Westerngeco LLC v. Ion Geophysical Corporation

United States Court of Appeals
for the Federal Circuit
______________________
WESTERNGECO LLC,
Appellant
v.
ION GEOPHYSICAL CORPORATION, ION
INTERNATIONAL S.A.R.L.,
Appellees
---------------------------------------------------------------------------------
IN RE: WESTERNGECO LLC,
Appellant
______________________
2016-2099, 2016-2100, 2016-2101, 2016-2332, 2016-2333,
2016-2334
______________________
Appeals from the United States Patent and Trade-
mark Office, Patent Trial and Appeal Board in Nos.
IPR2014-00687, IPR2014-00688, IPR2014-00689,
IPR2014-01475, IPR2014-01477, IPR2014-01478,
IPR2015-00565, IPR2015-00566, IPR2015-00567.
______________________
Decided: May 7, 2018
______________________
JOHN C. O’QUINN, Kirkland & Ellis LLP, Washington,
DC, argued for appellant. Also represented by WILLIAM
H. BURGESS; LESLIE M. SCHMIDT, TIMOTHY GILMAN, New
2 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
York, NY; MICHAEL KIKLIS, CHRISTOPHER RICCIUTI, Oblon,
McClelland, Maier & Neustadt, LLP, Alexandria, VA.
GREGORY A. CASTANIAS, Jones Day, Washington, DC,
argued for appellees. Also represented by JASON M. GARR,
EMILY JUSTINE TAIT, Detroit, MI; DANIELLE J. HEALEY,
BRIAN GREGORY STRAND, Fish & Richardson, PC, Hou-
ston, TX.
______________________
Before WALLACH, CHEN, and HUGHES, Circuit Judges.
CHEN, Circuit Judge.
WesternGeco LLC (WesternGeco) appeals from the fi-
nal written decisions of the Patent Trial and Appeal
Board (Board) in inter partes review (IPR) proceedings
instituted on six petitions filed by Petroleum Geo-
Services, Inc. (PGS)1 against three patents owned by
WesternGeco: U.S. Patent Nos. 7,080,607 (the ’607 Pa-
tent), 7,162,967 (the ’967 Patent), and 7,293,520 (the ’520
Patent) (collectively, the WesternGeco Patents). PGS
filed its IPR petitions in two rounds: the first three peti-
tions challenged certain claims of each of the three West-
ernGeco Patents; and the second three petitions
challenged additional claims of each of the WesternGeco
Patents. After the first round of IPRs was instituted, ION
Geophysical Corp. and ION International S.A.R.L. (to-
gether, ION) moved, under 35 U.S.C. § 315(c), to join
those IPRs. The Board granted ION’s request but re-
stricted its involvement to receiving notification of filings
and attending, rather than actively participating in,
depositions and oral hearings.
1 While WesternGeco’s appeal before this court was
pending, PGS settled with WesternGeco and withdrew
from the appeal. See PGS’s Unopposed Mot. to Withdraw
at 2, ECF No. 82; Order at 2, ECF No. 86.
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 3
The Board issued six final written decisions, finding
all of the instituted claims in the six proceedings to be
unpatentable as anticipated or obvious. It also rejected
WesternGeco’s arguments that the IPR proceedings were
time-barred under 35 U.S.C. § 315(b). We conclude that
substantial evidence supports the Board’s unpatentability
determinations, as well as its conclusion that the proceed-
ings were not time-barred. We thus affirm the Board’s
decisions.
BACKGROUND
I. Technical Background
We have familiarity with the WesternGeco Patents
through prior appeals. See, e.g., WesternGeco L.L.C. v.
ION Geophysical Corp., 837 F.3d 1358, 1364 (Fed. Cir.
2016). 2 The WesternGeco Patents are directed to technol-
ogies for controlling the movement and positioning of a
series of streamers towed in an array behind a ship.
These streamers emit acoustic signals and detect the
returning signals that reflect from the ocean floor. ’967
Patent col. 1, ll. 28–41. The collected data can be used to
create a map of the subsurface geology, helping oil com-
panies analyze underwater natural resource formations
and explore for oil and gas beneath the ocean floor.
Conventional marine seismic survey systems use long
streamers that are towed behind ships in open-water
conditions. The streamers, equipped with sensors, can
stretch for a mile or more. Vessel movements, weather,
and other conditions can cause the streamers to tangle or
drift apart. To obtain accurate survey data, it is neces-
sary to control the positioning of the streamers, both
vertically in the water, as well as horizontally against
2 The prior appeals involved an additional patent
owned by WesternGeco, U.S. Patent No. 6,691,038 (the
’038 Patent), which is not at issue here.
4 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
ocean currents and forces that can cause the normally-
parallel streamers to bend and even entangle with each
other. Id. at col. 1, l. 42–col. 2, l. 16. The WesternGeco
Patents generally relate to a system for controlling the
positioning of the streamers in relation to each other by
mounting on each streamer a set of “streamer positioning
devices” which can realign the individual streamers into
their desired positions. Id. col. 2, ll. 56−58.
II. Procedural History
WesternGeco, PGS, and ION are all participants in
the marine seismic survey industry. WesternGeco
launched its commercial steerable streamer system, the
Q-Marine, in 2000. J.A. 4794. Subsequently, PGS com-
missioned ION to design and build a competing commer-
cial streamer system, the DigiFIN, which launched
several years later. Id.In 2009, WesternGeco sued ION in the U.S. District
Court for the Southern District of Texas (the District
Court) for infringement of the WesternGeco Patents, as
well as the ’038 Patent. To assist in developing its in-
fringement case against ION, WesternGeco served PGS
with a third-party subpoena, seeking information relating
to PGS’s use and operation of ION’s DigiFIN product. In
response, PGS appeared (through its own counsel) in the
lawsuit as a third party and produced documents, but did
not file anything in that litigation. In August 2012, a jury
returned a verdict finding ION had infringed all four
patents asserted and that ION had failed to prove that
any of the asserted patents were invalid. On appeal, this
court affirmed all aspects of the District Court’s judgment
except for willful infringement and damages. 3
3 We vacated the judgment of no willful infringe-
ment by ION and remanded for further consideration of
enhanced damages under § 284. See WesternGeco L.L.C.
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 5
After receiving a favorable infringement verdict
against ION, WesternGeco next sued PGS in the District
Court for allegedly-related infringement of the same four
patents ION had been found to have infringed. In re-
sponse, PGS sought to have the patent claims asserted
against it administratively cancelled, by filing at the
Board the two rounds of inter partes review petitions
discussed above. The Board denied institution of review
for the petitions concerning the ’038 Patent but instituted
review on all six of PGR’s IPR petitions concerning the
WesternGeco Patents, finding a reasonable likelihood that
PGS would prevail with respect to the challenged claims.
After the first round of PGS’s petitions had been insti-
tuted, ION moved to join those proceedings. Both West-
ernGeco and PGS opposed. WesternGeco argued that
joinder would create delay and complicate the PGS IPR
schedule. PGS, for its part, expressed concern that West-
ernGeco would seek to add a “substantial volume of
testimony” from the ION litigation to the IPR proceeding.
