Ac Technologies S.A. v. amazon.com, Inc.

United States Court of Appeals
for the Federal Circuit
______________________
AC TECHNOLOGIES S.A.,
Appellant
v.
AMAZON.COM, INC., BLIZZARD
ENTERTAINMENT, INC.,
Appellees
______________________
2018-1433
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2015-
01802.
______________________
Decided: January 9, 2019
______________________
MINGHUI YANG, Hardy Parrish Yang, LLP, Austin,
TX, argued for appellant. Also represented by VICTOR G.
HARDY; ANDREW DINOVO, NICOLE E. GLAUSER, DiNovo,
Price, Ellwanger & Hardy LLP.
DANIEL T. SHVODIAN, Perkins Coie, LLP, Palo Alto,
CA, argued for appellees. Also represented by
CHRISTOPHER LEE KELLEY, WING LIANG, VICTORIA Q.
SMITH; DAN L. BAGATELL, Hanover, NH.
______________________
2 AC TECHS. v. AMAZON.COM
Before MOORE, SCHALL, and STOLL, Circuit Judges.
STOLL, Circuit Judge.
The Patent Trial and Appeal Board issued a final
written decision ruling certain claims of AC Technologies
S.A.’s U.S. Patent No. 7,904,680 unpatentable. On recon-
sideration, it invalidated the remaining claims based on a
ground of unpatentability raised by Amazon.com, Inc. and
Blizzard Entertainment, Inc. (collectively, “Amazon”) in
their petition but not addressed in the final written
decision. AC appeals, arguing that the Board exceeded its
authority and deprived it of fair process by belatedly
considering this ground.
We disagree. Precedent mandates that the Board
consider all grounds of unpatentability raised in an
instituted petition. The Board complied with due process,
and AC does not persuade us that the Board erred in
either its claim construction or its ultimate conclusions of
unpatentability. Accordingly, we affirm.
BACKGROUND
I. The ’680 Patent
The ’680 patent relates generally to data access and
management. As shown in Figure 1, clients, such as
users’ (B) personal computers, may store data in or re-
quest data stored in clusters (C), each composed of one or
more cells (Z), via a network (N).
AC TECHS. v. AMAZON.COM 3
’680 patent col. 7 ll. 45–46, 53–56, col. 9 ll. 55–56. The
patent teaches that storing copies of data across a net-
work improves data integrity and reduces network lag.
Id. at col. 1 l. 28–col. 2 l. 5, col. 2 ll. 21–31. To achieve
this, the system copies data—either “the entire data GD
or the fields [data subsets] F”—redundantly across the
network. Id. at col. 7 ll. 1–3, col. 7 l. 65–col. 8 l. 2. The
system determines when and where to copy and store
particular data as a function of predetermined data
transmission parameters. See, e.g., id. at col. 2 ll. 21–27.
Representative claim 1 reads as follows:
1. A data management system comprising:
at least two data storage units;
4 AC TECHS. v. AMAZON.COM
at least one computer unit that stores at least one
complete file, each file including a plurality of in-
dividual pieces, the pieces containing parts of the
files, wherein at least one piece is stored in a re-
dundant manner in the at least two data storage
units;
a controller to enable data transmission between
the data storage units and the computer unit;
wherein at least one of the data storage units and
computer unit measures a data transmission per-
formance between at least one of the data storage
units and the computer unit, the at least one piece
being stored by the computer unit in a redundant
manner in the data storage units as a function of
the measured data transmission performance, and
the computer unit accessing the at least one of the
data storage units as a function of the measured
data transmission performance; and
wherein at least one of the at least two data stor-
age units measures a data transmission perfor-
mance between at least two of the at least two
data storage units and the data storage units copy
pieces that are redundantly stored in the system
from one of the data storage units to another of
the data storage units independently of an access
of the computer unit based on the data transmis-
sion performance measured between the data
storage units.
(emphases added to indicate limitations relevant to the
parties’ disputes). Claim 2 depends from claim 1 and
further recites that the data storage units and computer
unit “are connected over a wireless network.” Claims 4
and 6 depend from claims similar to claim 1 and likewise
require connection over a wireless network.
AC TECHS. v. AMAZON.COM 5
II. Rabinovich
Amazon challenged the ’680 patent in an IPR. It
based its unpatentability arguments on a single prior art
reference: “Dynamic Replication on the Internet,” by
Dr. Michael Rabinovich. See Michael Rabinovich, et al.,
AT&T Labs Research, Dynamic Replication on the Inter-
net (1998) (J.A. 567–601). Figure 1 shows the Rabinovich
system, which, as relevant here, includes both a client (c),
which requests files, and hosts (h and s), which maintain
those files and service client requests.
