CAFC Vacates PTAB Win for Centripetal Due to Board’s Poorly Articulated Motivation to Combine Analysis

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Monday in a precedential opinion vacated and remanded a decision of the Patent Trial and Appeal Board (PTAB) that had found Palo Alto Networks (PAN), Inc. failed to establish certain claims of Centripetal Networks, LLC’s Communication Network patents unpatentable as obvious. The CAFC said the PTAB erred by not sufficiently explaining its reasoning with respect to its motivation to combine analysis.

Centripetal’s U.S. Patent No. 10,530,903 is titled “Correlating Packets in Communications Networks.” PAN argued in its petition for inter partes review (IPR) that claims 1–18 would have been obvious over U.S. Patent Application Publication No. 2014/0280778 (“Paxton”) and U.S. Patent No. 8,413,238 (“Sutton”) in view of U.S. Patent No. 8,219,675 (“Ivershen”). In its final written decision, the PTAB held that the final limitation of claim 1, “transmitting an indication of the first host responsive to the correlating,” was not proven to be taught by PAN’s proposed combination. The Board said PAN had failed to demonstrate the “necessary bridge” to demonstrate its argument that “Paxton expressly teaches creating a log and notifying a network administrator of the identified host.” Ultimately, the PTAB said it was left “with a correlation from Paxton with no specific actions taken post-correlation, and a transmission from Sutton unrelated to any correlation, but without the necessary bridge showing that one of ordinary skill in the art would have appreciated that the transmission would be responsive to the correlation.”

On appeal, however, the CAFC said the Board failed to explain what it meant by “necessary bridge” and that it merely summarized PAN’s arguments on motivation to combine without making “a clear finding on whether a person of ordinary skill in the art would have been motivated to modify Paxton by adding Sutton’s step of transmitting a notification of malicious activity after Paxton’s correlation step as proposed by PAN.” The PTAB’s explanation that it was left with a correlation from Paxton and a transmission from Sutton with no bridge was unclear.

“If the Board meant to say that it found no motivation to combine—and we do not know whether it did—it certainly failed to explain why a person of ordinary skill in the art would not have been motivated to modify Paxton to provide the recited notification as taught by Sutton in response to the correlation disclosed in Paxton,” said the CAFC’s opinion.

Additionally, the Board erred in looking at each reference individually rather than in combination, said the court. “Where, as here, the grounds for obviousness are based on a specific combination of references, arguments that ‘attack the disclosures of the two references individually’ lack merit,” the opinion said. “Here, Paxton and Sutton must be read together, not in isolation.”

Addressing Centripetal’s argument that the Board did consider the references in combination, the CAFC asserted that the “language that Centripetal quotes is not the Board’s analysis, but rather the Board’s recital of Centripetal’s own position.” The court said the PTAB’s analysis of the references in isolation constituted legal error and ultimately remanded the case back to the Board to  “clarify and explain” its holding in more detail.