Apple Inc. v. voip-pal.com, Inc.

Case: 18-1456 Document: 90 Page: 1 Filed: 09/25/2020

United States Court of Appeals

for the Federal Circuit

______________________

APPLE INC.,

Appellant

v.

VOIP-PAL.COM, INC.,

Appellee

ANDREI IANCU, UNDER SECRETARY OF

COMMERCE FOR INTELLECTUAL PROPERTY

AND DIRECTOR OF THE UNITED STATES

PATENT AND TRADEMARK OFFICE,

Intervenor

______________________

2018-1456, 2018-1457

______________________

Appeals from the United States Patent and Trademark

Office, Patent Trial and Appeal Board in Nos. IPR2016-

01198, IPR2016-01201.

______________________

Decided: September 25, 2020

______________________

MARK ANDREW PERRY, Gibson, Dunn & Crutcher LLP,

Washington, DC, argued for appellant. Also represented

by BRIAN BUROKER, ANDREW WILHELM; RYAN IWAHASHI,

Palo Alto, CA; PAUL R. HART, Erise IP, P.A., Greenwood

Village, CO; ERIC ALLAN BURESH, ADAM PRESCOTT SEITZ,

Overland Park, KS.

Case: 18-1456 Document: 90 Page: 2 Filed: 09/25/2020

2 APPLE INC. v. VOIP-PAL.COM, INC.

LEWIS EMERY HUDNELL, III, Hudnell Law Group PC,

Mountain View, CA, argued for appellee.

DENNIS FAN, Appellate Staff, Civil Division, United

States Department of Justice, Washington, DC, argued for

intervenor. Also represented by MELISSA N. PATTERSON,

ETHAN P. DAVIS; THOMAS W. KRAUSE, FARHEENA YASMEEN

RASHEED, DANIEL KAZHDAN, Office of the Solicitor, United

States Patent and Trademark Office, Alexandria, VA.

______________________

Before PROST, Chief Judge, REYNA and HUGHES, Circuit

Judges.

REYNA, Circuit Judge.

In two consolidated appeals, Apple Inc. challenges the

final written decisions of the Patent Trial and Appeal

Board that certain claims of Voip-Pal.com, Inc.’s patents

were not invalid for obviousness. Apple also challenges the

Board’s sanctions determinations. We find no error in the

Board’s non-obviousness determinations or in its sanctions

rulings. We vacate and remand the Board’s final written

decisions as to nineteen claims on mootness grounds. We

affirm as to the remaining claims.

BACKGROUND

I

Appellee Voip-Pal.com, Inc. (“Voip-Pal”) owns U.S. Pa-

tent Nos. 8,542,815 (“the ’815 patent”) and 9,179,005 (“the

’005 patent”) (collectively, the “Asserted Patents”), both of

which are titled “Producing Routing Messages for Voice

Over IP Communications.” The Asserted Patents describe

the field of invention as “voice over IP communications and

methods and apparatus for routing and billing” and relate

to routing communications between two different types of

Case: 18-1456 Document: 90 Page: 3 Filed: 09/25/2020

APPLE INC. v. VOIP-PAL.COM, INC. 3

networks—public and private. See ’815 patent at 1:12–13,

1:15–21.

In February 2016, Voip-Pal sued appellant Apple Inc.

(“Apple”) for infringement of the Asserted Patents in the

United States District Court for the District of Nevada.

Voip-Pal.com, Inc. v. Apple Inc., No. 2:16-cv-260 (D. Nev.

Feb. 9, 2016). In June 2016, Apple petitioned for inter

partes review (“IPR”) of several claims of the Asserted Pa-

tents in two separate proceedings before the Patent Trial

and Appeal Board (“Board”)—IPR2016-01198 and

IPR2016-01201. The Nevada district court stayed Voip-

Pal’s infringement action pending the IPRs.

In its IPR petitions, Apple argued that the claims were

obvious over the combination of U.S. Patent No. 7,486,684

B2 (“Chu ’684”) and U.S. Patent No. 8,036,366 (“Chu ’366”).

Apple relied on Chu ’684 as a primary reference for its in-

frastructure, call classifying, and call routing disclosures.

