Carucel Investments L.P. v. Vidal ( 2023 )

Case: 21-1731 Document: 123 Page: 1 Filed: 12/26/2023
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
CARUCEL INVESTMENTS L.P.,
Appellant
v.
KATHERINE K. VIDAL, UNDER SECRETARY OF
COMMERCE FOR INTELLECTUAL PROPERTY
AND DIRECTOR OF THE UNITED STATES
PATENT AND TRADEMARK OFFICE,
Intervenor
-------------------------------------------------
CARUCEL INVESTMENTS L.P.,
Appellant
v.
UNIFIED PATENTS, LLC,
Appellee
KATHERINE K. VIDAL, UNDER SECRETARY OF
COMMERCE FOR INTELLECTUAL PROPERTY
AND DIRECTOR OF THE UNITED STATES
PATENT AND TRADEMARK OFFICE,
Intervenor
______________________
2021-1731, 2021-1734, 2021-1735, 2021-1736, 2021-1737
______________________
Case: 21-1731 Document: 123 Page: 2 Filed: 12/26/2023
2 CARUCEL INVESTMENTS L.P. v. VIDAL
Appeals from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in Nos. IPR2019-
01079, IPR2019-01101, IPR2019-01102, IPR2019-01103,
IPR2019-01105, IPR2019-01573.
-------------------------------------------------
CARUCEL INVESTMENTS L.P.,
Appellant
v.
KATHERINE K. VIDAL, UNDER SECRETARY OF
COMMERCE FOR INTELLECTUAL PROPERTY
AND DIRECTOR OF THE UNITED STATES
PATENT AND TRADEMARK OFFICE,
Intervenor
______________________
2021-1911, 2021-1912, 2021-1913, 2021-1914
______________________
Appeals from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in Nos. IPR2019-
01298, IPR2019-01404, IPR2019-01441, IPR2019-01442,
IPR2019-01635, IPR2019-01644.
______________________
Decided: December 26, 2023
______________________
BRIAN T. BEAR, Spencer Fane LLP, Kansas City, MO,
argued for appellant. Also represented by ANDY LESTER,
Oklahoma City, OK; ERICK ROBINSON, Houston, TX; R.
SCOTT RHOADES, Warren Rhoades LLP, Arlington, TX.
DEBRA JANECE MCCOMAS, Haynes and Boone, LLP,
Case: 21-1731 Document: 123 Page: 3 Filed: 12/26/2023
CARUCEL INVESTMENTS L.P. v. VIDAL 3
Dallas, TX, argued for appellee. Also represented by
RAGHAV BAJAJ, Austin, TX; ANGELA M. OLIVER, Washing-
ton, DC; MICHELLE ASPEN, ROSHAN MANSINGHANI, Unified
Patents, LLC, Chevy Chase, MD.
MICHAEL TYLER, Office of the Solicitor, United States
Patent and Trademark Office, Alexandria, VA, argued for
intervenor. Also represented by PETER J. AYERS, ROBERT
MCBRIDE, FARHEENA YASMEEN RASHEED. Also represented
by PETER JOHN SAWERT in 2021-1911, 2021-1912, 2021-
1913, 2021-1914.
______________________
Before DYK, SCHALL, and STARK, Circuit Judges.
STARK, Circuit Judge.
Carucel Investments L.P. (“Carucel”) appeals the final
written decisions of the Patent Trial and Appeal Board
(“Board”) holding that certain claims of U.S. Patent Nos.
7,221,904 (“’904 patent”), 7,848,701 (“’701 patent”),
7,979,023 (“’023 patent”), and 8,718,543 (“’543 patent” and,
together with the ’904, ’701, and ’023 patents, the “Carucel
patents”) are unpatentable as obvious. For the reasons
provided below, we affirm.
I
A
The Carucel patents, each entitled “mobile communi-
cation system with moving base station,” share substan-
tially identical specifications. The patents disclose a
mobile communication system that “employs moving base
stations moving in the direction of flow of traffic moving
along a roadway.” ’904 patent, Abstract. These “moving
base stations” then “communicate with a plurality of fixed
radio ports connected by a signal transmission link to a
gateway office which, in turn, is connected to the wire line
network.” Id. This general configuration of the various
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4 CARUCEL INVESTMENTS L.P. v. VIDAL
elements of the invention is illustrated in Figure 1 of the
Carucel patents, reproduced below, which depicts 1) “mo-
bile units 20 traveling on a first roadway 10,” 2) “[a] plural-
ity of moving base stations 30 [which] are disposed along
one side of the roadway 10 . . . [and which] may be moved
by means of a rail 35, or other suitable conveying device
which may include an automotive vehicle travelling on the
roadway, in the same direction as the traffic flow on the
roadway 10,” and 3) “a plurality of fixed radio ports 50
which are connected . . . to a telephone office connected to
the wire line telephone network and referred to as a . . .
gateway office 60 [which] forms the interface between the
mobile telecommunication system and the wire line tele-
phone network.” Id. at 3:66-4:28.
