author: FRIEDMAN, District Judge:

text:
    GLOBAL QUEST, LLC, Plaintiff-Counter Defendant-Appellant, v. HORIZON YACHTS, INC., Horizon Group, et al., Defendants-Counter Claimants-Appellees.
    No. 15-10713
    United States Court of Appeals, Eleventh Circuit.
    February 24, 2017

      Beverly A. Pohl, Broad <& Cassel, Judith Ann Bradshaw, Christopher R. Fertig, Darlene Mondi Lidondici, Andrew Nicholas Mescolotto, Fertig & Gramling, FORT LAUDERDALE, FL, Mark Hicks, Hicks Porter Ebenfeld & Stein, PA, MIAMI, FL, for Plaintiff-Appellant.
    Scott Andrew Wagner, Michael T. Moore; Moore & Company, PA, CORAL GABLES, FL, for Defendants-Appellees.
    Before MARCUS and FAY, Circuit Judges, and FRIEDMAN, District Judge.

       Honorable Paul L. Friedman, United States District Judge for the District of Columbia, sitting by designation.

   FRIEDMAN, District Judge:

Plaintiff Global Quest, LLC. appeals from the district court’s grant of summary judgment to defendants on all but one count of plaintiffs amended complaint and to defendant Horizon Yachts, Inc. on its counterclaim for foreclosure of a promissory note. Plaintiff appeals from the district court’s entry of partial final judgment pursuant to Rule 54(b) of the Federal Rules of Civil Procedure. We reverse the district court’s grant of summary judgment to defendants on Counts I, III, IV, VII, and VIII of plaintiffs amended complaint and the grant of summary judgment to defendant Horizon Yachts, Inc. on its counterclaim.

I. BACKGROUND

Plaintiff purchased a 105 foot luxury super-yacht, specifically a CC-105 Horizon Explorer named “Starlight,” from defendant Horizon Yachts, Inc. (“Seller”). The yacht was manufactured by defendant Horizon Yacht Co., Ltd. (“Horizon”) and its wholly-owned subsidiary Premier Yacht Co., Ltd. (“Premier”) in Taiwan. While both Horizon and Premier are Taiwanese companies, Seller is an independent U.S. Corporation based in Florida. It is undisputed, however, that the Seller is Horizon’s agent and appears to be owned, at least in part, by Horizon and Premier’s founder and CEO, John Lu. Horizon Yachts, Inc., http://www.horizonyachtusa. com (last visited May 10, 2016) (“Horizon Yacht USA is the U.S. agent for Horizon Yachts”).

Plaintiff purchased the Starlight for $6,835,000 after negotiating and executing a Purchase and Sale Agreement with Seller, along with an Addendum executed shortly thereafter. That contract, as modified by the Addendum, contains a seemingly self-contradictory provision. The “as is” clause in the original Agreement, paragraph 10, states that “upon closing, buyer will have accepted the vessel in its ‘as is’ condition. Seller and the brokers have given no warranty, either express or implied, and make no representation as to the condition of the vessel, its fitness for any particular purpose or merchantability, all of which are disclaimed.” The Addendum, however, modifies this clause — providing that before the word “Seller,” “the following language is inserted: ‘Other than the limited express warranty attached here as Exhibit A.’ ” With this alteration, paragraph 10 thus reads: “Other than the limited express warranty attached here as Exhibit A, Seller and the broker have given no warranty, .either express or implied .... ” Thus, while the original Agreement purported to disclaim all warranties, express or implied, the Addendum inserted an express limited warranty into the contract. But the Addendum also contains a further provision stating that “[t]he terms of this Acceptance shall govern over any inconsistent terms in the Purchase Agreement which is hereby ratified and declared to be in full force and effect.”

As stated in the Addendum, Plaintiff was given a limited express warranty, the terms of which were negotiated by the parties as part of the sale. Issued on Seller’s letterhead but purporting to be from “Horizon Group,” a trade name for Horizon’s companies, the limited warranty covers certain manufacturing and design defects for a period of one year from the contract date. It is limited, however, to “covered defects first discovered and reported to Horizon or the Original Selling Dealer.” The limited warranty also disclaims “all other express and implied warranties (except title),” and states that “[n]o employee, representative, authorized dealer or agent of Horizon other than an executive officer of Horizon is authorized to alter or modify any provision of the Limited Warranty or to make any guaranty, warranty or representation, express or implied, orally or in writing which is contrary to the foregoing.” The limited warranty also lists Premier and its contact details on the final page, without any explanation as to their relationship to the warranty.

Plaintiff contends that defendants made numerous false representations regarding' the yacht’s condition during the negotiation of the sale. Specifically, plaintiff claims that the yacht was represented to be MCA LY2 compliant and built to DNV standards, both in statements made by Seller’s sales representative and on Horizon’s web-page advertising the Starlight. Plaintiff claims that after it took possession it quickly discovered that the yacht was not MCA LY2 compliant nor was it built to DNV standards. The yacht had numerous problems that sharply limited the range of the vessel to short distances and also had electrical issues that rendered it unsafe. After defendants refused to repair or address the problems under the warranty, plaintiff filed suit against the three defendants, bringing ten claims under the amended complaint against each defendant: (1) fraud in the inducement; (2) revocation of acceptance under the Magnuson-Moss Warranty Act; (3) breach of the implied warranties of merchantability and usage of trade; (4) breach of the implied warranty of fitness for a particular purpose; (5) breach of a pre-purchase express oral warranty; (6) breach of a post-purchase express oral warranty; (7) breach of the implied warranty of workmanlike performance; (8) breach of the express written limited warranty; (9) rescission of the promissory note executed with the purchase; and (10) an injunction barring defendants from foreclosing on the promissory note or taking possession of the yacht for non-payment. Seller counterclaimed to foreclose on the promissory note.

The district court entered summary judgment for defendants on all but two claims: the breach of express warranty claims against Horizon and Premier. The district court also entered summary judgment for Seller on its counterclaim to foreclose on the promissory note. Pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, the district court certified the judgment as a partial final judgment for interlocutory review. Plaintiff appeals, challenging the district court’s entry of summary judgment as to Counts I, III, IV, VII, and VIII and .the counterclaim.

II. DISCUSSION

We review a district court’s grant of summary judgment de novo. Stephens v. Mid-Continent Cas. Co., 749 F.3d 1318, 1321 (11th Cir. 2014) (citing Kragor v. Takeda Pharm. Am., Inc., 702 F.3d 1304, 1307 (11th Cir. 2012)). Summary judgment is appropriate when the evidence, viewed in the light most favorable to the nonmov-ing party, presents no genuine issue of material fact and compels judgment as a matter of law. Id.; see also Fed R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Plaintiff challenges the entry of summary judgment as to: (1) the fraudulent inducement claims against all three defendants (Count I); (2) the breach of implied warranty claims against all three defendants (Counts III, IV, and VII); and (3) the ’ breach of express warranty claim against Seller, Horizon Yachts, Inc. (Count VIII). Each is addressed in turn.

A. Fraudulent Inducement: Count I

The district court granted summary judgment to all three defendants on plaintiffs fraudulent inducement claim, relying on Florida precedent holding that a plaintiff “cannot recover for fraudulent oral representations which are covered in or contradicted by a later written agreement.” Sherwin-Williams Co. v. Auto Body Tech. Inc., No. 12-23362, 2014 WL 2177961, at *4 (S.D. Fla. May 26, 2014) (citing Giallo v. New Piper Aircraft, Inc., 855 So.2d 1273, 1275 (Fla. Dist. Ct. App. 2003)). Relying on the “as is” and “entire agreement” clauses in the contract, the district court held that the claim is based on alleged pre-contractual misrepresentations that were expressly contradicted by the later written agreement, concluding that plaintiff could not have relied on the earlier statements as a matter of law due to the conflicting conditions in the agreement.

The district court expressly declined to follow Oceanic Villas, Inc. v. Godson, 148 Fla. 454, 4 So.2d 689 (1941), which, contrary to the district court’s reasoning, held that an “as is” clause does not bar a plaintiff from bringing a fraud claim. Specifically, the Florida Supreme Court in Oceanic Villas held that where an agreement is procured by fraud or misrepresentation “every part of the [ ] contract” is vitiated because “[i]t is well settled that a party can not contract against liability for his own fraud.” Id. at 690. The district court declined to follow Oceanic Villas because, in its view, (1) it “is distinguishable because it did not involve a warranty disclaimer or address recent Florida law, stating that a party cannot recover in fraud for misrepresentations covered or expressly contradicted in a later written agreement;” (2) it was decided before the enactment of Florida’s Uniform Commercial Code in 1965, which permits “as is” clauses and the exclusion of warranties; and (3) the Florida Supreme Court’s holdings are “fact intensive and depend on a review of the conditions of the contract as a whole, not just one clause.”

