Uniloc USA v. Sega of America: Evaluating the Priority Date of a Means + Function Claim

Uniloc USA owns US 5,490,216 (‘216), with claims directed to “[a] registration system for licensing execution of digital data in a use mode….” Sega petitioned for IPR of the ‘216 patent, arguing that Claims 1–20 are anticipated by US 5,509,070 (“Schull”), which was filed on 15 December 1992. The ‘216 patent was filed on 21 September 1993, but claims priority to AU PL5524, filed on 26 October 1992. In other words, Schull is only prior art if ‘216 does not get the benefit of the Australian filing date. The PTAB concluded that the Australian application did not provide adequate written description support for the U.S. claims, and held that Schull anticipates ‘216 Claims 1–20.

At issue was the limitation “generating means” in the U.S. claims. In a previous lawsuit between Uniloc and Microsoft, the Federal Circuit had construed “generating means” to mean “to generate a local or remote licensee unique ID/registration key,” and agreed with the district court that the corresponding structure was “a summation algorithm or a summer.” The PTAB concluded that no such summation algorithm was present in the Australian application, and therefore the U.S. claims could not take the benefit of the Australian filing date.

Uniloc argued that this was legal error. While a failure to describe adequate structure in the specification to support a §112(6) claim limitation can give rise to an indefiniteness failure under §112(2), the priority analysis has historically focused on whether the priority filing contains adequate written description to satisfy §112(1). X2Y Attenuators, LLC v. Int’l Trade Comm’n, 757 F.3d 1358, 1365 (Fed. Cir. 2014). Uniloc argued that questions of §112(2) and §112(6) are not germane to the priority analysis, and therefore the PTAB had made an error of law in addressing these considerations when deciding priority for the ‘216 patent. The Federal Circuit Court of Appeals (CAFC) disagreed with Uniloc and affirmed the PTAB.

Although this decision is not precedential, the reasoning here could have important implications in many IPRs and PGRs in the future. The extent of the prior art is determined in view of a patent’s priority date. If a patent is not entitled to the benefit of its priority filing, the world of prior art is correspondingly larger. Moreover, the CAFC has recently made it easier for a claim limitation to be regarded as a means-plus-function (§112(6)) limitation. Williamson v. Citrix Online, LLC, 792 F.3d 1339, 1349 (Fed. Cir. 2015) (en banc). Therefore, a would-be challenger in IPR should pay careful attention to any limitations in the challenged patent that could be regarded as means-plus-function, and then scrutinize the priority filings to see whether the priority filings have adequate structure (and teachings listing the structure to the claimed function) to support the means-plus-function limitations in the patents to be challenged. If the supporting structure is not clearly present in the priority filing, then the challenged patent can be attacked on a wider basis of prior art.

The Demise of Rule 36 Judgments in Federal Circuit Decisions Relating to IPRs

The Federal Circuit issued a fairly mundane decision today in Boundary Solutions, Inc. v. Corelogic, Inc. (PTAB October 17, 2017), affirming the PTAB’s decision to cancel all challenged claims of two related patents. Over the course of 11 pages, the decision explained how the PTAB’s obviousness determination was supported by substantial evidence and Appellant’s arguments were unpersuasive.

So why is the decision even worth discussing? In short, such an ordinary, non-noteworthy decision is actually an anomaly in Federal Circuit jurisprudence as it relates to IPR decisions. Why? Because the Court has, over the past 5 years, made liberal use of its Rule 36, which allows the court to render a judgment without an opinion. This practice has, however, come under increasing fire. Commentators have called the practice an “unprecedented abuse” and have characterized it as the “Rule 36 debacle.”

On at least three occasions, petitions for writs of certiorari have been filed seeking Supreme Court review of this Rule 36 practice (See, e.g., Shore v. Lee). Perhaps leery of Supreme Court action on this issue, the Federal Circuit’s use of this Rule 36 technique has dramatically declined in recent months. A quick perusal of our “Key Decisions” tab here on IPR-PGR.com demonstrates that Rule 36 decisions have materially declined.

