Palo Alto Networks, Inc. v. Centripetal Networks, LLC
Authored by: Jeremy J. Gustrowsky
In a recent decision, the Federal Circuit vacated and remanded a Patent Trial and Appeal Board (PTAB) ruling after finding that the Board failed to adequately explain its reasoning in a dispute over network security technology. The case involved Palo Alto Networks, Inc. challenging the validity of Centripetal Networks, LLC’s U.S. Patent No. 10,530,903, which covers methods for correlating packets in communication networks to identify the true source of network traffic—even when that source is intentionally hidden.
Palo Alto Networks argued that the patent claims were obvious in light of two prior patents: one (Paxton) that describes tracking packets across network boundaries, and another (Sutton) that teaches notifying network administrators about potential malicious activity. The PTAB, however, sided with Centripetal, concluding that Palo Alto Networks had not shown by a preponderance of the evidence that the claims were obvious when these two references were combined.
The Federal Circuit found two key errors in the Board’s analysis. First, the Board failed to make a clear finding about whether someone skilled in the art would have been motivated to combine the two prior patents as Palo Alto Networks proposed. Second, the Board improperly analyzed the two patents separately, rather than considering whether their combination would meet the requirements of the challenged patent claims. The court emphasized that, in obviousness challenges, the question is whether the combination of prior art references would have suggested the claimed invention—not whether each reference alone discloses all elements.
As a result, the Federal Circuit sent the case back to the PTAB, instructing it to clarify its reasoning and specifically address whether a skilled person would have been motivated to combine the teachings of the two prior patents to achieve the claimed invention. This decision underscores the importance of clear and thorough explanations from the PTAB, especially when it comes to the motivation to combine prior art in patent challenges.