PGS GEOPHYSICAL AS v. IANCU , 891 F.3d 1354 ( 2018 )

United States Court of Appeals
for the Federal Circuit
______________________
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
______________________
Appeals from the United States Patent and Trade-
mark Office, Patent Trial and Appeal Board in Nos.
IPR2015-00309, IPR2015-00310, IPR2015-00311.
______________________
Decided: June 7, 2018
______________________
DAVID I. BERL, Williams & Connolly LLP, Washing-
ton, 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.
2 PGS GEOPHYSICAL AS v. IANCU
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. West-
ernGeco, L.L.C., a competitor of PGS’s, filed three peti-
tions 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 Western-
Geco’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 ap-
pealed, 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 In-
stitute, Inc. v. Iancu, 138 S. Ct. 1348 (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.
PGS GEOPHYSICAL AS v. IANCU 3
I
A
In the invention of the ’981 patent, both seismic ener-
gy 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 particular-
ly, 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 prede-
termined 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 systemati-
cally determined . . . and only need to be known.” Id., col.
10, lines 39–41. “[S]eismic sensors (typically hydro-
phones)” 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 identifi-
cation, which is then “decoded” in post-processing. PGS
Br. 8–9, 13.
4 PGS GEOPHYSICAL AS v. IANCU
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 struc-
ture.” ’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 survey-
ing, where the seismic sources are moving (as they are
towed behind a boat), can result in reduced spatial resolu-
tion 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 plu-
rality of sequences, a time delay between firing
the first source and the second source in each fir-
ing sequence being different than the time delay
in other ones of the firing sequences, the method
comprising:
determining a first component of the rec-
orded signals that is coherent from shot to
shot and from trace to trace;
PGS GEOPHYSICAL AS v. IANCU 5
time aligning the recorded signals with re-
spect 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 peti-
tions.
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
1 Unless otherwise noted, general references to the
Board’s reasoning in its final written decision in IPR2015-
00309 apply to all IPRs on appeal. WesternGeco, L.L.C. v.
PGS Geophysical AS, IPR2015-00309, 2016 WL 3193820
(PTAB June 8, 2016) (309 Final Decision); see also West-
6 PGS GEOPHYSICAL AS v. IANCU
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 an-
ticipation. PGS challenges only the two-reference obvi-
ousness ruling, and only as to claims 6, 17, 22, 28, 29, 31,
32, and 35–37. Beasley addresses “seismic survey sys-
tems and methods in which two or more seismic sources
are fired simultaneously, or significantly close together
temporally,” and “3-D marine seismic survey” applica-
tions. Beasley, col. 1, lines 19–27. Edington describes “a
method of separating for analysis seismic signals received
from multiple seismic sources which are activated sub-
stantially simultaneously,” col. 1, lines 7–10, using “de-
terminable 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 ad-
dress 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
ernGeco, L.L.C. v. PGS Geophysical AS, IPR2015-00310,
2016 WL 3193821 (PTAB June 8, 2016) (310 Final Deci-
sion); WesternGeco, L.L.C. v. PGS Geophysical AS,
IPR2015-00311, 2016 WL 3193823 (PTAB June 8, 2016)
(311 Final Decision).
PGS GEOPHYSICAL AS v. IANCU 7
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 re-
cent 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 consid-
ering 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 distinguish-
ing non-instituted claims from non-instituted grounds.
Equal treatment of claims and grounds for institution
purposes has pervasive support in SAS. Although 35
U.S.C. § 318(a), the primary statutory ground of decision,
speaks only of deciding all challenged and added
“claim[s],” the Supreme Court spoke more broadly when
considering other aspects of the statutory regime, and it
did so repeatedly. The Court wrote that “the petitioner is
master of its complaint and normally entitled to judgment
2 https://www.uspto.gov/patents-application-process
/patent-trial-and-appeal-board/trials/guidance-impact-sas-
aia-trial.
8 PGS GEOPHYSICAL AS v. IANCU
on all of the claims it raises.” SAS, 138 S. Ct. at 1355. It
said that § 312 contemplates a review “guided by a peti-
tion describing ‘each claim challenged’ and ‘the grounds
on which the challenge to each claim is based,’” and it
added that the Director does not “get[] to define the
contours of the proceeding.” Id. The Court also said that
§ 314’s language “indicates a binary choice—either insti-
tute review or don’t.” Id. It further reasoned that
“[n]othing suggests the Director enjoys a license to depart
from the petition and institute a different inter partes
review of his own design” and that “Congress didn’t
choose to pursue” a statute that “allows the Director to
institute proceedings on a claim-by-claim and ground-by-
ground basis” as in ex parte reexamination. Id. at 1356
(emphasis in original). And the Court concluded that “the
petitioner’s petition, not the Director’s discretion, is
supposed to guide the life of the litigation,” id., and the
“petitioner’s contentions . . . define the scope of the litiga-
tion all the way from institution through to conclusion,”
id. at 1357.