In general, this decrease in the Federal Circuit’s use of Rule 36 is welcome, even if some of the decisions are as mundane as Boundary Solutions. Stakeholders in the patent system will be better off with a more robust catalog of Federal Circuit decisions to which they can refer.

 

Aqua Products: Amendments in IPR Proceedings Come Roaring to the Forefront

Have you noticed the momentum of Federal Circuit decisions trending against the PTAB and petitioners? If not, today’s long-anticipated decision in the Aqua Products case will change your thinking. Albeit in a self-described “narrow” ruling, the rules for amending patent claims in post-grant review proceedings just took a sharp turn towards patent owners. The Federal Circuit reversed the Board’s practice on motions to amend, finding that it is the petitioner, not the patent owner, who bears the burden of persuasion regarding the patentability of proposed substitute claims presented in a motion to amend.

The Court’s detailed, 66-page opinion (accompanied by 4 additional concurring and dissenting opinions) provides a detailed analysis of the history of motions to amend and the burden of persuasion that applies in IPR proceedings. Further, the Court provides a detailed analysis of the deference (or lack thereof) that is required by Chevron.

Despite the dozens of pages of analysis, Judge O’Malley provides a concise summary of the Court’s holding:

As frustrating as it is for all who put so much thought and effort into this matter, very little said over the course of the many pages that form the five opinions in this case has precedential weight. The only legal conclusions that support and define the judgment of the court are: (1) the PTO has not adopted a rule placing the burden of persuasion with respect to the patentability of amended claims on the patent owner that is entitled to deference; and (2) in the absence of anything that might be entitled deference, the PTO may not place that burden on the patentee. All the rest of our cogitations, whatever label we have placed on them, are just that—cogitations. Order at 65-66.

So where do we go from here? Patent Owners will still be required to establish the basic requirements of 35 U.S.C. § 316(d); that is, that the amended claims are non-broadening, supported by the specification, and responsive to a ground already at issue in the IPR. From there, petitioner must act fast to obtain expert testimony, new art, and/or persuasive arguments to meet its burden of proving that the substitute claims are not patentable. In the end, the PTAB has the job of weighing the totality of the record before it to determine if the petitioner has met its burden of proving the substitute claims are unpatentable.

But, we may not have seen the end of the battle on motions to amend. Judge O’Malley’s opinion also makes clear that a new rule, shifting the burden of persuasion to the patent owner, may be implemented, but only after engaging in a notice and comment rule-making. “At that point, the court will be tasked with determining whether any practice so adopted is valid.” Order at 66.

Stay tuned: the PTAB has issued other opinions that can be argued to be rule-making by a PTAB panel (like the motion to amend rules from Idle Free that were addressed in Aqua Products). Practitioners will be on the lookout for ways to replicate the Aqua Products formula and require a more thorough notice and comment procedure for the finer details of IPR practice.

Federal Circuit Reverses PTAB for Refusing to Allow Supplementation of Record to Add Later Inconsistent Deposition Testimony from an Expert

The Board exercises substantial power over the scope of the record in IPRs, but the Federal Circuit’s decision in Ultratec v. CaptionCall illustrates a limit on that power.  The case involved a collection of consolidated IPR proceedings concerning patents for systems that assist deaf or hard-of-hearing users to make phone calls.  The patents were also the subject of district court litigation between the parties.  In a procedural oddity, the district court trial was completed before the IPR.  The jury found infringement and awarded $44.1 million in damages.  Execution of that judgment was stayed pending the IPR, and five months after the jury’s decision, the PTAB found all challenged claims unpatentable.