PGS added that such testimony would be highly prejudi-
cial because it did not have the opportunity to participate
in the ION lawsuit. After considering the arguments, the
Board granted ION’s request to join PGS’s first round of
IPRs, but restricted ION’s role to “spectator” status,
meaning that it had no right “to file papers, engage in
v. ION Geophysical Corp., 837 F.3d 1358, 1364 (Fed. Cir.
2016). We also reversed the District Court’s award of lost
profits resulting from conduct occurring abroad. Id.(reinstating aspects of our judgment set forth in Western-
Geco L.L.C. v. ION Geophysical Corp., 791 F.3d 1340,
1344 (Fed. Cir. 2015)). In January 2018, the Supreme
Court agreed to review WesternGeco’s challenge to our
ruling on lost profits. WesternGeco L.L.C. v. ION Geo-
physical Corp., 138 S. Ct. 734 (2018). It heard oral argu-
ment in April 2018.
6 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
discovery, or participate in any deposition or oral hear-
ing.” J.A. 13439. ION did not join the second round of
IPRs.
The Board issued six final written decisions (two deci-
sions per patent), finding that various claims were either
anticipated by or would have been obvious over several
prior art references. See generally Petroleum Geo-Servs.,
Inc. v. WesternGeco L.L.C. (PGS I), No. IPR2014-00687,
2015 WL 10378275 (P.T.A.B. Dec. 15, 2015) (J.A. 1–44)
(invalidating claims 1 and 15 of the ’967 Patent); Petrole-
um Geo-Servs., Inc. v. WesternGeco L.L.C. (PGS II), No.
IPR2014-00688, 2015 WL 10378495 (P.T.A.B. Dec. 15,
2015) (J.A. 45–99) (invalidating claims 1 and 15 of the
’607 Patent); Petroleum Geo-Servs., Inc. v. WesternGeco
L.L.C. (PGS III), No. IPR2014-00689, 2015 WL 10380984(P.T.A.B. Dec. 15, 2015) (J.A. 100–52) (invalidating claims
1–2 and 18–19 of the ’520 Patent); Petroleum Geo-Servs.,
Inc. v. WesternGeco L.L.C. (PGS IV), No. IPR2014-01475
(P.T.A.B. Mar. 16, 2016) (J.A. 153–216) (invalidating
claim 4 of the ’967 Patent); Petroleum Geo-Servs., Inc. v.
WesternGeco L.L.C. (PGS V), No. IPR2014-01477
(P.T.A.B. Mar. 16, 2016) (J.A. 217–95) (invalidating
claims 16–23 of the ’607 Patent); Petroleum Geo-Servs.,
Inc. v. WesternGeco L.L.C. (PGS VI), No. IPR2014-01478
(P.T.A.B. Mar. 16, 2016) (J.A. 296–359) (invalidating
claims 3, 5, 13–17, 20, 22, and 30–34 of the ’520 Patent).
WesternGeco appealed the Board’s decisions in PGS
I–VI to this court. The appeals were consolidated, listing
both PGS and ION as Appellees. See Order at 1–2, ECF
No. 27. In relevant part, WesternGeco argued that the
Board deprived WesternGeco of due process and violated
the Administrative Procedure Act by denying Western-
Geco the opportunity to be heard on whether the inter
partes reviews were time-barred pursuant to 35 U.S.C.
§ 315(b). WesternGeco also reserved rights to file addi-
tional briefing in light of our then-pending en banc recon-
sideration of Wi-Fi One, LLC v. Broadcom Corp., 837 F.3d
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 7
1329 (Fed. Cir. 2016). PGS filed a response brief, and
ION “join[ed] in and adopt[ed] by reference” PGS’s brief
rather than filing its own. ION’s Joinder in the Br. of
PGS at 1, ECF No. 50; see Order at 2, ECF No. 51.
After briefing was completed in this appeal, PGS set-
tled with WesternGeco and filed a motion to withdraw.
See PGS’s Unopposed Mot. to Withdraw at 2, ECF No. 82.
We granted PGS’s motion, ordered the USPTO to inform
the court whether it intended to intervene, and ordered
WesternGeco and ION to file a joint status report. See
Order at 2, ECF No. 86. The USPTO declined to inter-
vene. Upon consideration of the parties’ report, we or-
dered ION to file a new brief, addressing only PGS I–III,
and permitted WesternGeco to file a new reply brief.
Order at 2, ECF No. 92.
Shortly before the date scheduled for oral argument,
we issued our en banc decision in Wi-Fi One v. Broadcom
Corp., 878 F.3d 1364 (Fed. Cir. 2018) (en banc). Wi-Fi
One held that “time-bar determinations under [35 U.S.C.]
§ 315(b) are reviewable by this court” and overruled our
prior contrary precedent. Id. at 1374. Consequently,
WesternGeco requested leave to file supplemental briefing
regarding the proper legal standard to determine whether
a party is a “real party in interest, or privy of the peti-
tioner” under 35 U.S.C. § 315(b) and whether ION was a
“real party in interest” or a “privy of” of PGS. Notice at 1,
ECF No. 107. We granted the request. Order at 2, ECF
No. 108.
STANDARDS OF REVIEW
We review Board decisions using the standard set
forth in the Administrative Procedure Act (APA),
5 U.S.C. § 706 et seq. In re Sullivan, 362 F.3d 1324, 1326
(Fed. Cir. 2004) (citing Dickinson v. Zurko, 527 U.S. 150,
154 (1999)); see Belden Inc. v. Berk–Tek LLC, 805 F.3d
1064, 1080 (Fed. Cir. 2015). Under the APA, we must
“hold unlawful and set aside agency action . . . not in
8 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
accordance with law [or] . . . without observance of proce-
dure required by law.” 5 U.S.C. § 706.
We review the Board’s legal conclusions de novo but
review for substantial evidence any underlying factual
determinations. See Nike, Inc. v. Adidas AG, 812 F.3d
1326, 1332 (Fed. Cir. 2016); In re Giannelli, 739 F.3d
1375, 1378–79 (Fed. Cir. 2014). Substantial evidence is
“such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” Consol.
Edison Co. v. NLRB, 305 U.S. 197, 229 (1938); In re
Applied Materials, Inc., 692 F.3d 1289, 1294 (Fed. Cir.
2012).
DISCUSSION
WesternGeco contends that the Board’s decisions in-
validating claims of the WesternGeco Patents are wrong
on the merits and should be reversed. But WesternGeco
argues we need not reach the merits because Wi-Fi One
has made time-bar decisions under § 315(b) judicially
reviewable, and, as a threshold matter, we should vacate
and dismiss the petitions as time-barred. In Western-
Geco’s view, (1) ION was served with a patent infringe-
ment complaint well over a year before the IPR petitions
were filed and unquestionably would have been time-
barred from filing any petitions challenging the Western-
Geco Patents had it not been joined with PGS’s petitions;
and (2) PGS’s petitions should be time-barred because
ION was a “real party in interest,” or “privy” of PGS.
Consequently, WesternGeco argues that the Board never
should have instituted the requested IPRs because no
party timely filed the petitions. 4
4 WesternGeco did not argue before the Board, nor
does it argue here, that ION is barred from joining the
IPRs pursuant to 35 U.S.C. § 315(c), provided the IPRs
were properly instituted. J.A. 13436; see 35 U.S.C.
