United States: Federal Circuit Again Reminds PTAB That BRI Must Be Reasonable

Last Updated: January 8 2018
Article by Ryan Schermerhorn

Last fall, the Federal Circuit reversed a PTAB decision that affirmed an Examiner's rejection of various claims in an ex parte reexamination because the Examiner's interpretation of the claims, which the PTAB upheld, was unreasonably broad. In re Smith International, Inc., Appeal No. 2016-2303 (Fed. Cir. Sept. 26, 2017). The court's decision is noteworthy because it reinforces the bounds of the broadest reasonable interpretation claim construction standard the Patent Office must apply when assessing patentability, bounds that do not encompass the broadest possible interpretation.

Smith International, Inc. ("Smith") owns U.S. Patent No. 6,732,817 ("the '817 Patent"), which issued with 73 claims and generally relates to an expandable downhole drilling tool, for oil and gas operations, that includes, in relevant part, a body, a mandrel, and a cam sleeve. Smith sued Baker Hughes Inc. ("Baker Hughes") and, in turn, Baker Hughes successfully requested that the Patent Office reexamine claims 28-37, 39-46, 49, and 50 of the '817 Patent. During the reexamination, Smith again sued Baker Hughes for infringement of the patent, albeit in a different federal district. In turn, Baker Hughes petitioned for inter partes review, which the PTAB denied for reasons of administrative economy implicated by the substantive overlap between the petitions and the pending reexamination.

During the reexamination, the Examiner rejected a subset of these claims (claims 28-36, 39, 40-43, and 50) as well as claims 79-81 and 93-99 that Smith sought to add to the patent. All of these claims, according to the Examiner, were anticipated by Eddison and/or obvious over Eddison in view of Wardley and Jewkes. The rejections rested on the Examiner's construction of the claim term "body," as a broad term that may include other components such as a "cam sleeve" and a "mandrel," which, according to the Examiner, was met by the combination of Eddison's "body," "mandrel," and "cam sleeve".

The PTAB affirmed all of the Examiner's rejections, finding the Examiner's construction of the term "body" to be reasonable. First, the PTAB determined that the term "body" is "a generic term ... that by itself provides no structural specificity." Slip op. at 10. Second, the PTAB noted that nothing in Smith's patent altered this general meaning of the term "body," as the specification did "not 'define the term body' or 'preclude the Examiner's interpretation.'" The PTAB also rejected Smith's argument that one of ordinary skill in the art would understand the "body" as an element that is distinct from components like the "mandrel" and the "cam sleeve," noting Smith's failure to demonstrate such an understanding in the prior art and the fact that the "mandrel" was not expressly recited in the claims. The PTAB concluded therefore that it was reasonable to construe the term "body" to mean "the overall portion or portions of the downhole tool that define the bore and may include one or more other elements." Slip op. at 11.

On appeal to the Federal Circuit, Smith argued that the Patent Office's construction of the term "body" was unreasonably broad. More particularly, Smith argued that the PTAB's construction was inconsistent with the specification, which consistently and clearly described the body as a component of the drilling tool that is distinct from other separately identified components like the "mandrel" and the "cam sleeve" that are also part of the drilling tool. Smith therefore contended that the proper construction of the term "body" was "an outer housing" distinct from other components of the tool, and cited various prior art references, including Eddison, in support of this contention.

The Federal Circuit agreed with Smith. In its decision, the court first reminded the PTAB that even under the broadest reasonable interpretation (BRI) standard, claims cannot be construed '"so broadly that its constructions are unreasonable"', i.e., cannot be construed in a manner that is '"divorced from the specification."' Slip op. at 12 (citing Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1298 (Fed. Cir. 2015)). Here, the Federal Circuit concluded that the PTAB's construction was divorced from the patent's specification, which clearly and consistently described the body as a component separate from other components such as the mandrel.

"Even when giving claim terms their broadest reasonable interpretation, the Board cannot construe the claims "so broadly that its constructions are unreasonable under general claim construction principles."

Next, the court rejected the Patent Office's argument that the patent's specification did not preclude the Examiner's broad construction. The court reminded the Patent Office that "[t]he correct inquiry ... is not whether the specification proscribes or precludes some broad reading of the claim term adopted by the examiner." Slip op. at 12-13. The Patent Office argument would, according to the court, effectively turn the BRI standard into a "broadest possible interpretation" standard. That is not the law and, accordingly, the Federal Circuit emphasized that the correct inquiry is whether the interpretation is "consistent with the specification." Slip op. at 13 (citing In re Morris, 127 F.3d 1048, 1054 (Fed. Cir. 1997)). And here, again, the court determined that the construction of the term "body" adopted by the Examiner and confirmed by the PTAB was inconsistent with the specification. Additionally, the court noted that Smith's proposed construction was also consistent with Eddison, which itself described its "body," "mandrel," and "cam sleeve" as separate components of the drilling tool.

The Federal Circuit thus concluded that the proper construction of the term "body" is a component that is distinct from other components, such as the mandrel and the cam sleeve, separately identified in the patent's specification. Properly construed, the term "body" did not read on Eddison's "body," "mandrel," and "cam sleeve." Accordingly, the Federal Circuit reversed the PTAB's decision that claims 28-36, 39, 40-43, 50, 79-81, and 93-99 were anticipated by Eddison or rendered obvious by Eddison, Wardley, and Jewkes.

This decision serves as yet another reminder to examiners, the PTAB, and patent practitioners that BRI means broadest reasonable interpretation in light of both the claims and the specification, and not the broadest possible interpretation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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