Plaintiff argues that the district court erred by refusing to follow Oceanic Villas and granting summary judgment to defendants on the fraudulent inducement claim. We agree.

“As a federal court sitting in diversity jurisdiction, we apply the substantive law of the forum state, in this case Florida, alongside federal procedural law.” Horowitch v. Diamond Aircraft Indus., Inc., 645 F.3d 1254, 1257 (11th Cir. 2011) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)). The Florida Supreme Court “does not intentionally overrule itself sub silentio.” Puryear v. Florida, 810 So.2d 901, 905 (Fla. 2002). “Where a court encounters an express holding from [the Florida Supreme] Court on a specific issue ..., the court is to apply [the] express holding in the former decision until such time as [the Supreme] Court recedes from the express holding.” Id.; see also Hoffman v. Jones, 280 So.2d 431, 434 (Fla. 1973). The Florida Supreme Court has not overruled Oceanic Villas, explicitly or implicitly. In fact, Florida’s intermediate courts of appeal have continued to apply Oceanic Villas as recently as 2011. See, e.g., Lower Fees, Inc. v. Bankrate, Inc., 74 So.3d 517, 519 (Fla. Dist. Ct. App. 2011); D & M Jupiter, Inc. v. Friedopfer, 853 So.2d 485, 488-89 (Fla. Dist. Ct. App. 2003); Burton v. Linotype Co., 556 So.2d 1126, 1127 (Fla. Dist. Ct. App. 1990); see also Carolina Acquisition, LLC v. Double Billed, LLC, No. 07-61738-CIV, 2009 WL 3190807, at *2 (S.D. Fla. 2009). Oceanic Villas therefore remains binding precedent on the law of fraudulent inducement in Florida, a fact unchanged by the more recent case law cited by the district court. And neither the district court nor this Court is “at liberty to disregard binding case law that is so closely on point,” and has not been directly overruled by the Florida Supreme Court. United States v. Clarke, 780 F.3d 1131, 1133 (11th Cir. 2015) (second alteration in original) (quoting United States v. Chubbuck, 252 F.3d 1300, 1305 n.7 (11th Cir. 2001)).

Oceanic Villas also is not distinguishable from this case. Nor was its holding “fact intensive” such that its reasoning must be limited to the precise contract provisions it considered. Oceanic Villas held that a contract provision, including an “as is” clause, cannot preclude a fraud claim, unless the contract expressly states that it is incontestable on the ground of fraud. 4 So.2d at 690-91 (“We recognize the rule to be that fraud in the procurement of a contract is ground for rescission and cancellation of any contract unless for consideration or expediency the parties agree that the contract may not be cancelled or rescinded for such cause.”). This rule is directly contrary to the district court’s holding that plaintiffs claim is barred by virtue of the provisions of the contract. That the contract at issue in Oceanic Villas did not contain a warranty disclaimer is a distinction without a difference. Nothing in Oceanic Villas suggests that the result would have been different with a warranty disclaimer, or any other contract provision save a specific disclaimer of liability for fraud. Absent such a disclaimer, no matter the context, “a party can not contract against liability for [its] own fraud.” 4 So.2d at 690.

The district court appears to have confused the threshold question of whether a claim is barred as a matter of law with the later question of whether the evidence is sufficient to survive summary judgment. The Sixth Circuit, applying Oceanic Villas in a diversity case, recently explained this distinction as follows:

Attempting to overcome this conclusion [that its alleged reliance on statements was unreasonable], [Appellant] relies on two Florida cases — Oceanic Villas, Inc. v. Godson, [148 Fla. 454] 4 So.2d 689, 690 (Fla. 1941); Allen v. Stephan Co., 784 So.2d 456 (Fla. Dist. Ct. App. 2000) — to show that a fraud claim can survive an integrated lease. But simply because [Appellant] is not prohibited from bringing a fraud claim does not mean [Appellant] can prove the elements of its fraud claim. Neither case suggests otherwise. In Oceanic Villas, the Florida Supreme Court held that an integration clause similar to the ones at issue here did not “estop[ ]” the lessee from alleging fraud or “make the contract incontestable because of fraud.” Oceanic Villas, Inc v. Godson, 4 So.2d at 690-91. But the court went on to call an integration clause “evidenee[]” that “neither party has relied upon the representation of the other party made prior to the execution of the contract.” Id. at 691; accord Cassara v. Bowman, [136 Fla. 302] 186 So. 514, 514 (1939). Here, we have that precise “evidence” and [Appellants’ actual knowledge that Best Buy Mobile would enter the relevant malls or already had done so before any final leases were signed [directly contradicting the alleged fraudulent misrepresentations].... But again, no one here thinks [Appellant’s claim is barred; the claim just lacks merit.”

Beeper Vibes, Inc v. Simon Property Grp., Inc., 600 Fed.Appx. 314, 318-19 (6th Cir. Dec. 12, 2014). The “as is” clause and the rest of the Purchase Agreement in this case may constitute evidence against plaintiffs fraud allegations, but plaintiffs claims are not precluded as a matter of law.

The confusion over this distinction appears to have led the district court to conclude that two Florida cases, Faulk v. Weller K-F Cars, Inc., 70 So.2d 578 (Fla. 1954), and Lou Bachrodt Chevrolet, Inc. v. Savage, 570 So.2d 306 (Fla. Dist. Ct. App. 1990), are irreconcilable and that Faulk suggests an implicit rejection of Oceanic Villas. In Faulk, the Florida Supreme Court held that a written guarantee with a clear disclaimer of warranties and representations “negatives the idea of fraudulent misrepresentations” and that plaintiffs “allegations and the proof with reference to fraudulent misrepresentations were wholly insufficient.” 70 So.2d at 579. Faulk thus is an illustration of the above distinction — the court did not address whether the claim was barred as a matter of law; the claim just lacked merit because the allegations and evidence “were wholly insufficient” and the clear contract provisions weighed in the other direction. Similarly, in Lou, the Florida District Court of Appeal did not consider whether a claim was barred as a matter of law by a contract provision, but instead found sufficient evidence to affirm a jury verdict because the plaintiff had “produced evidence as to all the elements of fraud in the inducement” despite the existence of an “as is” provision in the contract. 570 So.2d at 308. Neither Faulk nor Lou applied the rule from Oceanic Villas, and they are irrelevant for our purposes here.

Lastly, the fact that Oceanic Villas was decided before Florida’s enactment of the Uniform Commercial Code also is of no moment because, although the UCC permits “as is” clauses and warranty disclaimers, it is silent as to the impact, if any, that such contract provisions have on fraud claims. See Hill v. Florida, 711 So.2d 1221, 1224 (Fla. Dist. Ct. App. 1998) (“In the absence of clear constitutional or statutory authority reflecting a change in established law, we do not possess the authority to disregard controlling precedent of the [Florida Supreme Court].”); see also Hoffman v. Jones, 280 So.2d at 434. There is no indication that the Florida legislature intended to overrule Oceanic Villas by passing the UCC. See also Tinker v. De Maria Porsche Audi, Inc., 459 So.2d 487, 491 (Fla. Dist. Ct. App. 1984) (Florida’s UCC “states that the pre-Code law with regard to fraud supplements the U.C.C. and is not displaced by the Code, unless a particular provision specifically provides for such displacement.”) (citing Fla. Stat. § 671.103).

Defendants suggest two alternatives bases on which we might affirm the district court. First, defendants maintain that they are entitled to summary judgment because there are no genuine issues of material fact. Specifically, defendants argue that plaintiff has failed to present “any record evidence of the required elements of knowledge and intentional deceit.” In fraud cases, however, summary judgment “is rarely proper as the issue so frequently turns on the axis of the circumstances surrounding the complete transaction, including circumstantial evidence of intent and knowledge.” Coastal Investment Properties, Ltd. v, Weber Holdings, LLC, 930 So.2d 833, 834 (Fla. Dist. Ct. App. 2006) (quoting Cohen v. Kravit Estate Buyers, Inc., 843 So.2d 989, 991 (Fla. Dist. Ct. App. 2003)); see also Burton, 556 So.2d at 1129-30 (“Fraud is ordinarily inappropriate for summary disposition; only after a full explanation of the facts and circumstances can the occurrence of fraud be determined.”). To establish a claim of fraud in the inducement under Florida law, a plaintiff must establish that: (1) the representor made a false statement concerning a material fact; (2) the repre-sentor knew or should have known that the representation was false; (3) the repre-sentor intended to induce another party to act in reliance on the false statement; and (4) the party acted in justifiable reliance on the representation and ,was injured as a result. Butler v. Yusem, 44 So.3d 102, 105 (Fla. 2010) (citing Johnson v. Davis, 480 So.2d 625, 627 (Fla. 1985)). Despite defendants’ protestations that there is no direct evidence proving intent and knowledge, suffice it to say that the elements of fraud — particularly including intent and knowledge — may be, and often are, proven by circumstantial evidence. See, e.g., Bacon & Bacon Mfg. Co. Inc. v. Bonsey Partners, 62 So.3d 1285 (Fla Dist. Ct. App. 2011); Century Properties, Inc, v. Machtinger, 448 So.2d 570 (Fla. Dist. Ct. App. 1984). Viewed in the light most favorable to plaintiff, there is sufficient evidence on the elements of fraudulent inducement for this case to proceed to trial.