Illustrative claim 22 of the ’904 patent recites:
22. An apparatus adapted to move in accordance
with a movement of a mobile unit moving relative
to a plurality of fixed radio ports, the apparatus
comprising:
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CARUCEL INVESTMENTS L.P. v. VIDAL 5
a receiver adapted to receive a plurality of signals,
each of the plurality of signals transmitted from
each of the plurality of fixed radio ports within a
frequency band having a lower limit greater than
300 megahertz;
a transmitter adapted to transmit, within the fre-
quency band, a resultant signal to the mobile unit
in accordance with at least one of the plurality of
signals; and
a processor adapted to maximize an amount of
transferred information to the mobile unit by eval-
uating a quality of each of the plurality of signals
transmitted from the plurality of fixed radio ports.
B
Carucel brought patent infringement lawsuits against
Volkswagen Group of America, Inc. (“Volkswagen”) and
Mercedes-Benz USA, LLC (“Mercedes-Benz”) in the U.S.
District Court for the Northern District of Texas, asserting
all four Carucel patents. Volkswagen and Mercedes-Benz
then filed petitions for several inter partes review (“IPR”)
proceedings of all of the Carucel patents, which were insti-
tuted by the Board. A third-party organization, Unified
Patents, Inc. (“Unified”), also obtained institution of an IPR
of certain claims of the ’023 patent.
In their petitions seeking institution of IPRs,
Volkswagen and Mercedes-Benz set out various obvious-
ness combinations, based on (as pertinent to here) primary
prior art references U.S. Patent Nos. 5,559,865 (“Gil-
housen865”), 5,519,761 (“Gilhousen761”), and 5,276,686
(“Ito”). 1 Gilhousen865 and Gilhousen761, which share
1 Unified’s grounds for unpatentability were obvi-
ousness combinations involving primary references U.S.
Patent Nos. 5,422,934 (“Massa”) and 4,748,655
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6 CARUCEL INVESTMENTS L.P. v. VIDAL
substantially identical specifications, disclose an airborne
communication system that allows radiotelephones on a
plane to communicate with a ground-based telephone sys-
tem. Figure 1 shows the Gilhousen system with ground-
based subsystem 105 and airborne-based subsystem 125.
No. 21-1911 J.A. 1241, 1245. 2 As shown, the ground-based
subsystem 105 includes base station 120 coupled to an-
tenna 150 and to mobile switching center 115, which in
turn is coupled to public switched telephone network
(“PSTN”) 110. J.A. 1245.
(“Thrower”), which are not at issue in Carucel’s appeal with
respect to Unified (No. 21-1731).
2 “J.A.” refers to the joint appendix filed in Appeal
No. 21-1911, unless otherwise indicated.
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CARUCEL INVESTMENTS L.P. v. VIDAL 7
Figure 2 of the Gilhousen references depicts an air-
borne-based subsystem having radiotelephones 205, signal
repeater 210, and antenna 215. J.A. 1243, 1245. Repeater
210 receives signals from radiotelephones 205 within an
aircraft and relays them to antenna 215 mounted outside
the aircraft, which in turn relays the signals to the base
station on the ground. J.A. 1245. These references disclose
that signal repeater 210 may be replaced by “an airborne
base station that has the ability to register the radiotele-
phones on the aircraft. The airborne base station then reg-
isters the radiotelephone with the ground based
subsystem.” J.A. 1246 at 3:9-13. The airborne base station
has “the same functionality of its ground-based counter-
part but on a much smaller scale since it does not have to
handle the thousands of radiotelephones of the ground-
based station.” Id. at 3:13-16.
Ito discloses “a mobile radio communication system
that wirelessly connects not only between a base station
and a mobile station but also between a mobile station, or
a mobile base device, and a portable device by a radio chan-
nel in order to eliminate the necessity of wiring the mobile
base device and portable device and enhance the
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8 CARUCEL INVESTMENTS L.P. v. VIDAL
maneuverability of an automobile telephone handset.” J.A.
1212 at 2:6-12. This system is illustrated in Figure 6 of Ito,
J.A. 1208, which depicts a mobile radio communication sys-
tem, in which a mobile base device (MSS) is “connected
simultaneously with two portable devices PSS1 and PSS2.”
J.A. 1217 at 12:50-54. The base station (BSS) and the mo-
bile base device (MSS) communicate with each other by
way of radio frequencies, and the mobile base device (MSS)
and portable devices (PSS1 and PSS2) communicate with
each other by way of different radio frequencies. J.A. 1217.
Ito teaches using frequency-division multiple access
(“FDMA”) and time-division multiple access (“TDMA”)
techniques “for connection between a base station and a
mobile base device as well as for connection between a mo-
bile base device MSS and a portable device PSS. With a
FDMA/TDMA technique, a number of radio frequencies are
shared by a plurality of stations.” J.A. 1214 at 5:47-52.
