United States: Federal Circuit Gives PTAB Free Hand On Claim Construction

The Federal Circuit recently held that the Patent Trial and Appeal Board is not constrained by parties' proposed constructions and may, in fact, adopt an alternative construction that the Board raises for the first time at oral argument, so long as both sides have adequate notice and an opportunity to respond.

On May 8, the US Court of Appeals for the Federal Circuit affirmed the Patent Trial and Appeal Board's (Board's) decision to invalidate certain claims challenged in an inter partes review (IPR) proceeding based on an alternative construction previewed by the Board for the first time at oral argument and that no party had previously argued for or expected. As long as both parties offer constructions for that claim term prior to argument and are given an opportunity to respond during the argument, the court held that the Board may adopt that alternative construction in its final written decision without violating a party's due process rights.

The Decision

In Intellectual Ventures II LLC v. Ericsson Inc. et al., the Board granted three petitions for IPR filed by Ericsson and Google challenging different claims from two different Intellectual Ventures II (IV) patents, both of which claimed methods for selecting an appropriate bandwidth in a multibandwidth communication system.[1]

In their briefing, the parties offered competing constructions of a key term recited in both patents: "an indication of an operating bandwidth." IV advocated for one construction, Google contended that the plain and ordinary meaning should control, and Ericsson argued that IV's definition was too narrow and no construction was needed.[2] This debate carried over into the oral argument for each petition—an exchange later characterized by the Board as a "vigorous dispute over the proper construction." [3]

During the oral argument, however, the Board sua sponte asked the parties whether it would be "sufficient for us to say that enough information is conveyed from the transmitter to the receiver so that the receiver can configure itself to receive that which is transmitted"—i.e., an alternative construction of the term that neither party had proposed and that was notably broader than IV's proposed construction.[4] Google's counsel responded affirmatively. And although IV's counsel disputed the Board's proposed construction, it too conceded that "there's no special requirement for the form of an indication of operating bandwidth." In its final written decision, the Board relied solely on its alternative construction to find all challenged claims of the IV patents invalid over the cited references.[5]

IV appealed on several grounds, including that the Board had denied it procedural due process by construing a claim term to mean something no party had proposed or expected.[6]

The Federal Circuit disagreed. The court explained that "[d]ue process requires notice and an opportunity to be heard by an impartial decision-maker."[7] In other words, due process requires that the Board "give the parties an opportunity to submit facts and arguments for consideration," so that each party may "present oral and document evidence in support of its case, as well as rebuttal evidence."[8] The court also reiterated that "the Board may not change theories midstream without giving the parties reasonable notice of its change."[9]

Turning to the facts at hand, the Federal Circuit found "no due process violation" given "the continuous focus on 'an indication of an operating bandwidth' before and during oral arguments and [IV's] opportunity to seek a sur-reply or rehearing."[10] As long as the Board provides parties with the necessary notice and opportunity to be heard, the court held that "the Board is not constrained by the parties' proposed constructions and is free to adopt its own construction, as it did here."[11]

However, the Federal Circuit issued a word of caution: "To be clear, after the Board adopts a construction, it may not change theories without giving the parties an opportunity to respond."[12] According to the court, however, "[n]o such change occurred here" because "the Board questioned counsel about [the disputed term] at oral argument, asked for a reaction to a hypothetical construction, and issued its construction in its Final Written Decision."[13]

Future Implications

The Intellectual Ventures decision falls in line with two recent Federal Circuit decisions—In re Magnum Oil International Ltd.[14] and SAS Institute, Inc. v. ComplementSoft, LLC[15]—that addressed similar due process concerns in the context of post-grant proceedings.  

In Magnum Oil, the Federal Circuit reversed the Board's decision to "adopt[] arguments on behalf of petitioners that could have been, but were not, raised by the petitioner during an IPR."[16] Because the petitioner bears the burden of proving unpatentability, the court held that "the Board must base its decision on arguments that were advanced by a party, and to which the opposing party was given a chance to respond."[17] In other words, "the Board supplied completely new arguments that the petitioner never raised."[18] This differs from Intellectual Ventures, "where the Board questioned counsel extensively over the construction of [the disputed term] after receiving briefs that contested both whether and how the Board needed to construe the term."[19]

Along the same lines, the Federal Circuit in SAS reversed the Board's decision to "adopt[] a construction in its final written decision" after "chang[ing] theories in midstream."[20] Unlike SAS, however, "where the Board construed a claim term one way in its Institution Decision and, unexpectedly, a different way in its Final Written Decision," the Board in Intellectual Ventures posed the hypothetical construction to both parties during oral argument before adopting the construction in its final written decision.[21]

At bottom, the Intellectual Ventures decision makes clear that the Board may adopt a construction not advanced by any party so long as it provides the parties with notice and an opportunity to respond, even if that construction is raised for the first time at oral argument. Accordingly, parties to a post-grant proceeding should be prepared to substantively address any alternative construction previewed by the Board during oral argument, especially where both sides argued competing constructions prior to argument. But even where the Board adopts a construction for a claim term that neither side briefed, or adopts a construction without affording both sides a meaningful opportunity to respond, parties should still consider seeking a sur-reply or rehearing in order to preserve their due process claim for appeal.

Footnotes

[1] Nos. 2016-1739, 2016-1740, 2016-1741, 2017 WL 1842527 (Fed. Cir. May 8, 2017).

[2] Id. at *2.

[3] Id.

[4] Id.

[5] Id. at *3.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Id. at *4.

[11] Id.

[12] Id.

[13] Id.

[14] 829 F.3d 1364, 1381 (Fed. Cir. 2016).

[15] 825 F.3d 1341, 1351 (Fed. Cir. 2016).

[16] In re Magnum Oil, 829 F.3d at 1381.

[17] Id.

[18] Intellectual Ventures, 2017 WL 1842527, at *4.

[19] Id.

[20] 825 F.3d at 1351.

[21] Intellectual Ventures, 2017 WL 1842527, at *4.

This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.