J.A. 573. To better manage client requests, Rabinovich
defines an algorithm for making and placing file copies
across hosts. Among other things, that algorithm consid-
ers both “cnt(s, xs),” defined as the total number of re-
quests for file xs from a particular host (s) for a particular
period of time, and “cnt(E, xs),” defined as the number of
times those requests for file xs have passed an entity (E)
as they pass from the client to host (s). J.A. 577–78.
6 AC TECHS. v. AMAZON.COM
III. The IPR
Amazon’s petition for IPR presented three grounds.
In Ground 1, Amazon argued that if “computer unit” were
construed narrowly and mapped to Rabinovich’s client,
Rabinovich rendered all claims of the ’680 patent obvious.
In Ground 2 and Ground 3, Amazon argued that if “com-
puter unit” were instead construed broadly and mapped
to Rabinovich’s host, it anticipated some claims
(Ground 2) and rendered remaining claims 2, 4, and 6
obvious (Ground 3).
At institution, the Board adopted the broad construc-
tion of “computer unit” and then instituted review of
Grounds 1 and 2. See Amazon.com, Inc. v. AC Techs. S.A.,
No. IPR2015-01802, Paper 10 at 7–9, 23, 25 (P.T.A.B.
Mar. 8, 2016). With respect to Ground 3, the Board stated
that it had “addressed Petitioner’s contentions in our
analysis above of Ground 1 and determined that Petition-
er has established a reasonable likelihood of showing that
claims 2, 4, and 6 are unpatentable as obvious over Rab-
inovich under our construction of ‘computer unit.’ As a
result, this ground is moot.” Id. at 25. The Board con-
cluded by instituting review of whether all claims of the
’680 patent would have been obvious over Rabinovich and
whether some claims were anticipated by Rabinovich. See
id. at 26.
The IPR proceeded, and AC filed a patent owner re-
sponse. In it, AC argued that as properly construed, the
claims require redundantly storing file pieces, not redun-
dantly storing a complete file, and that Rabinovich failed
to disclose this aspect of the claims. AC further argued
that Rabinovich failed to disclose copying data “inde-
pendently of an access of the computer unit” because
Rabinovich’s replication algorithm relied on cnt(s, xs),
entailing access of the client computers. At oral argu-
ment, AC added that Rabinovich’s reliance on cnt(E, xs)
also violated the “independently of an access” limitation.
AC TECHS. v. AMAZON.COM 7
In its final written decision, the Board rejected AC’s
contention that the claims require storage of distinct
individual pieces of the file. It reasoned that because the
claims recite “at least one piece” and “pieces,” the claims
contemplate and include copying and storing more than
one piece of a file, including up to an entire file. And it
noted that the claims do not limit how the system stores
or copies the at least one file-piece(s). Amazon.com, Inc. v.
AC Techs. S.A., No. IPR2015-01802, Paper 32 at 25–30
(P.T.A.B. Mar. 6, 2017) (“Final Written Decision”). The
Board also rejected AC’s contention that Rabinovich failed
to teach copying data “independently of an access of the
computer unit.” The Board agreed that if Rabinovich’s
client corresponded to the claimed “computer unit,” Rab-
inovich did not render any claims obvious under Amazon’s
Ground 1. At the same time, however, it found that if
Rabinovich’s host corresponded to the claimed “computer
unit,” as argued by Amazon in Ground 2, then Rabinovich
anticipated every claim except claims 2, 4, and 6 because
neither of the cnt parameters cited by AC involved access
of Rabinovich’s hosts. It found that cnt(s, xs) represented
access of Rabinovich’s client, not the host. See id. at 18,
33. And it credited Amazon’s expert’s unchallenged
testimony that cnt(E, xs) measured possible future de-
mand for a file and did not require access of the host. Id.
at 34–36.
The Board’s final decision did not address whether
claims 2, 4, and 6 would have been obvious if the host
were treated as the “computer unit,” as Amazon had
asserted in Ground 3. Pointing to that omission, Amazon
promptly moved for reconsideration. Despite AC’s protest
that Ground 3 had never been part of the IPR, the Board
determined that it should reach the challenge. With the
Board’s permission, both parties submitted additional
arguments, expert declarations, and supporting exhibits.