The patentee used the same expert in both the PTAB proceedings and the district court litigation.  After the trial, the challenger felt the expert’s district court trial testimony was inconsistent with his testimony in the IPR and sought to supplement the record.  Following its procedure, the Board required a conference call to discuss whether a motion to supplement would be authorized.  As also required by the Board’s rules, that discussion did not include the substance of the testimony that challenger sought to add to the record.  The Board denied the challenger’s request for authorization to file the motion, effectively excluding the trial testimony from the IPR.  The Board did not issue a written order on this point.  Then, in the final written decision, the Board found patentee’s expert credible, including on points where challenger argued that the expert’s trial testimony contradicted his testimony in the IPR.  The Board then denied a motion for reconsideration, addressing the supplemental evidence in a cursory manner.  The net effect of the procedure followed by the Board was to exclude the expert’s trial testimony from the record on appeal too.

The Federal Circuit vacated and remanded, finding that the Board abused its discretion by refusing to entertain a motion to supplement.  First, the court found the challenger satisfied § 42.123(b)’s requirements because the evidence could not have been obtained earlier, and because the Board offered no reasoned basis why allowing this evidence into the record would not be in the interests of justice.  In sum, per the Federal Circuit, a “reasonable adjudicator would have wanted to review this evidence.”

The Federal Circuit added additional criticisms of the Board’s procedures.  First, the Court found that the Board lacked the information necessary to make a reasoned decision, because it would not even look at the evidence sought to be added.  Second, the Court noted the Board’s procedures allowed it to make “significant evidentiary decisions without providing an explanation or a reasoned basis for its decisions,” in contravention of Supreme Court law.  Third, the Court explained the procedures impeded meaningful appellate review, because those procedures set up a situation where evidence that was excluded could not be a part of the appellate record.  The Court also reminded the Board of governing statutory law, noting “To the extent the Board views the two-step process it created to file motions as insulating it from its APA obligations, this is incorrect.”

Although the Courts have largely given the PTAB free reign in creating IPR procedures, this decision, combined with the panel-stacking controversy precipitated by the Federal Circuit’s recent Nidec opinion, may a growing concern at the Federal Circuit with the Board’s use of this freedom.

Federal Circuit Signals that Issue Joinder and Expanded Panels May Not Be Long for the IPR World

A fairly straightforward Federal Circuit decision today, that affirmed a PTAB determination of obviousness, provides insight into a potential reigning in of the PTAB on two issues. In Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., 2016-2321 (August 22, 2017), Judges Dyk and Wallach filed a concurring opinion that casts some level of doubt on the PTAB’s practices of: 1) construing 35 U.S.C. §315(c) to encompass both party joinder and issue joinder and 2) using expanded panels to decide requests for rehearing.

More specifically, Broad Ocean filed a Petition seeking inter partes review, citing two grounds; the first based on an obviousness argument and the second an anticipation argument. The second ground relied on a Japanese reference, but failed to include the requisite affidavit attesting to the accuracy of the translation of the reference, pursuant to 37 C.F.R. §42.63(b). As such, the Board denied the ground (while instituting an IPR trial on the first ground).

Broad Ocean responded to this denial by filing a second IPR Petition that included the requisite affidavit. Because the second petition was time barred pursuant to 35 U.S.C. §315(b), Broad Ocean included a motion for joinder, pursuant to 35 U.S.C. §315(c), seeking to join the second proceeding with the first.

The original 3-judge panel denied this Petition, finding that §315(b) does not allow a party to join issues to a proceeding to which it is already a party. Broad Ocean filed a request for rehearing of this denial and an expanded board of 5 judges set aside the original panel’s decision, concluding that §315(c) encompasses both party joinder and issue joinder.

This expanded panel then went on to find that the subject patent was unpatentable pursuant to both the first obviousness ground, and the second ground based on the Japanese reference. Nidec appealed both the substance of the decision and the joinder procedure undertaken by the Board. The Federal Circuit affirmed the Board without reaching the joinder issue because it found that the Board correctly determined that the challenged claims were obvious, thus negating the need to reach the procedural issue.