Apple relied on Chu ’366 as a secondary reference for its

caller profile and dialed digit reformatting disclosures.

A panel of the Board (Benoit, Pettigrew, Margolies, JJ.)

(“Original Panel”) instituted review in both proceedings.

In June 2017, the Original Panel was replaced by a second

panel (Cocks, Chagnon, Hudalla, JJ.) (“Interim Panel”) for

reasons not memorialized in the record.

During both IPR proceedings, Voip-Pal’s former Chief

Executive Officer, Dr. Thomas E. Sawyer, sent six letters

to various parties, copying members of Congress, the Pres-

ident, federal judges, and administrative patent judges at

the Board. Dr. Sawyer did not copy or send Apple the let-

ters. The letters criticized the IPR system, complained

about cancellation rates at the Board, and requested judg-

ment in favor of Voip-Pal or dismissal of Apple’s petition in

the ongoing Apple IPR proceedings. The letters did not dis-

cuss the underlying merits of Apple’s IPR petitions.

Case: 18-1456 Document: 90 Page: 4 Filed: 09/25/2020

4 APPLE INC. v. VOIP-PAL.COM, INC.

On November 20, 2017, the Interim Panel issued final

written decisions in both actions, determining all claims to

be not invalid as obvious over Chu ’684 and Chu ’366. In

its final written decisions, the Interim Panel found that Ap-

ple did not provide evidentiary support for Apple’s argu-

ment on motivation to combine. Additionally, the Interim

Panel credited Voip-Pal’s expert’s testimony that Chu ’684

did not have, as Apple argued, a dialing deficiency.

II

Apple then moved for sanctions against Voip-Pal based

on Sawyer’s ex parte communications with the Board and

with the United States Patent and Trademark Office. Ap-

ple argued that Voip-Pal’s ex parte communications vio-

lated its due process rights and the Administrative

Procedures Act. Apple requested that the Board sanction

Voip-Pal by entering adverse judgment against Voip-Pal

or, alternatively, by vacating the final written decisions

and assigning a new panel to preside over “constitutionally

correct” new proceedings going forward.

After moving for sanctions, Apple appealed the Board’s

final written decision to this court, giving rise to the instant

consolidated appeals. Upon Apple’s motion, we stayed the

appeals and remanded the cases for the limited purpose of

allowing the Board to consider Apple’s sanctions motions.

Apple Inc. v. Voip-Pal.com, Inc., Nos. 18-1456, -1457 (Fed.

Cir. Feb. 21, 2018). For the sanctions proceedings, a new

panel (Boalick, Bonilla, Tierney, JJ.) (“Final Panel”) re-

placed the Interim Panel.

The Final Panel determined that Voip-Pal engaged in

sanctionable ex parte communications. The Final Panel

rejected Apple’s request for a directed judgment and Ap-

ple’s alternative request for new proceedings before a new

panel. The Final Panel fashioned its own sanction, which

provided that the Final Panel would preside over Apple’s

petition for rehearing, which, according to the Final Panel,

Case: 18-1456 Document: 90 Page: 5 Filed: 09/25/2020

APPLE INC. v. VOIP-PAL.COM, INC. 5

“achieves the most appropriate balance when considering

both parties’ conduct as a whole.” J.A. 71.

The parties proceeded to panel rehearing briefing. The

Final Panel denied Apple’s petition for rehearing because

Apple had “not met its burden to show that in the Final

Written Decision, the [Interim] panel misapprehended or

overlooked any matter,” J.A. 86, and “[e]ven if [the Panel]

were to accept [Apple’s] view of Chu ’684 . . . [the Panel]

would not reach a different conclusion.” J.A. 82. Apple

then moved our court to lift the limited stay. We lifted the

stay and proceeded to briefing and oral argument. Apple

Inc. v. Voip-Pal.com, Inc., Nos. 18-1456, -1457 (Fed. Cir.

July 3, 2019). We have jurisdiction under 28 U.S.C.

§ 1295(a)(4)(A).