The Board issued final written decisions determining
that each of the challenged claims is unpatentable as obvi-
ous over combinations of prior art references including Gil-
housen865, Gilhousen761, and Ito. Carucel filed motions
for rehearing, which were denied, and then timely
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CARUCEL INVESTMENTS L.P. v. VIDAL 9
appealed. 3 Following the Supreme Court’s issuance of its
decision in United States v. Arthrex, Inc., 141 S. Ct. 1970
(2021), we remanded for the limited purpose of allowing
Carucel to seek Director Review. After such review was
denied, Carucel filed amended notices of appeal. Mercedes-
Benz and Volkswagen then notified us they would not par-
ticipate in the appeals. Hence, briefing was submitted only
by Carucel, Unified, and the Director of the U.S. Patent
and Trademark Office (“PTO”).
The Board had jurisdiction under 35 U.S.C. § 316(c).
We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A) and
35 U.S.C. §§ 141(c), 319.
II
Obviousness is a question of law based on underlying
fact findings. See KSR Int’l Co. v. Teleflex Inc., 550 U.S.
398, 427 (2007). Those findings include: (1) the scope and
content of the prior art; (2) differences between the prior
art and the claims at issue; (3) the level of ordinary skill in
the pertinent art; and (4) secondary considerations such as
commercial success, long felt but unsolved needs, and fail-
ure of others. See Graham v. John Deere Co., 383 U.S. 1,
17-18 (1966). We review the Board’s legal conclusions on
obviousness de novo and its findings of fact for substantial
3 In No. 21-1731, Carucel appeals the final written
decisions in IPR2019-1101/1573, regarding the ’904 patent;
IPR2019-1102 (’701 patent); IPR2019-1103 (’023 patent);
IPR2019-1079 (’023 patent); and IPR 2019-1105 (’543 pa-
tent). All but one of the IPRs at issue in No. 21-1731 were
filed by Volkswagen; the exception, IPR2019-1079 (’023 pa-
tent), was filed by Unified. In No. 21-1911, Carucel appeals
the final written decisions in IPR2019-1298/1635, regard-
ing the ’904 patent; IPR2019-1442 (’701 patent); IPR2019-
1404 (’023 patent); and IPR2019-1441/1644 (’543 patent).
All of the IPRs in No. 21-1911 were filed by Mercedes-Benz.
Case: 21-1731 Document: 123 Page: 10 Filed: 12/26/2023
10 CARUCEL INVESTMENTS L.P. v. VIDAL
evidence. See HTC Corp. v. Cellular Commc’ns Equip.,
LLC, 877 F.3d 1361, 1369 (Fed. Cir. 2017). “Substantial
evidence is such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.” Intel
Corp. v. PACT XPP Schweiz AG, 61 F.4th 1373, 1378 (Fed.
Cir. 2023). “[T]he possibility of drawing two inconsistent
conclusions from the evidence does not prevent an admin-
istrative agency’s finding from being supported by substan-
tial evidence.” Consolo v. Fed. Mar. Comm’n, 383 U.S. 607,
620 (1966). Additionally, we “defer to the Board’s findings
concerning the credibility of expert witnesses.” Yorkey v.
Diab, 601 F.3d 1279, 1284 (Fed. Cir. 2010).
We review the Board’s claim construction de novo and
any subsidiary factual findings based on extrinsic evidence
for substantial evidence. See Polaris Innovations Ltd. v.
Brent, 48 F.4th 1365, 1372 (Fed. Cir. 2022). Claim terms
are generally given their ordinary and customary meaning,
which is the meaning understood by one of ordinary skill
in the art at the time of the invention, reading the claim in
the context of the full specification and prosecution history.
See Phillips v. AWH Corp., 415 F.3d 1303, 1313-14 (Fed.
Cir. 2005) (en banc); see also Lexion Med., LLC v. Northgate
Techs., Inc., 641 F.3d 1352, 1356 (Fed. Cir. 2011). “There
are only two exceptions to this general rule: 1) when a pa-
tentee sets out a definition and acts as his own lexicogra-
pher, or 2) when the patentee disavows the full scope of the
claim term either in the specification or during prosecu-
tion.” Thorner v. Sony Computer Ent. Am. LLC, 669 F.3d
1362, 1365 (Fed. Cir. 2012).
We review the actions of the PTO for compliance with
the Administrative Procedure Act (“APA”), 5 U.S.C. § 551et seq. Applying this standard of review, we “hold unlawful
and set aside agency action, findings, and conclusions
found to be . . . arbitrary, capricious, an abuse of discretion,
or otherwise not in accordance with law,” “without ob-
servance of procedure required by law,” or “unsupported by
substantial evidence.” 5 U.S.C. §§ 706(2)(A), (D), (E).
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CARUCEL INVESTMENTS L.P. v. VIDAL 11
III
On appeal, Carucel challenges: (1) the Board’s con-
struction of the claim terms “mobile unit” and “mobile de-
vice;” (2) the Board’s construction of “adapted to;” 4 (3) the
Board’s conclusion that various claims of Carucel’s patents
are invalid as obvious over several prior art combinations;
and (4) the PTO’s “Director Review” procedures, which
Carucel contends violate the APA. We conclude that none
of these issues has merit.
