Unreasonable Claim Construction Causes PTAB Reversal


In a fairly case-specific claim construction analysis, the Federal Circuit reversed the PTAB today in D’Agostino v. Mastercard, Int’l, 2016-1592, -1593 (Fed. Cir. Dec. 12, 2016), finding that the Board erred in determining the challenged claims to be unpatentable because, as a matter of logic, the prior art could not anticipate or render those claims.

The patent at issue involved methods of effecting secure credit-card purchases by minimizing merchant access to credit card numbers. In those methods, a limited-use transaction code is given to the merchant in the place of the credit card number. Of particular importance to the Court’s decision was a “single-merchant” limitation that required that, when such a transaction code is requested, the request limits the number of authorized merchants to one, but does not then identify the merchant because the claims required that such identification occurred only later. Id. at 7.

In its claim construction during the inter partes review trial, the PTAB adopted a construction that did not recognize the separation in time of the communication of the transaction code and the communication of the merchant’s identity. Id. at 5-6. As might be expected, the Court relied upon the specification of the subject patent, as well as its file history, to support this claim construction. See, e.g., id. at 6 (“The prosecution history reinforces the evident meaning of the single-merchant limitation…”).

In general, this decision represents another decision that patent owners can point to in support of the notion that the Board is not flawless in all of its decisions. This particular Board panel made errors that, according to the Federal Circuit, were fairly obvious in nature helping to undercut any notion of Board infallibility.

Patent Owner’s IPR Statements May Constitute A “Disclaimer” of Claim Scope In Litigation

33513289_sIt is well-established that a patent owner’s statements about a claim term made during prosecution can be viewed as a disclaimer of claim scope during the Markman phase of litigation. Similarly, clear and unambiguous statements made in the patent specification can restrict claim scope during litigation. Several district courts have now followed suit with regard to statements made by a patent owner in an IPR proceeding, including the District Court for the Northern District of California in the recent case Aylus Networks, Inc. v. Apple, Inc., Civil Action No. 13-cv-04700.

In Aylus, the patent-in-suit was directed to a media streaming architecture that permitted a user to coordinate the transfer of media content from an internet-based server to a physically-proximate media renderer. Aylus asserted the patent against Apple’s AirPlay feature of its iOS devices. Independent claim 1 recited a method of controlling and delivering media content by invoking “Control Point” logic and “Control Point Proxy” logic to cooperatively negotiate media content delivery under certain conditions. Claim 2, which depended from claim 1, recited that the “Control Point Proxy” logic is invoked to negotiate media content delivery under other conditions.

During the litigation, Apple filed a Petition for Inter Partes Review of the patent-in-suit. In its Preliminary Response, Aylus argued that claim 2 requires that “only” the Control Point Proxy logic is invoked under the conditions described in claim 2. Aylus was successful in avoiding institution of trial on claim 2.

In the litigation, the District Court later construed claim 2 to require that “only” the Control Point Proxy logic be invoked, which ultimately led the court to find non-infringement in favor of Apple on summary judgment. The district court’s claim construction was based upon traditional claim construction factors, including assessing the plain language of the claim and the teachings of the patent specification. The district court also relied upon Aylus’ arguments in its Preliminary Response in the IPR. The district court noted that IPRs are technically adjudicative proceedings, rather than prosecution, but nonetheless considered Aylus’ Preliminary Response statements to constitute a “prosecution disclaimer.”

Though there has been no Federal Circuit opinion on this topic yet, several district courts have viewed statements made during an IPR as disclaimers, akin to similar statements made in the specification and during actual prosecution, when it comes to claim construction during litigation.

PTAB Claim Construction Ruling Wipes out Half of Challenged Grounds, But Trial Still Initiated

iStock_000003630733XSmallIn a case marked by a great number of grounds of unpatentability, Covidien was able to get 14 challenged claims of an Ethicon Endo-Surgery patent into a trial for inter partes review in a case styled as Covidien LP v. Ethicon Endo-Surgery, Inc. (IPR2013-00209), involving U.S. Pat. No. 8,317,070.

The ‘070 patent relates to surgical stapling devices which are “capable of producing staples of different formed length” when applied to tissue.

After listing the prior art references relied upon by Patent Challenger, the Board listed the 36 alleged grounds of unpatentability, stretching nearly two pages of the decision. Following, the Board conducted a detailed claim construction analysis, beginning with the phrase “two prongs extending non-paralelly from the main portion.” The Board’s claim construction mimicked that of a typical district court claim construction analysis, including citations to the claims, specification and file history. Ultimately, the Board agreed with Patent Owner.

Then, the Board moved to analyze the alleged grounds of unpatentability, beginning by noting that 18 of the 36 grounds of unpatentability alleged by Patent Challenger relied on a construction of “extending non-parallely” which was inconsistent with the Board’s interpretation. The Board accordingly declined to analyze these grounds. Of the remaining 18 grounds which relied on a construction consistent with the Board’s definition of the limitation, all relied at least in part on one reference which accounts for the “extending non-parallely” feature.

Patent Challenger combined this reference with three other references, all of which disclosed a type of surgical stapler, to form several obviousness grounds. Relying on the three references, as well as expert testimony, Patent Challenger showed that the reference taught all limitations of the challenged claims, including the “anvil” and “formed staple length” limitations. Completing a lengthy, but straightforward obviousness analysis, the Board granted the Petition as to several obviousness grounds.

Despite having half of its numerous alleged grounds of unpatentability doomed by reliance on inconsistent claim construction, Covidien was able to get 14 challenged claims of the ‘070 patent into a trial for inter partes review.