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 9
I. Time Bar Under 35 U.S.C. § 315(b)
A. Legal Standard for Privity
Section 315(b) of the Leahy-Smith America Invents
Act (AIA), Pub. L. No. 112-29, § 3(b)(1), 125 Stat. 284, 287
(2011) provides that the USPTO may not institute an IPR
where the petition “is filed more than 1 year after the
date on which the petitioner, the real party in interest, or
privy of the petitioner is served with a complaint alleging
infringement of the patent.” 35 U.S.C. § 315(b) (emphases
added).
For purposes of this appeal, WesternGeco focuses on
privity as the key basis of its time-bar challenge, reason-
ing that privity is more expansive in the types of parties it
encompasses compared to real party in interest. See
Appellant’s Supp. Br. 8 n.5 (citing the USPTO Office
Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759
(Aug. 14, 2012) (hereinafter, “Trial Practice Guide”)).
Neither the AIA nor the Patent Act defines the statu-
tory term “privy.” But “privy” is a well-established com-
mon-law term, and it is a “cardinal rule of statutory
construction” that where Congress adopts a common-law
term without supplying a definition, courts presume that
Congress “knows and adopts the cluster of ideas that were
attached” to the term. FAA v. Cooper, 566 U.S. 284, 291–
92 (2012); Microsoft Corp. v. i4i P’ship Ltd., 564 U.S. 91,
103–04 (2011). Where Congress adopts a term that is
used in common law across multiple legal subjects, courts
“cannot rely on any all-purpose definition but must con-
§ 315(b) (“The time limitation set forth in the preceding
sentence shall not apply to a request for joinder under
subsection (c).” (emphasis added)).
10 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
sider the particular context in which the term appears.”
Cooper, 566 U.S. at 294. 5
The AIA’s legislative history supports adopting the
common law meaning of privity. The proposed adminis-
trative review procedures, including IPR, were intended
to provide “quick and cost effective alternatives to litiga-
tion.” H. REP. NO. 112-98, at 48 (2011). Another ex-
pressed congressional goal was to “establish a more
efficient and streamlined patent system that will improve
patent quality[.]” Id. at 40. At the same time, Congress
recognized the importance of protecting patent owners
from patent challengers who could use the new adminis-
trative review procedures as “tools for harassment.” Id.
(“While this amendment is intended to remove current
disincentives to current administrative processes, the
changes made by it are not to be used as tools for harass-
ment or a means to prevent market entry through repeat-
ed litigation and administrative attacks on the validity of
a patent.”).
In particular, Congress observed that the then-
existing inter partes reexamination regime at times
5 Considering that the context here involves an in-
terpretation of the text of § 315(b), WesternGeco’s reliance
on our assignor estoppel case law is misplaced. Assignor
estoppel is an equitable doctrine that prevents a patentee
who has assigned the rights to a patent (and those in
privity with the assignor) from later contending that the
patent assigned is a nullity. Intel Corp. v. ITC, 946 F.2d
821, 836–38 (Fed. Cir. 1991). In contrast, privity in the
context of the § 315(b) bar refers to whether the relation-
ship between the party to be estopped and the party in
the prior litigation is sufficient to conclude that the act of
one should be attributed to the other. In other words,
assignor estoppel is about the consequences of a commer-
cial transaction, rather than the effects of prior litigation.
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 11
unfairly burdened patent owners in situations where a set
of challengers coordinated reexamination attacks to tie up
a patent in the administrative review process for an
extended period. S. REP. NO. 111-18 at 54–55 (2009) (“It
is not uncommon for the competitors of a patent’s owner
or licensee to coordinate their efforts and bring serial
inter partes challenges to a patent, one after another,
each raising a different set of prior art in its challenge.”).
To address this concern, Congress placed several re-
strictions on IPR petitioners. For example, it raised the
substantive threshold standard that governs the Patent
Office’s institution of the agency’s review process. Instead
of requiring for IPRs, as for reexaminations, that a peti-
tioner raise merely a “substantial new question of patent-
ability,” the AIA requires a showing of “a reasonable
likelihood that” the challenger would prevail with respect
to at least one of the claims challenged in the petition.
Compare 35 U.S.C. § 312(a) (2006) (repealed 2012), with
id. § 314(a) (2012).
The statute imposes other restrictions as well. A par-
ty cannot file an IPR petition against a patent after
having already brought a declaratory judgment action
challenging the validity of a claim of that patent. Id.
§ 315(a)(1). IPR is also barred for petitions filed more
than one year after a party is served with a complaint
alleging infringement of the patent. See id. § 315(b). And
following a final written decision in an IPR, the petitioner
is estopped from continuing to challenge the validity of
the patent claims subject to that decision based on any
grounds that the petition “raised or reasonably could have
raised during” the IPR. See id. § 315(e). For § 315(b) and
(e), these restrictions apply with equal force to an IPR
petitioner, any “real party in interest” to that IPR, and
any “privy of the petitioner.”
As one Senator observed, privity, as used in the AIA,
“takes into account the ‘practical situation,’ and should
12 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
extend to parties to transactions and other activities
relating to the property in question.” 157 Cong. Rec.
S1376 (daily ed. March 8, 2011) (statement of Sen. Kyl);
see also 154 Cong. Rec. S9987 (daily ed. Sept. 27, 2008)
(statement of Sen. Kyl) (“The concept of privity, of course,
is borrowed from the common law of judgments.”). The
legislative history thus lends support to the conclusion
that “privity” in § 315(b) should be given its common law
meaning.
Historically, common law definitions of privity were
narrow and specific, denoting mutual succession or rela-
tionship to the same rights of property. See 18A Charles
Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 4449 & n.32 (2d ed. 2017). Over time, its
common law meaning expanded: “The term ‘privity,’
however, has also come to be used more broadly, as a way
to express the conclusion that nonparty preclusion is
appropriate on any ground.” Taylor v. Sturgell, 553 U.S.
880, 894 n.8 (2008) (citing 18A Wright & Miller § 4449, at
351–53 & n.33); Cal. Physicians’ Serv. v. Aoki Diabetes
Research Inst., 163 Cal. App. 4th 1506, 1521 (Cal. App.
2008). As the Trial Practice Guide observes: “The empha-
sis is not on a concept of identity of parties, but on the
practical situation.” 77 Fed. Reg. at 48,759 (quoting Cal.
Physicians’ Serv., 163 Cal. App. 4th at 1521).
The Trial Practice Guide further recognizes that
“privity” has no universally-applicable common law
definition. Id. “Privity is essentially a shorthand state-
ment that collateral estoppel is to be applied in a given
case.” Id. (quoting Cal. Physicians’ Serv., 163 Cal. App.
4th at 1521). That is, the privity analysis seeks to deter-
mine “whether the relationship between the purported
‘privy’ and the relevant other party is sufficiently close
such that both should be bound by the trial outcome and
related estoppels.” See id. Given that determining
whether two parties may be in privity “is a highly fact-
dependent question,” the Trial Practice Guide states the
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 13
Board will engage in a “flexible” analysis on a “case-by-
case basis.” Id. In sum, these descriptions of the privity
analysis in the Trial Practice Guide accurately reflect the
common law considerations for a privity inquiry.