Internal emails of the defendants indicate knowledge of the yacht’s very poor condition, and plaintiffs representative, Paul Queyrel, and its brokers testified in depositions that defendants and their representatives made representations to them during the sales pitch about the condition of the yacht and specifically that it met international standards, which allegedly proved false after delivery. In addition, plaintiff alleges that defendants advertised the yacht, both on the internet and in physical handouts, as being MCA LY2 compliant and built to DNV standards. Plaintiffs representative and its brokers also testified that they discussed these two standards at length with defendants and relied on defendants’ written and oral representations, and that defendants were aware that these standards were “the selling point” of the sale. Plaintiff claims that these repeated representations induced it to purchase the.yacht. Plaintiffs representative and its brokers further testified that the yacht was represented to be new, not a used “dealer-demo” as defendants claim, and that when certain problems were discovered prior to the sale, defendants “represented that Horizon would ‘take care of and fix th[e] problem.”

The CEO of the Seller, Roger Sower-butts, denied under oath ever making representations that the yacht was MCA LY2 compliant, denied that defendants were aware of manufacturing defects and damage to the yacht, and claimed that defendants believed the yacht to have been built to DNV standards. Mr. Sower-butts conceded, however, that defendants’ website incorrectly described the yacht as MCA LY2 compliant, despite the fact that the yacht “never was inspected by MCA.” There therefore are genuine issues of material fact and evidence sufficient to survive summary judgment as to all four elements of the claim of fraudulent inducement.

Second, defendants argue that the economic loss rule bars plaintiffs claim for fraudulent inducement. The “economic loss rule is a judicially created doctrine that sets forth the circumstances under which a tort action is prohibited if the only damages suffered are economic losses.” Tiara Condominium Assoc., Inc. v. Marsh & McLennan Companies, 110 So.3d 399, 401 (Fla. 2013). The rule was designed to prevent the application of tort remedies to traditional contract law damages. Id. The economic loss rule “has its roots in the products liability arena,” id. and the Florida Supreme Court recently clarified in Tiara that under Florida law “the economic loss rule applies only in the products liability context.” Id. at 407. The Florida Supreme Court thus “reeede[d] from [its] prior rulings to the extent that they [] applied the economic loss rule to cases other than products liability.” Id.; see also Alpha Data Corp. v. HX5, L.L.C., 139 So.3d 907, 910 (Fla. Dist. Ct. App. 2013) (citing Tiara and summarily reversing a district court’s decision that the economic loss rule barred a fraudulent inducement claim).

Although a fraudulent inducement claim still must be independent of a breach of contract claim, that minimal requirement is readily met here — the fraud allegations are separate and distinct from defendants’ performance under the contract. The fraud allegations concern representations about the yacht’s condition and certain international building standards. The contract contains no statements about either the international standards or the yacht’s condition. Such claims therefore could not form the basis of a breach of contract claim.

B. Breach of Implied Warranties: Counts III, IV, and VII

The district court granted summary judgment to all three defendants — Horizon Yachts, Inc., Horizon Yacht Co., Ltd., and Premier Yacht Co., Ltd. — on plaintiffs breach of implied warranty claims due to the contract’s express disclaimer of all implied warranties. Plaintiff argues that Section 2308(a) of the Magnuson-Moss Warranty Act (“MMWA”), 15 U.S.C. § 2308(a), prohibits a seller from disclaiming implied warranties if an express warranty, including a limited warranty, is given. The district court rejected this argument because “limited warranties are not governed by MMWA.” Not so.

The Magnuson-Moss Warranty Act does apply to limited warranties. As relevant, Section 2308(a) provides that:

(a) No supplier may disclaim or modify (except as provided in subsection (b) of this section) any implied warranty to a consumer with respect to such consumer product if ... such supplier makes any written warranty to the consumer with respect to such Consumer Product....”

15 U.S.C. § 2308(a). As Section 2303 of the Act makes clear, the term “written warranty” encompasses both “full” warranties, written warranties that meet “the Federal minimum standards for warranty set forth in section 2304 of [the Act],” and “limited” warranties, written warranties that do not meet the Federal minimum standards. 15 U.S.C. § 2303(a). By its plain language, Section 2308 prohibits sellers from disclaiming implied warranties when either a full or a limited warranty is provided by the seller. Accord Abraham v. Volkswagen of America, Inc., 795 F.2d 238, 248 (2d Cir. 1986) (“Implied warranties ... may not be disclaimed if a written warranty, ‘full’ or ‘limited,’ is given, 15 U.S.C. § 2308(a).”); Boelens v. Redman Homes, Inc., 748 F.2d 1058, 1063 (5th Cir. 1984) (“Although ‘limited’ warranties are not subject to [the standards of Section 2304], the Act does provide that the terms of a limited warranty may limit the duration of implied warranties only- to the duration of the written warranty.”) (quoting 15 U.S.C. § 2308). If a jury concludes that one or all of the defendants issued or agreed to be bound by the limited written warranty, the disclaimer of implied warranties therefore would be ineffective to bar plaintiffs claim.

Defendants argue in the alternative that Horizon and Premier are entitled to summary judgment because they are not in privity of contract with plaintiff, that only the Seller — Horizon Yachts, Inc. — is. See Kramer v. Piper Aircraft Corp., 520 So.2d 37, 38 (Fla. 1988) (Florida law requires privity of contract for a breach of implied warranty claim). Because, as we discuss infra at 1033-34, there is a genuine issue of material fact regarding who issued the limited express warranty (Horizon, Premier, Horizon Yachts, or some combination thereof), there also is a genuine issue of fact regarding privity of contract. Florida courts have found the privity requirement to be satisfied when a manufacturer directly provides a warranty to, or otherwise has direct contact with, a buyer who purchases from a third party. See ISK Biotech Corp. v. Douberly, 640 So.2d 85 (Fla. Dist. Ct. App. 1994) (finding privity where manufacturer’s representative told third-party seller that seller could assure plaintiff that product would not destroy plaintiffs crop); Cedars of Lebanon Hosp. Corp. v. European X-Ray Distribs. of America, Inc., 444 So.2d 1068, 1072 n.4 (Fla. Dist. Ct. App. 1984) (finding privity where manufacturer’s representative made express warranty through direct contacts with the purchaser who bought product from third-party distributor).

Here, a jury could find that Horizon and Premier directly issued to plaintiff a unique limited express warranty that was provided and specifically negotiated as part of the purchase of the yacht they manufactured. See Cedars of Lebanon, 444 So.2d at 1072 (“It seems fundamentally unfair, and anomalous in the extreme, to allow the manufacturer to hide behind the doctrine of privity when the product, which it induced the purchaser to buy, turns out to be worthless.”). There also is evidence that the founder and CEO of Horizon and Premier was directly involved in the negotiation of the purchase and limited warranty, it is undisputed that the Seller, Horizon Yachts, is an agent of Horizon. Horizon Yachts, Inc., http://www.horizonyachtusa. com (last visited May 2, 2016) (“Horizon Yacht USA is the U.S. agent for Horizon Yachts”). Plaintiff therefore might well be able at trial to establish privity through the agency relationship. See Ocana v. Ford Motor Co., 992 So.2d 319, 324-25 (Fla. Dist. Ct. App. 2008) (an agency relationship can establish the requisite privity).

C. Breach of Express Limited Warranty: Count VIII

The district court granted summary judgment to the Seller, Horizon Yachts, Inc., on plaintiffs breach of express warranty claim, but not to Horizon Yacht Co., Ltd. or to Premier Yacht Co., Ltd. It held that the Seller did not issue or provide an express limited warranty to plaintiff. The district court concluded that the Addendum did not incorporate the limited express warranty into the contract because: (1) “it would be unreasonable to interpret paragraph ten of the agreement, indicating both that the [Seller] makes no warranties and sells the yacht ‘AS IS,’ and to thereafter include a limited warranty by the [Seller];” and (2) the Purchase Agreement, Addendum, and limited warranty “indicate[ ] that [Horizon Yachts] is not part of ‘Horizon’ or ‘Horizon Group,’ the party that issued the limited warranty.”

We disagree that it would be unreasonable to interpret the Purchase Agreement, as amended by the Addendum, to include both the limited warranty and an “as is” clause. The amended “as is” clause specifically demarcates the limited warranty as an exception to the clause. And the Addendum states that “[t]he Terms of this Acceptance shall govern over any inconsistent terms in the Purchase Agreement.” Thus, to the extent that the original “as is” clause conflicts with the Addendum or the added limited warranty, the Addendum and limited warranty would govern — assuming, of course, that they are a part of the contract — a question to which we now turn.

