The Board Cannot Adopt a Surprise Claim Construction

In SAS Institute, Inc. v. Complementsoft,LLC, [2015-1346, 2015-1347] (June 10, 2016), the Federal Circuit agree with the Board in an IPR involving U.S. Patent No. 7,110,936 on all of the challenged constructions resulting in finding of invalidity of all but one of the challenged claims.  The Federal Circuit also confirmed that the Board did not need to address in its final written decision claims for which IPR was not instituted.  Finally, the Federal Circuit vacated the Board’s determination that claim 4 is patentable and remanded so that the parties may address a new construction that the Board adopted in its final written decision after interpreting the claim differently before.

With respect to claim 4, which was sustained based upon a different construction of the phrase “graphical representations of data flows, the Federal Circuit remanded so that the parties could address the construction in the final written decision.  The Federal Circuit agreed with the construction of graphical representations of data flows” as “a graphical representation comprised of icons depicting data processing steps and arrows to depict the movement of data through source code.”  The Federal Circuit noted that the term was not used in the specification, and agreed with the Board’s use of the definition of the term “data flow diagrams,” which did appear in the specification.

The Federal Circuit rejected petitioner’s argument that because the construction was narrow, it could not be the broadest reasonable interpretation, saying:

While we have endorsed the Board’s use of the broadest reasonable interpretation standard in IPR proceedings, we also take care to not read “reasonable” out of the standard. This is to say that “[e]ven under the broadest reasonable interpretation, the Board’s construction cannot be divorced from the specification and the record evidence, and must be consistent with the one that those skilled in the art would reach.”

The Federal Circuit also relied upon the structure of the claims, noting that some of the claims speak broadly of flows, while others speak of data flows and program flows, was instructive as to the meaning of the claims (although this is not claim differentiation).

The Federal Circuit affirmed the Board’s invalidation of claims in the face of patent owner’s arguments that the claim constructions were incorrect.  The Federal Circuit specifically noting that because the specification and prosecution history did not conclusively resolve construction, it was appropriate for the Board to rely on dictionaries and expert testimony to aid its construction.

The most interesting aspect of the case may be the Federal Circuit’s treatment of the Board’s change in claim construction between the Institution Decision and the Final Written Decision, which gave the Federal Circuit “pause.”  The Federal Circuit noted that the Board’s new construction of “graphical representations of data flows” as “a graphical representation comprised of icons depicting data processing steps and arrows to depict the movement of data through source code,” varied varied significantly from its initial interpretation of the term as “a map of the path of data through the executing
source code.”  The Federal Circuit was not concered that the Board changed its construction, which the Federal Circuit said it was free to do, but that it Petitioner was not given an opportunity to address the new construction since the Patent Owner agreed with the original construction, and never suggested that the Board adopt the
construction that eventually materialized in the final written decision. Under these circumstances, the Federal Circuit said that it was difficult to imagine either party anticipating that already-interpreted terms were actually moving targets, and it is thus unreasonable to expect that they would have briefed or argued hypothetical constructions not asserted by their opponent.  The Federal Circuit vacated the decision, and remanded for further proceedings.

Federal Circuit Affirms Exclusion of IPR Reply that Raised New Grounds of Invalidity

In Intelligent Bio-Systems, Inc., v, Illumina Cambridge Ltd., [2015-1693] (May 9, 2016), the Federal Circuit affirmed the PTAB’s Final Written decision that the challenged claims of U.S. Patent No. 7,566,537, directed to a method of labeling nucleotides in DNA strand, was not shown to be obvious.

The presence or absence of a motivation to combine references in an obviousness determination and the presence or absence of a reasonable expectation of success are questions of fact reviewed for substantial evidence.  With respect the the expectation of success, the Federal Circuit found that the Board got it wrong, by failing to consider the appropriate scope of the claim.  The Federal Circuit noted that the Board seemed to believe that the “reasonable expectation of success” inquiry looked to whether one would reasonably expect the prior art references to operate as those references intended once combined. The Court said that is not the correct inquiry—one must have motivation to combine accompanied by a reasonable expectation of achieving what is claimed in the patent-at-issue.

