As v. Iancu

891 F.3d 1354

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

2016-2470, 2016-2472, 2016-2474

United States Court of Appeals, Federal Circuit.

Decided: June 7, 2018

David I. Berl, Williams & Connolly LLP, Washington, DC, argued for appellant. Also represented by Jessamyn Sheli Berniker, David M. Krinsky, James Matthew Rice.

Monica Barnes Lateef, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, argued for intervenor. Also represented by Nathan K. Kelley, Thomas W. Krause, Meredith Hope Schoenfeld.

Before Wallach, Taranto, and Stoll, Circuit Judges.

Taranto, Circuit Judge.

PGS Geophysical AS owns U.S. Patent No. 6,906,981, which describes and claims methods and systems for performing "marine seismic surveying" to determine the structure of earth formations below the seabed. WesternGeco, L.L.C., a competitor of PGS's, filed three petitions requesting inter partes reviews (IPRs) of claims 1–38 of the '981 patent. The Patent Trial and Appeal Board of the Patent and Trademark Office (PTO), acting as the PTO Director's delegate, instituted three IPRs, but it specified for review only some of the claims WesternGeco challenged and only some of the grounds for WesternGeco's challenges, not all claims or all grounds. In its final written decisions in the IPRs, the Board ruled partly for PGS and partly for WesternGeco on the reviewed claims and grounds. Both PGS and WesternGeco appealed, but WesternGeco then settled with PGS and withdrew, leaving only PGS's appeals as to certain claims of the '981 patent that the Board ruled unpatentable for obviousness. The Director intervened to defend the Board's decisions. 35 U.S.C. § 143.

We affirm. We first conclude that, although SAS Institute, Inc. v. Iancu , ––– U.S. ––––, 138 S.Ct. 1348, 200 L.Ed.2d 695 (2018), now makes clear that the Board erred in limiting the scope of the IPRs it instituted and hence the scope of its final written decisions, we have jurisdiction to address the merits of the Board's final written decisions and that we need not, and will not, sua sponte revive the "non-instituted" claims and grounds. We then conclude that the Board committed no error justifying disturbance of its obviousness decisions on their merits.

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; id. , col. 1, lines 50–52. More particularly, the invention uses multiple seismic sources that are spaced apart "at a selected distance." Id. , col. 2, lines 42–47. The "seismic energy sources such as air guns and water guns ... are fired substantially simultaneously," id. , col. 4, lines 4–6, but with a short, predetermined time delay that is typically "less than one second," id. , col. 6, lines 18–20. "Firing the first source, waiting the predetermined delay and firing the second source thereafter is referred to ... as a 'firing sequence.' " Id. , col. 5, line 67 through col. 6, line 2. The claimed methods use multiple firing sequences, and the time delay "is different for each successive firing sequence." Id. , col. 6, lines 4–9. "The delay times may be random, quasi-random or systematically determined ... and only need to be known." Id. , col. 10, lines 39–41. "[S]eismic sensors (typically hydrophones)" capture the acoustic response from underground rock formations. Id. , col. 4, lines 21–23,

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. Id. , col. 10, lines 56–62. Time delays are one form of "encoding" the data to allow such identification, which is then "decoded" in post-processing. PGS Br. 8–9, 13.

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. Id. ; PGS Br. 14–15. The use of multiple shots fired in close temporal proximity makes the surveying process more efficient. PGS Br. 7–8; see also '981 patent, col. 10, lines 52–64.

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 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 U.S. Patent No. 6,545,944. The Board also determined that claims 1, 2, 6, 16, 17, 21–24, 28, 29, 31, 32, and 35–37 are unpatentable for obviousness over U.S. Patent Nos. 5,924,049 (Beasley) and 4,953,657 (Edington).

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. 138 S.Ct. at 1352–54. Neither PGS nor the Director asks for any SAS -based action—whether to block our deciding the appeal on the instituted claims and grounds or to revive the "non-instituted" claims or grounds. Nor has a request for SAS -based relief been filed by WesternGeco, which settled with PGS and withdrew from the appeals long ago.

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 (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...