But, importantly, the reach of privity cannot extend
beyond the limits of due process. In Taylor v. Sturgell,
the Supreme Court observed that a person who was not a
party to a suit generally has not had a “full and fair
opportunity to litigate” the claims and issues settled in
that suit. 553 U.S. at 894. Because nonparty preclusion
risks binding those who have not had a full and fair
opportunity to litigate, the Supreme Court has cautioned
that there is a general rule against nonparty preclusion,
subject to certain exceptions. Id. at 892–93; see Aspex
Eyewear, Inc. v. Zenni Optical, Inc., 713 F.3d 1377, 1382
(Fed. Cir. 2013) (“A full and fair opportunity to litigate is
the touchstone of any preclusion analysis.”); see also Cal.
Physicians’ Serv., 163 Cal. App. 4th at 1522 (“Notions of
privity have been expanded to the limits of due process.”).
As informed by Taylor and other cases, the standards
for the privity inquiry must be grounded in due process.
Turning back to the statute, the preclusive effect of
§ 315(b) extends to privies—i.e., beyond those who were
parties to the prior lawsuit. Because the rationale behind
§ 315(b)’s preclusion provision is to prevent successive
challenges to a patent by those who previously have had
the opportunity to make such challenges in prior litiga-
tion, the privity inquiry in this context naturally focuses
on the relationship between the named IPR petitioner and
the party in the prior lawsuit. For example, it is im-
portant to determine whether the petitioner and the prior
litigant’s relationship—as it relates to the lawsuit—is
sufficiently close that it can be fairly said that the peti-
tioner had a full and fair opportunity to litigate the validi-
ty of the patent in that lawsuit. In other cases, it may be
more relevant to determine whether the petitioner is
simply serving as a proxy to allow another party to liti-
14 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
gate the patent validity question that the other party
raised in an earlier-filed litigation. See Taylor, 553 U.S.
at 895.
The Supreme Court in Taylor identified a non-
exhaustive list of considerations where nonparty preclu-
sion would be justified. Id. at 894–95. These considera-
tions include: (1) an agreement to be bound; (2) pre-
existing substantive legal relationships between the
person to be bound and a party to the judgment (e.g.,
“preceding and succeeding owners of property”);
(3) adequate representation by someone with the same
interests who was a party (e.g., “class actions” and “suits
brought by trustees, guardians, and other fiduciaries”);
(4) assumption of control over the litigation in which the
judgment was rendered; (5) where the nonparty to an
earlier litigation acts as a proxy for the named party to
relitigate the same issues; and (6) a special statutory
scheme expressly foreclosing successive litigation by
nonlitigants. Id.With these principles in mind, we turn to Western-
Geco’s challenge to the Board’s time-bar decision under
§ 315(b).
B. WesternGeco’s Time-Bar Challenge
As noted, WesternGeco’s time-bar challenge focuses
on privity, rather than real party in interest. See Appel-
lant Supp. Br. 8 n.5. WesternGeco argues that the scope
of privity is more expansive than real party in interest,
and that neither concept is limited to the question of
“control” as an exclusive test for privity. Id. In other
words, the privity analysis is broader than simply inquir-
ing whether PGS controlled or had an opportunity to
control ION’s decisions in the ION patent infringement
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 15
litigation, or whether ION controlled or had an opportuni-
ty to control PGS’s decisions in the PGS-initiated IPRs. 6
We agree with WesternGeco that “control” is not the
exclusive analytical pathway for analyzing privity; as
described above, it is but one of a variety of considera-
tions. However, we disagree with WesternGeco’s asser-
tion that the Board applied an unduly-restrictive test and
focused only on control. To the extent the Board analyzed
privity based on ION’s control over the PGS proceedings,
it properly did so in response to WesternGeco’s advance-
ment of a theory focusing primarily on control. See, e.g.,
J.A. 35 (summarizing WesternGeco’s control arguments);
see also Wi-Fi One, LLC v. Broadcom Corp., No. 2015-
1944, 2018 WL 1882911 (Fed. Cir. Apr. 20, 2018) (on
remand by en banc court to merits panel, deciding merits
of WiFi One’s time-bar claim). 7 But where WesternGeco
raised additional considerations, such as pre-existing
legal relationships, the Board considered those arguments
and found them unpersuasive. See, e.g., J.A. 33−38,
193−206.
6 We are unpersuaded by ION’s contention that
WesternGeco waived its privity argument. This issue was
raised in both rounds of the IPR. The Board fully consid-
ered the circumstances surrounding the relationship
between ION and PGS and made extensive fact findings.
7 In that remand decision, we found that the Board
properly focused on the factors that the patent owner
raised in its argument, i.e., whether the IPR petitioner
had been in control of a prior litigation that challenged
the validity of the patent. Wi-Fi One, No. 2015-1944,
2018 WL 1882911, at *4, *5 n.3.. Wi-Fi One specifically
affirmed the Board’s understanding of a broader test to
include “a number of circumstances in which privity
might be found, including when the nonparty controlled
the district court litigation.” Id. at *4.
16 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
Substantial evidence supports the Board’s finding
that ION lacked the opportunity to control PGS’s IPR
petitions. See Taylor, 553 U.S. at 894; Wi-Fi One, LLC v.
Broadcom Corp., No. 2015-1944, 2018 WL 1882911, at *8
(noting control as a factor to determine privity). The
Board found no evidence to suggest that ION directed,
funded, controlled, or influenced the PGS IPR petitions.
See J.A. 35–38, 198–99, 204–06. Nor is there evidence
supporting WesternGeco’s contention that ION used PGS
as a proxy. Id. The litigation history suggests that PGS
filed its IPRs as a defensive measure in response to West-
ernGeco’s lawsuit against PGS, rather than at ION’s
instruction. When ION tried to join the IPRs, PGS active-
ly opposed the attempted joinder. Even when ION was
joined, the PTO gave ION only spectator status. Moreo-
ver, ION did not disclose any prior art references to PGS
in connection with the IPR proceedings, nor did it pay for
PGS’s IPRs. The Board reasonably found that ION did
not control or direct the IPR petitions.
Further, ION and PGS are distinct and unrelated cor-
porate entities represented by different counsel. J.A. 198.
Nothing in the evidence shows that one has any control
over the other. J.A. 198–203. Nor does the record show
that PGS controlled or funded the prior litigation. Other
than responding to a third-party subpoena issued by
WesternGeco, PGS lacked any substantive involvement in
the ION litigation. J.A. 194–95. As a general proposition,
we agree with the Board that a common desire among
multiple parties to see a patent invalidated, without
more, does not establish privity. J.A. 196, 203; see Trial
Practice Guide, 77 Fed. Reg. at 48,760.
Setting aside factors concerning control, we also see
no reason to overturn the Board’s determination that
privity did not exist based on any of the other alleged
considerations. WesternGeco relies on the pre-existing
business alliance between ION and PGS before the ION
lawsuit commenced, as well as indemnity provisions
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 17
contained in the purchase agreements for the product
accused of infringing WesternGeco’s patents. Appellant
Supp. Br. 13–19. As explained below, we agree with the
Board that these factors are insufficient to make PGS and
ION privies within the meaning of the statute.
