MBHB-Webinar-PTAB-Williams-Lovsin-051616-FINAL

The PTAB Front and Center at the
Federal Circuit and the Supreme Court:
The First Year of Appellate Review
(Live MBHB Webinar)
Andrew W. Williams, Ph.D.
James L. Lovsin
May 18, 2016

PTAB Front and Center
 Appeal Statistics
 Claim Construction
 Reviewability of Institution
 Constitutional and Structural Challenges
 Best Practices for Appeal
•2

Appeal to the Federal Circuit
•3
“A party dissatisfied with the final written decision of the
Patent Trial and Appeal Board under section 318(a) may
appeal the decision pursuant to sections 141 through
144. Any party to the inter partes review shall have the
right to be a party to the appeal.”
35 U.S.C. § 319
 Since February 4, 2015, 93 cases have been decided by the Federal
Circuit

Appeal Statistics
 27 precedential opinions
 15 Affirmed
 12 Affirmed-in-part / reversed-in-part, vacated
and remanded, or dismissed
 11 non-precedential opinions
 7 Affirmed
 4 Affirmed-in-part / reversed-in-part, vacated
and remanded, reversed, or dismissed
 55 cases affirmed pursuant to Rule 36
•4

Appeal Statistics
 1st Quarter 2015
 1 precedential opinion (Affirmed)
 2nd Quarter 2015
 1 precedential opinion
 Affirmed-in-part / reversed-in-part, vacated-in-part
and remanded
 1 non-precedential opinion (Affirmed)
•5

Appeal Statistics
 3rd Quarter 2015
 2 Affirmed, 1 Dismissed
 2 non-precedential opinions (Both affirmed)
•6

Appeal Statistics
 4th Quarter 2015
 6 Affirmed
 3 Affirmed-in-part / reversed-in-part, or vacated and
remanded
 1 non-precedential opinion (Dismissed)
•7

Appeal Statistics
 1st Quarter 2016
 4 Affirmed
 6 Affirmed-in-part / vacated-in-part and remanded,
affirmed-in-part / reversed-in-part, or vacated and
remanded
 5 non-precedential opinions
 3 Affirmed
 2 Vacated and remanded or dismissed as moot
•8

Appeal Statistics
 2nd Quarter 2016 (through May 17, 2016)
 2 Affirmed
 1 Affirmed-in-part / reversed-in-part
 2 non-precedential opinion
 1 Affirmed (with one combined appeal dismissed)
 1 Reversed
•9

•10

Claim Construction Standard
•11
Broadest reasonable
construction in light
of specification
Phillips Standardvs.

In re Cuozzo Speed Techs., LLC
•12
 The first Supreme Court case of the first appeal of the
first Final Written Decision for the first IPR petition filed
 U.S. Patent No. 6,778,074

•13
 Garmin USA had been sued in district court and filed
petition IPR2012-00001

•14
10. A speed limit indicator comprising:
a global positioning system receiver;
a display controller connected to said global
positioning system receiver, wherein said display controller
adjusts a colored display in response to signals from said
global positioning system receiver to continuously update
the delineation of which speed readings are in violation of
the speed limit at a vehicle's present location; and
a speedometer integrally attached to said colored
display.

•15
“Integrally Attached”
 Cuozzo’s Proposed Construction
 “Joined or combined to work as a complete unit”
 The Board’s Construction
 “Discrete parts physically joined together as a unit without each
part losing its own separate identity.”

(Fed. Cir. 2015)
•16
 The Federal Circuit concluded “that Congress implicitly
approved the broadest reasonable interpretation
standard in enacting the AIA.”
 “It can therefore be inferred that Congress impliedly approved the
existing rule of adopting the broadest reasonable construction.”
 Failing that, the Court determined that “[e]ven if approval
of the broadest reasonable interpretation standard were
not incorporated into the IPR provisions of the statute, the
standard was properly adopted by PTO regulations.”