We read those and other similar portions of the SAS
opinion as interpreting the statute to require a simple
yes-or-no institution choice respecting a petition, embrac-
ing all challenges included in the petition, and we have
seen no basis for a contrary understanding of the statute
in light of SAS. We note that it is a distinct question (not
presented here) whether, after instituting on the entire
petition, the Board, in a final written decision, may decide
the merits of certain challenges and then find others
moot, the latter subject to revival if appellate review of
the decided challenges renders the undecided ones no
longer moot. We conclude, based on our understanding of
the statute in light of SAS, that the SAS transition issues
about institution arise in all three appeals before us,
given the Board’s denial of institution on Ground 2 in all
three petitions, not only in the appeal from IPR2015-
00309, which included fewer than all challenged claims.
PGS GEOPHYSICAL AS v. IANCU 9
B
We conclude that we have jurisdiction to rule on the
appeals, i.e., that the existence of non-instituted claims
and grounds does not deprive us of jurisdiction to decide
PGS’s appeals. Under 28 U.S.C. § 1295(a)(4)(A), this
court has “exclusive jurisdiction . . . of an appeal from a
decision of . . . the [Board] with respect to [an] . . . inter
partes review under title 35.” “We have held that
§ 1295(a)(4) should be read to incorporate a finality re-
quirement.” In re Arunachalam, 824 F.3d 987, 988 (Fed.
Cir. 2016) (quoting Loughlin v. Ling, 684 F.3d 1289, 1292
(Fed. Cir. 2012)); see Arthrex, Inc. v. Smith & Nephew,
Inc., 880 F.3d 1345, 1348 (Fed. Cir. 2018). There is finali-
ty here: the combination of the non-institution decisions
and the final written decisions on the instituted claims
and grounds “terminated the IPR proceeding[s]” that are
now on appeal. Arthrex, 880 F.3d at 1348.
The standard for “final agency action” under the Ad-
ministrative Procedure Act (APA), 5 U.S.C. § 704, is met.
Generally, agency action is final when the agency’s deci-
sion-making process is complete and the action deter-
mines legal “rights or obligations” or otherwise gives rise
to “legal consequences.” U.S. Army Corps of Eng’rs v.
Hawkes Co., 136 S. Ct. 1807, 1813 (2016) (citing Bennett
v. Spear, 520 U.S. 154, 177–78 (1997)). Here, the Board
issued an institution decision and a final written decision
in each IPR. In each matter, the Board’s decisions are
final, even if erroneous, because they “terminated the IPR
proceeding” as to all claims and all grounds, Arthrex, 880
F.3d at 1348, and the Board made patentability determi-
nations that affect the patent rights of PGS, Automated
Merch. Sys., Inc. v. Lee, 782 F.3d 1376, 1381 (Fed. Cir.
2015). We note that, in SAS, the Court reviewed the
Board’s decisions under the APA, 5 U.S.C. § 706(2)(A) and
(C), see 138 S. Ct. at 1359, and despite concluding that the
Board erred in its institution decision by denying review
of some challenged claims, the Court nowhere suggested
10 PGS GEOPHYSICAL AS v. IANCU
either the absence of a “final agency action” or the ab-
sence of jurisdiction on this court’s part.
Finality is also seen by drawing on the analogy to civil
litigation the Court invoked in SAS. What the Board did
here is analogous to a situation in which a district court,
upon receipt of a two-count complaint, incorrectly dis-
misses one count early in the case (without prejudice to
refiling in that forum or elsewhere) and proceeds to a
merits judgment on the second count. Once the second
count is finally resolved, there would be a final judgment
in that situation, with both counts subject to appeal. The
early dismissal would be final as to that claim, see United
States v. Wallace & Tiernan Co., 336 U.S. 793, 794 n.1
(1949) (involuntary dismissal without prejudice is review-
able final judgment if it stands alone); H.R. Techs., Inc. v.
