Details: I'm not going to cover the details of the case. Instead, I'll give you some quotes which might be of use in your next Appeal Brief. If you do want to read more about the case, you can find a short summary of it here on the IP Spotlight blog, or a longer post here on the IPWatchdog blog.
My two cents: I think In re Vaidyanathan is important, though it's really not new law. The Federal Circuit ruled back in 2001 that the BPAI must "point to some evidence in the record in support of [its] findings" rather than "simply reach conclusions based on its own understanding or experience – or on its assessment of what would be basic knowledge or common sense." In re Zurko, 258 F.3d 1379 (Fed. Cir. 2001)("Zurko IV").
I see In re Vaidyanathan as a post-KSR update to Zurko. The Federal Circuit found that the BPAI made two mistakes in Vaidyanathan. First, the Board found that a particular feature was not explicitly taught but was nonetheless implicit. The Federal Circuit said more detail was needed on this implicit finding:
The Board cited no other evidence indicating the level of ordinary skill in the relevant art, or explaining why a person of ordinary skill would view this autopilot aspect as an implicit teaching of Biggers.The second BPAI error was simple reliance on the "predictable use" rationale from KSR. The BPAI found that:
[T]he Board did not persuasively explain how a person of ordinary skill in the art would conclude that Biggers taught that the trajectory commands produced by the neural network are to be input into a separate autopilot function.
To combine the feature of a neural network for determining the optimal trajectory as taught by Biggers with the missile guidance system of Johnson to attain the advantages of each would have been obvious to a person of ordinary skill in the art, as this would involve nothing more than the predictable use of prior art elements according to their established functions.The Federal Circuit said a mere reference to the predictable use rationale was not enough:
[W]hile KSR relaxed some of the formalism of earlier decisions requiring a “teaching, suggestion, or motivation” to combine prior art references, it did not remove the need to anchor the analysis in explanation of how a person of ordinary skill would select and apply the teachings of the references. See, e.g., id. at 417 ...
The Federal Circuit provided this nice summary of the evidentiary requirement for obviousness findings post-KSR:
Where, as here, prior art references are cited to support an obviousness rejection, the references themselves need not in every case provide a “specific hint or suggestion” of the alteration needed to arrive at the claimed invention; the examiner’s analysis “may include recourse to logic, judgment, and common sense available to a person of ordinary skill that do not necessarily re-quire explication in any reference or expert opinion.” Perfect Web Techs. v. InfoUSA, Inc., 587 F.3d 1324, 1329 (Fed. Cir. 2009). In these cases the examiner should at least explain the logic or common sense that leads the examiner to believe the claim would have been obvious. Anything less than this results in a record that is insulated from meaningful appellate review. Zurko, 258 F.3d at 1386.I plan to paste this quote into my Appeal Brief the next time I get a conclusory statement of obviousness which doesn't explain why or how.