch module includes a
hot swap connector for connecting with a specific
hot swap mating connector of the backplane
board.
Id., col. 10, lines 18–33.
Claim 1, which is not itself at issue here, is similar to
claim 20 in all ways relevant to this appeal (though it
does not require a microcontroller module). Id., col. 9,
lines 2–15. Claim 3, which is at issue here, depends
indirectly (via claim 2) on claim 1 and adds:
wherein the chassis comprises caddies providing
air flow from the front to the rear of the chassis.
Id., col. 9, lines 20–22.
The other claims at issue here involve the ’021 pa-
tent’s disclosure of interactions between the claimed
computer-network appliance and other devices on the
network to which the appliance is connected. In particu-
lar, the patent describes a CPU module that includes a
basic input/output system (BIOS) for, among other things,
instructing a “network attached storage (NAS)” to locate
an operating system from which to boot the CPU module
remotely. Id., col. 2, lines 23–29. Claim 14, the key NAS
claim at issue here, depends on claim 1 and adds:
wherein a CPU module comprises hardware BIOS
for configuring the CPU module and instructing a
DELL INC. v. ACCELERON, LLC 5
network attached storage (NAS) to locate an oper-
ating system (OS) from which to boot.
Id., col. 9, lines 63–67. Claims 15–17 are similar to claim
14 in that they involve “a CPU module [ ] configured to
boot remotely from an OS located in an NAS,” id., col. 10,
lines 1–11, as are claims 34–36, which involve “locating
an OS in an NAS to boot the CPU module,” id., col. 12,
lines 24–38.
Dell petitioned for inter partes review of the ’021
patent under 35 U.S.C. § 311(a). As relevant here, Dell
argued that U.S. Patent No. 6,757,748 to Hipp anticipates
claims 3, 14–17, and 20 and that claims 34–36 would have
been obvious over Hipp in view of U.S. Patent No.
6,157,974 to Gasparik. Gasparik’s teachings are not at
issue in this appeal.
The primary reference, Hipp, describes a network in-
terface card that coordinates traffic between multiple web
server processing cards over one or more networks. ’748
patent, col. 2, lines 21–23. Each web server processing
card is a single-board computer, id., col. 7, line 58, and
includes a BIOS with instructions for sending information
from a program to a hardware device, id., col. 10, lines
47–51. Hipp also discloses a storage server providing
“network attached storage (NAS),” id., col. 5, lines 35–36,
chip sets on the web server processing cards capable of
booting from a local-area network, id., col. 9, lines 61–62,
and web server processing cards capable of running on
different operating systems, id., col. 8, lines 23–30.
Hipp’s Figure 12 shows a chassis encasing web server
processing cards 132–42 and 32 and power supplies 280:
DELL INC. v. ACCELERON, LLC 7
raised in Dell’s reply and to seek authorization to move to
strike those arguments or, in the alternative, permission
to file a sur-reply. The Board refused to hold a conference
call and denied Acceleron authorization to move to strike.
The Board heard oral argument, as authorized by 35
U.S.C. § 316(a)(10) and 37 C.F.R. § 42.70. During the oral
argument, Dell continued to rely on Hipp’s articulating
door 262 and power supply mounting mechanisms 278 as
caddies, but it also added a new argument. For the first
time it contended that Hipp’s Figure 12 shows (unlabeled)
“slides” located below the power supplies 280 and that
such slides also constitute caddies. Acceleron disagreed
with that contention on its merits and also objected on the
procedural ground that Dell had never before identified
the alleged slides as caddies.
In its final written decision under 35 U.S.C. § 318(a),
the Board determined, among other things, that claims
14–17 survived Dell’s anticipation challenge and claims
34–36 survived Dell’s obviousness challenge, but that
claims 3 and 20 are anticipated by Hipp. Dell Inc. v.
Acceleron, LLC, IPR2013-440, 2014 WL 7326580, at *14
(PTAB Dec. 22, 2014). As to the upheld claims: The Board
found that Hipp does not meet the claim requirement of a
BIOS programmed to instruct “a network attached stor-
age (NAS)” to locate an operating system from which to
boot a CPU module. On that basis the Board upheld
claim 14. Finding that Dell made no materially different
arguments for claims 15–17 and 34–36, the Board upheld
those claims too.
The Board found that claim 20 is anticipated by Hipp.
The Board concluded that claim 20 does not require the
microcontroller module to be programmed for remote
polling, but requires only that the claimed dedicated
ethernet path would allow remote polling if the microcon-
troller module were so programmed. Under that con-
struction, the Board found that Hipp meets the claim
8 DELL INC. v. ACCELERON, LLC
element involving polling because Hipp’s disclosed I2C
bus could be used for polling.