A
Before addressing Carucel’s contentions, we begin by
rejecting the PTO’s position that Carucel forfeited its op-
portunity to appeal the Board’s construction of “mobile
unit” and “mobile device” by not first raising these chal-
lenges in its request for Director Review. Appeals from IPR
proceedings are governed by 35 U.S.C. § 319, which pro-
vides that “[a] party dissatisfied with the final written de-
cision of the Patent Trial and Appeal Board . . . may appeal
the decision.” The statute does not impose as a further re-
quirement for preserving issues that they also be presented
as part of an intra-agency appeal.
The only other authority the PTO cites for its forfeiture
position is our non-precedential decision in Polycom, Inc. v.
Fullview, Inc., 767 F. App’x 970, 980 (Fed. Cir. 2019), which
held that “Polycom could have, and should have, raised [its]
anticipation argument in its request for rehearing” and, as
such, found the argument waived (forfeited). It would seem
to us, however, that just as failure to seek rehearing cannot
result in forfeiture, see In re Magnum Oil Tools Int’l, Ltd.,
829 F.3d 1364, 1377 (Fed. Cir. 2016), neither should failure
to raise an issue when rehearing is sought result in
4 Carucel raises this issue only in Appeal No. 21-
1731 and only in connection with IPRs filed by Volkswagen,
not those initiated by Unified.
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12 CARUCEL INVESTMENTS L.P. v. VIDAL
forfeiture. In any case, Polycom concerned inter partes
reexamination, not inter partes review. Inter partes reex-
aminations are governed by a regulation requiring parties
seeking rehearing of a Board decision to “state with partic-
ularity the points believed to have been misapprehended or
overlooked in rendering the Board’s opinion reflecting its
decision.” 37 C.F.R. § 41.79(b)(1). No similar regulation or
other authority exists in the IPR context. 5 Thus, issues
Carucel litigated in the IPR but chose not to present in its
requested Director Review are not forfeited and may be
pressed on appeal.
B
Carucel appeals the Board’s construction of “mobile de-
vice” and “mobile unit,” terms the parties agree have the
same meaning as each other. Carucel proposed that these
terms should be construed as “a device that must register
with and be able to directly communicate with the cellular
network.” The Board held, instead, that no construction
5 At the time Carucel made its requests for Director
Review, the PTO’s Arthrex Q&As webpage did not mention
any exhaustion requirement. See PTO, Arthrex Q&As,
https://www.uspto.gov/patents/patent-trial-and-appeal-
board/procedures/arthrex-qas (last accessed December 18,
2023). Later, on April 22, 2022, the Arthrex Q&As webpage
was superseded by the PTO’s Interim Process for Director
Review webpage, which instructed that parties “should
raise any additional issues sparingly, if at all.” No. 21-1911
Appellant’s Reply Br. at 9. On July 24, 2023, the PTO pub-
lished “Revised Interim Director Review Process,” an-
nouncing that henceforth “[a]ny argument not made within
the Request [for Director Review] may be deemed waived.”
See PTO, Revised Interim Director Review Process,
https://www.uspto.gov/patents/ptab/decisions/revised-in-
terim-director-review-process (last accessed December 18,
2023).
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CARUCEL INVESTMENTS L.P. v. VIDAL 13
was necessary. On appeal we must address two disputes:
(1) whether the “mobile device” and “mobile unit” are lim-
ited to devices that work with a “cellular network” or may
also include devices that work with other telephone net-
works, such as cordless phones; and (2) whether the
claimed “mobile device” and “mobile unit” must be capable
of registering and communicating with the network “di-
rectly” (i.e., “by itself”) without relying on actions by inter-
mediaries. 6 We agree with the Board on both issues: the
“mobile device” and “mobile unit” are not limited to devices
that work with a “cellular network” or to those that are ca-
pable of registering and communicating “directly” with the
network.
First, there is no basis in the intrinsic record to limit
the “mobile device” or “mobile unit” to devices that work
only with a “cellular network.” Nothing about the claim
language – that is, the words “mobile,” which refers to ca-
pability of movement, or “unit” or “device,” which are ge-
neric indications of a physical article – even suggests
Carucel’s proposed restriction.
Turning to the specification, Carucel points to the
“Field of the Invention,” which states that the Carucel pa-
tents “relate[] to cellular telephone systems in which a mo-
bile unit communicates by wireless communication to a
6 Although its proposed construction does not explic-
itly require that the claimed “mobile device” and “mobile
unit” register with a network “by itself,” Carucel has main-
tained, both during the IPRs and in the present appeals,
that its proposed construction does so. See, e.g., No. 21-
1731 J.A. 10635 (stating that prior art did not disclose “mo-
bile device” limitation as prior art telephone was “not capa-
ble of registering with a cellular network by itself”); No. 21-
1731 Appellant’s Reply Br. at 12 (arguing that “mobile de-
vice must register as part of its independent functionality”
and “by definition . . . can do so by itself”).
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14 CARUCEL INVESTMENTS L.P. v. VIDAL
base station connected to the wire telephone network.”
