PGS GEOPHYSICAL AS v. IANCU
Opinion
*1357
PGS Geophysical AS owns
We affirm. We first conclude that, although
SAS Institute, Inc. v. Iancu
, --- U.S. ----,
I
A
In the invention of the '981 patent, both seismic energy sources and seismic energy sensors are towed behind moving boats, the seismic sources are fired in a specific manner, and the sensors receive energy reflecting off earth formations below the seabed-the results being informative about the structure of those formations. '981 patent, Abstract;
Because the sources are fired (shot) in close temporal proximity, the responses from multiple shots will overlap. The use of known time delays between shots allows the "signals from each of the plurality of sources [to] be uniquely identified in a shot sequence" when post-processing the data.
It is desirable to record the response of multiple shots "to reduce the effects of noise and acquire a higher quality seismic representation of a particular subsurface structure." '981 patent, col. 2, lines 7-15. By isolating the seismic sources and "summing or 'stacking' " the recorded responses, the signal-to-noise ratio is increased for the response from each seismic source, which results in better imaging of the sub-surface structures.
Use of time-delay encoding in marine seismic surveying, where the seismic sources are moving (as they are towed behind a boat), can result in reduced spatial resolution of the data. Because the sources are towed behind moving vessels, each shot in a firing sequence is taken from a slightly different location. This can result in "spatial-reflection point smearing" (smearing) when the individual shot records are later summed together. PGS Br. 5, 12-13.
Several of the '981 patent's claims are at issue here. Claim 31 is illustrative for present purposes:
31. A method for determining signal components attributable to a first seismic energy source and to a second seismic energy source in signals recorded from seismic sensors, the first and second sources and the sensors towed along a survey line, the first source and the second source fired in a plurality of sequences, a time delay between firing the first source and the second source in each firing sequence being different than the time delay in other ones of the firing sequences, the method comprising:
determining a first component of the recorded signals that is coherent from shot to shot and from trace to trace;
time aligning the recorded signals with respect to a firing time of the second source in each firing sequence; and
determining a second component of the signals that is coherent from shot to shot and from trace to trace in the time aligned signals.
'981 patent, col. 13, lines 6-22.
B
In November 2014, WesternGeco filed three petitions requesting IPRs of claims 1-38 of the '981 patent -the first covering claims 1-22, the second covering claims 23-30, the third covering claims 31-38. In each petition, WesternGeco set forth the same three grounds. In June 2015, the Board instituted three IPRs covering various claims and only some grounds. In IPR2015-00309, the Board instituted a review of claims 1-7, 10-22; in IPR2015-00310, it instituted a review of claims 23-30; and in IPR2015-00311, it instituted a review of claims 31-38. The Board did not institute on all claims or all grounds set *1359 forth by WesternGeco: for example, the Board did not institute on claims 8 and 9, which were challenged in the first petition-the subject of IPR2015-00309; and it did not institute on Ground 2 set forth in all three petitions.
On June 8, 2016, the Board issued three final written decisions. For purposes of these appeals, the Board's reasoning is substantially similar in the three decisions.
1
The Board determined that claims 1, 2, 7, 10, 11, 16, 21, 23, 24, and 30 are unpatentable as anticipated by
On appeal, PGS does not challenge the ruling on anticipation. PGS challenges only the two-reference obviousness ruling, and only as to claims 6, 17, 22, 28, 29, 31, 32, and 35-37. Beasley addresses "seismic survey systems and methods in which two or more seismic sources are fired simultaneously, or significantly close together temporally," and "3-D marine seismic survey" applications. Beasley, col. 1, lines 19-27. Edington describes "a method of separating for analysis seismic signals received from multiple seismic sources which are activated substantially simultaneously," col. 1, lines 7-10, using "determinable time delay[s]," col. 2, lines 1-13, 28-41. PGS's argument on appeal is that the Board erred in finding a motivation to combine Beasley and Edington and, more particularly, in finding that smearing would not have deterred the making of that combination.
II
We first consider whether we have jurisdiction to address PGS's appeals and whether, if so, we may and should decide those appeals and do so without sua sponte remanding for the Board to address the claims and grounds that WesternGeco included in its petitions but that the Board excluded from the IPRs. Both PGS and the Director answer yes to those questions. So do we.
The issue arises because of the Supreme Court's recent decision in
SAS
, which held that the IPR statute does not permit a partial institution on an IPR petition of the sort presented here.
