Federal Circuit Reverses PTAB due to Unreasonably Broad Claim construction and Upholds Idle Free Requirement that Patent Owner Must Show that Substitute Claims are Patentable Over All Prior Art of Record
In the first reversal of a Final Decision by the Patent Trial and Appeal Board (PTAB), the Federal Circuit reversed the PTAB’s construction of several claim limitations and remanded the PTAB’s determination of on patentability. Microsoft v. Proxconn, 2014-1542, -1543, Fed. Cir. decided June 16, 2015. This decision shows that the “broadest reasonable construction” adopted by the USPTO during patent office trails in 37 C.F.R. § 42.1000(b) must consider the context of the specification and previous file history.
The patent at issue, US 6,757,717 assigned to Proxyconn, includes claims directed to a system and a method for data access in a packet-switched network. System claim 6 of the ‘717 patent recited “a gateway … connected to said packet-switched network in such a way that network packet sent between at least two other computers pass through” the gateway and “a caching computer connected to said gateway.” The PTAB had construed “two other computers” as being broad enough to include the caching computer. See Microsoft at pg. 8. The Federal Circuit reversed, noting that the “two other computers” were claimed “independently from, and in addition to” the gateway and that the claim’s use of the term “other” provides a further distinction between the “two other computers” and the gateway. Microsoft at pg. 9. The Federal Circuit also looked to the ‘717 patent’s specification, in which the phrase “two other computers” is used to describe components that are separate and distinct from the gateway and the caching computer. Microsoft at pg. 9. See also FIG. 11 of the ‘717 patent above. The Federal Circuit also found that the PTAB had made a similar construction error in system claim 1, in which the PTAB construed a “sender/computer” and a “receiver/computer” as also being broad enough to include intermediary devices. Microsoft at pg. 10-11.
Motion to Amend
Another issue of note in the Microsoft decision is that the Federal Circuit upheld the PTAB’s requirement that the Patent Owner, when adding a substitute claim, has the burden of showing that the substitute claim is a patentable over all prior art of record. See Microsoft at pg. 25-26. As first described in Idle Free System v. Bergstrom, IPR2012-00027 (PTAB June 11, 2013), the PTAB requires a Patent Owner that chooses to amend the patent by adding substitute claims to show that the substitute claims are (1) adequately supported by the specification, (2) patentably distinct from all prior art of record in the proceeding and (3) patentably distinct from all prior art known to the Patent Owner. See previous Patent Office Trials Blogs under the category “Motions to Amend.”
In Microsoft, the Patent Owner had distinguished the substitute claims from the prior art upon which the Inter Parties Review had been granted, but the Patent Owner had not distinguished the substitute claims from a prior art reference that the Petitioner had relied on in the Petitioner’s Opposition to the Patent Owner’s Motion to Amend. See Microsoft at pg. 27-28. The Federal Circuit generally found that the requirement (2) above is a reasonable interpretation of the statutory requirement in 35 U.S.C. § 318(b) that only claims that are “determined to be patentable” may be added by a motion to amend and found, with respect to the Microsoft substitute claims, that the Patent Owner had been given adequate notice and opportunity to present arguments distinguishing the substitute claims from the new prior reference during the PTAB trial. The decision also includes a footnote explaining that the Federal Circuit did not need to address the appropriateness of every requirement of Idle Free, including the controversial requirement to show that the substitute claims are patentable over all prior art known to the Patent Owner. See Microsoft at pg. 25, footnote 4. We will need to wait for a future Federal Circuit decision to see whether or not the Federal Circuit finds that requirement to be reasonable.
John M. Bird is a partner in the Washington, DC Office of Sughrue Mion PLLC. His focus is on the protection and enforcement of designs and a wide range of electrical and mechanical technologies, including analytical/measurement systems, medical devices, HVAC systems, printers/copiers, telecommunications systems, data recording mediums, semiconductor fabrication, bearings, welding processes, sports equipment, footwear, and various automobile components, such as tires, transmissions, engines, fuel-injection systems, motors, lamps, steering systems, connectors/wiring, valves, and control/monitoring systems.
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