While the Board conflated two different legal concepts—reasonable expectation of success and motivation to combine—it nevertheless made sufficient factual findings to support its judgment that the claims at issue are not invalid.  Petitioner had the burden to show  that a skilled artisan would have been motivated to combine the teachings of the prior art references to achieve the claimed invention.  However petitioner’s argument for obviousness was that it would have been obvious to combine the references to in order to improve the efficiency, reliability, and robustness of the sequencing by synthesis method taught in the primary reference, which required quantitative deblocking.  So even though quantitative deblocking was not a requirement of the claims, it was a requirement of Petitioner’ stated reason for the combination, and the “central” to a motivation to combine.  Not only did the Petition fail to provide a specific or credible explanation why an ordinary artisan would have combined the references, the patent owner provided substantial evidence to support a finding that a person of ordinary skill would not have had reason to combine the references.  These references support a conclusion that the claimed efficiency that allegedly motivated the combination would not be achieved and that a person of ordinary skill in this field would not have been motivated to combine the references.

Of more significance, is the Federal Circuit’s treatment of Petitioner’s improper reply brief.  The Federal Circuit noted that the Board’s determinations whether petitioner exceeded the scope of a proper reply in violation of 37 C.F.R. § 42.23(b) and/or improperly incorporated arguments by reference from another document in violation of 37 C.F.R. § 42.6(a)(3) are reviewed for an abuse of discretion.

The Federal Circuit said that it is of the utmost importance that petitioners in IPR proceedings adhere to the requirement that the initial petition identify “with particularity” the “evidence that supports the grounds for the challenge to each claim.” 35 U.S.C. § 312(a)(3).  The Court said that all arguments for the relief requested in a motion must be made in the motion, and a reply may only respond to arguments raised in the
corresponding opposition or patent owner response.” 37 C.F.R. § 42.23(b). Once the Where this rule is violated, neither the Federal Circuit not the PTAB will parse the reply brief to determine which, if any, parts of that brief are responsive and which are

The Federal Circuit observed that unlike district court litigation—where parties have greater freedom to revise and develop their arguments over time and in response to newly discovered material—the expedited nature of IPRs bring with it an obligation for petitioners to make their case in their petition to institute. The Federal Circuit agreed that new grounds were presented in Petitioner’s reply, and that the Board did not err in refusing the reply brief as improper under 37 C.F.R. § 42.23(b).  Having concluded the Reply was improper, the Federal Circuit did not reach the issues of whether the reply also impermissably incorporated arguments by reference.





Posted in IPR

BRI Should Not Depart from What the Claim Language and Specification so Clearly Mean

In Pride Mobility Products Corporation v, Permobil, Inc., [2015-1585, -1586] (April 5, 2016), the Federal Circuit reversed the PTAB’s construction and cancellation of claim 7, but affirmed cancellation of all the other claims of U.S. Patent Nos. 8,408,598 and 8,408,343 in IPR2013-00407 and IPR2013-00411.

At issue was the claim language “mounting plate [that] is substantially planar and is
oriented perpendicular to the drive wheel axis.”  The Federal Circuit said it was unreasonable to read that straightforward language as meaning anything other
than that the drive-wheel axis is perpendicular to the surface of the mounting plate that makes the plate substantially planar.  The Federal Circuit explained:

The claim language says two things about the plate: it must be substantially planar, and it must be oriented perpendicular to the drive-wheel axis. The “oriented” term allows the plate and axis not to be touching: it requires that their placement in space must be such that, if translated in space without rotation, they would be perpendicular. With the axis idealized as a line, perpendicularity in the ordinary geometric sense relevant here requires that the axis make a right angle with either an essentially one-dimensional feature (a line or curve) or an essentially two-dimensional feature (a plane or surface) of the plate: lines are not “perpendicular” to a three dimensional object in any other ordinary geometric sense.  And the claim tells us exactly what that feature of the three-dimensional plate is: it is the surface that makes the plate substantially planar. The claim identifies no other feature of the plate. The phrase “oriented perpendicular to the drive wheel axis” must be read to mean that the drive-wheel axis is perpendicular to the mounting plate’s substantially planar surface. We do not see how the claim language can mean anything else without obvious strain.