In a concurring opinion authored by Judge Dyk, and joined by Judge Wallach, it was pointed out that the joinder provision of §315(c) is clearly tied to the time bar of §315(b). As such, the justices remarked that “[w]e think it unlikely that Congress intended that petitioners could employ the joinder provision to circumvent the time bar by adding time-barred issues to an otherwise timely proceeding…” Additionally, the justices expressed their “concern” with the PTO’s practice of using an expanded administrative panel to decide requests for rehearing. While the Patent Office argued that the expanded panel is used to ensure uniformity in PTO decisions, the justices questioned “whether the practice of expanding panels where the PTO is dissatisfied with a panel’s earlier decision is the appropriate mechanism of achieving the desired uniformity.”

In the end, the PTAB’s unpatentability determination stands, but a couple of key PTO practices may soon be reversed.

 

Whether You Need to Show Standing Depends on Where You are Standing

The Federal Circuit (CAFC) held in Consumer Watchdog v. WARF, 753 F.3d 1258, 1263 (Fed. Cir. 2014), while one does not need to satisfy Article III standing requirements to prosecute an inter partes re-examination in front of the Patent Trial & Appeal Board (PTAB), if one does not like the PTAB’s decision and one wants to take an appeal to the CAFC, then one does need to satisfy the Article III requirements for standing. If the appellant does not show a concrete and particular injury from the PTAB’s decision, the court will not have jurisdiction to hear the appeal. InConsumer Watchdog, it was the patent challenger (Consumer Watchdog) who had lost in front of the PTAB. Because Consumer Watchdog does not actually make, use, or sell any products or services that might infringe the patent that they were challenging, the CAFC decided that Consumer Watchdog had no standing to appeal the PTAB’s determination that the challenged claims are patentable. The CAFC dismissed Consumer Watchdog’s appeal. The CAFC recently affirmed in Phigenix Inc. v. ImmunoGen Inc., 845 F.3d 1168, 1172 (Fed. Cir. 2017) that the Consumer Watchdog holding applies just as much to inter partes reviews (under the America Invents Act) as it applied to inter partes re-examinations. See alsoPPG Indus. Inc. v. Valspar Sourcing Inc., 679 Fed. Appx. 1002, 1005 (Fed. Cir. 2017).

All of these cases concerning standing in appeals from the PTAB, however, featured one common fact pattern: it was always the patent challenger who was trying to appeal to the CAFC. That is to say, it was an open question whether—in a case where there was no allegation of infringement or likelihood of infringement between two parties—an appeal could proceed where the patent owner had lost in front of the PTAB. The CAFC definitively answered this question in Personal Audio v. Electronic Frontier Fdn., No. 16-1123 (Fed. Cir., Aug. 7, 2017), holding that the patent owner whose claim has been held unpatentable at the PTAB has suffered the sort of concrete, particularized injury that will support standing in an Article III court.

This holding makes intuitive good sense. While Consumer Watchdog had not really lost anything when it failed to get WARF’s patent declared invalid, Personal Audio definitely had lost something (its patent claim!) when the EFF convinced the PTAB to declare certain of Personal Audio’s patent claims unpatentable. It makes sense, in other words, to say that a patent owner has standing to appeal from an adverse PTAB judgment, even if a patent challenger does not.

The other open question in this case was, if there is standing to appeal, is EFF allowed to participate, or does the appeal proceed with only Personal Audio allowed to present its case. The court held that once Article III standing is established, then the appeal proceeds as normal, i.e., with an appellant and a respondent. In other words, EFF was permitted to defend the judgment below, even though EFF had no tangible interest that would have supported the appeal if the PTAB decision had gone the other way. The fact that the EFF (which has no personal interest in the outcome of the case) was allowed to participate suggests that the CAFC will likely hold that the PTO has a right to intervene in PTAB appeals when it considers that question in Knowles Electronics v. Matal, No. 16-1954 (Fed. Cir., Jun. 30, 2017).