The Board found that claim 3 is anticipated by Hipp.
The Board relied exclusively on its agreement with Dell’s
contention that Hipp Figure 12 shows “slides”—the Board
used a plural—that are caddies as required by claim 3.
Dell, 2014 WL 7326580, at *6. It concluded that Dell had
pointed to that structure in Figure 12 in its reply and
therefore rejected Acceleron’s argument that Dell’s con-
tention was improperly presented for the first time at oral
argument and therefore should be disregarded.
Dell appeals under 35 U.S.C. § 319, challenging the
Board’s confirmation of claims 14–17 and 34–36. Accel-
eron cross-appeals the cancellation of claim 20 and claim
3. We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).
DISCUSSION
We review an anticipation determination and factual
findings underlying a non-obviousness determination for
substantial evidence, and we review an ultimate determi-
nation of non-obviousness de novo. Belden Inc. v. Berk-
Tek LLC, 805 F.3d 1064, 1073 (Fed. Cir. 2015); In re
Gleave, 560 F.3d 1331, 1334–35 (Fed. Cir. 2009). As to
claim construction, “[t]here being no dispute here about
findings or evidence of facts extrinsic to the patent,
whether facts about outside-the-patent understandings of
technical words or other facts, we conduct a de novo
review of the Board’s determination of the broadest
reasonable interpretation of the claim language.”
Straight Path IP Grp., Inc. v. Sipnet EU S.R.O., 806 F.3d
1356, 1360 (Fed. Cir. 2015). We review the Board’s pro-
cedures for compliance with the Administrative Procedure
Act, 5 U.S.C. § 551 et seq. See Belden, 805 F.3d at 1080.
We first consider the Board’s finding as to the teach-
ing of Hipp relevant to claims 14–17 and 34–36. We then
review the Board’s rulings on claim 20 and claim 3.
DELL INC. v. ACCELERON, LLC 9
A
The Board found that Hipp does not disclose a CPU
module that includes a BIOS for instructing a “network
attached storage” to locate an operating system from
which to boot the CPU module, as required by claim 14.
That finding is supported by substantial evidence, and we
therefore affirm the Board’s non-anticipation ruling as to
claim 14 and claims 15–17 and its non-obviousness ruling
as to claims 34–36.
We begin with claim 14. The Board accepted Dell’s
contention that Hipp discloses (a) a CPU module (“web
server processing card”) that includes a BIOS, can run on
different operating systems, and can boot from a local-
area network and (b) a server 54 that “provides network
attached storage (NAS)” among the devices on the net-
work. See Dell, 2014 WL 7326580, at *8 (citing Hipp, col.
5, lines 35–38; id., col. 8, lines 26–30; id., col. 9, lines 61–
62). But the Board had ample evidence to find those facts
not to be enough to meet the key claim 14 requirement at
issue.
Acceleron’s expert, Mr. Putnam, explained that, even
if Hipp teaches that the CPU can boot from software
located somewhere on the network, “there is no specific
teaching or suggestion [in Hipp] to boot the web server
cards from the NAS or to instruct the NAS to locate an
operating system from which to boot.” J.A. 1768, ¶ 60
(emphases added). No evidence required the Board to
reject Mr. Putnam’s reading of Hipp. Dell’s expert, Dr.
Horst, did not establish the contrary. Indeed, he observed
that devices on the Hipp network other than the NAS—a
non-volatile storage device, legacy system, and application
server—each could store software for the booting. And
Dell agrees that a skilled artisan would understand
“network attached storage” in Hipp (as in the ’021 patent)
to refer to a specific kind of storage device, not to cover
10 DELL INC. v. ACCELERON, LLC
any device on the network that stores information. Oral
Arg. at 1:30–2:06.
Thus, the Board could properly find that Hipp does
not explicitly or implicitly describe its web server pro-
cessing cards as programmed to be capable of remotely
booting from the NAS. For anticipation purposes, the
absence of such a teaching makes it immaterial whether,
as Dell contends, a user of the Hipp system could modify
the system to activate such remote booting. See Nazomi
Commc’ns, Inc. v. Nokia Corp., 739 F.3d 1339, 1345–47
(Fed. Cir. 2014); Typhoon Touch Techs., Inc. v. Dell, Inc.,
659 F.3d 1376, 1380–81 (Fed. Cir. 2011); Finjan, Inc. v.
Secure Computing Corp., 626 F.3d 1197, 1204–05 (Fed.
