HTC Corp. v. Cellular Communications Equipment, LLC , 877 F.3d 1361 ( 2017 )

United States Court of Appeals
for the Federal Circuit
______________________
HTC CORPORATION, ZTE (USA), INC.,
Appellants
v.
CELLULAR COMMUNICATIONS EQUIPMENT,
LLC,
Appellee
______________________
2016-1880
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2014-
01134.
______________________
Decided: December 18, 2017
______________________
STEVEN ARTHUR MOORE, Pillsbury Winthrop Shaw
Pittman LLP, San Diego, CA, argued for appellants. Also
represented by MATTHEW ROBERT STEPHENS, BRIAN
CHRISTOPHER NASH, Austin, TX.
BARRY JAMES BUMGARDNER, Nelson Bumgardner PC,
Fort Worth, TX, argued for appellee. Also represented by
JOHN P. MURPHY.
______________________
Before DYK, REYNA, and TARANTO, Circuit Judges.
2 HTC CORPORATION v. CELLULAR COMMUNICATIONS EQUIP.
REYNA, Circuit Judge.
HTC Corporation and ZTE (USA), Inc. appeal a final
written decision of the Patent Trial and Appeal Board in
an inter partes review. Appellants argue that the Board
improperly construed the claim term “message” and erred
in finding that HTC failed to show that the prior art
anticipated or rendered obvious the challenged claims.
We find no error in the Board’s claim construction, and
substantial evidence supports the Board’s patentability
determination. We affirm.
BACKGROUND
A. The ’174 Patent
U.S. Patent No. 7,941,174 (“’174 patent”) is directed to
methods and apparatuses for a radio communications
system where a subscriber station, i.e., a mobile device, is
assigned a plurality of codes for transmitting messages.
’174 Patent Abstract, col. 2 ll. 1–6. The assigned codes
correspond to data transmission channels in a Universal
Mobile Telecommunications System (“UMTS”), in particu-
lar here, a Dedicated Uplink Channel (“DCH”) for trans-
mitting messages and an Enhanced Dedicated Uplink
Channel (“EDCH”) for transmitting high bit rate messag-
es. Id. col. 4 ll. 26–40. To send messages to a UMTS base
station, the subscriber station requires “transmit” or
“transmission” power. When radio transmission condi-
tions deteriorate, such as when there is a high amount of
interference in the communications cell, the base station
may command the subscriber station to increase transmit
power in order to send the message. Id. col. 7 ll. 20–26,
31–33; J.A. 2125. But the subscriber station is limited in
the amount of transmission power it can use, called the
“maximum transmission power,” which is “preferably
predetermined by the hardware of the subscriber station”
or “predefined on the network side.” Id. col. 2 ll. 50–51,
57–58. According to the ’174 patent, operating at maxi-
mum transmission power is undesirable because the
HTC CORPORATION v. CELLULAR COMMUNICATIONS EQUIP. 3
subscriber station cannot increase transmission power to
overcome poor transmission conditions, which in turn
results in incomplete and aborted message transmissions.
See id. col. 6 ll. 20–27.
To avoid operating at maximum transmission power,
the ’174 patent’s claimed solution sets a “transmit power
difference” or “power headroom” for the plurality of codes
in the subscriber station at the beginning of a message
transmission. Id. col. 6 ll. 40–47. Setting this power
headroom permits the subscriber station when sending
messages to increase transmit power to overcome inter-
ference and thus avoid aborted message transmission.
The transmit power difference “corresponds to an unused
transmit power at the start of the transmission” of a
message, such as a message transmitted over EDCH. Id.
col. 6 ll. 47–49.
Illustrative of the method claims, independent claim 1
teaches:
1. A method for operating a radio communication
system in which a subscriber station is assigned a
plurality of codes for transmitting messages, com-
prising:
determining a transmit power difference
which is to be maintained by the subscrib-
er station between on one hand a total
maximum transmit power of the subscrib-
er station for the codes and on another
hand a total transmit power of the sub-
scriber station for the codes at a start of a
message transmission using a first one of
the codes.
Id. col. 9 ll. 56–64.
