Synqor, Inc. v. Vicor Corp.

988 F.3d 1341

SYNQOR, INC., Appellant

v.VICOR CORPORATION, Appellee

2019-1704

United States Court of Appeals, Federal Circuit.

Decided: February 22, 2021

Steven J. Horowitz, Sidley Austin LLP, Chicago, IL, argued for appellant. Also represented by Thomas D. Rein ; Michael D. Hatcher, Dallas, TX.

Matthew A. Smith, Smith Baluch LLP, Menlo Park, CA, argued for appellee. Also represented by Elizabeth Laughton ; Andrew Baluch, Washington, DC.

Before Dyk, Clevenger, and Hughes, Circuit Judges.

Dissenting opinion filed by Circuit Judge Dyk.

Hughes, Circuit Judge.

SynQor, Inc. appeals the inter partes reexamination decision of the Patent Trial and Appeal Board holding unpatentable as obvious original claims 1–19, 28, and 31 of SynQor's patent, U.S. Patent No. 7,072,190, as well as newly presented claims 34–38, which were proposed during the reexamination proceeding. Because decisions the Board made in previous reexamination proceedings preclude finding claims 1–19, 28, and 31 obvious based on the grounds relied upon by the Board, we vacate the Board's decision as to those claims. And because the expiration of the ’190 patent renders any appeal of the Board's decision regarding claims 34–38 moot, we also vacate the Board's decision as to those claims.

I

The ’190 patent, entitled "High Efficiency Power Converter," issued on July 4, 2006, with a lineage of parent applications dating back to a January 1997 provisional application. The ’190 patent counts itself part of an extensive family including two other patents that have been involved in litigation reaching this court: U.S. Patent Nos. 7,564,702 and 8,023,290. See Appellant's Br. vi–viii. These patents disclose technology for DC-DC power converters used in large computer systems and telecommunication and data communication equipment to convert direct electric current from one voltage to another. See SynQor, Inc. v. Artesyn Techs., Inc. , 709 F.3d 1365, 1372–73 (Fed. Cir. 2013) ( SynQor I ). The patents claim a technology SynQor dubs "Intermediate Bus Architecture," which SynQor claims "improve[s] prior art systems by separating the isolation and regulation functionality of DC-DC converters into two steps and using a single isolation stage to drive multiple regulation stages." Vicor Corp. v. SynQor, Inc. , 869 F.3d 1309, 1313–14, 1316–17 (Fed. Cir. 2017) ( SynQor II ).

The ’190 patent has a lengthy litigation history with multiple board decisions and appeals in this court. Only the portions relevant to this appeal are recited here.

In 2011, SynQor asserted the ’190 patent, the ’702 patent, and the ’290 patent, among others, against Vicor. See SynQor, Inc. v. Cisco Sys., Inc. , No. 2:11CV54, 2014 WL 1338712 (E.D. Tex. Jan. 2, 2014). Vicor petitioned for reexamination of the ’190, ’702, and ’290 patents, arguing that the claims of the ’190 patent were unpatentable over two references: "Steigerwald," U.S. Patent No. 5,377,090, including the text and drawings of U.S. Patent No. 5,274,539 incorporated by reference, and "Cobos," Cobos et al., "Low Output Voltage DC/DC Conversion ," 20th Int'l Conf. Indus. Electronics, Control and Instrumentation (Sept. 5–9, 1994) pp. 1676–81. In response, SynQor argued that an artisan would not have combined Steigerwald and Cobos because they taught circuits that operated at incompatible frequencies.

On appeals from the reexaminations of the ’702 and ’290 patents, the Board affirmed that the challenged claims of the ’702 patent were not unpatentable, finding that "there are incompatibilities in frequency between [Cobos and Steigerwald]." Vicor Corp. v. SynQor, Inc. , No. APPEAL 2014-007362, 2015 WL 1871498, at *12 (P.T.A.B. Apr. 20, 2015). The Board likewise found the challenged claims of the ’290 patent not unpatentable based on a combination of Steigerwald, Cobos, and another reference. Vicor Corp. v. SynQor, Inc. , No. APPEAL 2015-004509, 2016 WL 2344380, at *6–7 (P.T.A.B. May 2, 2016). The Board reasoned that SynQor's evidence that Steigerwald and Cobos operated at incompatible frequencies was more credible than Vicor's evidence to the contrary. Id.

SynQor and Vicor appealed the decisions of the Board in the reexaminations of the ’702 and ’290 patents to this court. This court affirmed the patentability of the challenged claims of the ’290 patent, holding that substantial evidence supported the Board's finding that an artisan would not combine Steigerwald and Cobos because of their frequency incompatibility. SynQor II , 869 F.3d at 1320. The court also affirmed the Board's decision finding the ’702 patent not unpatentable but was not asked to review and therefore did not reach the Board's finding that Steigerwald and Cobos were incompatible. See generally Vicor Corp. v. SynQor, Inc. , 706 F. App'x 673 (Fed. Cir. 2017).