A
We will treat claims and grounds the same in considering the SAS issues currently before us. In light of SAS , the PTO issued a "Guidance" declaring that the Board will now institute on all claims and all grounds included in a petition if it institutes at all. PTO, Guidance on the impact of SAS on AIA trial proceedings *1360 (Apr. 26, 2018). 2 The cases currently in this court, which emerged from the Board under pre- SAS practice, raise certain transition issues. We will address those issues without distinguishing non-instituted claims from non-instituted grounds.
Equal treatment of claims and grounds for institution purposes has pervasive support in
SAS
. Although
We read those and other similar portions of the SAS opinion as interpreting the statute to require a simple yes-or-no institution choice respecting a petition, embracing all challenges included in the petition, and we have seen no basis for a contrary understanding of the statute in light of SAS . We note that it is a distinct question (not presented here) whether, after instituting on the entire petition, the Board, in a final written decision, may decide the merits of certain challenges and then find others moot, the latter subject to revival if appellate review of the decided challenges renders the undecided ones no longer moot. We conclude, based on our understanding of the statute in light of SAS , that the SAS transition issues about institution arise in all three appeals before us, given the Board's denial of institution on Ground 2 in all three petitions, not only in the appeal from IPR2015-00309, which included fewer than all challenged claims.
B
We conclude that we have jurisdiction to rule on the appeals,
i.e.
, that the existence of non-instituted claims and grounds does not deprive us of jurisdiction to decide PGS's appeals. Under
The standard for "final agency action" under the Administrative Procedure Act (APA),
Finality is also seen by drawing on the analogy to civil litigation the Court invoked in
SAS
. What the Board did here is analogous to a situation in which a district court, upon receipt of a two-count complaint, incorrectly dismisses one count early in the case (without prejudice to refiling in that forum or elsewhere) and proceeds to a merits judgment on the second count. Once the second count is finally resolved, there would be a final judgment in that situation, with both counts subject to appeal. The early dismissal would be final as to that claim,
see
United States v. Wallace & Tiernan Co.
,
No different analysis is warranted for what the Board did here. In two stages, the Board finally disposed of all the challenges ( i.e. , claims and grounds) in the *1362 petitions placed before it. Some of what the Board did is now seen to be legally erroneous under SAS , but legal error does not mean lack of finality. For those reasons, we conclude that we have jurisdiction to hear PGS's appeals.
C
Having found jurisdiction, we readily conclude that we may decide PGS's appeals of the Board decisions and that we need not reopen the non-instituted claims and grounds. In this case, no party seeks SAS -based relief. We do not rule on whether a different conclusion might be warranted in a case in which a party has sought SAS -based relief from us.
We have uncovered no legal authority that requires us sua sponte to treat the Board's incorrect denial of institution as to some claims and grounds either as a basis for disturbing or declining to review the Board's rulings on the instituted claims and grounds or as a basis for reopening the IPRs to embrace the non-instituted claims and grounds. Even if the Board could be said to have acted "ultra vires" in refusing to institute reviews of some claims and grounds-and then proceeding to merits decisions concerning the claims and grounds included in the instituted reviews-the Board's error is waivable, not one we are required to notice and act on in the absence of an appropriate request for relief on that basis.
See
CBS Broad., Inc. v. EchoStar Commc'ns Corp.
,
In the absence of an obligation to act sua sponte, we will not sua sponte exercise *1363 any discretion to decline to decide the appeals on the instituted claims and grounds. There is a clear private and public interest in our deciding the patentability issues before us. Nor will we exercise any discretion to revive the non-instituted claims and grounds. Finality and expedition interests strongly counsel against such action. And so does the Court's emphasis in SAS on the petitioner's control of the contours of the proceeding.
III
As relevant here, "[t]he obviousness inquiry entails consideration of whether a person of ordinary skill in the art would have been motivated to combine the teachings of the prior art references to achieve the claimed invention, and ... would have had a reasonable expectation of success in doing so."
Insite Vision Inc. v. Sandoz, Inc.
,
PGS does not here dispute that the combination of Beasley and Edington teaches all of the limitations of the challenged claims. The Board found that PGS had waived any contrary argument for all claims now on appeal except claims 36 and 37.
309 Final Decision
,
On appeal, PGS argues that the Board erred regarding the needed motivation to combine Beasley and Edington, including by not adequately addressing the problem of smearing. We reject PGS's challenge.