Regarding the pre-suit business alliance, the Board
found that ION and PGS had a contractual and fairly
standard customer-manufacturer relationship regarding
the accused product. J.A. 203. This finding does not
necessarily suggest that the relationship is sufficiently
close that both should be bound by the trial outcome and
related estoppels, nor does it suggest, without more, that
the parties were litigating either the district court action
or the IPRs as proxies for the other.
As for the parties’ legal relationship, the Board re-
viewed the purchase agreements as well as relevant
business correspondence between ION and PGS but did
not find them adequate to establish privity. J.A. 35–36,
199–202. WesternGeco contends that ION is obligated to
indemnify PGS and is thus a privy of PGS. The Board,
however, fully considered and reasonably rejected such a
contention based on the ambiguous, undefined nature of
the underlying agreements. J.A. 205–06. In particular,
the 2008 Master Purchase Agreement between PGS and
an ION subsidiary stated that the ION subsidiary “shall
indemnify” PGS. J.A. 200. But it did not specify the
meaning of “indemnify” as requiring ION or its subsidiary
to pay for any litigation defense expenses or for any
damages related to infringement. Rather, the provision
included options by the ION subsidiary to modify or
replace the equipment if an infringement claim was made
against PGS. Id. After reviewing the entire provision as
a whole, the Board found that the evidence did not show
any obligation of ION to defend PGS from a patent in-
fringement lawsuit, reimburse or pay for a lawsuit, cover
any damages liability for any adverse patent infringement
verdict against PGS, or initiate an invalidity challenge in
18 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
one or more fora. See J.A. 200–01. Moreover, as the
Board observed, the communications between ION and
PGS reveal a cordial, but arms-length negotiation over
potential limited remedies available under the indemnity
provisions. See J.A. 38, 201–02. None of the correspond-
ence relating to the indemnity provision shows an expec-
tation that ION would be responsible for stepping in, or
otherwise protecting PGS from a patent infringement
suit. J.A. 36, 206.
The Board reasonably found that the non-specific na-
ture of the indemnification provisions here, combined
with the parties’ communications as to the scope of those
provisions, did not obligate ION to protect PGS in the
comprehensive way that WesternGeco alleges. The Board
also noted that the remedies may have been limited to
options such as replacing or modifying a product found to
have infringed a patent. We agree with the Board that
such a circumscribed indemnity provision does not
amount to a sufficiently-close relationship to warrant
finding ION and PGS in privity.
Finally, WesternGeco points to ION and PGS’s con-
duct in the aftermath of the ION jury trial to argue that
their relationship is sufficiently close to trigger § 315(b)’s
time-bar. Specifically, WesternGeco claims that ION and
PGS continued meeting to discuss litigation strategy after
the jury’s verdict in the ION litigation. Appellant Supp.
Br. 16. The evidence, however, only shows that ION’s
counsel made two brief inquiries of PGS, one of which
PGS ignored. J.A. 4085. The other was a single, half-
hour phone call between PGS and ION as to whether
WesternGeco had disputed the prior art status of a par-
ticular reference during the ION trial, J.A. 4083–86,
during which the attorneys did not even discuss the
substance of the reference, J.A. 4084. These communica-
tions do not compel a reversal of the Board’s findings
about the parties’ arms-length relationship.
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 19
For these reasons, we affirm the Board’s conclusion
that PGS and ION are not privies within the meaning of
§ 315(b). 8 Substantial evidence supports the Board’s
conclusion that ION’s relationship with PGS is not suffi-
ciently close such that the ION proceeding would have
given PGS a full and fair opportunity to litigate the
validity of the claims of the WesternGeco Patents. Ac-
cordingly, the petitions are not barred under 35 U.S.C.
§ 315(b). 9
8 To the extent that WesternGeco makes a separate
argument regarding real party in interest, that argument
merely relies on the same or a subset of considerations we
have discussed concerning privity and fails for similar
reasons.
9 WesternGeco also argues that we should remand
for additional discovery if we have “substantial doubt”
about whether PGS would be time-barred under § 315(b),
Appellant Supp. Br. 19; see 37 C.F.R. § 42.51(b)(2) (au-
thorizing additional discovery when it is “in the interests
of justice”), but we do not. To the extent WesternGeco
asks for review of the Board’s denial of its initial request
for additional discovery, which is reviewed for abuse of
discretion, see Ultratec, Inc. v. CaptionCall, LLC, 872 F.3d
1267, 1272 (Fed. Cir. 2017), we find no abuse. The Board
considered the discovery already provided to WesternGeco
and reasonably found no evidence to suggest that addi-
tional discovery would produce agreements with any
relation to the ION litigation, the DigiFIN product, or
obligations on the part of ION to defend or indemnify
PGS. J.A. 34–39, 206–11. PGS responded to two sets of
interrogatories, J.A. 4077, 5417, and produced the Master
Purchase Agreement, J.A. 5396, along with related busi-
ness correspondence, J.A. 4119–33. The Board found that
the interrogatory responses unambiguously stated that
PGS had made no claim or demands to ION for indemnity
20 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
II. Merits
Having decided that PGS’s IPR petitions were not
statutorily barred by § 315(b), we turn to the merits of
WesternGeco’s appeal.
A. The ’607 Patent
The only merits issue on appeal for the ’607 Patent is
the construction of the claim term “predicting positions.”
The Board construed this term to mean “estimating the
actual locations” of streamer positioning devices. J.A. 54–
60, 226–32. By contrast, WesternGeco’s proposed con-
struction requires the prediction to be performed in a
particular way—using “behavior-predictive model-based
control logic.” Id. After considering the intrinsic evi-
dence, we agree with the Board’s construction.
Claim 1, which includes the step of “predicting posi-
tions of at least some of the streamer positioning devices,”
is representative. It recites:
1. A method comprising:
(a) towing an array of streamers each hav-
ing a plurality of streamer positioning de-
vices there along;
(b) predicting positions of at least some of
the streamer positioning devices;
(c) using the predicted positions to calcu-
late desired changes in position of one or
concerning the challenged patents. See J.A. 210 (citing
J.A. 4090). The Board further worked with the parties to
limit discovery in accordance with the parties’ agreement.
J.A. 1116. On this record, the Board did not abuse its
discretion in concluding that additional discovery was not
justified. J.A. 365–68.
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 21
more of the streamer positioning devices;
and
(d) implementing at least some of the de-
sired changes.
’607 Patent, claim 1 (emphasis added).
The Board gives “[a] claim . . . its broadest reasonable
construction in light of the specification of the patent in
which it appears.” 37 C.F.R. § 42.100(b) (2015). A specifi-
cation “includes both the written description and the
claims” of the patent. In re Packard, 751 F.3d 1307, 1320
n.11 (Fed. Cir. 2014). A patent’s specification, together
with its prosecution history, constitutes intrinsic evidence
to which the Board gives priority when it construes
claims. See Microsoft Corp. v. Proxyconn, Inc., 789 F.3d
1292, 1297–98 (Fed. Cir. 2015), overruled on other
grounds by Aqua Prods., Inc. v. Matal, 872 F.3d 1290(Fed. Cir. 2017) (en banc). We review the PTAB’s assess-
ment of the intrinsic evidence de novo. See id.The plain language of the claim does not mention a
“behavior predictive” model or require a specific type of
prediction scheme. As the Board noted, the word “predict”
itself does not impart any dynamic characteristic to the
limitation as whole. J.A. 229. Although the claim limits
what must be predicted (positions of at least two streamer
positioning devices), it imposes no limit on how those
positions are predicted.