A collateral document, such as the limited warranty, is deemed to be incorporated by reference into a contract if the contract “(1) specifically providefs] that it is subject to the incorporated [collateral] document and (2) the collateral document to be incorporated must be sufficiently described or referred to in the incorporating agreement so that the intent of the parties may be ascertained.” BGT Grp., Inc. v. Tradewinds Engine Servs., LLC, 62 So.3d 1192, 1194 (Fla. Dist. Ct. App. 2011) (quoting Kantner v. Boutin, 624 So.2d 779, 781 (Fla. Dist. Ct. App. 1993)). The first requirement mandates that “there must be some expression in the incorporating document ... of an intention to be bound by the collateral document.” Kantner, 624 So.2d at 781. As to the second requirement, “[i]t is a generally accepted rule of contract law that, where a writing expressly refers to and sufficiently describes another document, that other document, or so much of it as is referred to, is to be interpreted as part of the writing.” Id. (quoting OBS Co. v. Pace Constr. Corp., 558 So.2d 404, 406 (Fla. 1990)).

Viewing the evidence in the light most favorable to the plaintiff, as we must on summary judgment, we conclude— while it is a very close question — that there are genuine issues of material fact as to whether the limited warranty was incorporated into the contract or whether the Seller, Horizon Yachts, otherwise agreed to be bound 'by the warranty. Admittedly, the Purchase Agreement and the warranty appear to differentiate between “Buyer” and “Seller [Horizon Yachts]” on the one hand, and the “Horizon Group,” on the other, an indication that the Seller, Horizon Yachts, is not a part of the Horizon Group, as the district court found. And paragraph 13 of the warranty suggests that it was not the Seller who issued the warranty and that the Seller did not agree, to be bound by it. But this evidence, while strong, conflicts with three pieces of evidence that in our view raise genuine issues of material fact for a jury to resolve.

First, the Purchase Agreement, as amended by the Addendum, states that “[o]ther than the limited express warranty attached here as Exhibit A, Seller and the brokers have given no warranty, either express or implied.... ” This reasonably could be read to mean that the Seller, Horizon Yachts, itself, at least in part, issued the limited express warranty. The Purchase Agreement, together with the Addendum, specifically lists the limited warranty and states that it is attached “as Exhibit A.” Moreover, the limited warranty was listed in the Closing Index, along with the Purchase Agreement and the Addendum, as a part of the parties’ agreement. Second, the limited warranty was issued on the Seller’s letterhead, and it was negotiated alongside the Purchase Agreement and provided to plaintiff by the Seller prior to the execution of the Purchase Agreement. Finally, a jury also could reasonably conclude that the Seller is part of the “Horizon Group” mentioned in the limited warranty — its website states that it is the U.S. agent of Horizon and the Seller appears to be owned, at least in part, by Horizon’s founder and CEO.

The Purchase Agreement as a whole thus contains conflicting provisions as to the Seller’s relationship with the warranty, and it is bolstered by extrinsic evidence of the Seller’s relationship with the other Horizon entities. While there, is certainly strong evidence against finding that the Seller, Horizon Yachts, Inc., agreed to be bound by the limited warranty, we believe that there is also sufficient evidence in the record to create a genuine issue of material fact entitling the jury rather than the court to decide that question.

There is one final point to address with respect to the express limited warranty. As noted, the Purchase Agreement states that it is “attached here as Exhibit A,” but it was not actually physically attached as an exhibit. Nevertheless, the limited warranty was negotiated by the parties in conjunction with the Purchase Agreement, provided to plaintiff well before the agreement was executed, and was listed in the Closing Index. See Avatar Properties, Inc. v. Greetham, 27 So.3d 764, 766 (Fla. Dist. Ct. App. 2010) (where a home warranty was not attached to any agreement, language that “the warranty was available for examination at [the seller’s] offices and that upon request the warranty would be attached as an exhibit to the purchase and sale agreement” was sufficient to satisfy the second requirement for incorporation by reference). Reading the documents together, a jury could conclude that the parties intended for the Purchase Agreement, Addendum, and limited warranty all to be part of the same contract. See Phoenix Motor Co. v. Desert Diamond Players Club, Inc., 144 So.3d 694, 697-98 (Fla. Dist. Ct. App. 2014) (holding that documents “executed as part of the same transaction” are incorporated when “they indicate the parties’ intent for the [incorporating document] and the [collateral document] to be part of the same contract”); see also Collins v. Citrus Nat’l Bank, 641 So.2d 458, 459 (Fla. Dist. Ct. App. 1994) (“Where two or more documents are executed by the same parties, at or near the same time, in the course of the same transaction, and concern the same subject matter, they will be read and construed together.”).

III. CONCLUSION

For the foregoing reasons, we vacate the district court’s grant of summary' judgment, as to Counts I, III, IV, VII, and VIII and remand for trial, but affirm the grant of summary judgment as to the remaining claims. We also reverse the district court’s grant of summary judgment on defendants’ counterclaim.

AFFIRMED IN PART, VACATED IN PART, AND REMANDED.

      . "When an action presents more than one claim for relief ... or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay." Fed. R. Civ. P. 54(b); see Lloyd Noland Found., Inc. v. Tenet Health Care Corp., 483 F.3d 773, 778-80 (11th Cir. 2007).

      . Plaintiff does not challenge the district court’s entry of summary judgment on Counts II, V, VI, IX, and X of the amended complaint. Counts VIII, IX, and X incorrectly are labeled in the amended complaint as IX, X, and XI respectively.

      . MCA is an acronym for the United Kingdom’s Maritime and Coastguard Agency. The agency publishes, among other codes, the Large Commercial Yacht Code, abbreviated "LY2”, which is a set of building standards for large yachts. DNV stands for "Det Norske Veritas” and it is the world's largest classification society. The organization sets safety, reliability, and environmental standards for maritime vessels.

      . Because judgment in favor of plaintiff on the fraudulent inducement claim would "vitiate" the contract, we also reverse the grant of summary judgment to the Seller on its counterclaim to foreclose on the promissory note.

      . The district court’s reliance on Bailey v. Monaco Coach Co., 350 F.Supp.2d 1036, 1042 (N.D. Ga. 2004), to reach the opposite conclusion was misplaced. In Bailey, the Northern District of Georgia correctly noted that the MMWA distinguishes between full and limited warranties and that "[o]nly full warranties are required to meet the minimum standards set forth in 15 U.S.C. § 2304.” 350 F.Supp.2d at 1042. The court then concluded that "because the law relating to limited warranties is not expressly modified, limited warranties ... are not governed by Magnuson-Moss but by the Uniform Commercial Code” and went on to discuss relevant state law warranty standards. Id. This overly broad statement is correct as to Section 2304 — the minimum standards of Section 2304, by definition, apply only to full warranties — but incorrect as to Section 2308, which, as discussed above, does apply to limited warranties.

      . Horizon Yachts, Inc. also uses the name "Horizon Yacht USA.”


source: Caselaw Access Project

author: WALLACH, Circuit Judge. O’MALLEY, Circuit Judge,

license: Public Domain

text:
    ICON HEALTH AND FITNESS, INC., Appellant v. STRAVA, INC., UA Connected Fitness, Inc., Appellees
    2016-1475
    United States Court of Appeals, Federal Circuit.
    Decided: February 27, 2017

      Larry R. Laycock, Maschoff Brennan Laycock Gilmore Israelsen & Wright, Salt Lake City, UT, argued for appellant. Also represented by John T. Gadd; Mark W. Ford, Robert Parrish Freeman, Jr., Park City, UT.
    Glenn E. Forbis, Harness, Dickey & Pierce, PLC, Troy, MI, argued for appel-lees. Also represented by Matthew L. Cutler, Douglas Alan Robinson, St. Louis, MO.
    Before O’MALLEY, REYNA, and WALLACH, Circuit Judges.
   Concurring-in-part and dissenting-in-part opinion filed by Circuit Judge O’MALLEY.

WALLACH, Circuit Judge.

Appellees Strava, Inc. and UA Connected ' Fitness, Inc. (together; “Strava”) sought inter partes reexamination of several claims of U.S. Patent No. 7,789,800 (“the ’800 patent”). During the reexamination, certain claims were cancelled, and others (claims 38-100) were added. An examiner at the U.S. Patent and Trademark Office (“USPTO”) found certain claims obvious over various prior art references. Appellant Icon Health & Fitness, Inc. (“Icon”) appealed the Examiner’s findings to the USPTO’s Patent Trial and Appeal Board (“PTAB”). In its decision on appeal, the PTAB affirmed the Examiner’s rejection of all .the pending claims as obvious. See Strava, Inc. v. Icon Health & Fitness, Inc., No. 95/002359, 2015 WL 5723014, at *1 (P.T.A.B. Sept. 28, 2015).