Astechnologies, Inc., 275 F.3d 1378, 1383 (Fed. Cir. 2002)
(same); Cyprus Amax Coal Co. v. United States, 205 F.3d
1369, 1372 (Fed. Cir. 2000) (same), though not immediate-
ly reviewable. Under broadly recognized principles ad-
dressing review of partial dispositions once the rest of the
case is resolved, see 15A Charles A. Wright & Arthur R.
Miller, Federal Practice and Procedure §§ 3914.7, 3914.9
(2d ed. 2018), the early dismissal would become reviewa-
ble upon “the entry of a judgment adjudicating all the
claims,” Fed. R. Civ. P. 54(b). See, e.g., Herdrich v. Pe-
gram, 154 F.3d 362, 367–68 (7th Cir. 1998), rev’d on other
grounds, 530 U.S. 211 (2000). Indeed, this court has held
that even a voluntary dismissal without prejudice of some
claims, when all the other claims in the case have been
adjudicated on their merits, results in a final judgment.
See Atlas IP, LLC v. Medtronic Inc., 809 F.3d 599, 604–05
(Fed. Cir. 2015); Doe v. United States, 513 F.3d 1348,
1352–54 (Fed Cir. 2008).
No different analysis is warranted for what the Board
did here. In two stages, the Board finally disposed of all
the challenges (i.e., claims and grounds) in the petitions
placed before it. Some of what the Board did is now seen
PGS GEOPHYSICAL AS v. IANCU 11
to be legally erroneous under SAS, but legal error does
not mean lack of finality. For those reasons, we conclude
that we have jurisdiction to hear PGS’s appeals.
C
Having found jurisdiction, we readily conclude that
we may decide PGS’s appeals of the Board decisions and
that we need not reopen the non-instituted claims and
grounds. In this case, no party seeks SAS-based relief.
We do not rule on whether a different conclusion might be
warranted in a case in which a party has sought SAS-
based relief from us.
We have uncovered no legal authority that requires us
sua sponte to treat the Board’s incorrect denial of institu-
tion as to some claims and grounds either as a basis for
disturbing or declining to review the Board’s rulings on
the instituted claims and grounds or as a basis for reopen-
ing the IPRs to embrace the non-instituted claims and
grounds. Even if the Board could be said to have acted
“ultra vires” in refusing to institute reviews of some
claims and grounds—and then proceeding to merits
decisions concerning the claims and grounds included in
the instituted reviews—the Board’s error is waivable, not
one we are required to notice and act on in the absence of
an appropriate request for relief on that basis. See CBS
Broad., Inc. v. EchoStar Commc’ns Corp., 450 F.3d 505,
520 n.27 (11th Cir. 2006) (finding challenge to FCC action
as ultra vires waived). Several courts of appeals have
recognized the same for a challenge to an agency’s “juris-
diction,” after the Supreme Court, in City of Arlington v.
FCC, 569 U.S. 290, 297–98 (2013), rejected a distinction
between agency “jurisdiction” errors and other errors for
certain deference purposes and treated the label “ultra
12 PGS GEOPHYSICAL AS v. IANCU
vires” as embracing any “improper” agency action. 3 See,
e.g., Metro-N. Commuter R.R. Co. v. U.S. Dep’t of Labor,
886 F.3d 97, 108 (2d Cir. 2018) (finding waiver of chal-
lenge to agency jurisdiction); 1621 Route 22 W. Operating
Co. v. NLRB, 825 F.3d 128, 140–43 (3d Cir. 2016) (same).
Moreover, the Supreme Court in SAS characterized the
error at issue here as an error under 5 U.S.C. § 706, but
errors under that provision are generally subject to a
traditional harmless-error analysis, with challengers of
the agency action having the burden of showing prejudice.
See Shinseki v. Sanders, 556 U.S. 396, 406, 409 (2009);
Suntec Indus. Co. v. United States, 857 F.3d 1363, 1368
(Fed. Cir. 2017). That burden assignment further sug-
gests that the SAS error is not one that must be recog-
nized sua sponte.
In the absence of an obligation to act sua sponte, we
will not sua sponte exercise any discretion to decline to
decide the appeals on the instituted claims and grounds.