For Waterproofing Patent, Arguments Against Obviousness Didn’t Hold Water

The Federal Circuit’s decision in Outdry Technologies Corporation, v. Geox S.P.A. discusses some criteria for determining whether or not the explanations provided by the PTAB in an IPR decision are sufficient to support a finding of motivation to combine.

The independent claims of Outdry Technologies Corp.’s US Patent No. 6,855,171 (“the ‘171 patent”) were found to be obvious during IPR proceedings. Outdry’s ‘171 Patent is directed to two claimed processes for waterproofing leather by “directly pressing,” on an internal surface of the leather, a semi-permeable membrane to which a discontinuous pattern of glue dots has been added. One of the claimed leather waterproofing processes of the ‘171 patent requires the glue dots have a particular density. The other requires that the glue dots have a particular size. According to Outdry, directly pressing the glue dot-bearing membrane onto the leather addressed the problem of water pockets forming between the semi-permeable membrane and the leather when only the edges of the semi-permeable membrane are sown or glued to the leather.

In the IPR decision, the PTAB found the claimed leather waterproofing processes of the ‘171 to be obvious in view of US Patents to Thornton and Hayton, and a reference entitled “Chemistry of the Textiles Industry” (“Scott”), each of which discuss using glue dots, or something similar, to adhere a film or waterproof layer to another layer (e.g., a water permeable layer, like leather).  The PTAB determined that the petitioners for the IPR proceedings, Geox, S.p.A., had provided a rational underpinning for combining Scott and Hayton, and that the claimed leather waterproofing processes of the ‘171 Patent would have been obvious in view of Thornton, Hayton and Scott.

Outdry appealed the PTAB’s IPR decision, arguing, among other things, that the motivation to combine Thornton, Scott and Hayton relied upon by the PTAB during the IPR proceedings was insufficient.

In particular, Outdry argued that the PTAB failed to make the required findings supporting the conclusion that a motivation to combine Thornton, Scott and Hayton existed because the PTAB merely relied on Geox’s petition to find a motivation to combine without making its own findings. The CAFC disagreed. The CAFC listed a number of example reasons for which the findings of the PTAB have previously been determined by the CAFC to be insufficient to support a decision that motivation to combine exists, including: failing to cite any evidence, either in the asserted prior-art references or elsewhere in the record, with sufficient specificity for us to determine whether a person of ordinary skill in the art would have been so motivated; merely stating that a combination is “intuitive” or “common sense,” without articulating a rationale; and simply agreeing with arguments in a petitioner’s brief without making any factual findings. However, the CAFC concluded that the PTAB did not make any of the above-referenced errors by articulating, in the IPR decision, Geox’s arguments explaining the motivation to combine the cited references. Further, the CAFC clarified that a PTAB decision that relies on a petitioner’s arguments and includes an explanation supporting the decision to rely on the petitioner’s arguments is acceptable, unlike a PTAB decision that merely adopts a petitioner’s arguments by reference without providing such an explanation.

Outdry also argued that the PTAB’s finding of a motivation to combine was insufficient because the PTAB failed to explain why a person of ordinary skill in the art would be motivated to combine the cited references to solve the water pocket problem addressed by Outdry’s ‘171 Patent. The CAFC was not persuaded by this argument either. The CAFC responded to this argument by citing previous CAFC decisions indicating that a motivation to combine cited references identified in support of a conclusion of obviousness does not have to match a motivation provided by the patent at issue or the patentee.  The CAFC further explained that the identified motivation does not even have to come from the references, themselves.

Accordingly, in Outdry Technologies, the CAFC confirmed that there are standards the PTAB must satisfy when asserting, in an IPR decision, that a motivation to combine exists. Further, the CAFC also explained that these standards are not quite as strict as the Appellant argued they were.