Icon appeals the PTAB’s rejection of claims 43, 46, 57-62, 65, 71, 74, 86, and 98-100 (“the Asserted Claims”). We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A) (2012). We vacate-in-part, affirm-in-part, and remand for additional proceedings consistent with this opinion.

Discussion

Icon presents two arguments on appeal. First, Icon contends that “[t]he principal error affecting all aspects of the reexamination proceedings is Strava’s use of an expert to supply legal conclusions of obviousness” and the PTAB’s reliance on those conclusions. Appellant’s Br. 10. Second, Icon avers that the PTAB erred in affirming the Examiner’s rejection of the Asserted Claims, either for lack of substantial evidence or for legal error in the conclusion of obviousness. Id. at 17-35. After summarizing our standard of review and the applicable legal standard, we address these arguments in turn.

I. Standard of Review and Legal Standard for Obviousness

“We review the PTAJB’s factual findings for substantial evidence and its legal conclusions de novo.” Redline Detection, LLC v. Star Envirotech, Inc., 811 F.3d 435, 449 (Fed. Cir. 2015) (citation omitted). “Substantial evidence is something less than the weight of the evidence but more than a mere scintilla of evidence.” In re NuVasive, Inc., 842 F.3d 1376, 1379-80 (Fed. Cir. 2016) (internal quotation marks and citations omitted).

A patent claim is invalid as obvious “if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the [relevant] art [ (THO-SITA’) ]....” 35 U.S.C. § 103(a) (2006). The ultimate determination of obviousness is a question of law, but that determination is based on underlying factual findings. See In re Gartside, 203 F.3d 1305, 1316 (Fed. Cir. 2000). The underlying factual findings include (1) “the scope and content of the prior art,” (2) “differences between the prior art and the claims at issue,” (3) “the level of ordinary skill in the pertinent art,” and (4) the presence of secondary considerations of nonobviousness such “as commercial success, long felt but unsolved needs, failure of others,” and unexpected results. Graham v. John Deere Co. of Kan. City, 383 U.S. 1, 17-18, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966); United States v. Adams, 383 U.S. 39, 50-52, 86 S.Ct. 708, 15 L.Ed.2d 572 (1966).

II. The PTAB Did Not Err by Relying Upon Strava’s Expert’s Declarations

Icon avers that the PTAB erred because it adopted Examiner findings tainted by legal defect. Specifically, Icon contends that the Examiner improperly “affirm[ed] legal conclusions” in the declarations of Strava’s expert, Frank Koperda. Appellant’s Br. 12; see J.A. 1173-87 (“First Kop-erda Deck”), 1559-77 (“Second Koperda Deck”). According to Icon, Mr. Koperda’s Declarations “go well beyond supplying opinions regarding factual matters” and, “instead!,] venture further, improperly opining as to the legal conclusion of obviousness.” Appellant’s Br. 12; see id. at 15-16 (listing instances where Mr. Koperda stated something “would have been obvious” or some variant thereof). Because the Examiner cited to large portions of Mr. Koperda’s Declarations, Strava argues, Mr. Koperda’s legal conclusions “appearf ] to have supplanted” the Examiner’s analysis, id. at 16, mandating reversal, id. at 17. Before we address these arguments on the merits, we first must determine whether we may consider them.

A. Waiver Is Not Appropriate

It is uncontested that Icon failed to raise before the PTAB arguments regarding the Examiner’s purported reliance on Mr. Koperda’s Declarations. Therefore, we must determine whether Icon waived these arguments on appeal.

While we “retainf] case-by-case discretion over whether to apply waiver,” Harris Corp. v. Ericsson Inc., 417 F.3d 1241, 1251 (Fed. Cir. 2005), “[i]t is the general rule ... that a federal appellate court does not consider an issue not passed upon below,” Singleton v. Wulff, 428 U.S. 106, 120, 96 S.Ct. 2868, 49 L.Ed.2d 826 (1976). However, “[u]nder certain circumstances, we may consider issues not previously raised.... ” Automated Merch. Sys., Inc. v. Lee, 782 F.3d 1376, 1379 (Fed. Cir. 2015). Some of the relevant considerations include whether (1) “the issue involves a pure question of law and refusal to consider it would result in a miscarriage of justice”; (2) “the proper resolution is beyond any doubt”; (3) “the appellant had no opportunity to raise the objection” below; (4) “the issue presents significant questions of general impact or of great public concern”; or (5) “the interest of substantial justice is at stake.” Id. (citations omitted). We also may consider, inter alia, whether the issue has been fully briefed, a party will be prejudiced by consideration of the issue, or no purpose will be served by remand. See id. at 1380.

Certain considerations weigh in favor of finding waiver: whether Mr. Koper-da’s Declarations contained legal conclusions is not a pure question of law; Strava had the opportunity to raise its objections to Mr. Koperda’s Declarations below; and the interest of substantial justice is not at stake in that neither party will be deprived a legal right or evade judicial review. See id. at 1379. However, other considerations weigh in favor of exercising our discretion and deciding the issue: the proper resolution is clear, and the arguments raise an issue of general impact in that the issue potentially could affect the weight afforded to a large number of expert declarations containing similar statements. Cf. Broad. Innovation, L.L.C. v. Charter Commc’ns, Inc., 420 F.3d 1364, 1366 (Fed. Cir. 2005) (stating that an “issue presents significant questions of general impact” when it “potentially impacts a large number of patents” (citations omitted)). Because the issue has been fully briefed, the record is complete, there will be no prejudice to any party, and no purpose is served by remand, we will consider Icon’s arguments. See Automated Merch., 782 F.3d at 1379-80 (exercising discretion to review in a case involving similar circumstances).

B. The PTAB Was Permitted to Rely on Mr. Koperda’s Declarations in Support of Its Factual Findings

Having found waiver inapplicable, we must answer whether the PTAB (by virtue of its adoption of some of the Examiner’s findings) erred because it relied upon certain aspects of Mr. Koperda’s Declarations to support its conclusion. Icon acknowledges that “[i]t is not improper for an expert to supply ... factual information or to opine as to factual matters,” Appellant’s Br. 13, and Icon does not dispute that Mr. Koperda was qualified to supply factual information to the Examiner, Oral Argument 8:09-8:26, http://oralarguments.cafc. uscourts.gov/default.aspx?fl=2016-1475.mp 3. Instead, Icon argues that the Examiner erred because he extensively cited to statements in the First and Second Koperda Declarations, one of which Strava submitted with its April 5, 2013 Comments After Non-Final Office Action (“Strava’s April 2013 Comments”) (J.A. 1204-66) and the other with its November 6, 2013 Comments After Non-Final Action Closing Prosecution (“Strava’s November 2013 Comments”) (J.A. 1524-57). According to Icon, the Examiner “did not form his own legal conclusions of obviousness” but rather “adopted the legal conclusions provided to him by ... Mr. Koperda.” Appellant’s Br. 17.

Icon’s arguments ignore the standard against which we review PTAB determinations. “We review the PTAB’s factual findings for substantial evidence and its legal conclusions de novo.” Redline, 811 F.3d at 449 (citation omitted). To the extent Icon challenges the PTAB’s factual findings, as adopted from the Examiner, the PTAB is permitted to weigh expert testimony and other record evidence and, in so doing, rely on certain portions of an expert’s declaration while disregarding others. See Velander v. Garner, 348 F.3d 1359, 1371 (Fed. Cir. 2003) (“[W]hat the [PTAB] consistently did was accord little weight to broad conclusory statements that it determined were unsupported by corroborating references. It is within the discretion of the trier of fact to give each item of evidence such weight as it feels appropriate.” (citation omitted)); see also In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1368 (Fed. Cir. 2004) (“[T]he [PTAB] is entitled to weigh the declarations and conclude that the lack of factual corroboration warrants discounting the opinions expressed in the declarations.... ” (citations omitted)).

To the extent Icon makes a legal argument, there is no per se prohibition against relying on an expert’s declaration in support of factual findings underlying a legal conclusion of obviousness solely because the declaration states that something “would have been obvious.” Indeed, we frequently have affirmed PTAB-deter-minations on obviousness that rely on expert declarations that include such statements, so long as other aspects of the declarations contain statements related to factual findings. See Veritas Techs. LLC v. Veeam Software Corp., 835 F.3d 1406, 1413 (Fed. Cir. 2016) (affirming the PTAB’s conclusion of obviousness that relied on, inter alia, an expert’s statements that “it would have been obvious that” a prior art reference discloses a limitation in the disputed patent application (emphasis added) (internal quotation marks and citation omitted)); MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284, 1293 (Fed. Cir. 2015) (affirming the PTAB’s conclusion of obviousness that was based, in part, upon an expert’s statement that “it would have been obvious ... to incorporate” a prior art reference’s capabilities into another prior art reference (emphasis added) (citation omitted)). To determine if an expert’s statement is directed to factual findings or the legal conclusion of obviousness, we look to the statement not in isolation, but in the context of the whole declaration. Cf. VirnetX Inc. v. Apple Inc., Nos. 2015-1934, -1935, 665 Fed.Appx. 880, 886, 2016 WL 7174130, at *4 (Fed. Cir. Dec. 9, 2016) (“We will not find legal error based upon an isolated statement, stripped from its context.”). Therefore, we will review the PTAB’s rejection of the Asserted Claims in accordance with the operative standard of review.

