On December 15, 2015, in SightSound Technologies, LLC v. Apple Inc., the US Court of Appeals for the Federal Circuit found that it lacked jurisdiction to review the Patent Trial and Appeal Board's (PTAB) decision to grant covered business method (CBM) review of two patents based on obviousness grounds not specifically raised by the petitioner. The Federal Circuit held that 35 U.S.C. § 324(e) prohibits the review of the PTAB's decision to consider issues not explicitly raised in the petition in a CBM review proceeding (Nos. 2015-1159, -1160 (Fed. Cir. Dec. 15, 2015)).

This case involved CBM petitions filed by Apple Inc. against SightSound Technologies, LLC's US Patent Nos. 5,191,573 and 5,966,440, directed toward methods for the electronic sale and distribution of digital audio and video signals. In its petition, Apple argued that claims of the patents were invalid as anticipated and alleged facts supporting obviousness, but did not explicitly assert obviousness as a grounds of challenge. The PTAB granted review, finding a reasonable likelihood of anticipation or obviousness based on prior art related to a computer system developed in the 1980s.

The PTAB held all of the claims invalid as obvious in a final decision, and reiterated that it did not exceed its jurisdiction by initiating CBM review because Apple's prior art supported the obviousness ground, even though Apple did not assert it explicitly.

On appeal, the Federal Circuit determined that it lacked jurisdiction to review the PTAB's institution decision under § 324(e), and affirmed the PTAB’s final decision on the merits.

Regarding jurisdiction, the Federal Circuit found the issue analogous to the issue in In re Cuozzo Speed Technologies, LLC, in which the court found that PTAB institution decisions on inter partes review (IPR) petitions could not be appealed under 35 U.S.C. § 314(d) (793 F.3d 1268 (Fed. Cir. July 8, 2015)). The court held that § 324(e) is identical to § 314(d), and that based on Cuozzo and the plain language of the statute, CBM institution decisions cannot be appealed. The court also found support in its decision in Achates Reference Publishing, Inc. v. Apple, Inc., in which it held that it lacks jurisdiction to review the PTAB's decision regarding the petition time-bar provision of 35 U.S.C. § 315(b) (803 F.3d 652 (Fed. Cir. 2015)).

Turning to the merits, the Federal Circuit affirmed the PTAB's determination that SightSound's patents were CBM patents eligible for PTAB review, because the PTAB's finding that the patents were directed toward financial activities, and did not meet the "technological invention" statutory exception, was supported by substantial evidence and not arbitrary or capricious. The court also affirmed the PTAB's claim construction, holding that the intrinsic and extrinsic evidence supported a broadest reasonable interpretation of the disputed "second memory" limitation to include floppy disks and not to be limited to non-removable hard drives.

Finally, the Federal Circuit affirmed the PTAB's finding that the SightSound patent claims were obvious. The Federal Circuit agreed with the PTAB that a skilled artisan would have combined the teachings of the prior art computer systems to invent the claims at issue, rejecting SightSound's argument that the prior art taught away from the claimed inventions.