The Federal Circuit said that the Board’s sole basis for its claim construction does
not reasonably support a departure from what the claim language and specification so clearly mean. There was no evidence of the claim 7 element in the relied-on prior art. Because there is no other Board ruling or properly preserved argument addressed to this element, the Federal Circuit reversed the cancellation of claim 7.

Posted in IPR

We’ll Say it Again: Redundancy is not Reviewable

In HP Inc., v. MPHJ Technology Investments, LLC, [2015-1427] (April 5, 2016) the Federal Circuit affirmed the PTAB Final Written Decision in IPR2013-00309, agreeing that all but one challenged claim (claim 13) of U.S. Patent 6,771,381 was anticipated, and holding that it cannot review the Board’s decision not to review that claim as obvious, on redundancy grounds.

The Federal Circuit noted that under 35 U.S.C. § 314(d), the determination
by the Director whether to institute an inter partes review shall be final and nonappealable.  The Board rejected HP’s arguments, including that 314(d) only barred review of findings under 314, namely where there is a reasonable likelihood that petitioner would prevail;  that § 314(d) does not bar review of whether the Board has properly construed the scope of its authority; that the Board lacks authority to grant review on only a subset of properly presented grounds; that the Board did not fulfill its obligations under the APA; and finally that the Board did not adequately explain redundancy.

All is not lost for HP, however, as the Federal Circuit repeated its statement from its recent Shaw decision that estoppel does not apply to grounds that are not instituted, and thus “HP is not estopped from raising the obviousness of claim 13 in a subsequent court or Board proceeding, and a challenger cannot assert that the nonobviousness of claim 13 was resolved by the Board in this proceeding.”


Posted in IPR

PGR, IPR, and CBMPR Rules Amended Effective May 2, 2016


Rule 37 CFR 42.11 has been amended to provide for sanctions against parties and attorneys:



Pages Limits

The 60 page limit for a IPR Petiton has been replaced with a limit of 14,000 words (37 CFR 42.24(a)(i), and 60 page limit of the Patent Owner Preliminary Response, and Response are likewise replaced with a 14,000 word limit (37 CFR 42.24(b)(1), (2)).  The 80 page limit for a PGR or CBMPR Petition has been replaced with a limit of 18,700 words (37 CFR 42.24(a)(ii), (iii)), and the 80 page limit of the Patent Owner Preliminary Response, and Response are likewise replaced with a 18,700 word limit (37 CFR 42.24(b)(1), (2)).. These word counts do not include the table of contents, table of authorities, grounds for standing under § 42.104, § 42.204, or § 42.304, mandatory notices under § 42.8, a certificate of service or word count, or appendix of exhibits or claim listing.  Where a paper is limited by a word count, the paper must include a certification as to the word count

The page limit for motions to amend is bumped to 25 pages (37 CFR 42.24(a)(vi)), as is the Petitioner’s Opposition (37 CFR 42.24(b)(d), and the reply to an opposition to a motion to amend is bumped to 12 pages (37 CFR 42.24(c)(3)).


You now have to serve your demonstrative exhibits two days earlier — seven days before oral argument.  37 CFR 42.70(b).


The USPTO still insists on applying BRI to all claims, in all proceedings, except if the patent will expire within 18 months from the entry of the Notice of Filing Date Accorded to Petition, and the Patent Owner makes a timely motion.  37 CFR 42.100(b); 37 CFR 42.200(b); 37 CFR 42.300(b).

Bar Against Testimony in a Preliminary Response Removed

The bar against the submission of testimony to support a Preliminary Response has been removed.  37 CFR 42.107(c) and 37 CFR 42.207(c) have been removed.  While testimony can be submitted with a Preliminary Response, any genuine issue of material fact created by such testimonial evidence will be viewed in the light most favorable to the petitioner solely for purposes of deciding whether to institute an inter partes review.  37 CFR 42.108(c);  37 CFR 42.208(c)


Posted in IPR

Estoppel Does Not Apply to Uninstituted Grounds in an IPR

In Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., [2015-1116, -1119] (March 23, 2016), the Federal Circuit affirmed in part, vacated-in-part, and remanded the USPTO’s final written decision regarding claims 1-21 of U.S. Patent No. 7,806,360 relating to  “creels” for supplying yarn and other stranded materials to a manufacturing process.