E.g., ’904 patent at 1:15-18 (emphasis added). That the in-
vention “relates to” cellular telephone systems does not
mean the invention is also limited to, and may only be prac-
ticed with, a cellular network. Carucel emphasizes that
“[t]he only embodiments disclosed in the specification are
mobile units and mobile base stations that connect to mo-
bile cellular networks” and “[t]he only communications
standards discussed” in the specification, “TDMA/CDMA
and IS-95,” are “cellular phone standards.” No. 21-1731
Appellant’s Br. at 36-37. However, “[e]ven when the spec-
ification describes only a single embodiment, the claims of
the patent will not be read restrictively unless the patentee
has demonstrated a clear intention to limit the claim scope
using words or expressions of manifest exclusion or re-
striction.” Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d
898, 906 (Fed. Cir. 2004) (internal quotation marks omit-
ted). We see no such clear intention here. To the contrary,
adoption of Carucel’s construction would result in the
claims failing to capture the breadth of the patents’ disclo-
sure – including embodiments in which mobile devices
communicate with the moving base stations using “a stand-
ard radio interface, well known in the art,” ’904 patent at
6:43-45 – a generally disfavored outcome in the absence of
intrinsic evidence limiting the scope of the claims. See
Vitronics Corp. v. Conceptronic Inc., 90 F.3d 1576, 1583
(Fed. Cir. 1996) (noting that claim construction excluding
preferred embodiment “is rarely, if ever, correct”).
Second, the intrinsic evidence does not require the “mo-
bile device” or “mobile unit” to be able to “directly” com-
municate with the telephone network or to register with
the telephone network “by itself.” To the contrary, the
specification repeatedly discloses embodiments in which
the claimed “mobile device” or “mobile unit” communicates
with the telephone network indirectly via intermediaries.
In one such embodiment, “the mobile unit does not receive
communications from the fixed radio port but only from the
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CARUCEL INVESTMENTS L.P. v. VIDAL 15
movable base station . . . thereby eliminating any direct
communication from the mobile unit to the fixed radio
port.” ’904 patent at 3:49-56 (emphasis added); see also id.
at 3:18-21 (explaining that moving base stations may be
interposed between fixed base stations and mobile device).
For its narrower construction, Carucel relies on a por-
tion of the specification which states, in pertinent part:
When a mobile unit set is first powered up or first
enters a service area, the mobile unit must register
in the manner described earlier, by transmitting its
unique address in the new service area. The ad-
dress will be received by the closest moving base
station 30 and transmitted via a fixed radio port
and the gateway switch 60 to the telephone net-
work. This registration procedure is required so
that an incoming call for the mobile unit can be ap-
propriately directed.
’904 patent at 9:64-10:4. Even this portion of the specifica-
tion, however, describes indirect communication between
the “mobile unit” and the telephone network during the
registration process, explaining that the “address” of the
mobile unit is relayed to the telephone network via inter-
mediaries including “the closest moving base station 30 and
. . . a fixed radio port and the gateway switch 60.” Id. (em-
phasis added). This language does not support the restric-
tive reading of the claim terms pushed by Carucel.
Thus, we agree with the Board’s decision to reject
Carucel’s proposed construction of the terms “mobile de-
vice” and “mobile unit.” Because Carucel only challenges
the Board’s claim construction to the extent that it failed
to narrow claim scope in the manner Carucel had proposed,
we need not determine whether the Board was also correct
that these terms require no construction.
C
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16 CARUCEL INVESTMENTS L.P. v. VIDAL
In appeal No. 21-1731 only, Carucel challenges the
Board’s construction of the term “adapted to,” as it appears
in the preambles of claims 22 and 34 of the ’904 patent. In
previous litigation, a district court construed the term to
mean “‘constructed to move with the traffic at a rate of
speed which is comparable to the speed of the traffic.’” No.
21-1731 J.A. 234-35 (quoting J.A. 5556-59). The Board ac-
cepted the parties’ agreement to adopt this same construc-
tion. Later, the parties developed a dispute over the
meaning of “traffic” as used in the Board’s construction.
Specifically, Carucel proposed that “traffic” refers only to
“an automotive vehicle traveling on a roadway” and does
not also include “airplane traffic.” No. 21-1731 J.A. 6639.
Carucel argued that because “[a]n airplane does not move
with traffic as it is not bound to predetermined roads,” and
“an airplane can travel at speeds up to five hundred miles-
per-hour and, as such, does not move with the traffic at a
rate of speed which is comparable to the traffic,” airplanes
must be excluded from the construction. Id. The Board
rejected Carucel’s proposed narrowing of the term, as it
was not supported by the specification or the prosecution
history of the Carucel patents.
We agree with the Board’s rejection of Carucel’s pro-
posal to narrow the claim term “adapted to” by restricting
“traffic” to only “vehicular traffic” traveling on “predeter-
mined roads.” Carucel asserts that “[t]he type of traffic
that is described in the specification is solely automobile
traffic” and “the sole embodiment is directed to ‘roadways’
involving ‘vehicular traffic.’” No. 21-1731 Appellant’s Br.
at 46. However, as the Board explained and the PTO ar-
gues on appeal, the specification also discloses pedestrian
traffic. See, e.g., ’904 patent at 2:41 (“The low speed is
mostly pedestrian traffic . . .”), 3:35-39 (“[A] number of
fixed base stations are provided in addition to moving base
stations allowing slower moving traffic, such as pedestrian
traffic . . . to communicate via the fixed base stations.”),
4:48-51 (“[F]ixed base stations 70 would accommodate
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CARUCEL INVESTMENTS L.P. v. VIDAL 17
communications with mobile units traveling at a speed of
less than 30 miles per hour including pedestrian traffic and
stationary units.”). Carucel’s narrowed construction, thus,
would improperly read embodiments relating to pedestrian
traffic out of the scope of the claims. See Vitronics, 90 F.3d
at 1583.