But as to the patent at issue here, the ’190 patent, the Board found instead that Steigerwald and Cobos were not incompatible. In concluding that the challenged claims of the ’190 patent were unpatentable over Steigerwald and Cobos, the Board was "not persuaded that the switching frequency differential is sufficient to render the combination unsuitable." Vicor Corp. v. SynQor, Inc. , No. APPEAL 2014-001733, 2016 WL 2344371, at *6 (P.T.A.B. May 2, 2016). It found claim 34 unpatentable based on a new ground of rejection, see id. at *15, and SynQor opted to reopen prosecution of claim 34.

The ’190 patent expired in January 2018. A year later, the Board issued its decision regarding the claim in the ’190 reexamination. The Board again rejected SynQor's argument that Steigerwald and Cobos had incompatible frequencies, concluding that "the evidence points strongly to the lack of a frequency range discrepancy between Cobos and Steigerwald." Vicor Corp. v. SynQor, Inc. , No. APPEAL 2018-000038, 2019 WL 852075, at *4 (P.T.A.B. Feb. 19, 2019).

SynQor timely appealed the Board's final decision in the ’190 patent reexamination. We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).

II

SynQor makes four arguments on appeal. First, SynQor argues that common law issue preclusion arising from the ’702 and ’290 patent reexaminations should have collaterally estopped the Board from finding that an artisan would be motivated to combine Steigerwald and Cobos.¹ Second, SynQor argues that the Board's findings on the frequency (in)compatibility in the ’190 patent reexamination exhibit inadequately explained inconsistencies with the ’290 patent reexamination decision and within the two decisions issued in the ’190 patent reexamination, requiring vacatur under principles of administrative law. Third, SynQor argues that an additional obviousness ground under which the Board found claims 2–4 obvious, combining Steigerwald, Cobos, and a third reference, lacked substantial evidence that an artisan would combine Steigerwald with the third reference. Finally, SynQor argues that its appeal of the Board's decision on newly presented claims 34–38 became moot through the happenstance of patent expiration, so the Board's decisions regarding those claims should therefore be vacated.

Because we agree with SynQor as to its first argument that issue preclusion compelled a finding that an artisan would not combine Steigerwald and Cobos—which resolves the parties’ dispute for claims 1–19, 28, and 31—we address only this argument and SynQor's fourth argument as to the mootness of the Board's decisions regarding claims 34–38.

A

"[T]he determination of a question directly involved in one action is conclusive as to that question in a second suit." B & B Hardware, Inc. v. Hargis Indus., Inc. , 575 U.S. 138, 147, 135 S.Ct. 1293, 191 L.Ed.2d 222 (2015) (quoting Cromwell v. County of Sac , 94 U.S. 351, 354, 24 L.Ed. 195 (1877)). "It is well established that collateral estoppel, also known as issue preclusion, applies in the administrative context." MaxLinear, Inc. , 880 F.3d at 1376. In fact, "because the principle of issue preclusion was so ‘well established’ at common law, in those situations in which Congress has authorized agencies to resolve disputes, ‘courts may take it as given that Congress has legislated with the expectation that the principle [of issue preclusion] will apply ‘except when a statutory purpose to the contrary is evident.’ " B & B Hardware , 575 U.S. at 148, 135 S.Ct. 1293 (quoting Astoria Fed. Sav. & Loan Ass'n v. Solimino , 501 U.S. 104, 108, 111 S.Ct. 2166, 115 L.Ed.2d 96 (1991) ).

Thus, administrative decisions have preclusive effect "[w]hen an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate." B & B Hardware , 575 U.S. at 148–49, 135 S.Ct. 1293 (quoting Univ. of Tenn. v. Elliott , 478 U.S. 788, 797–98, 106 S.Ct. 3220, 92 L.Ed.2d 635 (1986) ). "Although administrative estoppel is favored as a matter of general policy, its suitability may vary according to the specific context of the rights at stake, the power of the agency, and the relative adequacy of agency procedures." Astoria , 501 U.S. at 109–10, 111 S.Ct. 2166.

Applying these principles, we have already held that issue preclusion applies to inter partes reviews. See Papst Licensing GmbH & Co. KG v. Samsung Elecs. Am., Inc. , 924 F.3d 1243, 1250–51 (Fed. Cir. 2019). Accordingly, we must decide "whether there is an ‘evident’ reason why Congress would not want [inter partes reexamination] decisions to receive preclusive effect, even in those cases in which the ordinary elements of issue preclusion are met." B & B Hardware , 575 U.S. at 151, 135 S.Ct. 1293. In doing so, we apply a "lenient presumption in favor of administrative estoppel." Astoria , 501 U.S. at 112, 111 S.Ct. 2166. If Congress did not foreclose the application of issue preclusion, we then "turn to whether there is a categorical reason why [inter partes reexamination] decisions can never meet the ordinary elements of issue preclusion, e.g. , those elements set out in § 27 of the Restatement (Second) of Judgments." B...