Illustrative of the apparatus claims, independent
claim 18 teaches:
4 HTC CORPORATION v. CELLULAR COMMUNICATIONS EQUIP.
18. A subscriber station for a radio communication
system, the subscriber station assigned a plurality
of codes for transmitting messages, comprising:
at least one processor programmed to de-
termine a transmit power difference which
is to be maintained by the subscriber sta-
tion between on one hand a total maxi-
mum transmit power of the subscriber
station for the codes and on another hand
a total transmit power of the subscriber
station for the codes at a start of a mes-
sage transmission using a first one of the
codes.
Id. col. 12 ll. 1–10.
The sole figure in the specification depicts the rela-
tionship between the mobile station, UE, which transmits
messages over the DCH and EDCH channels, and base
station, NODE B, in a UMTS system:
Id. Fig. 1.
Relevant to this appeal, the ’174 patent recognizes
that an EDCH message is measured in intervals of 10
milliseconds, which is comprised of 15 timeslots. Id. col. 5
HTC CORPORATION v. CELLULAR COMMUNICATIONS EQUIP. 5
ll. 29–31. The 10 ms transmission time interval is re-
ferred to as a “frame.” See J.A. 1181–82, 2130. In UMTS
systems available around 1999, transmission time inter-
vals could either be 10 ms, 20 ms, 40 ms, or 80 ms. J.A.
2128.
B. Prior Art
1. Baker
U.S. Patent Application Pub. No. 2008/0151840
(“Baker”) is directed to a UMTS communication system in
which a mobile station transmits acknowledgement
(“ACK”) or non-acknowledgement (“NACK”) signals to a
base station upon receiving data from the base station.
J.A. 909. To allow for the transmission of ACK/NACK
signals, the mobile station must scale down the maximum
transmit power allocated to its transmission codes: a
dedicated physical data channel (“DPDCH”) and a dedi-
cated physical control channel (“DPCCH”). Id. Figure 4
depicts this process in a timing diagram, with PC1 and PD1
representing the transmit power associated with each of
the two transmission channels, DPDCH and DPCCH,
operating at maximum transmission power for the mobile
station, Pmax. When the ACK/NACK signal is to be
transmitted, PC1 and PD1 are scaled down to PC2 and PD2,
respectively, for the duration of the ACK/NACK transmis-
sion.
See J.A. 911, 914.
6 HTC CORPORATION v. CELLULAR COMMUNICATIONS EQUIP.
As Baker explains, “at the boundary of the frame or
time slot immediately preceding the sending of an ACK or
NACK, these amplitudes [PC1 and PD1] are adjusted by for
example reducing DPCCH whilst maintaining the power
ratio PD/PC constant.” Id. Baker thus leaves capacity for
the transmission of the ACK/NACK signal, or other types
of signaling information. J.A. 914–15.
2. Reed
U.S. Patent No. 7,689,239 (“Reed”) is directed to a
system, method, and apparatus for “establishing head-
room for a mobile station” based on “specific channel
variance conditions and battery conditions.” J.A. 901
Abstract. Reed defines “headroom” as “the difference
between the maximum power of the transmitter and the
transmission power level required for a particular data
rate.” J.A. 905 col. 1 ll. 29–31. Headroom is therefore a
“margin built in” to the maximum data rate “to provide
some protection against varying channel conditions.” Id.
col. 1 ll. 36–38. In the sole portion of the written descrip-
tion discussing a mobile station with multiple data
streams, Reed states:
If the mobile station desires to send two or more
data streams (or hold voice and data connections
at the same time), an addition [sic] degree of free-
dom allows the mobile station to deliberately in-
crease the headroom on one of the data streams to
de-prioritize that data stream. This would result
in, for example, a longer time to transmit a text
message from the mobile station but allow a digi-
tal picture to be transmitted at an optimum data
rate.
J.A. 906 col. 4 ll. 14–21.