Carucel urges us to consider the testimony of its expert,
Dr. Lanning, who opined that there is a significant differ-
ence in the circuitry and signaling between a car-based sys-
tem and one involving commercial aircraft. We may not,
however, rely on extrinsic evidence to adopt a claim con-
struction that contradicts what a person of ordinary skill
in the art would understand from the intrinsic evidence.
See Seabed Geosolutions (US) Inc. v. Magseis FF LLC, 8
F.4th 1285, 1287 (Fed. Cir. 2021) (“If the meaning of a
claim term is clear from the intrinsic evidence, there is no
reason to resort to extrinsic evidence.”).
For these reasons, we affirm the Board’s construction
of the term “adapted to.”
D
Carucel next contends that substantial evidence does
not support the Board’s determination that its patent
claims were proven to be invalid as obvious. In particular,
Carucel challenges the Board’s findings with respect to the
combination of Gilhousen865 with Gilhousen390 7 and the
combinations of Ito with references relating to a CDMA cel-
lular system. 8 We are unpersuaded.
7 U.S. Patent No. 5,109,390. See No. 21-1731 J.A.
2166-76.
8 In the No. 21-1731 appeal, Carucel also faults com-
binations involving the Vercauteren reference. But the
Board did not consider the Vercauteren-based combina-
tions in its final written decision and neither do we.
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18 CARUCEL INVESTMENTS L.P. v. VIDAL
Carucel first attacks the Board’s findings regarding the
combination of the aircraft repeater disclosures in Gil-
housen865 with the CDMA system of Gilhousen390, criti-
cizing the Board for failing to credit the testimony of
Carucel’s expert, Dr. Lanning, who pointed out “technical
flaws that would render the combination of the two refer-
ences non-functional.” No. 21-1731 Appellant’s Br. at 48.
Substantial evidence supports the Board’s determination
of obviousness based on the combination of Gilhousen865
and Gilhousen390. For instance, with respect to claim 22
of the ’904 patent, the Board relied on the testimony of pe-
titioner’s expert, Dr. Ding, to find that a person of ordinary
skill in the art would have been motivated to modify Gil-
housen865’s airborne communication system with Gil-
housen390’s “various configurations to achieve signal
diversity at the receiver,” at least for the purpose of “reduc-
ing errors caused by well-known deleterious effects on
wirelessly-transmitted signals.” No. 21-1731 J.A. 259, 261-
62; see also No. 21-1731 J.A. 3457-65 ¶¶ 97-109. The Board
also credited Dr. Ding’s testimony that an ordinarily
skilled artisan would have combined these references “with
a reasonable expectation of success.” No. 21-1731 J.A. 261
(citing No. 21-1731 J.A. 10509-12 ¶¶ 46-50). The testimony
cited by the Board directly addressed Carucel’s contentions
as to the purported incompatibility caused by the high
speed of aircraft. Having determined to credit the opinion
of Dr. Ding, a finding to which we defer, see Yorkey, 601
F.3d at 1284, the Board had substantial evidence for its
conclusion that “the proposed combination of Gilhousen865
and Gilhousen390 would involve nothing more than incor-
porating well-known concepts . . . into a well-known sys-
tem.” No. 21-1731 J.A. 263-64 (citing No. 21-1731 J.A.
3465 ¶ 109). 9
9 Carucel faults the Board’s final written decisions
for failing to adequately explain why it was persuaded by
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CARUCEL INVESTMENTS L.P. v. VIDAL 19
Carucel next challenges the Board’s obviousness deter-
minations regarding combinations involving Ito and a
CDMA cellular phone system. Carucel argues that Ito de-
scribes a TDMA system and, because “CDMA and TDMA
cellular phone systems are incompatible as a matter of
technology,” a skilled artisan would not combine these ref-
erences. No. 21-1731 Appellant’s Br. at 50. Substantial
evidence supports the Board’s conclusion to the contrary.
For example, looking again at ’904 patent claim 22 –
which was challenged in IPR2019-1298/1635 based on the
combination of Ito and Gilhousen501 10 – the Board credited
testimony from petitioner’s expert, Dr. Fischer, that devel-
opments in the telecommunications industry would have
led a person of ordinary skill in the art to apply Gil-
housen501’s CDMA technology to Ito’s disclosures, given
the advantages of CDMA over FDMA/TDMA. J.A. 40-41
(citing J.A. 1387-89 ¶¶ 104-09). The Board also pointed to
Gilhousen501’s disclosure that CDMA technology has “sig-
nificant advantages” over Ito’s FDMA/TDMA technology.
J.A. 40 (citing J.A. 1230 at 1:18-23).