The Board’s construction comes directly from the ’607
specification, which discloses that, because of time delays
inherent in measuring positions, “the global control
system 22 runs position predictor software to estimate the
actual locations of each of the birds 18 [i.e., streamer
positioning devices].” ’607 Patent col. 4, ll. 51–55; J.A. 56,
227. The specification thus explains that its system runs
“position predictor software” to predict the positions of the
streamer positioning devices. See Phillips v. AWH Corp.,
22 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
415 F.3d 1303, 1315 (Fed. Cir. 2005) (“[T]he specification
‘is always highly relevant to the claim construction analy-
sis’ and is ‘the single best guide to the meaning of a dis-
puted term.’” (citation omitted)); cf. J.A. 15688
(WesternGeco’s expert acknowledging that construing the
limitation in accordance with this portion of the specifica-
tion was “not unreasonable”).
To support its position, WesternGeco relies on a sen-
tence in the specification that states, “[t]o compensate for
these localized current fluctuations, the inventive control
system utilizes a distributed processing control architec-
ture and behavior-predictive model-based control logic to
properly control the streamer positioning devices.” ’607
Patent col. 4, ll. 10–14. A review of the preceding and
following paragraphs, however, reveals that this passage
describes a preferred embodiment. Id. at col. 3, ll. 56–64;
col. 4, ll. 15–27. It is well established that claims are not
limited to preferred embodiments, unless the specification
clearly indicates otherwise. Comaper Corp. v. Antec, Inc.,
596 F.3d 1343, 1348 (Fed. Cir. 2010) (“[T]his court has
repeatedly cautioned against limiting claims to a pre-
ferred embodiment.”). Nothing in the ’607 specification
provides such an indication.
For these reasons, we affirm the Board’s construction
of “predicting positions.” Because that construction is the
only appealed issue as to the ’607 Patent, we affirm the
Board’s finding that claims 1 and 15–23 of the ’607 Patent
are unpatentable.
B. The ’520 Patent
WesternGeco makes two challenges to the Board’s
unpatentability rulings for the ’520 Patent: (1) the Board’s
construction of “control mode” is overbroad; and (2) the
Board’s finding that the prior art disclosed or suggested
the claimed “feather angle control mode” is legally flawed.
Neither is persuasive.
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 23
1. Construction of “Control Mode”
The challenged claims recite a control system “config-
ured to operate in one or more control modes.”
’520 Patent, claims 1, 18. The Board construed “control
mode” to mean “operational state.” J.A. 307. The Board’s
construction noted that the specification did not define
“control mode” and looked further to a computer diction-
ary for its construction. J.A. 306–07.
According to WesternGeco, the proper construction of
“control mode” should be “a goal-oriented, automatic
configuration.” Appellant Br. 43. For support, Western-
Geco cites a passage in the specification describing three
control modes: feather angle, streamer operation, and
turn control. See ’520 Patent col. 10, ll. 27–60. Western-
Geco contends that the description of each of these control
modes requires steering the streamers in an automated
and coordinated manner.
The passage recited by WesternGeco, however, does
not make it proper to read limitations like “goal-oriented”
or “automatic” into the term “control mode.” As the Board
noted, any operation of a computer system or program
would have a goal or desired result, so injecting “goal-
oriented” to the construction adds nothing meaningful.
J.A. 114. Also, the specification does not make clear that
a control mode must be automatic. Indeed, the words
“automated” and “automatic” do not appear anywhere in
the claims or the written description addressing “control
mode.” Further, there is evidence calling into question
whether the feather angle mode necessarily involves
automatic operations. See J.A. 114, 306, 11251 ¶ 34,
20450 ¶ 34. That certain aspects of the feather angle
mode can operate manually further undermines West-
ernGeco’s assertion that the specification’s disclosure of
three control modes requires adding “automatic” into the
“control mode” construction. Accordingly, the Board
24 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
correctly declined to read WesternGeco’s unsupported
limitations into the claims. 10
2. The Board Correctly Found that the Workman Refer-
ence Renders the Feather Angle Mode Obvious
WesternGeco next challenges the Board’s decision to
cancel the claims directed to “feather angle mode” (claims
2, 3, 5, 19, and 22) as obvious over U.S. Patent No.
5,790,472 (Workman). Workman discloses a method for
controlling the position and shape of marine seismic
streamer cables towed by a vessel.
The “feather angle mode” in the ’520 Patent refers to
“a control mode that attempts to keep each streamer in a
straight line offset from the towing direction by a certain
feather angle.” J.A. 111. According to PGS’s expert, Dr.
Brian Evans, a configuration with no feather angle means
that the streamers are linear and parallel to each other
behind a boat.
10 In PGS III, the Board held that, even applying
WesternGeco’s construction of “control modes,” it did not
discern “a substantive difference between the claims and
the prior art.” Petroleum Geo-Services Inc. v. WesternGeco
LLC, 2015 WL 10380984, at *10. WesternGeco does not
contest that holding on appeal.
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 25
J.A. 20254. If there is a cross-current, the streamers may
drift and become offset from the towing direction of the
vessel. This phenomenon is known as “feathering.” The
extent to which the streamers become offset from the
towing direction of the vessel is known as the “feather
angle.” In other words, the streamers, while organized so
as to be in parallel with each other, are collectively “off-
set” at a small angle from the direction of the ship towing
the streamers.
26 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
J.A. 20255.
We review the Board’s ultimate determination of ob-
viousness de novo and its underlying factual findings for
substantial evidence. Allied Erecting & Dismantling Co.
v. Genesis Attachments, LLC, 825 F.3d 1373, 1380 (Fed.
Cir. 2016). A patent claim is unpatentable “if the differ-
ences between the subject matter sought to be patented
and the prior art are such that the subject matter as a
whole would have been obvious at the time the invention
was made to a [skilled artisan].” 35 U.S.C. § 103(a)
(2006). The Board found that one of ordinary skill in the
art would have been motivated to modify Workman’s
control system to implement a feather angle mode thresh-
old parameter and would have had a reasonable expecta-
tion of success. J.A. 126–31. Although Workman does not
disclose a feather angle, 11 the Board credited passages
11 Workman discloses a “straight and parallel con-
figuration,” meaning that the streamers are linear and
parallel to each other. The streamers are also in-line with
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 27
from Workman and expert testimony that explained why
one of skill in the art would want to control and maintain
consistent separations between streamers during seismic
surveys. For example, it was well recognized that entan-
glement of the streamers was a significant and known
problem. J.A. 127–28. A consistent separation was thus
important to optimize efficient seismic data collection. Id.The Board also explained why prescribing a specific
offset “feather angle” value to the streamers’ positioning
determination system would have been apparent to one of
skill in the art confronting the challenge of towing
streamers through cross-currents. For example, it credit-
ed Workman for evidence that noise produced by streamer
positioning devices was a well-known problem to be
avoided or minimized. J.A. 130. It also cited expert
testimony by PGS’s expert witness, Dr. Evans, that when
ocean cross-currents offset the streamers from the line of
survey (e.g., by five degrees), attempting to reposition the
streamers to a zero-degree feather angle against the
current may create too much hydrophone noise, which
impairs data quality. Id. Additionally, Dr. Evans testi-
fied that one of skill in the art would need to match
feather angles in subsequent surveys of the geographic
area to obtain reliable 4D survey data. J.A. 20354–55.
