In a split opinion in Homeland Housewares, LLC v. Whirlpool Corporation, the Federal Circuit has again overturned a final written decision issued by the PTAB determining that challenged claims in an IPR were not unpatentable, a development that should at least cast doubt on the validity of patents that survive challenges at the PTAB.

Homeland initially petitioned the PTAB for an inter partes review of all claims of U.S. Patent No. 7,581,688 ("the '688 patent"), assigned to Whirlpool, arguing that the claims were invalid as anticipated by U.S. Patent No. 6,609,821 ("the '821 patent"). The '688 patent is directed to a blender having a predetermined operating cycle, notably reciting an acceleration phase where the speed of a cutter assembly is increased from a predetermined settling speed to an operating speed.

In the IPR, Whirlpool offered unrebutted testimony of an expert witness to argue that the '821 patent does not anticipate the '688 patent and that the PTAB's provisional construction of "settling speed" was incomplete. In view of the argument, the final written decision declined to adopt any explicit construction of "settling speed," ultimately concluding that Homeland did not show that any claim of the '688 patent is anticipated. Homeland appealed the PTAB's final written decision.

On appeal, the court first reiterated that the PTAB must resolve actual disputes regarding the proper scope of claims in the context of IPRs, and sought to determine the correct claim construction. While Homeland contended that settling speed means "any comparative low speed less than the operating speed," Whirlpool proposed that settling speed means "a speed, greater than zero, that indicates that items have settled around the cutter assembly." The court rejected both parties' proposed constructions, and determined that the proper construction of settling speed is a "speed that slows significantly enough to allow the contents to reach the 'settled' condition to be proceed again," noting that this construction was "practically identical" to the construction utilized by the PTAB in its Institution Decision.

Using its determined claim construction, the court found that "low speeds" as indicated in Figure 25 of the '821 patent refers to speeds at which blended ingredients fall back to the cutters. The court also established that the "ramp to high" functionality of the '821 is representative of an acceleration phase. Additionally, the court determined that Whirlpool's expert testimony, although unrebutted by Homeland, was inconsistent with the intrinsic records of the '821 and '688 patents, and therefore should be disregarded. For at least these reasons, the court reversed the decision of the PTAB and concluded that the '688 patent is invalid as anticipated by the '821 patent.

The dissenting opinion disagreed, arguing that the majority erred in adopting a claim construction that broadly includes the prior art, and contending that the court "[strayed] from the substantial evidence standard of review of PTAB findings of fact."

The court's decision points out that even unrebutted, expert testimony concerning claim construction may provide little assistance to a patent owner. In addition, it signals to the Board that shortcuts will not be tolerated—the Board will be required to "show its work." It also indicates that the Federal Circuit may be inclined to construe clams in the first instance on appeal, rather than merely returning the matter to the PTAB for further proceedings. Additionally, patent holders should have no illusion that a patent's survival in an IPR assures its validity.

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