A
In its petitions, WesternGeco relied for the motivation to combine on the express suggestion in Beasley that its systems and methods could use various types of encoding-of which the use of time delays taught in Edington was one known type. J.A. 171. 4 WesternGeco argued that, given Beasley's disclosure, "[i]t would have been *1364 obvious to employ the known time encoding techniques disclosed in Edington in the system of Beasley to achieve the predictable result of distinguishing sources that are fired either simultaneously or near simultaneously." J.A. 172-73. That contention, as PGS noted, was "[t]he linchpin of WesternGeco's obviousness case." J.A. 261. The Board found WesternGeco's argument persuasive, and we conclude that substantial evidence supports the Board's finding of a motivation to combine.
Beasley states: "If desired, the leading and trailing sources may be arranged to emit encoded wavefields
using any desired type of coding
. The respective sources are then programmed to be activated concurrently instead of sequentially." Beasley, col. 7, lines 54-58 (emphasis added). According to Beasley, "[t]he advantage to that technique is that the subsurface incident points have improved commonality since there is no time shift and therefore no spatial reflection-point smearing between successive ... source activations."
On the question of what Beasley teaches, which is a factual question,
see
,
e.g.
,
In re Fulton
,
Second, the Board found that Edington's time-delay encoding is a type of source signature encoding, as required by Beasley.
309 Final Decision
,
*1365
PGS contends that the Board did not really make the needed motivation finding. It cites decisions in which we have explained that the finder of fact in a case like this must go beyond the question of whether one of ordinary skill in the art could have combined the references at issue (in the way claimed) to answer the question of whether such an artisan would have been motivated to do so.
See
,
e.g.
,
Personal Web Techs., LLC v. Apple, Inc.
,
We understand the Board to have answered that question. Immediately after stating that PGS "does not dispute Petitioner's assertion that the combination of Beasley and Edington describes each element of independent claim 1, but merely asserts that an ordinarily skilled artisan would not have combined Beasley and Edington," it concluded: "Accordingly, upon reviewing the record developed during trial, we are persuaded by Petitioner's position regarding the relevant teachings of Beasley and Edington and address in detail only the disputed issues relating to the combinability of Beasley and Edington."
309 Final Decision
,
Our conclusion is not undermined by the fact that the Board concentrated much of its attention on what could be combined. The Board explained that it was persuaded by WesternGeco's simple affirmative case for motivation, highlighting the key statement in Beasley itself, and therefore that it would focus its discussion on PGS's contrary arguments, which were substantially directed at combinability.
309 Final Decision
,
B
PGS also argues that the Board did not properly consider the effect of smearing as a problem that would teach away from combining Beasley with Edington, undermining any finding of motivation to combine.
*1366
PGS invokes the principle that the prior art must be considered "as a whole, including portions that would lead away from the invention in suit."
Panduit Corp. v. Dennison Mfg. Co.
,
The Board found that the risk of smearing would not teach away from the combination of Beasley with the simple time-delay teaching of Edington to arrive at the claims at issue here.
309 Final Decision
,
As discussed above, the Board found that Beasley's disclosure of near-simultaneous activation of energy sources includes some amount of time delay. And it is undisputed that some amount of smearing would occur when using Edington's time-delay encoding in the marine context where the seismic sources are continuously moving.
309 Final Decision
,
The Board found that "Beasley indicates that simultaneous (or near-simultaneous) activation of sources avoids the smearing that otherwise results when activating the sources sequentially." Id. at *14. On that basis, the Board found that significant smearing could be avoided by using small time delays such that the firings were nearly simultaneous as contemplated by Beasley's concurrent-firing embodiment. Id. Small time delays are covered by the '981 patent claims at issue, so smearing could be avoided by making the combination at issue.
PGS argues that its expert Dr. Lynn provided undisputed testimony that combining Edington's method with Beasley "would result in an eight-fold loss of spatial resolution." PGS Br. 35-36. That argument relies on the presumption that one of ordinary skill would blindly incorporate Edington's exact methodology into Beasley. But the Board properly did not view WesternGeco's proposed combination to be so limited.
309 Final Decision
,
IV
For the foregoing reasons, we affirm the Board's final written decisions.
AFFIRMED
Unless otherwise noted, general references to the Board's reasoning in its final written decision in IPR2015-00309 apply to all IPRs on appeal.
WesternGeco, L.L.C. v. PGS Geophysical AS
, IPR2015-00309,
https://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/trials/guidance-impact-sas-aia-trial.
See
City of Arlington
,
Because WesternGeco's petitions, PGS's patent owner responses, and the Board decisions in the three IPRs are materially the same for present purposes, we refer only to the papers in IPR2015-00309.
Reference
- Full Case Name
- PGS GEOPHYSICAL AS, Appellant v. Andrei IANCU, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, Intervenor
- Cited By
- 52 cases
- Status
- Published