DISCUSSION

I

Before turning to the merits of these appeals, we ad-

dress a threshold jurisdictional issue Apple raised post-

briefing. On June 8, 2020, prior to oral argument, Apple

filed a post-briefing document in both appeals entitled

“Suggestion of Mootness.” Apple Inc. v. Voip-Pal.com, Inc.,

Nos. 18-1456 (Fed. Cir. June 8, 2020), ECF No. 79. In that

submission, Apple contends that our recent ineligibility de-

termination in Voip-Pal.com, Inc. v. Twitter, Inc., 798

F. App’x 644 (Fed. Cir. 2020) (“Twitter”), renders the in-

stant appeals moot and that we must vacate the Board’s

underlying final written decisions and sanctions orders.

For the reasons discussed below, we agree in part with Ap-

ple.

A. Twitter

Shortly after the Interim Panel issued its final written

decisions in December 2017, the parties agreed to lift the

stay in the underlying district court litigation. See Voip-

Pal.com, Inc. v. Apple Inc., No. 2:16-cv-260, ECF No. 37

Case: 18-1456 Document: 90 Page: 6 Filed: 09/25/2020

6 APPLE INC. v. VOIP-PAL.COM, INC.

(D. Nev. Jan. 26, 2018). In October 2018, the Nevada dis-

trict court litigation was transferred to the Northern Dis-

trict of California, along with three other related cases in

which Voip-Pal had filed similar complaints alleging in-

fringement of the same patents. See Voip-Pal.com, Inc. v.

Apple Inc., 375 F. Supp. 3d 1110, 1117 (N.D. Cal. 2019).

The California district court required Voip-Pal to nar-

row the number of asserted claims against all parties in all

cases to the same maximum twenty claims. In March 2019,

the district court identified two representative claims

(claim 1 of the ’815 patent and claim 74 of the ’005 patent). 1

Apple and other defendants filed a consolidated motion to

dismiss, arguing that the twenty asserted claims were in-

eligible under 35 U.S.C. § 101. The district court granted

the motion to dismiss, determining that the representative

claims were patent ineligible. In March 2020, we affirmed

the district court’s judgment that the asserted claims were

patent ineligible. Twitter, 798 F. App’x at 645. We denied

Voip-Pal’s rehearing request in Twitter.

B. Overlapping Claims

At oral argument, Apple argued, and Voip-Pal did not

dispute, that these appeals are moot as to Claims 1, 7, 27,

28, 72, 73, 92, and 111 of the ’815 patent and Claims 49,

73, 74, 75, 77, 78, 83, 84, 94, 96, and 99 of the ’005 patent

(collectively, the “overlapping claims”). 2 These nineteen

overlapping claims were at issue in the underlying IPR pro-

ceedings and were also deemed patent ineligible in Twitter.

1 In the Apple IPR proceedings, the representative

claims were claim 1 of the ’815 and claim 1 of the ’005 pa-

tent.

2 See Oral Arg. at 18:06–10, 18:28–35, 19:23–47, No.

2018-1456, http://www.cafc.uscourts.gov/oral-argument-

recordings.

Case: 18-1456 Document: 90 Page: 7 Filed: 09/25/2020

APPLE INC. v. VOIP-PAL.COM, INC. 7

We agree that these overlapping claims are rendered moot

in these appeals in light of Twitter.

Because we have determined that the overlapping

claims failed the Section 101 threshold in Twitter, Apple

“no longer has the potential for injury, thereby mooting the

[obviousness] inquiry” at issue in the instant appeals. Mo-

menta Pharm., Inc. v. Bristol-Myers Squibb Co., 915 F.3d

764, 770 (Fed. Cir. 2019) (“[W]hen the potential for injury

has been mooted by events, the federal courts are deprived

of jurisdiction.”). Thus, we vacate-in-part the Board’s final

written decisions only as to these overlapping claims and

direct the Board to dismiss Apple’s petitions as to these

claims. See, e.g., United States v. Munsingwear, Inc., 340

U.S. 36, 39–41 (1950) (noting that the “established practice

. . . in dealing with a civil case from a court in the federal

system which has become moot while [on appeal] is to re-

verse or vacate the judgment below and remand with a di-

rection to dismiss” (emphasis added)). 3

C. Nonoverlapping Claims

We now turn to whether these appeals are moot as to

the “nonoverlapping claims.” The nonoverlapping claims

are the fifteen remaining claims at issue in the underlying

IPR proceedings and were not part of the ineligibility

3 We recognize that these appeals did not arise from

a civil case in a federal court but rather from proceedings

before an administrative agency. This difference in proce-

dural history does not merit a different remedy. See, e.g.,

PNC Bank Nat’l Ass’n v. Secure Axcess, LLC, 138 S. Ct.