AC urged that under the Board’s claim constructions, the
claims permitted only ad hoc wireless networks, with
8 AC TECHS. v. AMAZON.COM
which Rabinovich would have been incompatible. But the
Board determined that nothing in the claims or the speci-
fication limited the claimed wireless network to a particu-
lar type of network, and it held that Amazon had proven
claims 2, 4, and 6 unpatentable. See Amazon.com, Inc. v.
AC Techs. S.A., No. IPR2015-01802, Paper 55 at 7–8
(P.T.A.B. Nov. 14, 2017) (“Rehearing Decision”). AC now
appeals.
DISCUSSION
Exclusive jurisdiction to review the Board’s final writ-
ten decisions rests with this court. See 35 U.S.C. § 319;
see also 28 U.S.C. § 1295(a)(4)(A). We enforce the limits
placed on the Board by statute and due process. See Wi-
Fi One, LLC v. Broadcom Corp., 878 F.3d 1364, 1374
(Fed. Cir. 2018) (en banc) (“Enforcing statutory limits on
an agency’s authority to act is precisely the type of issue
that courts have historically reviewed.”); Belden Inc. v.
Berk-Tek LLC, 805 F.3d 1064, 1080 (Fed. Cir. 2015)
(reviewing alleged denial of procedural due process rights
by the Board). We consider de novo the Board’s legal
conclusions. See PPC Broadband, Inc. v. Corning Optical
Commc’ns RF, LLC, 815 F.3d 734, 739 (Fed. Cir. 2016).
And we ensure that substantial evidence supports the
Board’s factual findings. See Polaris Indus., Inc. v. Arctic
Cat, Inc., 882 F.3d 1056, 1064 (Fed. Cir. 2018).
I
AC argues that the Board erred procedurally when it
invalidated claims 2, 4, and 6 based on a ground that it
did not institute in its institution decision. AC claims
that in doing so, the Board exceeded its statutory authori-
ty and fell short of the requirements of due process. We
address these arguments in turn.
A
At institution, the Board determines “whether to in-
stitute an [IPR].” 35 U.S.C. § 314(b). The Supreme Court
AC TECHS. v. AMAZON.COM 9
recently clarified that this statutory language “indicates a
binary choice—either institute review or don’t.” SAS Inst.
Inc. v. Iancu, 138 S. Ct. 1348, 1355 (2018). If the Board
institutes an IPR, it must issue a final written decision
addressing all claims challenged by the petitioner. See id.
at 1359–60; see also 35 U.S.C. § 318(a). And, we have
held, if the Board institutes an IPR, it must similarly
address all grounds of unpatentability raised by the
petitioner. See Adidas AG v. Nike, Inc., 894 F.3d 1256,
1258 (Fed. Cir. 2018) (remanding noninstituted grounds
for review); BioDelivery Scis. Int’l, Inc. v. Aquestive Ther-
apeutics, Inc., 898 F.3d 1205, 1208 (Fed. Cir. 2018) (“Post-
SAS cases have held that it is appropriate to remand to
the PTAB to consider non-instituted claims as well as
non-instituted grounds.”).
This precedent forecloses AC’s argument that the
Board exceeded its statutory authority when it reconsid-
ered its final written decision and addressed non-
instituted Ground 3. Indeed, it would have violated the
statutory scheme had the Board not done so. See PGS
Geophysical AS v. Iancu, 891 F.3d 1354, 1360 (Fed. Cir.
2018) (“Equal treatment of claims and grounds for institu-
tion purposes has pervasive support in SAS.”). Contrary
to AC’s arguments, see Appellant’s Br. 49–53, neither
§ 314(b)’s timing requirements nor § 314(d)’s limits on
appealability alter the Board’s statutory obligation to rule
on all claims and grounds presented in the petition. See
SAS, 138 S. Ct. at 1356 (explaining that an IPR must
“proceed[] ‘[i]n accordance with’ or ‘in conformance to’ the
petition” (second alteration in original) (quoting Pursuant,
Oxford English Dictionary (3d ed. 2007),
http://www.oed.com/view/Entry/155073)).
B
We recognize that SAS did not displace the Board’s
responsibility to comply with due process. We have
explained that due process dictates that parties before the
10 AC TECHS. v. AMAZON.COM
Board must receive adequate notice of the issues the
Board will decide as well as an opportunity to be heard on
those issues. See Genzyme Therapeutic Prods. Ltd. P’ship
v. Biomarin Pharm. Inc., 825 F.3d 1360, 1367–68
(Fed. Cir. 2016).