The Board found his reasoning to be persuasive and found
that a skilled artisan would have been motivated to use a
specific feather angle for streamer positioning to maintain
data collection quality. J.A. 130–31. Further, the Board
found that Workman discloses a control system that uses
various threshold parameters to control the positions of
the streamers and that it would have been possible to
adapt Workman so that its control system could include a
the towing direction, which is essentially a configuration
with a zero-degree feather angle. J.A. 501 (Workman Fig.
1); J.A. 325–26; see J.A. 127.
28 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
parameter that measured the feather angle between
streamers. J.A. 128. Viewed collectively, substantial
evidence supports the Board’s conclusion that the skilled
artisan would have been motivated to modify Workman to
include a feather angle threshold parameter with a rea-
sonable expectation of success.
WesternGeco objects to the Board’s conclusion as im-
permissible hindsight. That argument lacks force in this
case. PGS’s expert testified from the perspective of one of
ordinary skill in the art as of the priority date, and West-
ernGeco identifies nothing to suggest that his testimony
or the other evidence cited by the Board invoked facts
unavailable to the skilled artisan as of the priority date.
J.A. 11107, 20340–61. As discussed, substantial evidence
before the Board shows that one of ordinary skill would
have been motivated to modify Workman to attempt to
keep streamers straight and parallel, whether in a zero or
non-zero feather angle mode, with a reasonable expecta-
tion of success.
The Board appropriately relied on the prior art and
expert testimony about how the skilled artisan would
have modified the prior art. Substantial evidence sup-
ports its obviousness determination.
C. The ’967 Patent
WesternGeco challenges the Board’s claim construc-
tion, anticipation, and obviousness determinations re-
garding the “global control system” limitation of the
claims at issue in the ’967 Patent.
The ’967 Patent relates to distributed-control systems
that apportion operational command between (1) a global
control system onboard the towing vessel and (2) local
control systems within each streamer positioning device
on a streamer. ’967 Patent col. 10, ll. 18–21. According to
the specification, the global control system monitors the
positions of the streamers and provides desired forces or
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 29
desired position information to the local control system.
Id. at col. 10, ll. 18–29. The local control system within
each streamer positioning device (e.g., “bird”) is responsi-
ble for adjusting the bird’s wing splay angle to rotate the
bird to the proper position and for adjusting the wing
common angle to produce the magnitude of total desired
force required. Id.Claims 1, 4, and 15 all recite a “global control system.”
Claim 1 is illustrative:
1. A method comprising:
(a) towing an array of streamers each hav-
ing a plurality of streamer positioning de-
vices there along, at least one of the
streamer positioning devices having a
wing;
(b) transmitting from a global control sys-
tem location information to at least one lo-
cal control system on the at least one
streamer positioning devices having a
wing; and
(c) adjusting the wing using the local con-
trol system.
’967 Patent, claim 1 (emphasis added).
1. Construction of “Global Control System”
As an initial matter, WesternGeco argues that the
Board’s construction of “global control system” changed
midstream. But the record shows that WesternGeco is
actually the one who changed course, urging a different
construction during the IPR. J.A. 1213, 14314. The
chronology is undisputed. Before the institution deci-
sions, both PGS and WesternGeco agreed that the term
“global control system” should be interpreted as “a control
system that sends commands to other devices in a system
(e.g., local control system).” J.A. 1420; see J.A. 1155,
30 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
3424. In the patent owner response, WesternGeco revised
its proposed construction to “a control system configured
to coordinate all streamer positioning devices in the
array.” J.A. 1213, 14314. Upon considering the argu-
ments from both sides, the Board construed the term as “a
control system capable of overseeing and affecting the
array of streamers and streamer positioning devices.”
J.A. 18, 171. This construction was close to that request-
ed by WesternGeco, but did not require controlling all
streamer positioning devices in the array. J.A. 162–71.
Contrary to WesternGeco’s argument, the Board was
permitted to issue a new construction in the final written
decision given that claim construction was a disputed
issue during the proceedings. See Intellectual Ventures II
LLC v. Ericsson Inc., 686 F. App’x 900, 905 (Fed. Cir.
2017). Moreover, the Board is not bound to adopt either
party’s preferred articulated construction of a disputed
claim term. See Exxon Chem. Patents, Inc. v. Lubrizol
Corp., 64 F.3d 1553, 1556 (Fed. Cir. 1995); see also Home-
land Housewares, LLC v. Whirlpool Corp., 865 F.3d 1372,
1376 (Fed. Cir. 2017).
The facts in this case can be distinguished from SAS
Institute, Inc. v. ComplementSoft, LLC, 825 F.3d 1341,
1351 (Fed. Cir. 2016), rev’d and remanded on other
grounds, SAS Institute, Inc. v. Iancu, --- S. Ct. ---, No. 16-
969 (Apr. 24, 2018), on which WesternGeco relies. In
SAS, the Board construed the relevant term in its institu-
tion decision, but in the final written decision sua sponte
issued and adopted a significantly different construction,
even though neither party had disputed the Board’s
original construction and premised their arguments in the
proceeding on that construction. Because the appellant
had no notice that the Board’s construction could change
or an opportunity to address the new construction, this
court vacated the decision and remanded on that issue.
Id. at 1351–53.
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 31
Here, by contrast, the construction of “global control
system” became disputed when WesternGeco changed
course in its patent owner response. Having put it at
issue, WesternGeco was well aware that the Board could
alter its construction in the final written decision. See
Genzyme Therapeutic Prods. v. Biomarin Pharm. Inc., 825
F.3d 1360, 1367 (Fed. Cir. 2016) (finding no APA violation
where the parties “received adequate notice of the issues
that would be considered, and ultimately resolved”).
Further, even though the Board’s ultimate construction is
not identical to either party’s proposed construction, the
differences are not so materially different as to raise
potential due process concerns. WesternGeco does not
contend that it would have presented different arguments
had it known what the final construction would be.
Moreover, the Board’s construction of “global control
system” did not affect the unpatentability outcome be-
cause the Board concluded that the challenged claims
were unpatentable even under WesternGeco’s construc-
tion requiring control of “all” streamer positioning devic-
es. J.A. 182 (“Even assuming the appropriate claim
construction was limited to ‘all’ streamer positioning
devices, which it is not, this would not serve to distinguish
the claimed invention from the ’636 PCT.”). Thus, the
Board’s decision to adopt a construction between those
offered by the parties did not prejudice WesternGeco, and
we perceive no reason to overturn the Board’s construc-
tion of this term.
2. The Board’s Unpatentability Findings Based on
the ’636 PCT Are Not Erroneous
The Board found claims 1, 4, and 15 of the ’967 Patent
to be unpatentable under 35 U.S.C. §§ 102 and 103 in
view of WO 98/28636 (the ’636 PCT). The ’636 PCT
discloses a streamer positioning device for controlling the
position of a marine seismic streamer as it is towed be-
hind a boat in a streamer array.