1982 (2018) (mem.) (ordering remand for Board to vacate

order for mootness).

Case: 18-1456 Document: 90 Page: 8 Filed: 09/25/2020

8 APPLE INC. v. VOIP-PAL.COM, INC.

determination in Twitter. 4 Apple argues that the question

of obviousness as to the nonoverlapping claims “appears to

be moot” in light of Twitter because Apple faces no liability

for infringing these claims. Suggestion of Mootness at 11

(emphasis added). Apple argues that “[b]asic principles of

claim preclusion (res judicata) preclude Voip-Pal from ac-

cusing Apple” of infringing the nonoverlapping claims in

future litigation, and thus, Apple can never face infringe-

ment liability as to these claims. Id. According to Apple,

Voip-Pal is precluded from asserting these fifteen nonover-

lapping claims against Apple because they are “essentially

the same” as the claims held patent ineligible in the Twit-

ter appeal. Id. Apple also argues that Voip-Pal effectively

conceded in the underlying district court litigation that the

overlapping claims are essentially the same as the

nonoverlapping claims when Voip-Pal dropped the latter

claims from the litigation (at the request of the district

court). We disagree with Apple’s assertion of claim preclu-

sion.

Under the doctrine of claim preclusion, “a judgment on

the merits in a prior suit involving the same parties or their

privies bars a second suit based on the same cause of ac-

tion.” Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322, 326

(1955) (internal quotation marks omitted). The determina-

tion of the “precise effect of the judgment[] in th[e] [first]

case will necessarily have to be decided in any such later

actions that may be brought.” In re Katz Interactive Call

Processing Pat. Litig., 639 F.3d 1303, 1310 n.5 (Fed. Cir.

2011) (emphasis added). Apple acknowledges that any res

judicata effect of a first proceeding is “an issue that only a

future court can resolve.” Appellant’s Br. at 35 (citing

4 The fifteen nonoverlapping claims are claims 34,

54, 74, and 93 of the ’815 patent and claims 1, 24–26, 50,

76, 79, 88, 89, 95, and 98 of the ’005 patent.

Case: 18-1456 Document: 90 Page: 9 Filed: 09/25/2020

APPLE INC. v. VOIP-PAL.COM, INC. 9

Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 396

(1996) (Ginsburg, J., concurring in part and dissenting in

part) (“A court conducting an action cannot predetermine

the res judicata effect of the judgment; that effect can be

tested only in a subsequent action.”) (emphasis added)).

Thus, any preclusive effects that Twitter could have

against the same or other parties must be decided in any

subsequent action brought by Voip-Pal. Until then, any de-

termination we make as to whether Voip-Pal is claim pre-

cluded from filing an infringement action concerning the

nonoverlapping claims—claims that no court has deter-

mined are patent ineligible—is advisory in nature and falls

outside of our Article III jurisdiction. See Flast v. Cohen,

392 U.S. 83, 96 (1968) (“[I]t is quite clear that the oldest

and most consistent thread in the federal law of justiciabil-

ity is that the federal courts will not give advisory opin-

ions.”) (internal quotation marks omitted). The question of

obviousness as to the nonoverlapping claims is thus not

moot. On these grounds, we deny Apple’s request that we

vacate the Board’s sanctions order as moot. We maintain

jurisdiction over both appeals as to the nonoverlapping

claims and now turn to the merits of the appeals.

II

Apple challenges the Board’s sanctions order and de-

nial of rehearing on two grounds. First, Apple argues that

the Board violated the Administrative Procedures Act

(“APA”) and its due process rights when the Board imposed

non-enumerated sanctions for Voip-Pal’s ex parte commu-

nications. Second, Apple argues that the Board wrongly

concluded that the challenged claims are not invalid for ob-

viousness.