Operability of Combined References Considered by PTAB in Obviousness Analysis

iStock_000011462794XSmallIn a challenge relying in part on prior art previously considered during prosecution, Zodiac Pool was able to get 15 of 18 challenged claims of an Aqua Products patent into a trial for inter partes review in a case styled as Zodiac Pool Sys., Inc. v. Aqua Products, Inc. (IPR2013-00159), involving U.S. Pat. No. 8,273,183.

The ‘183 patent relates to “self-propelled apparatus and methods for controlling such apparatus for cleaning a submerged surface of a pool or tank.” The ‘183 patent further discloses methods for controlling the movement patterns of the cleaning apparatus as it moves over the bottom and sides of a pool or tank.

The Board’s construction of the term “a stationary directional discharge conduit” warrants discussion in light of its consideration of the indefinite article “a” contained in the term.  After considering the specification and file history of the ‘183 patent, the Board construed the term to mean “one or more discharge conduits.”  Citing KCJ Corp. v. Kinetic Concepts, Inc. 223 F.3d 1351, 1356 (Fed. Cir. 2000), the Board adopted the long-established rule that an indefinite article, such as “a” or “an” is typically construed to mean “one or more” when found in an open-ended claim that contains the transitional phrase “comprising.”  Order at 10.

Patent Owner sought to limit the Board’s review by pointing out that one of the prior art references cited by Petitioner was already considered by the Examiner during prosecution.  The Board noted, however, that Petitioner presented different arguments and evidence that that before the Examiner, so the Board did not deny the grounds solely on the basis of 35 USC § 325(d).

Lastly, it is worth noting two arguments made by Patent Owner that were rejected by the Board relating to the obviousness grounds raised in the petition.  First, regarding the idea that the prior art taught away from the incorporation of an internal pump, the Board found that, “the fact that the motivating benefit comes at the expense of another benefit…should not nullify its use as a basis to modify the disclosures of one reference with the teaching of another.  Instead, the benefits, both lost and gained, should be weighted against one another.”  In view of this analysis, the Board found that the references did not teach away.  Order at 24.  Second, with regard to Patent Owner’s argument that Petitioner failed to describe how an internal pump could be operably incorporated, the Board cited the Federal Circuit explanation that “[t]he test for obviousness is not whether the features of a secondary reference may be bodily incorporated into the structure of the primary reference…Rather, the test is what the combined teachings of those references would have suggested to those of ordinary skill in the art.”  As a result, the Board again rejected Patent Owner’s argument.  Order at 25-26.

This rationale by the Board, that hurt Patent Owner’s argument in one regard, was helpful in another.  Regarding one of the obviousness grounds set forth by Petitioner, the Board noted that Petitioner did not “address the inconsistency or conflict created by the proposed modification or to explain why, on balance the benefits of the proposed modification outweigh its deleterious effects on the operation and use of [the prior art’s] device.” Order at 33.  Operability is, therefore, a viable argument for a Patent Owner before the PTAB.

In the end, after a lengthy challenge, Zodiac Pool was able to get 15 of 18 challenged claims of the ‘183 patent into a trial for inter partes review.


Seventh Inter Partes Review Trial Instituted

The last four PTAB Orders from February 12, 2013, that instituted inter partes review trials, were all related to the large battle underway between Xilinx and Intellectual Property Ventures Management.  We will take them in order, first looking to the Board’s decision to institute an IPR trial in Intellectual Ventures Management, LLC v. Xilinx, Inc. (IPR2012-00018) (J. Arbes), relating to US Patent No. 7,566,960.  In that Order, the board denied the proposed ground that sought a finding of unpatentability based on anticipation, but granted the trial on four separate obviousness grounds that covered all 13 challenged claims.

The subject matter of the ‘960 patent was an “interposer disposed inside an integrated circuit package between a die and the package.”  Order at 2.  The Board’s analysis focused on the only really interesting portion of the opinion–claim construction.  To that end, the Board first considered the limitation of the claims that required “an array of landing pads disposed on an inside surface of the integrated circuit package.”  Order at 8.  While petitioner did not proffer a definition of this claim limitation, Patent Owner suggested that the limitation required the IC package to “completely surround” both the IC die and landing pads.  The Board rejected this proposal on a number of grounds: 1) the language of the claim itself did not indicate such a relationship, 2) the specification did not disclose an intent on the part of Patent Owner to define the “inside surface” language consistent with Patent Owner’s proposal, 3) while one embodiment of the specification supported Patent Owner’s position, there was no reason to limit the claim as Patent Owner suggested; indeed, the term “surround” only appeared in the patent on one occasion, relating to a different context, and 4) while an argument made in prosecution was consistent with Patent Owner’s definition, the Board did not find that such argument was an express or clear disclaimer of a broader construction.”  (for those litigators used to relying heavily on the file history to define a claim term, this has to be an eye opener).  Order at 9-10.  In short, in view of the broadest reasonable interpretation, Patent Owner’s proposal was incorrect.

The Board also construed the limitation “means for electrically coupling,” finding that because the word “means” was used, and no structure was recited tin the claim as performing the electrical coupling, the term was subject to 35 USC §112(f).  As compared to other, more cursory means-plus-function analysis in other Orders, in the its analysis here, the Board undertook a detailed analysis of the specification in coming up with its proposed corresponding structure.

In view of the Board’s claim construction positions, it went on to find that Patent Challenger presented arguments that made it reasonably likely that all challenged claims were unpatentable in view of 4 of the 9 grounds proposed in the petition.