No due process violation occurred here. As AC ad-
mits, after the Board decided to accept Amazon’s rehear-
ing request and consider Ground 3, it permitted AC to
take discovery and submit additional briefing and evi-
dence on that ground. Though AC did not receive a
hearing specific to Ground 3, it never requested one. Had
AC desired a hearing, it should have made a request
before the Board. See, e.g., Intellectual Ventures II LLC v.
Ericsson Inc., 686 F. App’x 900, 905–06 (Fed. Cir. 2017)
(finding no due process violation where party had notice
and an opportunity to be heard and failed to request sur-
reply or rehearing to address issue).
II
On the merits, AC initially challenges the Board’s in-
terpretation of the claim limitations reciting “piece(s).”
We review the Board’s ultimate claim constructions de
novo, see In re Man Mach. Interface Techs. LLC, 822 F.3d
1282, 1285 (Fed. Cir. 2016), and we review any subsidiary
factual findings involving extrinsic evidence for substan-
tial evidence, see Teva Pharm. USA, Inc. v. Sandoz, Inc.,
135 S. Ct. 831, 841 (2015). The broadest reasonable
interpretation standard applies to this IPR. 1 Thus, the
1 Per recent regulation, the Board applies the Phil-
lips claim construction standard to petitions filed on or
after November 13, 2018. See Changes to the Claim
Construction Standard for Interpreting Claims in Trial
Proceedings Before the Patent Trial and Appeal Board,
83 Fed. Reg. 51,340 (Oct. 11, 2018) (to be codified at
37 C.F.R. pt. 42). Because Amazon filed its petition before
AC TECHS. v. AMAZON.COM 11
Board’s construction must be reasonable in light of the
record evidence and the understanding of one skilled in
the art. See Microsoft Corp. v. Proxyconn, Inc., 789 F.3d
1292, 1298 (Fed. Cir. 2015), overruled on other grounds by
Aqua Prods., Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017)
(en banc).
The Board acknowledged that a file consists of pieces
of data. The Board explained, however, that because the
claims recite storing “at least one piece” and copying
“pieces” of data, they permit copying and storing of “more
than one piece, and thus all of the pieces of an entire file.”
Final Written Decision, at 25–26. The Board further
explained that the claims impose no limit on how the
system stores or copies pieces and they do not require
storing or copying pieces on an individual basis or prohib-
it storing or copying pieces “contiguously with other pieces
of the same file.” Id. at 28–29.
We conclude that the intrinsic evidence supports the
Board’s view. The claims themselves specifically contem-
plate storage and copying of multiple pieces of a file.
They recite storing “at least one piece” and copying “pieces
that are redundantly stored in the system.” ’680 patent
col. 25 l. 64–col. 26 l. 24 (emphases added). Though other
claims recite “the received piece” of data, such claims each
refer back to the “at least one piece” limitation for ante-
cedent basis. See, e.g., id. at col. 27 ll. 36–37, 49–50,
col. 28 ll. 25–26, 31–32; Oral Arg. at 11:45–59,
http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20
17-1999.MP3 (agreeing that “every time [the claim]
refer[s] to a piece of data later in the claim, it refers back
to ‘at least one piece’”). No claim limits how many pieces
the system may copy and store, and no claim limits how
the system copies and stores those pieces. Indeed, claim 1
November 13, 2018, we apply the broadest reasonable
interpretation standard.
12 AC TECHS. v. AMAZON.COM
requires storage of all pieces of a complete file as a com-
plete file, at least on the computer unit. See ’680 patent
col. 25 ll. 66–67 (“[A]t least one computer unit that stores
at least one complete file, each file including a plurality of
individual pieces . . . .”).
The specification further supports the Board’s claim
construction. It contemplates “distribution of the entire
data,” not merely specific pieces. Id. at col. 7 l. 65–col. 8
l. 2. And though it also describes the system separately
storing pieces of data, it specifies that those disclosures
relate to particular embodiments of the claimed invention
and never disclaims whole-file storage. See id. at col. 2
l. 55–61 (“In another embodiment the data in the system
is divided into data subsets, and . . . stored
in . . . cells . . . .” (emphasis added)). The prosecution
history contains no contrary statements.
AC asserts that the Board’s construction conflicts
with the invention’s purpose and that the specification
compels a contrary construction. But it crafts that argu-
ment by ignoring—often through strategic use of ellip-
ses—the disclosures noted above and by relying on an
expert whose testimony the Board elsewhere character-
ized as “conclusory.” See Final Written Decision, at 7;
Appellant’s Br. 31, 37. Having broadly drafted its claims
to encompass both systems that copy and store individual
pieces and those that copy and store multiple or all pieces
of a file, AC cannot now read features from preferred
embodiments into its claims to bolster its validity argu-
ments. See In re Van Geuns, 988 F.2d 1181, 1184
(Fed. Cir. 1993) (“[L]imitations are not to be read into the
claims from the specification.”). For all of the above
reasons, we see no error in the Board’s claim interpreta-
tion.
