On December 16, 2024, the United States Court of Appeals for the Federal Circuit issued its opinion in
Palo Alto Networks, Inc. v. Centripetal Networks, LLC, holding that the Patent Trial and Appeal Board (PTAB) erred in its decision regarding the unpatentability of claims from Centripetal Networks’ U.S. Patent No. 10,530,903 (“the ’903 Patent”). Specifically, the Federal Circuit found that the PTAB failed to clearly explain its rationale for the motivation to combine prior art references, and specifically why the proposed combination would not have taught the final limitation of the disputed claim. Consequently, the Court vacated and remanded the PTAB's decision for further clarification and explanation.
The ’903 patent, entitled “Correlating Packets In Communications Networks,” discloses a computing system that can identify and correlate packets (“small segments that together make up a larger communication”) received and transmitted by a network device. The system generates log entries for these packets and correlates them to determine the association of transmitted packets with received packets, effectively de-obfuscating the identity of an obfuscated host. This technique is useful for identifying malicious entities attempting to obfuscate, spoof, or provide a proxy for the identity or location of a host.
Palo Alto Network’s (“PAN”)
inter partes review petition asserted that claims 1–18 of the ’903 patent would have been obvious over a combination of three prior-art references: U.S. Patent Application Publication No. 2014/0280778 (“Paxton”), U.S. Patent No. 8,413,238 (“Sutton”), and U.S. Patent No. 8,219,675 (“Ivershen”). PAN relied on Paxton for the majority of the claim elements of independent claim 1 and on Sutton for the final limitation, which required transmitting, by the computer system, an indication of the first host, which is responsive to the computer system logging and correlating packets. PAN argued that a person of ordinary skill in the art would have been motivated to combine Paxton's packet correlation technique with Sutton’s notification of network administrators about devices suspected of malicious activity to improve network security.
The PTAB concluded that PAN had not established that the claims would have been obvious. The Board found that PAN's argument regarding the motivation to combine Paxton and Sutton was not sufficiently articulated. Specifically, the Board found that PAN did not provide a clear explanation of how the combination of Paxton and Sutton would teach the final limitation of claim 1. PAN appealed the PTAB’s decision.
The Federal Circuit vacated and remanded the Board's decision. The Court found that the Board erred by not clearly explaining why a person of ordinary skill in the art would not have been motivated to modify Paxton by adding Sutton’s step of transmitting a notification of malicious activity after Paxton's correlation step. The Court noted that the Board’s opinion lacked sufficient findings and reasoning to permit meaningful appellate scrutiny. The Court emphasized that the Board must articulate why a person of ordinary skill in the art would combine (or would not combine) the prior art references and must provide an adequate explanation for its findings.
The Court also found that the Board erred by analyzing the references individually rather than in combination. The Court explained that the question in an obviousness inquiry is whether it would have been obvious to a person of ordinary skill in the art to combine the relevant disclosures of the two references, not whether each individual reference discloses all of the necessary elements. The Court concluded that the Board must consider whether the particular combination argued by PAN—modifying Paxton by adding Sutton's notification step after Paxton's correlation step—would meet the claim limitations at issue.
In summary, the Federal Circuit vacated and remanded the Board's decision for further clarification and explanation regarding the motivation to combine Paxton and Sutton and whether the proposed combination teaches the final limitation of claim 1.