3 See City of Arlington, 569 U.S. at 297–98 (“A
court’s power to decide a case is independent of whether
its decision is correct, which is why even an erroneous
judgment is entitled to res judicata effect. Put differently,
a jurisdictionally proper but substantively incorrect
judicial decision is not ultra vires. [¶] That is not so for
agencies charged with administering congressional stat-
utes. Both their power to act and how they are to act is
authoritatively prescribed by Congress, so that when they
act improperly, no less than when they act beyond their
jurisdiction, what they do is ultra vires. Because the
question—whether framed as an incorrect application of
agency authority or an assertion of authority not con-
ferred—is always whether the agency has gone beyond
what Congress has permitted it to do, there is no princi-
pled basis for carving out some arbitrary subset of such
claims as ‘jurisdictional.’” (emphases added)).
PGS GEOPHYSICAL AS v. IANCU 13
There is a clear private and public interest in our deciding
the patentability issues before us. Nor will we exercise
any discretion to revive the non-instituted claims and
grounds. Finality and expedition interests strongly
counsel against such action. And so does the Court’s
emphasis in SAS on the petitioner’s control of the con-
tours of the proceeding.
III
As relevant here, “[t]he obviousness inquiry entails
consideration of whether a person of ordinary skill in the
art would have been motivated to combine the teachings
of the prior art references to achieve the claimed inven-
tion, and . . . would have had a reasonable expectation of
success in doing so.” Insite Vision Inc. v. Sandoz, Inc., 783
F.3d 853, 859 (Fed. Cir. 2015) (internal quotation marks
and citation omitted). Such a motivation and reasonable
expectation may be present where the claimed invention
is the “combination of familiar elements according to
known methods” that “does no more than yield predicta-
ble results.” KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398,
415–16 (2007). Whether there would have been such a
motivation on the relevant priority date is an issue of fact,
and we review the Board’s finding on the issue for sub-
stantial-evidence support. Skky, Inc. v. MindGeek, s.a.r.l.,
859 F.3d 1014, 1021 (Fed. Cir. 2017), cert. denied, 2018
WL 1994802 (U.S. Apr. 30, 2018) (No. 17-349). “Substan-
tial evidence . . . means such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion.” Consol. Edison Co. of N.Y. v. NLRB, 305 U.S.
197, 229 (1938); Skky, Inc., 859 F.3d at 1021.
PGS does not here dispute that the combination of
Beasley and Edington teaches all of the limitations of the
challenged claims. The Board found that PGS had waived
any contrary argument for all claims now on appeal
except claims 36 and 37. 309 Final Decision, 2016 WL
3193820, at *10–11, *17 (discussing claims 6, 17, and 22);
14 PGS GEOPHYSICAL AS v. IANCU
310 Final Decision, 2016 WL 3193821, at *9, *15 (discuss-
ing claims 28 and 29); 311 Final Decision, 2016 WL
3193823, at *6, *12 (discussing claims 31, 32, and 35). As
to claims 36 and 37, PGS argued that the combination of
Beasley and Edington failed to teach limitations relating
to the use of common mid-point (CMP) gathers, but the
Board found otherwise—specifically, that those limita-
tions were disclosed in Beasley. 311 Final Decision, 2016
WL 3193823, at *12. PGS does not challenge that finding.
On appeal, PGS argues that the Board erred regard-
ing the needed motivation to combine Beasley and Eding-
ton, including by not adequately addressing the problem
of smearing. We reject PGS’s challenge.
A
In its petitions, WesternGeco relied for the motivation
to combine on the express suggestion in Beasley that its
systems and methods could use various types of encod-
ing—of which the use of time delays taught in Edington
was one known type. J.A. 171. 4 WesternGeco argued
that, given Beasley’s disclosure, “[i]t would have been
obvious to employ the known time encoding techniques
disclosed in Edington in the system of Beasley to achieve
the predictable result of distinguishing sources that are
fired either simultaneously or near simultaneously.” J.A.
172–73. That contention, as PGS noted, was “[t]he linch-
pin of WesternGeco’s obviousness case.” J.A. 261. The
Board found WesternGeco’s argument persuasive, and we
conclude that substantial evidence supports the Board’s
finding of a motivation to combine.
4 Because WesternGeco’s petitions, PGS’s patent
owner responses, and the Board decisions in the three
IPRs are materially the same for present purposes, we
refer only to the papers in IPR2015-00309.
PGS GEOPHYSICAL AS v. IANCU 15
Beasley states: “If desired, the leading and trailing
sources may be arranged to emit encoded wavefields using
any desired type of coding. The respective sources are
then programmed to be activated concurrently instead of
sequentially.” Beasley, col. 7, lines 54–58 (emphasis
added). According to Beasley, “[t]he advantage to that
technique is that the subsurface incident points have
improved commonality since there is no time shift and
therefore no spatial reflection-point smearing between
successive . . . source activations.” Id., col. 7, lines 59–63.