Cir. 2010); Fantasy Sports Props., Inc. v. Sportsline.com,
Inc., 287 F.3d 1108, 1118–19 (Fed. Cir. 2002). We affirm
the Board’s finding that Hipp does not anticipate claim
14.
The Board determined that Hipp does not anticipate
claims 15–17 for essentially the same reasons. Dell, 2014
WL 7326580, at *10. We affirm that determination,
because Dell did not meaningfully present a challenge to
claim 15 separate from its claim 14 challenge. Although
Dell now contends that textual differences between claims
14 and 15 required the Board to conduct independent
analyses, Dell did not, in its petition to the Board, seek
different constructions for those two claims or identify
how any differences mattered for purposes of the anticipa-
tion analysis. Nor, after institution, did Dell argue antic-
ipation separately for claims 14 and 15. Because Dell
presented claims 14 and 15 as rising and falling together
before the Board, the Board did not err in analyzing them
together and drawing the same conclusion for claim 15 as
for claim 14. And because claims 16 and 17 depend on
claim 15, they too are not anticipated.
The Board likewise determined that claims 34–36
would not have been obvious over Hipp and Gasparik for
DELL INC. v. ACCELERON, LLC 11
the same reasons that Hipp did not anticipate claim 14.
Before the Board, Dell did not develop an argument for
the invalidity of claims 34–36 separate from its argu-
ments concerning claims 14–17. See Oral Arg. at 7:48–
8:36. For that reason, we also affirm the Board’s conclu-
sion that those claims would not have been obvious over
Hipp and Gasparik.
B
Claim 20 requires “a microcontroller module and a
dedicated ethernet path, wherein the dedicated ethernet
path is separate from a switched fast ethernet connection
and provides the microcontroller module with a connec-
tion to remotely poll the CPU module, the power module
and the ethernet switch module.” ’021 patent, col. 10,
lines 24–29 (emphasis added). As Dell and Acceleron
agree, the dedicated ethernet path itself is merely a
conduit: it does not remotely poll but instead provides a
connection for the microcontroller module to remotely
poll. Acceleron contends that claim 20 can only be rea-
sonably construed to require that the microcontroller
module actually be configured for remote polling. Dell
contends, and the Board concluded, that it is enough that
there be an ethernet path that would provide a connection
for polling if the microcontroller were configured for, and
engaged in, remote polling of the three identified modules.
We agree with Acceleron.
The Board’s construction runs counter to the claim-
construction principle that meaning should be given to all
of a claim’s terms. Bicon, Inc. v. Straumann Co., 441 F.3d
945, 950 (Fed. Cir. 2006); Innova/Pure Water, Inc. v.
Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1119
(Fed. Cir. 2004). As Dell has conceded, the Board’s read-
ing of claim 20 denies any substantial meaning to “re-
motely poll.” Oral Arg. at 18:30–19:00. The Board’s
construction treats the claim as if it said simply that the
ethernet path “provides the microcontroller module with a
12 DELL INC. v. ACCELERON, LLC
connection to the CPU module, the power module and the
ethernet switch module.” Such a connection could be used
for a wide range of communications, including remote
polling. But the claim calls out one specific kind of com-
munication. It is unreasonable to deny effect to the
“remotely poll” language, which naturally indicates that
the microcontroller module is actually configured to
communicate in that way.
Claim 22, which depends on claim 20, supports (with-
out unambiguously demanding) the requirement that the
microcontroller module be configured for remote polling.
Claim 22 adds that “the microcontroller module polls the
CPU module on the status of an OS.” ’021 patent, col. 10,
lines 36–38 (emphases added). That the microcontroller
module in claim 22 actually polls the CPU module sug-
gests that the microcontroller module in claim 20 also
polls—and thus is configured for polling—the modules
listed in that claim. Claim 22’s narrowing of claim 20 is
naturally understood as specifying the subject of the
polling: the status of an operating system.
The specification is significant, too. It states that
“[t]he microcontroller module uses a dedicated ethernet
path . . . to remotely poll the health of the power module
106, the ethernet switch module 108 and the CPU mod-
ules 102(a)–102(e).” Id., col. 7, lines 62–65 (emphasis
added). That the specification’s most direct support for
the claim 20 limitation speaks of the microcontroller
actually engaging in remote polling supports reading the
claim language to require that the controller be config-
ured for such remote polling. Further support along
similar lines comes from other passages. Id., col. 7, line
65, through col. 8, line 2 (“The microcontroller module
communicates with other modules using an I2C bus that
gathers status information, logs the results and provides
the log to the management software either actively
(should a failure is [sic] detected) or as part of a routine
poll.”); id., col. 8, lines 2–5 (“The microcontroller module
DELL INC. v. ACCELERON, LLC 13
108 also gathers information relating to the voltage levels,
CPU temperatures, fan RPMs and CPU module OS
stability.”).