3. Love
U.S Patent No. 7,321,780 (“Love”) is directed to “a
method for rate selection by a communication device for
HTC CORPORATION v. CELLULAR COMMUNICATIONS EQUIP. 7
enhanced uplink during soft handoff in a wireless com-
munication system.” J.A. 917. Relevant here, Love
discloses assigning codes to communication channels to
transmit data and setting a “power margin” to limit the
rate of data transmitted over the codes. Id. col. 6 ll. 11–
19, col. 8 ll. 42–55. With respect to obviousness, HTC only
challenges the Board’s review of the scope and content of
Reed.
C. Proceedings Before the Board
The Board instituted inter partes review of claims 1,
6, 9, 14, 18, and 19 of the ’174 patent on three grounds:
(1) anticipation by Baker; (2) obviousness over Reed in
view of Baker; and (3) obviousness over Reed in view of
Love. Amazon.com, Inc. v. Cellular Commc’ns Equip.,
LLC, No. IPR2014-01134, 2016 WL 98583, at *1 (P.T.A.B.
Jan. 6, 2016) (“Final Written Decision”). 1 On January 6,
2016, the Board issued a final written decision concluding
that petitioners, including appellants HTC Corporation
and ZTE (USA), Inc. (together, “HTC”), failed to show that
any of the challenged claims were unpatentable. Id. at
*11.
First, the Board adopted patent owner’s, Cellular
Communications Equipment, LLC (“CCE”), construction
of the phrase “at a start of a message transmission using
a first one of the codes,” as it appears in claims 1, 9, and
18, to modify the phrase “a total transmit power of the
subscriber station for the codes.” Id. at *5. 2 The Board
thus interpreted the “start of a message transmission
1 Ten parties petitioned for inter partes review be-
fore the Board. Two were dismissed before the Board
issued its final written decision. Only two of the remain-
ing eight, HTC Corporation and ZTE (USA), Inc., current-
ly appeal the Board’s final written decision.
2 This construction is not disputed on appeal.
8 HTC CORPORATION v. CELLULAR COMMUNICATIONS EQUIP.
using a first one of the codes” limitation to require that a
total transmit power difference exist at the start of a
message transmission. Id.
Second, the Board found that HTC failed to show that
Baker either explicitly or inherently disclosed the “start of
a message transmission” limitation of the ’174 patent.
The Board reasoned that Baker did not disclose any
indication that the frame or timeslot boundary immedi-
ately preceding an ACK/NACK signal is the start of a
message transmission. Id. at *6. The Board then consid-
ered whether Baker inherently discloses the “start of a
message transmission” limitation. It found that HTC
provided no evidence that Baker discloses a mobile station
that transmits EDCH messages, and thus HTC failed to
show that the start of a frame preceding an ACK/NACK
signal is necessarily the start of a message transmission.
Id. at *6. The Board reasoned that the “mere possibility
that the start of a frame may correspond to the start of a
message transmission is not sufficient to show Baker
anticipates the challenged claims.” Id. The Board there-
fore concluded that HTC failed to show that Baker antici-
pated the challenged claims. Id.
Lastly, the Board denied HTC’s obviousness challeng-
es based on Reed in view of Love or Baker. The Board
found that Reed discloses a mobile station that can
transmit two or more data streams with each data stream
having its own adjustable headroom. Id. at *8. In con-
trast, the ’174 patent teaches a single headroom for
multiple data streams. Thus, the Board concluded that
Reed does not read on the limitation of the ’174 patent
that requires determining a single transmit power differ-
ence “between a maximum transmit power for a plurality
of codes and a total transmit power for a plurality of codes
at a start of a message transmission.” Id. at *9.
HTC appeals. We have jurisdiction under 28 U.S.C.
§ 1295(a)(4)(A) (2012).
HTC CORPORATION v. CELLULAR COMMUNICATIONS EQUIP. 9
DISCUSSION
We review Board decisions in accordance with the
Administrative Procedure Act, 5 U.S.C. § 706(2) (2012).
Dickinson v. Zurko, 527 U.S. 150, 152, 165 (1999). Under
the APA, we review the Board’s legal conclusions de novo
and its factual findings for substantial evidence. ACCO
Brands Corp. v. Fellowes, Inc., 813 F.3d 1361, 1365 (Fed.