Wasica Decision Reinforces Federal Circuit Guidance on Claim Construction

The Federal Circuit’s recent decision in Wasica Finance v. Continental Automotive Systems touched on a number of well-worn patent issues, but this article focuses on a few key claim construction principles discussed by the CAFC, including that the contents of the specification are highly relevant when performing claim construction, and a claim generally will not be construed in a manner that renders recited terms meaningless or superfluous.

Wasica is the result of the CAFC consolidating two appeals based on two IPRs arising from petitions filed with respect to Patent Owner’s U.S. Patent No. 5,602,524 (“the ‘524 patent”). The claims at issue were directed, generally, to a system for measuring tire pressure. In the system, each tire included a pressure measuring device and a transmitter, and each transmitter transmitted pressure data to a corresponding receiver. A transmission from a transmitter to a corresponding receiver also included an “identification signal” for identifying the transmitter that sent the transmission. A receiver receiving the identification signal stored the identification signal and processed transmissions only from the corresponding transmitter.

As to the first claim construction issue, Patent Owner argued that the PTAB erred in determining that a particular pressure sensor disclosed by the prior art taught a “pressure measuring device” because the pressure sensor only output a binary signal that indicated whether a measured pressure is abnormal. Patent Owner argued that the recited pressure measuring device, when properly construed, must output a tire’s pressure as a numerical value, and that such a numerical value cannot be represented by a single bit of a binary signal. The CAFC sided with the PTAB and rejected the claim construction presented by Patent Owner. The CAFC relied, in part, on the ‘524 patent, itself, which identifies a family of European patents as including examples of manners in which a sensor of the ‘524 patent may output a pressure signal. The CAFC decided that the family of European patents identified by the ‘524 patent disclose switch-based (e.g., binary) pressure sensors and non-numeric pressure signals. The CAFC pointed out that, in accordance with previous decisions, the CAFC generally does not interpret claim terms in a manner that excludes examples disclosed in the specification. Id. at 13.

As to the second claim construction issue, Petitioners argued that the proper claim construction for the term “bit sequence,” from claim 9, was a sequence of “one or more bits.” Patent Owner argued that the plain meaning of “sequence” implies at least two elements. The PTAB agreed with Patent Owner, but on appeal, the CAFC disagreed. The CAFC explained that the recited element required “at least a 4 bit sequence” which included 4 constituent bit sequences, and thus, interpreting a “sequence” as requiring at least two bits would result in a minimum size of 8 bits for the “at least 4 bit sequence.” The CAFC determined that such an interpretation would essentially rewrite “at least 4 bits” from claim 9 to “at least 8 bits.” The CAFC explained that it is highly disfavored to construe terms in a way that renders them void, meaningless, or superfluous. Id. at 28. As further support for reversing the PTAB’s decision regarding the patentability of claim 9, the CAFC pointed to a portion of the ‘524 patent interpreted by the CAFC as disclosing an embodiment in which a bit sequence included a single bit, thereby contradicting the at-least-two-bit interpretation of “bit sequence” sought by Wasica Finance.

In the end, the Patent Owner and Petitioner both took home partial victories, while the rest of us take home additional insight into the Court’s construction of claim limitations.

Novartis v. Noven: The PTAB is not Bound by Prior Decisions of District Courts

Novartis, together with LTS Lohmann Therapie-Systeme, owns a pair of patents covering rivastigmine transdermal patches. These patches are useful for treating Alzheimer’s disease. Noven Pharmaceuticals filed an abbreviated new drug application (ANDA) seeking FDA authorization to manufacture a generic version of the patch. When Novartis sued for infringement, Noven unsuccessfully defended in the ANDA litigation on the grounds of obvious over GB 2 203 040 A (“Enz”), JP 59-184121 (“Sasaki”), and a variety of other references. The Delaware court found that a person of ordinary skill would not have been motivated at the time of invention to add Sasaki’s antioxidant to Enz’s rivastigmine patch, because it was not known at that time that rivastigmine was subject to oxidative decay. Noven did not appeal this loss to the Federal Circuit (CAFC).