III
AC also challenges the Board’s ultimate findings of
anticipation and conclusions of obviousness. Specifically,
AC TECHS. v. AMAZON.COM 13
AC disputes the Board’s finding that Rabinovich discloses
copying “independently of an access of the computer unit,”
as recited by the anticipated independent claims, and the
Board’s conclusion that it would have been obvious to
connect Rabinovich’s computer unit and data storage
units over a wireless network, as recited by claims 2, 4,
and 6. We address these arguments in turn.
A
We review the Board’s finding that Rabinovich dis-
closes copying “independently of an access of the computer
unit,” a question of fact, for substantial evidence. See
In re Gleave, 560 F.3d 1331, 1334–35 (Fed. Cir. 2009).
The Board found that Rabinovich discloses this limitation
because neither cnt(s, xs) nor cnt(E, xs) requires access of
Rabinovich’s host, the element Amazon identified as the
claimed computer unit. See Final Written Decision, at 32–
37. Substantial evidence supports the Board’s finding.
Specifically, Rabinovich defines cnt(s, xs) as the access
count for a particular file by the client, not the host, and it
defines cnt(E, xs) as the number of appearances of an
entity (E) (which may be a host) along a request’s path
from the client to a requested file. J.A. 577. Dr. David
Ratner confirmed this understanding of cnt(E, xs) in his
testimony, where he further explained that cnt(E, xs)
simply measures “possible future demand for a replica of
[file] x.” J.A. 432. The Board specifically credited this
unchallenged testimony. See Final Written Decision,
at 34–35.
AC nonetheless argues that the Board should have
accepted its understanding of Rabinovich, and it further
argues that without explicit disclosure affirming that
Rabinovich does not depend on an access of the host,
Rabinovich cannot disclose independent access. AC’s
contentions lack merit. The first misunderstands our role
on appeal. We evaluate whether substantial evidence
supports the Board, but “[w]e may not re-
14 AC TECHS. v. AMAZON.COM
weigh . . . evidence.” In re Warsaw Orthopedic, Inc.,
832 F.3d 1327, 1333 (Fed. Cir. 2016). The second misap-
prehends the law. Contrary to AC’s suggestion, a refer-
ence need not state a feature’s absence in order to disclose
a negative limitation. See, e.g., Sud-Chemie, Inc. v. Mul-
tisorb Techs., Inc., 554 F.3d 1001, 1004–05 (Fed. Cir.
2009) (affirming finding that reference disclosed “uncoat-
ed” film where it did not describe the film as coated and
did not suggest necessity of coatings).
B
We review the Board’s ultimate determination that
claims 2, 4, and 6 would have been obvious de novo, and
we review its underlying factual findings for substantial
evidence. See Harmonic Inc. v. Avid Tech., Inc., 815 F.3d
1356, 1363 (Fed. Cir. 2016).
AC asserts that per the Board’s constructions and
Amazon’s petition, Rabinovich’s data storage units and its
computer unit must both serve as hosts. Continuing from
that premise, it contends that only “ad hoc” networks
permit hosts to directly connect to one another and that
Rabinovich could not operate with an ad hoc network. As
a result, AC claims, the Board erred in finding that it
would have been obvious to connect Rabinovich’s system
over a wireless network.
AC assumes that the phrase “connected over a wire-
less network” requires a direct wireless connection. But
the Board specifically found the claims “broad enough to
encompass a connection through a wireless hub.” Rehear-
ing Decision, at 8. AC fails to explain how or why the
Board erred in doing so, and we see no error in the
Board’s construction. 2 Consequently, we affirm.
2 Though AC does not directly challenge the Board’s
construction, we note that it finds support in the claims,
AC TECHS. v. AMAZON.COM 15
CONCLUSION
We have reviewed the parties’ remaining arguments
and find them unpersuasive. Accordingly, we affirm the
Board.
AFFIRMED
COSTS
Costs to Appellees.
which do not recite “direct” or “ad hoc” network connec-
tions, the specification, which describes the claimed
wireless connections in only the broadest terms, see
’680 patent col. 3 ll. 41–49, and in the prosecution history,
in which the examiner specifically recognized that “wire-
less networks were notoriously well known in the art and
commonly used at the time of the invention,” see Rehear-
ing Decision, at 6.