32 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
WesternGeco challenges the Board’s unpatentability
findings on two separate grounds. First, it argues that
the ’636 PCT reference does not explicitly disclose a
“global control system” and that the Board improperly
mixed the ’636 PCT’s background discussion with its
detailed description of the invention to find that this
reference teaches all limitations of claims 1, 14, and 15.
Second, it contends that the Board improperly relied on a
purported “admission” in the ’967 Patent about the ’636
PCT rather than relying solely on the ’636 PCT itself.
Both arguments fail.
We see no error in this case from the Board’s use of a
reference’s background to furnish context for how a
skilled artisan would understand the reference’s disclosed
embodiments. Here, the ’636 PCT background discloses
“marine seismic streamers,” towed in an array, each of
which has a plurality of streamer positioning devices
(birds). J.A. 485. That background, as the Board found,
provided context for the ensuing disclosures of the control
systems on individual birds, “for controlling the position
of a marine seismic streamer,” with each bird on a
streamer that “includes a control line” configured “to
receive control signals.” J.A. 485, 487. The Board also
found a link between the background disclosure of an
array of streamers and the later disclosures of control
lines on each streamer that control the local systems on
each bird; further, this link would have been apparent to
one of skill in the art. J.A. 177–78. As the Board con-
cluded, the ’636 PCT discloses an overall distributive
control system comprising a local control system in each
bird dispersed along the streamers and a separate global
“position determining system” capable of controlling the
birds within the array by transmitting appropriate loca-
tion information along the disclosed control lines.
J.A. 176–80. Collectively, this provides substantial evi-
dence that the ’636 PCT anticipates claims 1, 4, and 15 of
the ’967 Patent.
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 33
The Board’s consideration of the ’967 Patent’s charac-
terization of the prior art was also proper. “A statement
in a patent that something is in the prior art is binding on
the applicant and patentee for determinations of anticipa-
tion and obviousness.” Constant v. Advanced Micro-
Devices, Inc., 848 F.2d 1560, 1570 (Fed. Cir. 1988); see
PharmaStem Therapeutics, Inc. v. ViaCell, Inc., 491 F.3d
1342, 1362 (Fed. Cir. 2007). Here, the Board reviewed the
disclosure of the ’636 PCT and concluded that it teaches
the claimed distributed control system. The Board’s
finding was grounded in the ’636 PCT’s disclosure of a
global “positioning determining system” and a local con-
trol system on each bird. See J.A. 176. The Board then
found that the ’967 Patent’s characterization of the ’636
PCT reinforced the conclusion that the ’636 PCT antici-
pated the claims. J.A. 178.
As we have explained, substantial evidence supports
the Board’s determination that the ’636 PCT anticipates
the challenged claims of the ’967 Patent. See Kennametal,
Inc. v. Ingersoll Cutting Tool Co., 780 F.3d 1376, 1381
(Fed. Cir. 2015) (affirming anticipation determination
where a person of skill in the art would “at once envisage
the claimed arrangement or combination”). But, even if
the ’636 PCT does not anticipate, its disclosure, as inter-
preted by the credited and undisputed testimony of PGS’s
experts, would have rendered obvious the claimed combi-
nation of local control systems on birds with a global
control system that controls the birds. See J.A. 1044–46,
1443–44 (explaining how a person of ordinary skill would
have been motivated to adapt the ’636 PCT so that it
employed a global control system). The evidence regard-
ing the meaning of the ’636 PCT disclosures and motiva-
tions of the skilled artisan is sufficient to support the
Board’s alternative finding of obviousness.
34 WESTERNGECO LLC v. ION GEOPHYSICAL CORP.
D. Objective Indicia of Nonobviousness
Lastly, WesternGeco argues that the Board improper-
ly disregarded objective evidence of nonobviousness for
the ’967 and ’520 Patents. As the patent owner, West-
ernGeco bears the burden of showing a sufficient nexus
between the claimed invention and any objective evidence
of nonobviousness. ABT Sys., LLC v. Emerson Elec. Co.,
797 F.3d 1350, 1361–62 (Fed. Cir. 2015).
The Board found that WesternGeco failed to establish
a nexus between the claims at issue and the purported
objective indicia of nonobviousness. 12 Specifically, it
found the testimony of WesternGeco’s witness, Robin
Walker, insufficient to establish nexus because it was
directed to “lateral steering technology,” not the inven-
tions at issue. J.A. 32–33, 86–87, 133–34. The Board also
credited the patents’ inventor, who admitted that he did
not invent lateral steering, which was in the prior art.
J.A. 334. Further, Mr. Walker testified that the purchas-
ers of WesternGeco’s commercial product, Q-Marine, had
no interest in the technical features actually recited in the
claims of the WesternGeco Patents. J.A. 14749–50.
Based on this evidence, even if a nexus existed, the Board
concluded that the evidence was insufficient to overcome
the strong showing of obviousness demonstrated by the
Petitioner. J.A. 33, 88, 134, 192, 271, 337.
12 WesternGeco asserts that nexus is presumed for a
commercial embodiment like DigiFIN, but provides no
analysis. To establish a presumption of a nexus, the
patentee must show that the “product ‘embodies the
claimed features, and is coextensive with them.’” Polaris
Indus., Inc. v. Arctic Cat, Inc., 882 F.3d 1056, 1072 (Fed.
Cir. 2018) (quoting Brown & Williamson Tobacco Corp. v.
Philip Morris Inc., 229 F.3d 1120, 1130 (Fed. Cir. 2000)).
WesternGeco has not made this showing.
WESTERNGECO LLC v. ION GEOPHYSICAL CORP. 35
Substantial evidence supports the Board’s findings.
Any commercial success enjoyed by the Q-Marine or the
DigiFIN product “is only significant if there is a nexus
between the claimed invention and the commercial suc-
cess.” Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299,
1311–12 (Fed. Cir. 2006). Here, WesternGeco relied on
the testimony of Mr. Walker, who did not determine
whether the Q-Marine or DigiFIN products embodied the
challenged claims. J.A. 2895. Further, WesternGeco has
not shown that the driving force behind the product sales
was a direct result of the unique characteristics of the
claimed inventions. See In re DBC, 545 F.3d 1373, 1384
(Fed. Cir. 2008) (finding no nexus absent evidence that
“the driving force behind [the allegedly successful prod-
uct’s sales] was the [claimed invention]”). Even if West-
ernGeco had satisfied its burden of showing a sufficient
nexus between the claimed invention and its objective
evidence of nonobviousness, the evidence does not over-
come the strong showing of obviousness in this case. See
Sud-Chemie, Inc. v. Multisorb Techs., Inc., 554 F.3d 1001,
1009 (Fed. Cir. 2009).
CONCLUSION
We have considered WesternGeco’s remaining argu-
ments and find them unpersuasive. The Board properly
held that ION is not a real party in interest or privy of
PGS. Thus, the statutory time bar does not apply. On
the merits, we find that, for each of the WesternGeco
Patents, the Board correctly interpreted the claims, and
substantial evidence supports the Board’s unpatentability
findings.
For these reasons, the Board’s decisions regarding the
WesternGeco Patents are
AFFIRMED