The Board found a motivation to make the combination in
those disclosures. 309 Final Decision, 2016 WL 3193820,
at *12; see also id. at *10 (describing Beasley). It stated:
“The issue in dispute is what Beasley means by ‘using any
type of coding’ and ‘activated concurrently instead of
sequentially.’” 309 Final Decision, 2016 WL 3193820, at
*12.
On the question of what Beasley teaches, which is a
factual question, see, e.g., In re Fulton, 391 F.3d 1195,
1199–200 (Fed. Cir. 2004), we conclude that the Board’s
finding rests on a reasonable reading of Beasley. First,
the Board found that “Beasley does not exclude time delay
encoding from its disclosed ‘concurrent’ activation embod-
iments.” Id. at *13. The Board cited several portions of
Beasley stating that the sources may be fired “simultane-
ously or nearly simultaneously,” id. (citing Beasley, col. 8,
lines 46–47), and that the “seismic sources are fired
simultaneously, or significantly close together temporal-
ly,” id. (citing Beasley, col. 1, lines 19–25). See also
Beasley, Abstract (“simultaneously or nearly simultane-
ously”); col. 9, lines 6–10 (same); col. 1, lines 47–51 (“sim-
ultaneously or temporally close together”); col. 4, lines 49–
50 (“substantially simultaneously”); col. 12, lines 26–29
(same); col. 13, lines 23–24 (“temporally substantially
simultaneously”). Beasley can reasonably be read to
contemplate small time delays within its concurrent-firing
embodiment; substantial evidence supports the Board’s
16 PGS GEOPHYSICAL AS v. IANCU
finding that Beasley is not limited to exactly concurrent
firing.
Second, the Board found that Edington’s time-delay
encoding is a type of source signature encoding, as re-
quired by Beasley. 309 Final Decision, 2016 WL 3193820,
at *14. “Beasley distinguishes between ‘a signal with no
encoded feature, individual identifier, tag, discriminating
feature, or separate signature’ and ‘signals that can be
discriminated from each other due to some identifying
characteristic, parameter, signature or feature.’” Id.
(quoting Beasley, col. 9, line 67 through col. 10, line 8)
(emphasis omitted). In describing Edington, the Board
found that its “time delays allow separation of the record-
ed signals based on the source even when the sources are
activated substantially simultaneously.” Id. at *10. PGS
does not dispute that finding. And it is supported by the
statement of PGS’s expert, Dr. Lynn, that “Edington’s
time delay source coding is ‘a type of source signature
encoding.’” Id. at *14 (quoting J.A. 901 at 148:18–23).
PGS contends that the Board did not really make the
needed motivation finding. It cites decisions in which we
have explained that the finder of fact in a case like this
must go beyond the question of whether one of ordinary
skill in the art could have combined the references at
issue (in the way claimed) to answer the question of
whether such an artisan would have been motivated to do
so. See, e.g., Personal Web Techs., LLC v. Apple, Inc., 848
F.3d 987, 993–94 (Fed. Cir. 2017); InTouch Techs., Inc. v.
VGO Commc’ns, Inc., 751 F.3d 1327, 1352 (Fed. Cir.
2014). Although the questions are related, clarity in
distinguishing them is important, and its absence has
sometimes justified a remand. E.g., Personal Web, 848
F.3d at 994. Nevertheless, while “we may not supply a
reasoned basis for the agency’s action that the agency
itself has not given, we will uphold a decision of less than
ideal clarity if the agency’s path may reasonably be dis-
cerned.” Bowman Transp., Inc. v. Arkansas-Best Freight
PGS GEOPHYSICAL AS v. IANCU 17
Sys., Inc., 419 U.S. 281, 286 (1974) (citing SEC v. Chenery
Corp., 332 U.S. 194, 196–97 (1947)); In re NuVasive, Inc.,
842 F.3d 1376, 1383 (Fed. Cir. 2016). And in this case, we
think that, in the end, the Board did not fail to address
the motivation question.
