The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board obviousness determination, finding that the Board did not exceed the scope of the Court’s prior mandate by addressing a claim limitation that the Board had not reached in its original final written decision. Intellectual Pixels Ltd. v. Sony Interactive Entertainment LLC, Case No. 24-2174 (Fed. Cir. July 10, 2026) (Dyk, Stoll, Stark, JJ.)

Sony Interactive Entertainment petitioned for inter partes review (IPR) of an Intellectual Pixels Limited (IPL) patent directed to methods and systems for generating digital images using an external visual server. IPL is a UK-based intellectual property licensing company known for holding a US patent that covers methods for generating and displaying digital images using a remote visual server. A key feature of the claimed invention was that the external server assumed responsibility for generating the images, relieving the client device of that processing burden.

The primary prior art reference disclosed a system in which a game was hosted “exclusively on a server/host computer” while users played the game through separate client or terminal computers. The Board instituted review but, in its first final written decision, concluded that Sony had not shown the challenged claims to be unpatentable.

Sony appealed. The Federal Circuit vacated the Board’s decision, finding that substantial evidence did not support the Board’s determination regarding the claim limitation requiring “generating” a new image.

On remand, the Board addressed a separate “compressing” limitation, concluded that the prior art satisfied that limitation, and issued a second final written decision finding the challenged claims unpatentable as obvious.

IPL appealed, arguing that the Board violated the Federal Circuit’s mandate by revisiting findings that had not been expressly disturbed in the first appeal. Under the mandate rule, issues decided on appeal generally may not be reconsidered by a lower tribunal on remand.

The Federal Circuit rejected IPL’s argument. One of the two findings IPL identified had, in fact, been vacated by the Court’s prior decision as unsupported by substantial evidence. The other concerned the Board’s observation that the primary reference was “completely silent as to the content or origin of that ‘compressed video MPEG stream.’” The Court concluded that this second finding fell outside the scope of the prior mandate because it related to the “compressing” limitation, which the Board had not reached in its first final written decision. Because the Board’s original decision rested only on the “generating” limitation, the “compressing” issue was not before the Court in the first appeal and, therefore, was not resolved – expressly or implicitly – by the Court’s mandate.

The Federal Circuit also noted that its prior discussion of the “generating” limitation had implicitly undermined IPL’s reliance on the Board’s earlier observation. Both the “generating” and “compressing” limitations referred to “at least one updated image,” making the prior finding difficult to reconcile with the Court’s earlier analysis.

IPL relied on a 2025 Federal Circuit decision, Bitmanagement Software GmBH v. United States, suggesting that factual findings made during [...]

Continue Reading