III. The PTAB Erred as to Some, But Not All, of the Asserted Claims

Icon challenges the PTAB’s determination that the Asserted Claims would have been obvious over various prior art references. Of those references, Icon contests the PTAB’s determination as to: (1) claims 57-62 and 65 over U.S. Patent No. 7,689,-437 (“Teller”), Appellant’s Br. 17-20; (2) claim 86 over Teller, id. at 21-22; (3) claims 46 and 74 over U.S. Patent No. 6,198,394 (“Jacobsen”), id. at 22-28; (4) claims 98-100 over U.S. Patent Nos. 6,013,007 (“Root”) and 6,585,622 (“Shum”), id. at 28-32; and (5) claims 43 and 71 over U.S. Patent No. 6,066,075 (“Poulton”), id. at 32-35. After a brief discussion of the ’800 patent, we address the Asserted Claims in turn, evaluating whether the PTAB made factual findings with the requisite evidentiary basis and adequately explained its findings.

A. The ’800 Patent

Entitled “Methods and Systems for Controlling an Exercise Apparatus Using a USB Compatible Portable Remote Device,” the ’800 patent generally discloses “[a] portable system [that] retrieves one or more exercise programs from a remote communication system that provides motivational content for a user exercising upon an exercise mechanism.” ’800 patent, Abstract. The Asserted Claims of the ’800 patent are divided into five groups for the purposes of this appeal. We address Icon’s arguments on a group-by-group basis.

B. Claims 57-62 and 65

Claims 57-62 and 65 each recite “a cradle that includes electrical contacts” and a “first computing device [with] electrical contacts configured to mate with the cradle electrical contacts.” J.A. 1740 (claim 57), 1742-43 (claim 58), 1745 (claim 59), 1748 (claim 60), 1750 (claim 61), 1753 (claim 62), 1760 (claim 65). Icon argues that the PTAB’s rejection of claims 57-62 and 65 as obvious must be reversed because the PTAB’s failure to address these claims meant that the PTAB’s Decision on Appeal “cannot be said to be one supported by substantial evidence.” Appellant’s Br. 18. We agree that the PTAB failed to make the requisite factual findings or provide the attendant explanation and, therefore, vacate and remand for additional factual findings and explanation.

1. Neither the PTAB nor the Examiner Made the Requisite Factual Findings or Provided the Attendant Explanation

To determine whether the PTAB made the necessary factual findings with an adequate evidentiary basis, we must determine whether the PTAB incorporated by reference the Examiner’s factual findings and whether those findings were adequate, as Strava alleges. Appellees’ Br. 24. The PTAB rejected Icon’s arguments as to claims 57-62 and 65 by asserting only that Icon “merely restates previous arguments regarding contacts of the cradle as discussed above.” Strava, 2015 WL 5723014, at *11. But, as Strava admits, the PTAB had never actually addressed those arguments above. Oral Argument, 14:26-14:55, http://oralarguments.cafc.uscourts.gov/ default.aspx?fl=2016-1475.mp3. In fact, that one sentence is the PTAB’s only reference to the “cradle,” “contacts,” or “electrical” limitations recited in claims 57-62 and 65. See generally Strava, 2015 WL 5723014. The PTAB’s Decision on Appeal thus contains no substantive discussion of the limitations at issue for claims 57-62 and 65.

The PTAB, however, also stated that, “[t]o any extent we do not specifically address any ... remaining arguments, we agree with [Strava’s] rebuttal of such ... as well as the Examiner’s response to the same....” Id. at *9 (citing to the Examiner’s Right of Appeal Notice (J.A. 1641-56) and Strava’s PTAB Response Brief (J.A. 2591-98)). According to Strava, this catchall statement incorporated by reference the Examiner’s Right of Appeal Notice, which “in turn incorporated by reference [Strava’s November 2013] Comments ..., which rely upon the Teller reference and Mr. Koperda’s Declarations, which constitute substantial evidence.” Appellee’s Br. 24. This multi-layered incorporation by reference does not satisfy the substantial evidence standard of review.

As an initial matter, the PTAB was authorized to incorporate the Examiner’s findings. “It is commonplace in administrative law for a reviewing body within an agency to adopt a fact-finding body’s findings. On judicial review, the adopted material is treated as if it were part of the reviewing body’s opinion.” In re Cree, Inc., 818 F.3d 694, 698 n.2 (Fed. Cir. 2016) (emphases added) (citations omitted). The PTAB is no exception. See In re Brana, 51 F.3d 1560, 1564 n.13 (Fed. Cir. 1995) (upholding the PTAB’s findings, although it “did not expressly make any independent factual determinations or legal conclusions,” because it had “expressly adopted” the examiner’s findings by stating that, it “agree[d] with the examiner’s well reasoned, well stated[,] and fully supported by citation” findings (alterations modified) (internal quotation marks and citation omitted)). Therefore, the PTAB was authorized to adopt the Examiner’s findings in the Right of Appeal Notice.

Moreover, the PTAB identified the incorporated material with sufficient particularity. “To incorporate material by reference, the host document must identify with detailed particularity what specific material it incorporates and clearly indicate where that material is found in the various documents.” Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed. Cir. 2000) (emphases added). The PTAB identified with detailed particularity what specific material it incorporated — i.e., Strava’s PTAB Response Brief and the Examiner’s Right of Appeal Notice. See Strava, 2015 WL 5723014, at *9. By identifying page ranges for those documents, see id. (citing J.A. 1641-56, 2591-98), the PTAB clearly indicated where that material is found, see Advanced Display, 212 F.3d at 1282.

Nevertheless, the PTAB’s incorporation by reference of the Examiner’s factual findings as to claims 57-62 and 65 gives us considerable pause. The PTAB purported to incorporate portions of the Examiner’s Right of Appeal Notice that address these claims. Strava, 2015 WL 5723014, at *9. In the Right of Appeal Notice, however, the Examiner only stated that it “agree[d] with” and “incorporated by reference” Strava’s November 2013 Comments as to claims 57-62 and 65. J.A. 1643. Neither the PTAB nor the Examiner made any factual findings; instead, both purported to incorporate by reference arguments drafted by Strava’s attorneys. See Strava, 2015 WL 5723014, at *9 (citing Strava’s PTAB Response Brief (J.A. 2591-98) and Examiner’s Right of Appeal Notice (J.A. 1641-56), the latter of which cites Strava’s November 2013 Comments (J.A. 1541-42)).

Attorney argument is not evidence. See, e.g., Gemtron Corp. v. Saint-Gobain Corp., 572 F.3d 1371, 1380 (Fed. Cir. 2009) (“[U]nsworn attorney argument ... is not evidence and cannot rebut ... other admitted evidence.'... ”); see also Manual of Patent Examining Procedure § 2145 (9th ed. Nov. 2015) (“Attorney ár-gument is not evidence unless it is an admission, in which case, an examiner may use the admission in making a rejection.”). Neither the PTAB’s adoption of Strava’s PTAB Response Brief nor the Examiner’s adoption of Strava’s November 2013 Comments transform Strava’s attorney argument into factual findings or supply the requisite explanation that must accompany such findings. As we recently explained,

[t]wo distinct yet related principles are relevant to our review. First, the PTAB must make the necessary findings and have an adequate evidentiary basis for its findings.... Second, the PTAB must examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.... This explanation enables the court to exercise its duty to review the PTAB’s decision to assess whether those decisions are arbitrary, capricious, an abuse of discretion, or ... unsupported by substantial evidence....

NuVasive, 842 F.3d at 1382 (internal quotation marks and citations omitted). Because the PTAB failed to comport with what these principles demand, the PTAB’s rejection of these claims must be vacated and the case remanded for additional PTAB findings and explanation. See, e.g., In re Van Os, 844 F.3d 1359, 1362 (Fed. Cir. 2017) (explaining that the court vacates and remands when additional fact finding and explanation is warranted).

C. Claim 86

Claim 86 recites “a cradle that includes an [infrared (TR’) ] interface” and a “first computing device [with an] IR wireless interface ... configured to send the physical activity related information to the interface module via the IR interface.” J.A. 1787. Icon’s claim 86 arguments are similar to those that it raises as to claims 57-62 and 65; that is, Icon avers that the PTAB “failed to substantively address [the elements in] this limitation” and the “conclusion that claim 86 is obvious must therefore be reversed.” Appellant’s Br. 21, 22. We disagree.

