PTAB May Revisit Issues Left Unresolved by Prior Appeal

INTELLECTUAL PIXELS LIMITED v. SONY INTERACTIVE ENTERTAINMENT LLC

Before Dyk, Stoll, and Stark.  Appeal from the Patent Trial and Appeal Board.

Summary: The Board did not exceed the Federal Circuit’s mandate on remand by considering a limitation that was not addressed in the Board’s original decision or the appeal of that decision.

Sony petitioned for inter partes review of Intellectual Pixels Ltd.’s (“IPL”) patent covering methods for hosting interactive software on an external server, whereby a client device receives and transmits user input to the server, and the server generates updated images, compresses the images, and transmits the images to the client device for display. In its original decision, the Board concluded that Sony had not shown that the prior art, Wiltshire, disclosed generating updated images. Sony appealed and the Federal Circuit vacated the Board’s decision because Wiltshire disclosed using its system with a video game, which required generating new images. On remand, the Board issued a second decision finding that Wiltshire disclosed the generating limitation and also that it disclosed the other limitation of compressing and transmitting the generated image. Thus, the Board held the challenged claims unpatentable as obvious.

IPL appealed, arguing the Board exceeded the scope of the Federal Circuit’s mandate by making two findings that were not set aside in the prior appeal. First, the Board found on remand that Wiltshire applied its system to video games which required “generating” images, whereas the Board originally found that Wiltshire did not disclose the use of video games. But the Federal Circuit held that this finding was compelled by the Federal Circuit’s mandate, not foreclosed by it. Second, the Board found that Wiltshire disclosed the compressing limitation, whereas the Board originally stated that the “updated image” required in both the generating and compressing limitations was not present in Wiltshire. The Federal Circuit rejected IPL’s argument, explaining that the Board’s original decision was based on the generating limitation, and therefore any findings of fact relating to the compressing limitation were not subject to appeal, not decided by the Federal Circuit, and not part of the mandate.  Thus, the Board was free to consider on remand whether Wiltshire disclosed the compressing limitation.  And because the Board’s findings on remand were supported by substantial evidence, the Federal Circuit affirmed.

Editor: Sean Murray