We review the Board’s sanction decisions for an abuse

of discretion. See Bennett Regulator Guards, Inc. v. Atlanta

Gas Light Co., No. 2017-1555, 2020 WL 4743511, at *8

(Fed. Cir. 2020). The Board abuses its discretion if the

Case: 18-1456 Document: 90 Page: 10 Filed: 09/25/2020

10 APPLE INC. v. VOIP-PAL.COM, INC.

sanction “(1) is clearly unreasonable, arbitrary, or fanciful;

(2) is based on an erroneous conclusion of law; (3) rests on

clearly erroneous fact findings; or (4) involves a record that

contains no evidence on which the Board could rationally

base its decision.” Abrutyn v. Giovanniello, 15 F.3d 1048,

1050–51 (Fed. Cir. 1994). This court “review[s] contentions

that rights of due process have been violated de novo.” Ad-

ams v. Dep’t of Just., 251 F.3d 170 (Fed. Cir. 2000).

We review the Board’s ultimate determination of non-

obviousness de novo and its underlying factual findings for

substantial evidence. WesternGeco LLC v. ION Geophysi-

cal Corp., 889 F.3d 1308, 1326 (Fed. Cir. 2018).

A. APA

Apple argues that the Board violated the APA when

the Board exceeded its authority under its own sanction

regulations. According to Apple, upon determining that

Voip-Pal’s ex parte communications were sanctionable, the

Board was required to issue one of eight authorized sanc-

tions under 37 C.F.R. § 42.12(b). Apple noted that the

Board issued a sanction not explicitly provided by Section

42.12(b). Thus, Apple argues, the Board exceeded its au-

thority. We reject this argument.

The provision at issue provides that:

(a) The Board may impose a sanction against a

party for misconduct, . . . .

(b) Sanctions include entry of one or more of the

following:

(1) An order holding facts to have been es-

tablished in the proceeding;

(2) An order expunging or precluding a

party from filing a paper;

(3) An order precluding a party from pre-

senting or contesting a particular issue;

Case: 18-1456 Document: 90 Page: 11 Filed: 09/25/2020

APPLE INC. v. VOIP-PAL.COM, INC. 11

(4) An order precluding a party from re-

questing, obtaining, or opposing discovery;

(5) An order excluding evidence;

(6) An order providing for compensatory ex-

penses, including attorney fees;

(7) An order requiring terminal disclaimer

of patent term; or

(8) Judgment in the trial or dismissal of the

petition.

37 C.F.R. § 42.12 (emphasis added).

Key here, Section 42.12(b) uses the term “include,”

which signifies a non-exhaustive list of sanctions. See, e.g.,

Marrama v. Citizens Bank of Mass., 549 U.S. 365, 373 &

n.8 (2007) (determining statutory list of ten items preceded

by term “including” to be “a nonexclusive list”); Talk Am.,

Inc. v. Mich. Bell Tel. Co., 564 U.S. 50, 63 n.5 (2011) (deter-

mining regulation using phrase “include, but are not lim-

ited to,” to be “nonexhaustive”); see also Include, Black’s

Law Dictionary (11th ed. 2019) (“The participle including

typically indicates a partial list.”). Additionally, reading

this regulatory provision as non-exhaustive is consistent

with the context of the Board’s sanctioning regime, which

affords the Board discretion to impose sanctions in the first

place. See 37 C.F.R. § 42.12(a)(1) (providing that the Board

“may impose a sanction” (emphasis added)); Rules of Prac-

tice for Trials Before the Patent Trial and Appeal Board

and Judicial Review of Patent Trial and Appeal Board De-

cisions, 77 Fed. Reg. 48,612, 48,616 (Aug. 14, 2012) (provid-

ing that “an ex parte communication may result in

sanctions”) (second emphasis added). The use of “may” em-

phasized above renders permissible and non-exhaustive

use of the listed sanctions. Thus, contrary to Apple’s posi-

tion, Section 42.12(b) does not limit the Board to the eight

listed sanctions. Rather, the plain reading of Section

42.12(b) allows the Board to issue sanctions not explicitly

Case: 18-1456 Document: 90 Page: 12 Filed: 09/25/2020

12 APPLE INC. v. VOIP-PAL.COM, INC.

provided in the regulation. We therefore hold that the

plain reading of Section 42.12(b) provides the Board with

discretion to issue sanctions and that the Board did not

commit an APA violation when it issued a sanction not ex-

plicitly listed under Section 42.12.