Cir. 2016). Substantial evidence is “such relevant evi-
dence as a reasonable mind might accept as adequate to
support a conclusion.” In re Gartside, 203 F.3d 1305,
1312 (Fed. Cir. 2000) (quoting Consol. Edison Co. of N.Y.
v. NLRB, 305 U.S. 197, 229 (1938)).
HTC raises three arguments on appeal. First, HTC
argues that the Board failed to construe the term “mes-
sage” according to its broadest reasonable interpretation.
Second, HTC contends that Baker anticipates the chal-
lenged claims because it discloses reducing transmission
power at the beginning of a frame boundary in a UMTS
system, and therefore at the start of a message transmis-
sion. Third, HTC challenges the Board’s finding that
Reed does not disclose determining a single headroom for
multiple data streams.
A. Claim Construction
Claim construction serves to define the scope of the
patented invention and the patentee’s right to exclude.
See Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831,
835 (2015). Claim construction is a question of law that
may be based on underlying factual determinations. Id.
at 841–42. We review the Board’s constructions based on
intrinsic evidence de novo and its factual findings based
on extrinsic evidence for substantial evidence. Wasica
Finance GmbH v. Cont’l Auto. Sys., Inc., 853 F.3d 1272,
1278 (Fed. Cir. 2017).
On appeal, HTC challenges the Board’s interpretation
of the term “message” as applied by the Board in its
10 HTC CORPORATION v. CELLULAR COMMUNICATIONS EQUIP.
anticipation analysis. The record indicates that the Board
neither expressly construed the term “message,” nor did
HTC seek construction of the term “message” before the
Board. Despite no express construction of “message”
below, Board findings establishing the scope of the pa-
tented subject matter may fall within the ambit of claim
construction. See Netword, LLC v. Centraal Corp., 242
F.3d 1347, 1355–56 (Fed. Cir. 2001). Because HTC’s
challenge is directed to the Board’s expression of its
understanding of the scope of the claim term “message,” it
is properly before us on appeal.
HTC advances inconsistent claim construction argu-
ments. In its opening brief, HTC argues that the Board
failed to apply the broadest reasonable interpretation of
the term “message” by defining a message by its content
and by requiring a specific beginning and endpoint.
Appellants’ Br. 37–38. During oral argument, however,
HTC stated that the Board did not construe the term
“message” as having an ending requirement. Oral Arg.
3:06–3:34, http://oralarguments.cafc.uscourts.gov/default
.aspx?fl=2016-1880.mp3. Similarly, HTC’s opening brief
claims that the Board’s construction of message improper-
ly excludes single frame messages. Yet, at oral argument,
HTC conceded that the Board’s interpretation of “mes-
sage” did not exclude single frame messages. Oral Arg.
1:45–2:21. In its reply brief, HTC takes a different tack,
arguing that the Board improperly construed the phrase
“at a start of a message transmission” and failed to dis-
tinguish between “message transmission” and “message.”
Reply 5–6.
Despite the inconsistent positions, HTC appears to
primarily contend that the Board’s application of the term
“message” improperly excluded embodiments of “trans-
missions of data at intervals specified in a UMTS system,”
specifically by excluding single frame EDCH messages.
Appellants’ Br. 36–37, 41. But as HTC acknowledged, the
Board made no such exclusion. Oral Arg. 1:45–2:21.
HTC CORPORATION v. CELLULAR COMMUNICATIONS EQUIP. 11
Rather, the Board agreed with CCE that a message
transmission may occur over a single frame or over multi-
ple frames and timeslots. Final Written Decision at *5.
The Board relied on expert declarations from both HTC
and CCE testifying that messages in a UMTS system can
span multiple frames. Id.; see J.A. 1181–82 (“[A] message
in a UMTS system can include one or more frames (each
frame having 15 time slots).”). The Board thus properly
understood “message” to encompass EDCH messages that
last a single frame.
We therefore disagree with HTC that the Board erred
in its understanding of the scope of the term “message” as
claimed in the ’174 patent.