Taking claim 13 of the ’543 patent as another example
– which was challenged in IPR2019-1105 based on the com-
bination of Ito, Paneth, 11 and Gilhousen390 – the Board
certain obviousness arguments, analogizing the situation
here to what we encountered in Alacritech, Inc. v. Intel
Corp., 966 F.3d 1367, 1371 (Fed. Cir. 2020). This compari-
son lacks merit. Here, unlike in Alacritech, the Board out-
lined the parties’ dispute and articulated its rationale,
including by identifying the evidence it relied on, all of
which allows us to “reasonably discern that [the Board] fol-
lowed a proper path.” Ariosa Diagnostics v. Verinata
Health, Inc., 805 F.3d 1359, 1365 (Fed. Cir. 2015).
10 U.S. Patent No. 5,101,501. See J.A. 1225-40.
11 U.S. Patent No. 4,675,863. See No. 21-1731 J.A.
3341-76.
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20 CARUCEL INVESTMENTS L.P. v. VIDAL
credited Dr. Ding’s testimony, considered Carucel’s com-
peting evidence, and then found that a person of ordinary
skill in the art would have been “motivated to combine the
teachings of Ito and Paneth with the well-known CDMA
technology of Gilhousen390 with a reasonable expectation
of success.” No. 21-1731 J.A. 219 (citing J.A. 4125-28 ¶¶
176-81; J.A. 10597-604 ¶¶ 49-61). The Board also noted
that Dr. Ding provided “examples in the technical litera-
ture describing the combination of TDMA, FDMA, and
CDMA.” No. 21-1731 J.A. 218 (citing J.A. 10602-03 ¶¶ 59-
60).
Carucel’s reliance on In re IPR Licensing, Inc., 942 F.3d
1363 (Fed. Cir. 2019), where we reversed a Board decision
that was based on non-record evidence, is inapposite, as the
record of the present appeals contains direct expert support
for the Board’s findings. Most particularly, substantial ev-
idence supports the Board’s conclusions of obviousness.
E
We conclude by addressing Carucel’s APA arguments
concerning its requests for Director Review of the Board’s
final written decisions. Carucel acknowledges that our de-
cision in Arthrex, Inc. v. Smith & Nephew, Inc., 35 F.4th
1328 (Fed. Cir. 2022) (“Arthrex II”), is dispositive on certain
aspects of its challenges. It points to other issues that are
not directly controlled by binding precedent. Because there
is at least one dispositive flaw with respect to each of the
issues Carucel raises, we need not, and do not, catalog all
of the defects in its positions.
Carucel first argues that the orders denying its re-
quests for Director Review violate the APA because they
are unsigned and provide no explanation. We disagree.
The denial orders list the Office of the Under Secretary of
Commerce and Director of the PTO as the issuing office,
identify Commissioner Hirshfeld as the presiding officer,
and state that Carucel’s requests had been referred to him.
Although the orders do not bear the signatures of
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CARUCEL INVESTMENTS L.P. v. VIDAL 21
Commissioner Hirshfeld, it is sufficiently clear that he is
the official responsible for issuing them. See generally But-
ler v. Principi, 244 F.3d 1337, 1340 (Fed. Cir. 2001) (ex-
plaining that, “[i]n the absence of clear evidence to the
contrary,” we “presume that what appears regular is regu-
lar,” including that “public officers have properly dis-
charged their official duties”). The orders at issue here are
not, as Carucel suggests, anonymous.
Nor is Carucel entitled to additional explanation for
the denial of its requests for Director Review. Pursuant to
the APA, agency decisions must “include a statement of . . .
findings and conclusions, and the reasons or basis therefor,
on all the material issues of fact, law, or discretion pre-
sented on the record.” 5 U.S.C. § 557(c)(3)(A). Commis-
sioner Hirshfeld’s determination not to disturb the Board’s
final written decisions is not separately subject to these re-
quirements because, as the orders expressly state, “the Pa-
tent Trial and Appeal Board’s Final Written Decision is the
final decision of the agency.” E.g., No. 21-1731 J.A. 12442.
The Board’s final written decisions were and are reviewa-
ble final decisions of the agency; they contain a reasoned
explanation for the agency’s conclusion, an explanation
that remained the position of the PTO even after Carucel’s
request for Director Review was denied. Even where the
agency adopts an earlier subordinate decision within the
agency, adoption of the already-existing explanation in the
subordinate decision for the agency’s action is permissible.
See, e.g., City of Bethany v. Fed. Energy Regul. Comm’n,
727 F.2d 1131, 1144 (D.C. Cir. 1984) (“FERC’s summary
affirmance of the ALJ’s adoption of a 5% transmission loss
figure is not improper.”); Armstrong v. Commodity Futures
Trading Comm’n, 12 F.3d 401, 403-04 (3d Cir. 1993) (“An
administrative agency need not provide an independent
statement if it specifically adopts an ALJ’s opinion that
sets forth adequate findings and reasoning.”).