To the extent Apple argues that the Board abused its

discretion by not ordering a sanction of judgment in Apple’s

favor, see Appellant’s Br. at 31, we reject this argument.

“[A] sanction which may sound the death knell for im-

portant [patent] rights and interests . . . should be used as

a weapon of last, rather than first, resort.” Abrutyn, 15

F.3d at 1053 (internal quotation marks and citation omit-

ted). Additionally, “discretion implies a range of permissi-

ble choices. As long as the tribunal’s choice falls within a

reasonable range, it cannot constitute an abuse of discre-

tion.” Id. Here, the Board’s decision to (a) allow Apple to

petition for rehearing before a new panel, and (b) provide

Apple with a meaningful opportunity to respond to Voip-

Pal’s letters was a reasonable course of action and one we

will not disturb.

B. Due Process

Apple also argues that the Board violated Apple’s right

to due process by refusing to order a de novo proceeding

before a new panel. We are not persuaded.

First, Apple did not identify any property interests in

the course of its due process arguments below. We con-

clude that its arguments identifying property interests for

the first time on appeal are waived. See Stone v. FDIC, 179

F.3d 1368, 1374, 1377 (Fed. Cir. 1999) (noting that there

can be no due process violation without the deprivation of

a property interest); see also Patlex Corp. v. Mossinghoff,

771 F.2d 480, 484 (Fed. Cir. 1985) (outlining factors to be

analyzed when determining a due process violation, the

first of which is “the private interest that will be affected

by the official action”) (quoting Mathews v. Eldridge, 424

Case: 18-1456 Document: 90 Page: 13 Filed: 09/25/2020

APPLE INC. v. VOIP-PAL.COM, INC. 13

U.S. 319, 335 (1976)); Cleveland Bd. of Educ. v. Loudermill,

470 U.S. 532, 542–46 (1985) (“The essential requirements

of due process . . . are notice and opportunity to respond.”).

In particular, Apple argues for the first time on appeal that

the preclusive application of collateral estoppel of a final

written decision necessarily constitutes a deprivation of

Apple’s property interests and therefore entitles Apple to

reversal here. Despite Voip-Pal’s statement in its response

to Apple’s sanctions motion that “there is no property right

at stake,” J.A. 1674, Apple did not avail itself of the oppor-

tunity to address the issue in its reply. Apple also argues

for the first time on appeal that the money it spent in re-

questing IPR was a property interest. Apple failed to raise

these arguments below, and thus it has waived these argu-

ments on appeal. See, e.g., Sage Prods., Inc. v. Devon In-

dus., Inc., 126 F.3d 1420, 1426 (Fed. Cir. 1997) (declining

to consider new arguments raised for the first time on ap-

peal).

We also recognize that the Board introduced Voip-Pal’s

six ex parte letters into the record and gave Apple an op-

portunity to respond to these letters during the panel re-

hearing stage before a new panel. Apple chose, however,

not to address the substance of Voip-Pal’s letters—the very

same letters that Apple claims “tainted” its IPR proceed-

ings. See Appellant’s Br. at 36. Thus, we fail to see how

the Board’s sanctions orders deprived Apple of due process.

C. Non-Obviousness

Apple also challenges the Board’s non-obviousness de-

termination. Specifically, Apple argues that the Board le-

gally and factually erred when it determined that Apple

failed to establish a motivation to combine Chu ’684 with

Chu ’366. We are not persuaded by Apple’s arguments.

Apple’s underlying premise to combine the teachings of

Chu ’684 with those of Chu ’336 was that a skilled artisan

would have viewed Chu ’684’s interface as less “intuitive”

Case: 18-1456 Document: 90 Page: 14 Filed: 09/25/2020

14 APPLE INC. v. VOIP-PAL.COM, INC.

and less “user-friendly” than that of Chu ’366, and thus a

skilled artisan would have a desire to improve Chu ’684’s

system. In particular, Apple argued that Chu ’684’s system

had a dialing deficiency that did not permit short-form

phone number dialing but rather long-form, fully format-

ted “E.164 numbers,” e.g., “+1-202-555-1234.” See Appel-

lant’s Br. at 46. The Board rejected Apple’s argument,

noting that Apple’s expert provided no “adequate support”

and no “underlying evidentiary support” for the proposition

that a skilled artisan would have regarded Chu ’684’s

teachings as deficient.