Shaw challenged the Board’s institution decision that refused to consider one of the proffered grounds of unpatentability as redundant.  The Federal Circuit noted that the Board did not consider the substance of the cited reference, or compare it to the other cited art, nor did the Board make specific findings that the grounds overlapped or even involved overlapping arguments. Instead the Board merely denied the ground as redundant.  While pointing out that it may not agree with the Board’s handling of the Petition, or that the Board’s handling was more efficient, the Federal Circuit said it had no authority to review the Board’s decision not to institute.  Shaw persisted and requested a writ of mandamus, but the Federal Circuit found that Shaw had not shown it was entitled this extraordinary remedy, rejecting the Shaw’s argument that it had no other adequate means to attain the desired relief, because it would be estopped to raise the redundant grounds that the Board refused to hear.

The Federal Circuit held that §315(e) would not estop Shaw from re-raising the redundant grounds in either the PTO or the district courts. The Federal Circuit said that both parts of § 315(e) create estoppel for arguments “on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” Shaw raised the redundant ground in its petition for IPR, but the PTO denied the petition as to that ground, thus no IPR was instituted on that ground, and the IPR does not begin until it is instituted.

This language does not appear to be limited to grounds that are not instituted for redundancy, and thus would also apply to grounds that the Board finds did not meet the  or the “likelihood of success” and the more rigorous “more likely than not” standards of IPR and PGR proceedings.

It is conceivable that the Federal Circuit could later distinguish between grounds rejected on their merits and grounds merely found redundant, but their holding that there is no estoppel on grounds that are not instituted appears straight-forward and unambiguous.  Thus a petitioner may be able to preserve grounds by mentioning them, but not adequately supporting them, the resulting denial of institution protecting the petitioner from any estoppel effects.

Finally, the Federal Circuit held that it lacked authority to review the Board’s decision that the petition was not barred pursuant to 35 U.S.C. §315(b).  Leaving the Board’s  curious rule that a complaint served but later dismissed does not count as a complaint, completely unreviewable.



PTAB Can’t Rely on Anticipation Argument first Made during the Oral Hearing

In Dell Inc, v, Acceleron, LLC, [2015-1513, -1514](March 15, 2016) the Federal Circuit affirmed the confirmation of claims, but remanded the cancellation of two claims for reconsideration in view of corrected claim construction.  At issue was the claim language “a microcontroller module and a dedicated ethernet path, wherein the dedicated ethernet path is separate from a switched fast ethernet connection and provides the microcontroller module with a connection to remotely poll the CPU module, the power module and the ethernet switch module.”  The Board concluded, that it is enough that there be an ethernet path that would provide a connection for polling if the microcontroller were configured for, and engaged in, remote polling of the three identified modules.  The Federal Circuit held that this construction runs counter to the claimconstruction principle that meaning should be given to all of a claim’s terms, denying any substantial meaning to “remotely poll.”

Also at issue was the anticipation of the claim limitation “caddies” which the Federal Circuit found was first identified in the reference during the oral argument before the Board.  The Federal Circuit vacated the finding of anticipation because the Board denied the patent owner notice and a fair opportunity to respond to this basis of cancellation.  The Federal Circuit explained that a patent owner is undoubtedly entitled to notice of and a fair opportunity to meet the grounds of rejection.  The Federal Circuit said that for a formal adjudication like the inter partes, the APA imposes particular requirements on the PTO. The agency must timely inform the patent owner of the matters of fact and law asserted (5 U.S.C. § 554(b)(3)), must provide all interested parties opportunity for the submission and consideration of facts and arguments and hearing and decision on notice, (5 U.S.C. § 554(c)), and must allow a party to submit rebuttal evidence  as may be required for a full and true disclosure of the facts, (5 U.S.C. § 556(d)). The Federal Circuit noted that the PTO has advised participants in its Board proceedings that, at oral argument, a party may only present arguments relied upon in the papers previously submitted, and that no new evidence or arguments may be presented at the oral argument.  However, the Federal Circuit found that the Board denied the patent owner its procedural rights by relying in its decision on a factual assertion introduced into the proceeding only at oral argument, after the patent owner could meaningfully respond.