1. The PTAB Made the Requisite Factual Findings with an Adequate Evidentiary Basis

The PTAB stated that, “[Regarding claim 86, [Icon] merely restates arguments already addressed previously.” Strava, 2015 WL 5723014, at *11. But, once again, the PTAB never actually addressed those arguments above, as Strava admits. Oral Argument, 14:26-14:55, http:// oralarguments.eafc.uscourts.gov/default. aspx?fl=2016-1475.mp3. Indeed, the PTAB never discussed “IR,” “contacts,” or “cradle” as recited in claim 86. See generally Strava, 2015 WL 5723014. The PTAB’s treatment of claim 86, however, differs from its treatment of claims 57-62 and 65 in one key respect: unlike claims 57-62 and 65, the Examiner made his own factual findings as to claim 86. See J.A. 1652-53.

As explained above, the PTAB incorporated sections of the Examiner’s Right of Appeal Notice. See Strava, 2015 WL 5723014, at *9. This includes a section where the Examiner found that “Root teaches the first computing device [that] ... includes an IR interface” and that “Teller teaches [that] the uploading of data from [a] sensor device ... can ‘be accomplished by using a cradle ... that is electronically coupled to [a] personal computer ... into which [the] sensor device ... can be inserted.’ ” J.A. 1652 (quoting Teller col. 8 11. 38-41). In addition, the Examiner found that “USB ports were well known at the time since Teller teaches their existence” and, thus, could be used to “electronically couple[ ]” the cradle to the computer device. J.A. 1652 (citing Teller col. 8 I. 36).

The Examiner’s factual findings have an adequate evidentiary basis. Root discloses a “personal performance monitor and feedback device,” Root col. 4 1. 17, and an “[IR]-type port,” id. col. 6 1. 2; see J.A. 1703 (Icon acknowledging that Root discloses a personal performance monitor and feedback device that “appear[s] to have [IR] capabilities”). Teller’s specification recites the use of a cradle to establish a physical connection for uploading the sensor device’s data to a personal computer. See Teller col. 8 11. 37-41 (teaching the use of a USB or a “cradle ... that is electronically coupled to a personal computer ... into which [a] sensor device ... can be inserted, as is common in many commercially available digital assistants”); see also J.A. 1182 (First Koperda Declaration stating that “[s]uch a device would necessarily include electrical contacts to mate electrical components”). Moreover, Teller teaches that an IR connection can be substituted for the physical connection. See Teller col. 8 11. 44-47 (explaining that “[t]he data collected by [a] sensor device ... may be uploaded by first transferring the data to [a] personal computer ... by [IR] ... transmission”). Substantial evidence thus supports the Examiner’s finding that Root and Teller teach “a cradle that includes an IR interface” as recited in claim 86.

2. The PTAB Satisfactorily Explained Its Determination

Because the PTAB incorporated by reference the Examiner’s factual findings, we now consider whether the PTAB adequately explained its reasoning. As with the factual findings, the PTAB adopted the Examiner’s explanation. Strava, 2015 WL 5723014, at *9. The Examiner made factual findings as to the scope and content of known elements of Root and Teller, and then explained that “it would have been obvious to modify Root to place the first computer device ... in a cradle as taught by Teller to thereby transfer information using an IR interface between the first computer device ... and the cradle.” J.A. 1652-53.

Undoubtedly, it would be preferable for the PTAB to provide its own reasoned explanation. Nonetheless, we can discern that the Examiner — and, thus, the PTAB — considered claim 86’s disclosure of “a cradle that includes an [IR] interface,” J.A. 1787, to be the mere “combination of familiar elements”: Root’s device and Teller’s cradle and IR connection, KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 416, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007). This is sufficient, if minimally, to explain the connection between the Examiner’s factual findings and legal conclusion.

D. Claims 46 and 74

Claims 46 and 74 each recite “an audio input device [that] includ[es] a microphone configured to gather audio inputs from the user using a voice activated controller” (“the voice activated controller limitation”) and “a radio interface configured” to send and receive audio signals (“the two-way audio radio limitation”). J.A. 1723 (claim 46); see J.A. 1770 (claim 74) (similar). Icon argues that the PTAB erred in affirming the Examiner’s rejection for obviousness of these two limitations in claims 46 and 74. Appellant’s Br. 22-28. Because the PTAB failed to make the requisite factual findings or provide the attendant explanation, we vacate and remand for additional proceedings. See Van Os, 844 F.3d at 1362.

1. Neither the PTAB nor the Examiner Made the Requisite Factual Findings or Provided the Attendant Explanation

When addressing claims 46 and 74 generally, the PTAB stated that it was “not persuaded” by Icon’s arguments as to these claims because Icon had not “re-butt[ed] the substance” of the First Koper-da Declaration and that “the Examiner’s rejection [was] sufficiently supported by the record.” Strava, 2015 WL 5723014, at *11. The PTAB made only vague references to “the microphone ... of Jacobsen” and the “two-way audio radio limitation” when summarizing Icon’s arguments. Id. (internal quotation marks omitted). At no point did the PTAB make explicit findings as to these elements or specify what aspects of Jacobsen and the First Koperda Declaration it found persuasive. See id.

As with claims 57-62 and 65, the PTAB never made factual findings with a basis in the record or provided the requisite explanation to support its findings for claims 46 and 74. It merely summarized Icon’s arguments and stated that the “Examiner’s rejection [was] sufficiently supported by the record.” Id. However, the PTAB cannot satisfactorily make a factual finding and explain itself by merely “summarizing] and rejecting] arguments without explaining why [it] ... accepts the prevailing argument.” NuVasive, 842 F.3d at 1383.

To the extent that the PTAB adopted the Examiner’s determination as to claims 46 and 74, we find it similarly inadequate. In contrast to its discussion of claim 86, the Examiner never made a factual finding based on record evidence and failed to explain its reasoning for rendering claims 46 and 74 unpatentable. Instead, the Examiner stated only that he “agree[d] with” and “incorporated by reference” Strava’s November 2013 Comments regarding the voice activated controller limitation in claims 46 and 74. J.A. 1643. Attorney argument is not evidence or explanation in support of a conclusion. See, e.g., Gemtron, 572 F.3d at 1380; see also NuVasive, 842 F.3d at 1383 (providing that the fact finder must explain it why accepts the prevailing argument).

E. Claims 98-100

Claims 98-100 each recite “an accelerometer” that is “integrally included in a portable first computing device.” J.A. 1796-97 (claims 98-100). Icon argues that the PTAB erred in affirming the Examiner’s rejection of claims 98-100 for obviousness over Root and Shum because Icon showed that “the proposed modification to Root of removing the GPS and substituting Shum’s accelerometer would change Root’s ‘principle of operation.’ ” Appellant’s Br. 29 (quoting In re Mouttet, 686 F.3d 1322, 1332 (Fed. Cir. 2012)). According to Icon, “this modification would render the prior art GPS device ... unsatisfactory for its intended purpose because, unlike a GPS receiver ..., an accelerometer device is simply not capable of ‘continuously and accurately determining] the position of an outdoor athlete anywhere in the world.’” Id. at 31-32 (alterations in original) (quoting Root col. 2 11. 5-7). Although the PTAB made a factual finding, this finding did not have an adequate basis in the record, and the PTAB did not adequately explain its reasoning. Thus, we vacate and remand for additional PTAB findings and explanation. See Van Os, 844 F.3d at 1362.

1. The PTAB Did Not Provide an Adequate Evidentiary Basis for its Finding

The PTAB “sustained] the Examiner’s rejection” of claims 98-100. Strava, 2015 WL 5723014, at *12. Icon had argued that substituting Shum’s accelerometer for Root’s GPS would change Root’s principle of operation. J.A. 1705. The PTAB determined that Icon’s argument “ignor[ed] other rationales set forth by the Examiner and/or [Strava],” an apparent adoption of Strava’s argument that the references also teach combining Shum’s accelerometer and Root’s GPS in Root’s system. Strava, 2015 WL 5723014, at *12. Thus, “regardless of the mere substitution rationale,” the PTAB concluded that “the rejection may properly be supported by other rationales, which [Icon] d[id] not challenge.” Id.

While the PTAB found that Shum’s accelerometer and Root’s GPS could be combined in Root’s system, it did not provide any evidentiary basis for this finding. See id. Icon’s failure to produce evidence that the references could not be combined does not relieve the PTAB of its obligation to provide an “adequate evidentiary basis for its findings.” NuVasive, 842 F.3d at 1382 (internal quotation marks and citation omitted).

To the extent that the PTAB adopted the Examiner’s finding as to claims 98-100, we find them similarly inadequate because the Examiner’s Right of Appeal Notice lacks any evidentiary basis for its finding. Once again, the Examiner stated only that it “agree[d] with” and “incorporated by reference” Strava’s November 2013 Comments, J.A. 1654, but attorney argument is not evidence, see, e.g., Gemtron, 572 F.3d at 1380.