We understand the Board to have answered that
question. Immediately after stating that PGS “does not
dispute Petitioner’s assertion that the combination of
Beasley and Edington describes each element of inde-
pendent claim 1, but merely asserts that an ordinarily
skilled artisan would not have combined Beasley and
Edington,” it concluded: “Accordingly, upon reviewing the
record developed during trial, we are persuaded by Peti-
tioner’s position regarding the relevant teachings of
Beasley and Edington and address in detail only the
disputed issues relating to the combinability of Beasley
and Edington.” 309 Final Decision, 2016 WL 3193820, at
*11. The Board also affirmatively focused on the “other
types of encoding” language of Beasley as an affirmative
suggestion to look elsewhere, especially to a time-delay
reference, in light of Beasley’s contemplation of small
time delays between firing seismic sources, as we have
discussed. “[T]he motivation to modify a reference can
come from the knowledge of those skilled in the art, from
the prior art reference itself, or from the nature of the
problem to be solved.” SIBIA Neurosciences, Inc. v. Cadus
Pharm. Corp., 225 F.3d 1349, 1356 (Fed. Cir. 2000). We
are left with no meaningful doubt about the Board’s
motivation finding and its basis.
Our conclusion is not undermined by the fact that the
Board concentrated much of its attention on what could
be combined. The Board explained that it was persuaded
by WesternGeco’s simple affirmative case for motivation,
highlighting the key statement in Beasley itself, and
therefore that it would focus its discussion on PGS’s
contrary arguments, which were substantially directed at
combinability. 309 Final Decision, 2016 WL 3193820, at
18 PGS GEOPHYSICAL AS v. IANCU
*10–11. That discussion of why the Board was rejecting
PGS’s arguments against motivation does not undermine
the motivation finding. Nor does it reflect a shifting of
the burden of persuasion.
B
PGS also argues that the Board did not properly con-
sider the effect of smearing as a problem that would teach
away from combining Beasley with Edington, undermin-
ing any finding of motivation to combine. PGS invokes
the principle that the prior art must be considered “as a
whole, including portions that would lead away from the
invention in suit.” Panduit Corp. v. Dennison Mfg. Co.,
810 F.2d 1561, 1568 (Fed. Cir. 1987). We find no reversi-
ble error in the Board’s rejection of PGS’s smearing-based
argument.
The Board found that the risk of smearing would not
teach away from the combination of Beasley with the
simple time-delay teaching of Edington to arrive at the
claims at issue here. 309 Final Decision, 2016 WL
3193820, at *14 (finding that “the smearing allegedly
introduced by combining Edington’s time delay encoding
with Beasley’s system would [not] have led an ordinarily
skilled artisan away from that combination”). That
finding was sufficiently supported in the record.
As discussed above, the Board found that Beasley’s
disclosure of near-simultaneous activation of energy
sources includes some amount of time delay. And it is
undisputed that some amount of smearing would occur
when using Edington’s time-delay encoding in the marine
context where the seismic sources are continuously mov-
ing. 309 Final Decision, 2016 WL 3193820, at *14. At the
oral argument before the Board, PGS stated that “frankly,
any time you have a time delay at all, there is spatial
reflection point smearing.” Id. PGS agreed that even the
’981 patent “suffers it to some degree.” Id. at *14 n.12.
But neither party offered evidence as to the degree of
PGS GEOPHYSICAL AS v. IANCU 19
smearing that could be tolerated in the marine context,
where some amount of smearing is inevitable if time-
delay encoding is used.
The Board found that “Beasley indicates that simul-
taneous (or near-simultaneous) activation of sources
avoids the smearing that otherwise results when activat-
ing the sources sequentially.” Id. at *14. On that basis,
the Board found that significant smearing could be avoid-
ed by using small time delays such that the firings were
nearly simultaneous as contemplated by Beasley’s concur-
rent-firing embodiment. Id. Small time delays are cov-
ered by the ’981 patent claims at issue, so smearing could
be avoided by making the combination at issue.
PGS argues that its expert Dr. Lynn provided undis-
puted testimony that combining Edington’s method with
Beasley “would result in an eight-fold loss of spatial
resolution.” PGS Br. 35–36. That argument relies on the
presumption that one of ordinary skill would blindly
incorporate Edington’s exact methodology into Beasley.
But the Board properly did not view WesternGeco’s pro-
posed combination to be so limited. 309 Final Decision,
2016 WL 3193820, at *11 (stating that the “Petitioner’s
challenge relies on Edington for its teaching that time-
delays can be used to encode and decode signals”).
IV
For the foregoing reasons, we affirm the Board’s final
written decisions.
AFFIRMED