Apple argues on appeal that the Board legally erred in

rejecting its motivation-to-combine argument by improp-

erly applying the now-rejected teaching, suggestion, moti-

vation test rather than the flexible obviousness analysis

required under KSR International Co. v. Teleflex Inc., 550

U.S. 398, 415 (2007). In particular, Apple faults the Board

for rejecting its expert testimony that Chu ’684’s teachings

were deficient for failure to provide “underlying eviden-

tiary support for the proposition that [a POSITA] would

have regarded Chu ’684’s teachings as deficient.” J.A. 19.

We disagree with Apple.

The Board did not fault Apple for not citing explicit

“teachings, suggestions, or motivations to combine the

prior art.” Appellant’s Br. at 50. Rather, the Board noted

that Apple’s expert provided only “conclusory and insuffi-

cient” reasons for combining Chu ’684 with Chu ’366 and

failed to “articulate[] reasoning with some rational under-

pinning.” J.A. 21. Thus, contrary to Apple’s position, the

Board did not legally err but rather held Apple to the

proper evidentiary standard. See In re Kahn, 441 F.3d 977,

988 (Fed. Cir. 2006) (“[R]ejections on obviousness grounds

cannot be sustained by mere conclusory statements; in-

stead, there must be some articulated reasoning with some

rational underpinning to support the legal conclusion of ob-

viousness.”).

Case: 18-1456 Document: 90 Page: 15 Filed: 09/25/2020

APPLE INC. v. VOIP-PAL.COM, INC. 15

Apple also argues that the Board factually erred by

failing to consider that Chu ’366 provides explicit evidence

of motivation to combine, “explaining that there is a desire

to enter abbreviated numbers for local and national tele-

phone calls.” Appellant’s Br. at 50. However, the Board

considered Chu ’366’s teachings and cited material parts

but rejected the premise that Chu ’684’s interface was any

less intuitive or user-friendly than Chu ’366’s. The Board

credited the unrefuted testimony of Voip-Pal’s expert, Dr.

Mangione-Smith, who explained that Chu ’684’s operation

as a public branch exchange (“PBX”) system was not “inad-

equate or unintuitive.” J.A. 968–71 (Ex. 2016 ¶¶ 65–67).

In particular, Dr. Mangione-Smith explained, “PBX’s pro-

vided all the features of ordinary phones connected to the

[public switched telephone network], and in addition, sup-

ported the dialing of private extension numbers. The use

of a prefix digit such as ‘9’ was not a deficiency but rather

a simple way of supporting both [public switched telephone

network] dialing and extension dialing.” J.A. 969–70 (Ex.

2016 ¶ 66) (emphasis in original). 5 We find no error in the

Board’s decision to credit the opinion of Voip-Pal’s expert

over Apple’s, and we do not reweigh evidence on appeal.

Impax Labs. Inc. v. Lannett Holdings Inc., 893 F.3d 1372,

1382 (Fed. Cir. 2018). Substantial evidence supports the

Board’s finding that Chu ’684 did not disclose a dialing de-

ficiency.

CONCLUSION

We have considered the parties’ remaining arguments

and find them unpersuasive. We vacate the Board’s deter-

minations that claims 1, 7, 27, 28, 72, 73, 92, and 111 of the

5 The Board alternatively determined that even if

there was a motivation to combine, the combination of Chu

’684 and Chu ’366 still failed to render the challenged

claims obvious. We do not address this alternative deter-

mination.

Case: 18-1456 Document: 90 Page: 16 Filed: 09/25/2020

16 APPLE INC. v. VOIP-PAL.COM, INC.

’815 patent and claims 49, 73, 74, 75, 77, 78, 83, 84, 94, 96,

and 99 of the ’005 patent are not invalid as obvious and

remand to the Board to dismiss these claims as moot. We

affirm the Board’s non-obviousness determinations as to

the remaining claims. We also affirm the Board’s sanctions

orders.

AFFIRMED IN PART, VACATED AND REMANDED

IN PART

COSTS

No costs.