2. The PTAB Did Not Satisfactorily Explain Its Reasons for Its Determination

Even if we determined that the PTAB provided an adequate evidentiary basis for its finding that it would have been reasonable for a PHOSITA to combine Shum’s accelerometer and Root’s GPS, it did not satisfactorily explain its reasoning. The PTAB’s sole reason for its finding was that Icon “d[id] not challenge” the combination rationale. Strava, 2015 WL 5723014, at *12. This is insufficient. To be sure, the PTAB is permitted to credit a party’s argument as part of its reasoned explanation of its factual findings; however, the PTAB still must “explain[] why [it] accepts the prevailing argument.” NuVasive, 842 F.3d at 1383 (citation omitted). The PTAB failed to do so here.

To the extent that the PTAB adopted the Examiner’s rationale, that rationale cannot salvage the PTAB’s deficient explanation. Once again, the Examiner stated only that it “agree[d] with” and “incorporated by reference” Strava’s November 2013 Comments. J.A. 1654. That is no explanation at all. See NuVasive, 842 F.3d at 1383 (providing that the fact finder must explain it why accepts the prevailing argument).

F. Claims 43 and 71

Finally, claims 43 and 71 each recite “a portable first computing device” that includes an “electronic display [that] is configured to function as a virtual reality [(VR’)] display” and that includes an “electronic display [that] is ... configured to display ... data” related to physical activity. J.A. 1715-18 (claim 43), 1766-67 (claim 71). Icon contests whether Poulton discloses the VR display in these claims. See Appellant’s Br. 33. Icon contends that the PTAB erred in rejecting claims 43 and 71 because Root is “portable” and “teaches away from incorporating the external and massive [cathode ray tube (‘CRT’) ] array of Poulton.” Id. at 35. Icon adds that the PTAB “based its affirmance in part on Strava’s misleading argument that written description support was an open issue,” even though the Examiner withdrew the written description rejections. Id. at 33. We disagree.

1. The PTAB Made the Requisite Factual Findings with an Adequate Evidentiary Basis

The PTAB found that it would have been obvious to modify Root to use the VR display disclosed by Poulton because “the ’800 patent does not describe a [VR] display that is part of a portable device.” Strava, 2015 WL 5723014, at *10 (citation omitted). Before the PTAB, Icon argued that Poulton “does not teach a portable [VR] display” or “a single discrete monitor” and, thus, teaches away from the portability disclosed by Root. Id.; see J.A. 1695-97.

In rejecting these arguments, the PTAB noted that Icon had “selectively cite[d] the Specification to assert that the display ... must be portable” and that ‘a [VR] displa/ does not necessarily require a single discrete monitor ..., but may encompass a mosaic of monitors that acts as a single' [VR] display.” Strava, 2015 WL 5723014, at *10. However, “when looking at the disclosure as a whole, ... the ’800 patent discloses that the ‘display ... can be remote from [a] control device ... ’ and that this remote ‘display ... can be a [VR] display, [CRT display], and the like.’ ” Id. (quoting ’800 patent col. 51 11. 57-60). On this basis, the PTAB found that the ’800 patent “does not support an integral VR display,” i.e., a display imbedded in a portable system, but rather supports “remote displays only,” i.e., displays that are not imbedded in the portable system and are located on a treadmill, for example. Id.

In addition, the PTAB found that the ’800 patent “equates VR displays to CRT displays” in a similar manner to Poulton, such that the ’800 patent and Poulton teach similar levels of portability. Id. The record supports the PTAB’s finding. Compare ’800 patent col. 51 11. 58-60 (stating that the “display ... can be a [VR] display, [CRT display], and the like”), with Poulton col. 16 11. 9-11 (explaining that “the display ... may be a flat panel display, a [CRT display], or other device for displaying an image”). Substantial evidence thus supports the PTAB’s findings, which are grounded in the teachings of the ’800 patent and Poulton.

2. The PTAB Satisfactorily Explained Its Determination

Because the PTAB made factual findings with an adequate evidentiary basis, we turn to whether the PTAB satisfactorily explained its findings. The PTAB explained that the '800 patent was not limited to portable devices and also includes remote displays. Strava, 2015 WL 5723014, at *10. In addition, the PTAB explained that the ’800 patent and Poulton disclose similar levels of portability for VR displays, such that Poulton does not teach away from the portability of Root. Id. On this basis, we can “reasonably discern” that the PTAB determined that it would have been obvious to a PHOSITA to configure Root’s electronic display to include VR, as taught by Poulton, to create the electronic display that is configured to function as a VR display recited in claims 43 and 71. NuVasive, 842 F.3d at 1385 (internal quotation marks and citations omitted).

Icon attempts to undermine the PTAB’s explanation for its findings by presenting two arguments, neither of which is persuasive. First, Icon argues anew that Root teaches away from incorporating one or more CRT displays like that of Poulton into the ’800 patent. Appellant’s Br. 33-35. Teaching away raises a question of fact reviewed for substantial evidence, and “[a] reference teaches away when it suggests that the line of development flowing from the reference’s disclosure is unlikely to be productive of the result sought by the applicant.” Santarus, Inc. v. Par Pharm., Inc., 694 F.3d 1344, 1354 (Fed. Cir. 2012) (internal quotation marks and citation omitted). While Icon argues that a CRT display could not be incorporated into Root’s portable system, it does not address whether the ’800 patent teaches a remote display. It also does not present any evidence supporting its assertions that the non-portable system in Poulton could not inform a PHOSITA about which display to incorporate into a portable system like Root or the ’800 patent. Icon has failed to undermine the PTAB’s explanation as to teaching away and the combinability of Poulton and Root. See, e.g., Jones v. Dep’t of Health & Human Servs., 834 F.3d 1361, 1369 (Fed. Cir. 2016) (“Unsubstantiated assertions do not equate to evidence.” (internal quotation marks, brackets, and citation omitted)).

Second, Icon argues that the PTAB’s explanation of its findings is deficient because the PTAB improperly incorporated written description arguments. Appellant’s Br. 32-33. Only one statement in the PTAB’s analysis could be construed as addressing written description: “[A]s [Strava] point[s] out, the ’800 patent does not describe a [VR] display that is part of a portable device.” Strava, 2015 WL 5723014, at *10 (citation omitted). However, Icon reads the PTAB’s statement out of context. This statement was not directed to the parties’ previously-addressed written description arguments; instead, it was directed to the PTAB’s finding that the ’800 patent equates VR displays to CRT displays, see id., a conclusion supported by substantial evidence, see ’800 patent col. 51 11. 57-60 (explaining that the “display ... can be remote from [a] control device” and “can be a [VR] display, [CRT display], and the like”). An isolated statement stripped from its context is not proof-positive of a PTAB error. See. VirnetX, 2016 WL 7174130, at *4.

Conclusion

We have considered the parties’ remaining arguments and find them unpersuasive. We vacate the Decision on Appeal as to claims 46, 57-62,.65, 74, and 98-100 and remand for further proceedings consistent with this opinion. We affirm the Decision on Appeal as to claims 43, 71, and 86.

VACATED-IN-PART, AFFIRMED-IN-PART, AND REMANDED

Costs

Each party shall bear its own costs.

O’MALLEY, Circuit Judge,

concurring in part, dissenting in part.

I concur with the majority’s merits discussion in this opinion. I agree that the PTAB properly disallowed claims 43, 71, and 86 of the ’800 patent. I also agree that the Board’s disallowance of claims 46, 57-62, 65, 74, and 98-100 is not' supported by substantial evidence. I write separately because I believe that “remand is not the appropriate remedy in examination appeals in which the PTO has not carried its burden of establishing unpatentability.” In re Van Os, 844 F.3d 1359, 1362 (Fed. Cir. 2017) (Newman, J., concurring in part, dissenting in part). The PTO and PTAB bear the burden to establish unpatentability in examination appeals, and I agree with the majority that, in large measure, they failed to do so here. 35 U.S.C. § 102(a) (“A person shall be entitled to a patent unless— ... ”). The appropriate remedy in this situation is to allow any claims for which the PTAB has not carried its burden of proof. Accordingly, rather than simply vacate the PTAB’s findings on claims 46, 57-62, 65, 74, and 98-100, I would reverse those findings. From the majority’s conclusion otherwise, I respectfully dissent.

      . Congress amended § 103 when it enacted the Leahy-Smith America Invents Act ("AIA”). Pub. L. No. 112-29, § 3(c), 125 Stat. 284, 287 (2011). However, because the application that led to the '800 patent has never contained a claim having an effective filing date on or after March 16, 2013 (the effective date of the statutory changes enacted in 2011), or a reference under 35 U.S.C. §§ 120, 121, or 365(c) to any patent or application that ever contained such a claim, the pre-AIA § 103 applies. See id. § 3(n)(1),. 125 Stat. at 293.