However, while the ANDA litigation was proceeding in Delaware district court, Noven had also lodged a series of IPR petitions arguing obviousness over Enz, Sasaki, and a variety of other references. The PTAB instituted four IPRs on these petitions, and held the challenged claims unpatentable as obvious. Novartis appealed from the adverse PTAB decisions. Novartis AG v. Noven Pharm., 2016-1678 (Fed. Cir. Apr. 4, 2017).

Novartis’ principal argument before the CAFC was that the PTAB improperly ignored the Delaware court’s conclusion that there was no motivation to combine Enz and Sasaki at the time of invention. Novartis believed that the Delaware court’s decision should bind the PTAB. The CAFC disagreed for two reasons: first, there were expert declarations in the IPRs that had not been presented to the Delaware district court; and second, the standard for proving obviousness is higher in district court (clear and convincing evidence) than in an IPR (preponderance of the evidence). Therefore, the CAFC concluded that the PTAB should not be bound by Delaware court’s conclusions. The CAFC affirmed the IPR holdings.

It is somewhat unclear how issue preclusion should have applied between the Delaware district court’s conclusions and the PTAB’s fact-findings. Indeed, the CAFC never uses the words “issue preclusion” or “collateral estoppel” in the appeal decision, as if this legal doctrine were not implicated. In contrast to the Delaware court’s finding of no motivation to combine, however, the PTAB found that the person of ordinary skill at the time of invention would have expected rivastigmine to be subject to oxidative decay because Sasaki reports amino groups in other drugs that are prone to oxidative decay and rivastigmine has an amino group. It would have been hard for the PTAB to reach a conclusion of obviousness if it had adopted Delaware’s fact-findings about what the person of ordinary skill would have known, but the CAFC never addresses why the PTAB was not obliged as a matter of issue preclusion to adopt the Delaware fact-findings.

In any event, this case is a solid holding that the PTAB is not bound by a contrary decision in a district court, at least where there is some evidence in the PTAB proceedings that was not part of the district court proceedings. In other words, a patent challenger who loses in the district court need not count on also losing in a parallel PTAB trial.

Federal Circuit is No Place to Make New Claim Construction Arguments

The Federal Circuit has consistently made clear that arguments not first made to the PTAB will not be considered on appeal. Google fell victim to this well-worn concept in Google Inc. v. SimpleAir, Inc., 2016-1901 (CAFC March 28, 2017), wherein the Federal Circuit decided, in a non-precedential opinion, that Google waived a claim construction argument that was not first presented to the Board. The Court also denied Google’s backup argument that, even under the Board’s claim construction, the art rendered the challenged claims unpatentable.

Regarding the waiver issue, the Court gave context to the dispute by noting that the term at issue, “central broadcast server,” had been construed in three prior district court litigations. In each instance, the courts adopted a definition of the term that was identical to the construction ultimately applied by the PTAB. Although Google filed its IPR against the backdrop of those district court constructions, Google provided the Board with the district court definitions of the term, without offering any other suggested construction. Id. at 5-6 (“Google did not…insist or even request that the PTAB apply a differing construction.”). Google further conceded, at oral argument, that the district court constructions constituted the broadest reasonable interpretation in the IPR proceeding. As such, the claim construction argument Google attempted on appeal was deemed waived.

Regarding Google’s backup plan, the Court quickly dispatched with Google’s arguments, describing them as a “mischaracterization of the PTAB’s ruling, in attempt to create legal error.” Id. at 10.

In sum, this decision reminds Petitioners of the need to carefully weigh the entire record and choose their claim construction positions wisely. While it is hard to know all the litigation considerations that were present in this case, the BRI standard could have been a helpful distinction from the insufficient district court constructions to defeat the challenged claims.