B. Anticipation
A claim is anticipated if a single prior art reference
discloses all the claimed limitations arranged or combined
in the same way as in the claim. Kennametal, Inc. v.
Ingersoll Cutting Tool Co., 780 F.3d 1376, 1381 (Fed. Cir.
2015). Anticipation is a question of fact that we review
for substantial evidence. Blue Calypso, LLC v. Groupon,
Inc., 815 F.3d 1331, 1341 (Fed. Cir. 2016). To anticipate a
claim, a single prior art reference must disclose every
limitation of the claimed invention either expressly or
inherently. Id.
HTC only argued before the Board that the Baker ref-
erence discloses a mobile station that reduces the trans-
mit power of DPDCH and DPCCH codes at the timeslot
immediately preceding the ACK/NACK transmission.
J.A. 276–77. HTC did not identify any disclosure in
Baker showing that the frame boundary immediately
preceding the ACK/NACK transmission is the start of a
message transmission. See J.A. 696 (HTC conceding
during oral hearing before the Board that it had not
“identified anything in Baker that teaches that every
frame is a new message”). The Board thus found that
Baker’s description of the boundary of the frame or
12 HTC CORPORATION v. CELLULAR COMMUNICATIONS EQUIP.
timeslot immediately preceding the ACK/NACK signal
does not expressly disclose the “start of a message trans-
mission” limitation as claimed in the ’174 patent. Final
Written Decision at *6. We see no error in the Board’s
decision. See Eli Lilly & Co. v. L.A. Biomedical Research
Inst., 849 F.3d 1073, 1074 (Fed. Cir. 2017) (“To anticipate
a claim, a prior art reference must disclose every limita-
tion of the claimed invention, either expressly or inherent-
ly.” (citation and quotation marks omitted)).
The Board next considered whether Baker inherently
anticipates the “start of a message transmission” limita-
tion. A party seeking to establish inherent anticipation
must show that a person of ordinary skill in the art would
recognize that missing descriptive matter in a prior art
reference is nevertheless necessarily present. Cont’l Can
Co. v. Monsanto Co., 948 F.2d 1264, 1268 (Fed. Cir. 1991).
The Board found that HTC failed to show that the Baker
reference discloses a mobile station that transmits EDCH
messages, relying on an admission from HTC’s counsel
stating that he did not know whether “Baker [is] talking
about an EDCH message and not something else that can
be more than one frame.” Final Written Decision at *6;
J.A. 697. 3 Absent evidence that Baker teaches a mobile
3 In its reply brief, HTC points to portions of CCE’s
expert declaration that generally discuss UMTS systems,
in particular that EDCH data messages can be transmit-
ted through DPDCH and DPCCH channels. Reply 13;
J.A. 2128, 2130. This is a new argument. HTC did not
argue before the Board that Baker teaches a mobile
station that transmits EDCH messages. J.A. 12 (“Peti-
tioner does not argue or identify evidence indicating that
the mobile station in Baker transmits an EDCH mes-
sage.”). We decline to consider new arguments on appeal
that were not raised below before the Board. Icon Health
& Fitness, Inc. v. Strava, Inc., 849 F.3d 1034, 1040 (Fed.
HTC CORPORATION v. CELLULAR COMMUNICATIONS EQUIP. 13
station that sends single-frame EDCH messages, the
Board found that the start of a frame in Baker is not
inherently the start of a message transmission. Final
Written Decision at *6.
We agree with the Board’s conclusion. HTC failed to
identify evidence showing that Baker transmits EDCH
messages. Without such evidence, HTC has only shown
that it is possible for the start of a frame preceding an
ACK/NACK signal to correspond to the start of a message
transmission. This possibility, however, is not enough to
find that Baker necessarily discloses the “start of a mes-
sage transmission” limitation in independent claims 1, 9
and 18 of the ’174 patent. As such, substantial evidence
supports the Board’s finding that Baker does not inher-
ently anticipate the challenged claims of the ’174 patent.