Next, Carucel argues that the PTO violated the APA by
failing to promulgate regulations governing the Director
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22 CARUCEL INVESTMENTS L.P. v. VIDAL
Review process through notice-and-comment rulemaking,
thereby rendering the orders denying Director Review null
and void. According to Carucel, at the time it submitted its
requests for Director Review, the PTO had only provided
informal guidance about the review process on a webpage
called “Arthrex Q&As.” The PTO, joined by Unified, re-
sponds that notice-and-comment rulemaking is not re-
quired because the challenged guidance explaining the
agency’s internal processes and outlining the procedural
requisites for seeking Director Review falls within the
APA’s exemption for “rules of agency organization, proce-
dure, or practice,” which need not emanate from notice-
and-comment procedures. 5 U.S.C. § 553(b)(A).
We need not determine if the PTO’s guidance govern-
ing the Director Review process is exempt from notice-and-
comment rulemaking under the APA because, even assum-
ing it is not exempt, any error by the PTO in this regard
would be harmless and would not render the denial of
Carucel’s requests for Director Review “null and void.”
When we review agency actions for APA violations, we
must take “due account . . . of the rule of prejudicial error.”
5 U.S.C. § 706(2); see also Jicarilla Apache Nation v. U.S.
Dep’t of Interior, 613 F.3d 1112, 1121 (D.C. Cir. 2010) (“The
burden to demonstrate prejudicial error is on the party
challenging agency action.”). We can find no prejudice to
Carucel here. Carucel does not contend it was unaware of
the relevant procedural requirements for filing a request
for Director Review; nor does it identify any way in which
it was prejudiced by the manner in which the PTO distrib-
uted its guidance. Carucel filed its requests for Director
Review in a timely manner and consistent with the proce-
dures set out by the PTO. Its requests were not denied due
to any failure to comply with that guidance. Thus, the
PTO’s failure, if any, to follow the APA’s notice-and-com-
ment requirement is harmless error. See generally Window
Covering Mfrs. Ass’n v. Consumer Prod. Safety Comm’n, 82
F.4th 1273, 1284 (D.C. Cir. 2023) (“We will not set aside a
Case: 21-1731 Document: 123 Page: 23 Filed: 12/26/2023
CARUCEL INVESTMENTS L.P. v. VIDAL 23
rule absent a showing by the petitioner[] that [it] suffered
prejudice from the agency’s failure to provide an oppor-
tunity for public comment.”) (internal quotation marks
omitted); see also Nat’l Ass’n of Home Builders v. Defs. of
Wildlife, 551 U.S. 644, 659 (2007) (holding alleged agency
error harmless). Furthermore, the APA provides that if a
rule is erroneously issued outside the Federal Register
publication process it may nonetheless bind a party, like
Carucel, that had “actual and timely notice of the terms
thereof.” 5 U.S.C. § 552(a)(1). 12
Finally, Carucel argues that the PTO violated the APA
by delegating the Director’s review function to unidentified
“advisory committee” members. In Carucel’s view, because
the identities of the “advisory committee” members are not
made known to the parties requesting Director Review,
conflicts of interest might escape the PTO’s attention and
then avoid all scrutiny. Carucel grounds its argument on
5 U.S.C. § 556(b)(3), which provides that “[t]he functions of
. . . employees participating in decisions . . . shall be con-
ducted in an impartial manner.” Even assuming the Direc-
tor Review process is a formal adjudication, as defined in
§ 554 (making § 556 applicable), and even further assum-
ing that the involvement of the “advisory committee” mem-
bers in the Director Review process constitutes
“participating in decisions,” issues we do not decide, we
agree with the PTO that the Director is entitled to consult
12 On July 20, 2022, the PTO published in the Federal
Register a “Request for Comments on Director Review,
Precedential Opinion Panel Review, and Internal Circula-
tion and Review of Patent Trial and Appeal Board Deci-
sions.” See 87 Fed. Reg. 43249-52; see also 87 Fed. Reg.
58330-31 (extending comment period). The comment pe-
riod closed on October 19, 2022. As of the issuance date of
this opinion, the PTO has not adopted final rules on the
Director Review process.
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24 CARUCEL INVESTMENTS L.P. v. VIDAL
with subordinate agency employees in exercising her au-
thority in connection with Director Review without disclos-
ing the identities of these agency employees.
In its reply brief, Carucel belatedly adds that the PTO
further violated the APA by not publishing the recommen-
dations made by the “advisory committee” members.
Carucel’s reliance on 5 U.S.C. § 557(c), which requires that
“[a]ll decisions, including initial, recommended, and tenta-
tive decisions, are a part of the record,” is misplaced, as the
“recommended decisions” referred to in the statute are
those made by “the presiding employee or an employee
qualified to preside at hearings pursuant to [S]ection 556.”
5 U.S.C. § 557(b). Any “recommendations” made by the
“advisory committee,” by contrast, are merely internal ad-
vice provided to the Director, who is the agency deci-
sionmaker.
In sum, none of the purported APA violations provides
any basis for us to reverse or vacate the Board’s decisions.
IV
We have considered Carucel’s remaining arguments
and find them unpersuasive. For the foregoing reasons, we
affirm the Board’s final written decisions holding the
claims of the Carucel patents unpatentable as obvious.
AFFIRMED
COSTS
Costs shall be assessed against Appellant.