The US Court of Appeals for the Federal Circuit recently reversed a Patent Trial & Appeal Board (PTAB) decision, ruling that the challenged patent claims were obvious. The Court found that a person of ordinary skill in the art (POSITA) would have been motivated to swap two specific information bits in a 20-bit codeword to improve performance. The case in question is *Honeywell Int’l Inc. v. 3G Licensing, S.A.*, Case Nos. 23-1354; -1384; -1407 (Fed. Cir. Jan. 2, 2025) (Dyk, Chen, JJ.) (Stoll, J., dissenting).
3G Licensing holds a patent for a coding method used to transmit a channel quality indicator (CQI) in mobile communication systems. The CQI, a five-bit binary integer (ranging from 0 to 30), is sent from user equipment, like a cell phone, to a base station to indicate the quality of the cellular connection. Base stations adjust data rates based on the signal strength, using adaptive modulation and coding techniques to assign higher rates to stronger signals and lower rates to weaker ones. CQI accuracy plays a critical role in optimizing data transmission efficiency and ensuring the original message is recoverable despite transmission errors.
The patent claims at issue relate to a CQI code designed to maximize protection of the most significant bit (MSB), aiming to reduce the effects of transmission errors. The prior art disclosed a method and a basis sequence table that provided additional protection for the MSB, minimizing root-mean-square error. However, the claimed invention differed in requiring the swapping of the last two bits of the basis sequence table. The PTAB had found that a skilled artisan would not have been motivated to make this modification to improve MSB protection, nor would such a modification have been deemed desirable. Honeywell appealed.
The Federal Circuit reversed the PTAB’s decision, declaring the claims obvious for several key reasons. First, the Court determined that the PTAB had incorrectly concluded that a POSITA would not have been motivated to swap the last two bits to enhance MSB protection. The Court emphasized that the motivation to modify prior art does not need to align with the inventor’s original motivation. Therefore, the PTAB’s reasoning that minimizing root-mean-square error was not the patent’s primary goal should not have been a key consideration.
Second, the Federal Circuit noted that prior art explicitly taught the importance of protecting the MSB through redundancy. A skilled artisan would have understood that swapping the two bits, as claimed, would add redundancy and improve MSB protection. Honeywell’s expert testimony further supported the conclusion that the prior art would have provided the necessary motivation to reach the claimed invention. 3G’s expert did not dispute that swapping the bits would improve MSB protection.
Third, the Court found that the PTAB had wrongly conflated obviousness with anticipation by requiring that the prior art disclose the swapping of the two bits. Anticipation involves prior art specifically disclosing the claimed modification, while obviousness does not require such a direct disclosure. The Federal Circuit concluded that the PTAB had mistakenly treated these two standards as equivalent.
Finally, the Court ruled that the PTAB erred in requiring that the claimed basis sequence table represent the most preferred or optimal combination. As the Federal Circuit explained, obviousness is not determined by whether an invention is the best possible solution but by whether the prior art suggests the invention’s desirability.
Judge Stoll dissented in part. While she agreed that the PTAB had conflated obviousness with anticipation, she argued that this mistake warranted vacating and remanding the case for further analysis, rather than the majority’s decision to make new factual findings and resolve arguments not raised by the parties.
Our DC IP attorneys recognized this Federal Circuit decision highlights the importance of properly evaluating the factors related to obviousness and distinguishing them from other patentability standards, such as anticipation.