Cont’l Can, 948 F.2d at 1269 (“Inherency, however, may
not be established by probabilities or possibilities. The
mere fact that a certain thing may result from a given set
of circumstances is not sufficient.” (quoting In re Oelrich,
666 F.2d 578, 581 (C.C.P.A. 1981))).
C. Obviousness
If a person of ordinary skill in the art at the time of
the invention would find obvious the differences between
the claimed subject matter and the prior art, the claimed
subject matter cannot be patented. 35 U.S.C. § 103.
Obviousness is a question of law with underlying factual
findings relating to the “scope and content of the prior art,
differences between the prior art and the claims at issue,
the level of ordinary skill in the pertinent art, and any
objective indicia of non-obviousness.” Randall Mfg. v.
Rea, 733 F.3d 1355, 1362 (Fed. Cir. 2013); see Graham v.
John Deere Co., 383 U.S. 1, 17–18 (1966). We review the
Cir. 2017); see Singleton v. Wulff, 428 U.S. 106, 120
(1976).
14 HTC CORPORATION v. CELLULAR COMMUNICATIONS EQUIP.
Board’s underlying factual findings for substantial evi-
dence and its legal conclusion on obviousness de novo. In
re Mouttet, 686 F.3d 1322, 1330–31 (Fed. Cir. 2012).
HTC argues that the Board ignored that prior art ref-
erence Reed contemplates creating power headroom for
the entire mobile device by teaching that one data stream
can be deprioritized in order to increase the transmit
power available for another data stream. HTC is incor-
rect. The Board directly addressed the sole passage in
Reed’s specification describing a mobile station with
multiple data streams, which states:
If the mobile station desires to send two or more
data streams (or hold voice and data connections
at the same time), an addition [sic] degree of free-
dom allows the mobile station to deliberately in-
crease the headroom on one of the data streams to
de-prioritize that data stream. This would result
in, for example, a longer time to transmit a text
message from the mobile station but allow a digi-
tal picture to be transmitted at an optimum data
rate.
J.A. 906 col. 4 ll. 14–21 (emphasis added). The Board
found that Reed does not describe “determining a single
headroom for a plurality of codes” as claimed in the ’174
patent, but teaches “determining a separate headroom for
each code.” Final Written Decision at *8. To reach its
conclusion, the Board relied on both parties’ expert decla-
rations. Id. 4 HTC’s expert testified that “[o]ne skilled in
4 HTC’s expert, Dr. Tim Williams, submitted two
declarations in this matter. Because Dr. Williams’s
discussion of Reed in his second declaration was incon-
sistent with his first declaration, the Board found Dr.
Williams’s second declaration lacked credibility and
afforded it little weight. Final Written Decision at *8. We
HTC CORPORATION v. CELLULAR COMMUNICATIONS EQUIP. 15
the art would understand that the data streams disclosed
in Reed are assigned different codes, each code having its
own headroom.” Id. The Board also credited CCE’s
expert, who testified that “[o]ne of ordinary skill would
recognize that in Reed, a subscriber station can use a
plurality of codes for transmission of uplink messages,
and each code has its own headroom,” and that in the ’174
patent, “[t]he power difference is for all the codes being
used by the subscriber station.” Id. (citing to portions of
CCE’s expert report). In addition, the Board found that
Reed discloses determining power headroom for an entire
mobile device only when the device is assigned one code,
not a plurality of codes. Id. at *9.
We agree with the Board’s reading of Reed. HTC does
not point to any evidence in the record that would under-
mine the Board’s findings on the scope and content of
Reed. For mobile stations having multiple data streams,
Reed discloses distinct power headrooms for each data
stream. J.A. 906 col. 4 ll. 14–21. Because the Board’s
findings are supported by substantial evidence, we affirm
its conclusion that HTC failed to show that the combina-
tion of Reed in view of Baker or Love renders obvious
claims 1, 6, 9, 14, 18, and 19 of the ’174 patent.
CONCLUSION
The Board did not err in its construction of the term
“message.” In addition, the Board’s findings regarding
anticipation and obviousness are supported by substantial
evidence. We therefore affirm.
AFFIRMED
COSTS
No costs.
see no error in the Board’s handling of Dr. Williams’s
second declaration.