In context, we conclude, the Board’s construction of
claim 20 is unreasonable. Because the Board did not find
that Hipp anticipates claim 20 under the correct construc-
tion, we vacate the Board’s cancellation of claim 20 and
remand for reconsideration under that construction.
C
The Board found claim 3 to be anticipated by Hipp.
For the required “caddies” element, the Board relied
exclusively on what it found to be “slides” shown (without
separate numbering) in Figure 12 of Hipp as lying be-
neath the power supplies 280. That structure was first
identified as meeting the “caddies” claim limitation dur-
ing the oral argument before the Board. We vacate the
Board’s ruling, holding that the Board denied Acceleron
notice and a fair opportunity to respond to this basis of
cancellation.
“A patent owner in [Acceleron’s] position is undoubt-
edly entitled to notice of and a fair opportunity to meet
the grounds of rejection.” Belden, 805 F.3d at 1080. For a
formal adjudication like the inter partes review consid-
ered here, the APA imposes particular requirements on
the PTO. The agency must “timely inform[]” the patent
owner of “the matters of fact and law asserted,” 5 U.S.C.
§ 554(b)(3), must provide “all interested parties oppor-
tunity for the submission and consideration of facts [and]
arguments . . . [and] hearing and decision on notice,” id.
§ 554(c), and must allow “a party . . . to submit rebuttal
evidence . . . as may be required for a full and true disclo-
sure of the facts,” id. § 556(d). Reflecting those funda-
mental requirements, the PTO has advised participants
in its Board proceedings that, at oral argument, “[a] party
. . . may only present arguments relied upon in the papers
previously submitted. No new evidence or arguments
14 DELL INC. v. ACCELERON, LLC
may be presented at the oral argument.” Office Patent
Trial Practice Guide, 77 Fed. Reg. 48,756, 48,768 (Aug.
14, 2012).
In this case, the Board denied Acceleron its procedur-
al rights by relying in its decision on a factual assertion
introduced into the proceeding only at oral argument,
after Acceleron could meaningfully respond. In its peti-
tion, Dell argued that the articulating door 262 in Hipp’s
Figure 12 performs the same function as claim 3’s cad-
dies. In its post-institution reply, Dell added that the
mounting mechanisms 278 in Hipp’s Figure 12 constitute
a caddy. It was only at oral argument before the Board
that Dell pointed to the structure on which power supplies
280 rest in Hipp’s Figure 12 as meeting the “caddies”
requirement of claim 3. Acceleron was given no prior
notice of that contention. The oral argument presented no
opportunity for Acceleron to supply evidence, whether
expert or lay or documentary evidence, about what the
Hipp Figure 12 “slides” are (even if there is more than
one) and whether they meet all the claim requirements,
including the requirement that they allow air flow from
the front of the chassis to the rear. Yet the Board relied
on that basis alone for an essential part of its anticipation
ground of decision.
In its final written decision, the Board dismissed Ac-
celeron’s procedural objection (made at oral argument),
concluding that Dell had pointed to the “slides” in its
reply. We need not address under what circumstances a
cancellation may rely on a key factual assertion made for
the first time in a petitioner’s reply. In this case, contrary
to the Board’s conclusion, the key factual assertion was
not in fact made in Dell’s reply, but only at oral argument.
Acceleron has not had the required opportunity to present
evidence on whether the Hipp “slides” meet the claim’s
requirements. Because Dell has not shown in this court
that there can be no genuine factual dispute on that issue,
we vacate the Board’s cancellation of claim 3 and remand
DELL INC. v. ACCELERON, LLC 15
for further proceedings on anticipation of claim 3. See
Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d
1359, 1367 (Fed. Cir. 2015).
CONCLUSION
For the foregoing reasons, we affirm the Board’s
upholding of claims 14–17 and 34–36; vacate the Board’s
cancellation of claim 20 and remand for consideration of
that claim under the proper construction; and vacate the
Board’s cancellation of claim 3 and remand for appropri-
ate proceedings on that claim.
Costs awarded to Acceleron.
AFFIRMED IN PART, VACATED IN PART, AND
REMANDED