(Fed. Cir. 2015)
•17
 Judge Newman in dissent:
 BRI standard frustrates the goal of inter partes review to be a
surrogate for district court litigation
 Reference to other office proceedings cannot justify standard
 “Amendment in post-grant validity proceedings is not of right, and thus far
appears to be almost entirely illusory”
 Originally issued opinion noted that the House “Innovation Act”
contained a section amending the standard:
 “each claim of a patent shall be construed as such claim would be in a civil
action to invalidate a patent under section 282(b), including constructing each
claim of the patent in accordance with the ordinary and customary meaning
of such as understood by one of ordinary skill in the art and the prosecution
history pertaining to the patent . . . .”
 This comment not found in current version of the opinion

•18
 Petition for Rehearing en banc denied
 11 judges considered the petition, and it likely failed by one vote
 Judge Dyk, joined by Judges Lourie, Chen, and Hughes, filed a
concurrence
 Chief Judge Prost, and Judges Newman, Moore, O’Malley, and
Reyna filed a joint dissent
 Judge Newman filed a separate dissent

(Sup. Ct. 2016)
•19
 On March 4, 2016, the Supreme Court granted certiorari
on two questions:
1. Whether the court of appeals erred in holding that, in IPR
proceedings, the Board may construe claims in an issued patent
according to their broadest reasonable interpretation rather than
their plain and ordinary meaning.
2. Whether the court of appeals erred in holding that, even if the
Board exceeds its statutory authority in instituting an IPR
proceeding, the Board's decision whether to institute an IPR
proceeding is judicially unreviewable.
 Oral Argument on April 25, 2016

(Sup. Ct. 2016)
•20
 Chief Justice Roberts:
“So why – why should we be so wedded to the way they do
business in the PTO with respect to the broadest possible
construction when the – the point is not to replicate PTO
procedures. It’s supposed to take the place of district court
procedures.”
“[I]t’s a very extraordinary animal in legal culture to have two
different proceedings addressing the same question that lead to
different results.”

(Sup. Ct. 2016)
•21
 Justice Breyer:
“[Y]ou could look at this new law as you [Cuozzo] were looking at it,
as trying to build a little court proceeding. If I thought it was just
doing that, I would say you were right. But there is another way to
look at it. And the other way to look at it . . . is that there are these
things, for better words, let’s call them patent trolls, and that the –
the Patent Office has been issuing billions of patents that shouldn’t
have been issued – I overstate – but only some. . . . And so what
we’re trying to do with this process is to tell the office, you’ve been
doing too much too fast. Go back and let people who are hurt by
this come in and get rid of those patents that shouldn’t have issued.
. . . If it’s that second purpose, then I would think, well, maybe this is
right, what they [the PTAB] are doing.”

(Sup. Ct. 2016)
•22
 Justice Breyer:
“I apply for a patent because I have this thing that instead of putting
red cellophane on the speedometer, I put purple cellophane on the
speedometer. It signals the presence of a hot dog stand. All right.
[Laughter] I – I then try to patent it. And they look at this patent and,
no, absolutely not.”

BRI v. Phillips
•23
 Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1298 (Fed. Cir.
2015) (citations omitted).
That is not to say, however, that the Board may construe
claims during IPR so broadly that its constructions are
unreasonable under general claim construction
principles. . . . Even under the broadest reasonable
interpretation, the Board’s construction “cannot be
divorced from the specification and the record
evidence,” and “must be consistent with the one that
those skilled in the art would reach . . . .”

BRI v. Phillips
•24
 Straight Path IP Group, Inc. v. Sipnet EU S.R.O., 806 F.3d 1356,
1362 (Fed. Cir. 2015)
The plain meaning of the claim language is therefore not
overridden by the specification. And the plain meaning is
positively confirmed by the prosecution history, which
we have indicated is to be consulted even in
determining a claim’s broadest reasonable
interpretation.

BRI v. Phillips
•25
 Trivascular, Inc. v. Samuels, 812 F.3d 1056, 1062 (Fed. Cir. 2016)
(citations omitted).
While the broadest reasonable interpretation standard is
broad, it does not give the Board an unfettered license
to interpret the words in a claim without regard for the
full claim language and the written description. . . .
Instead, it is the “use of the words in the context of the
written description and customarily by those of skill in
the relevant art that accurately reflects both the
‘ordinary’ and ‘customary’ meaning of the terms in the
claims.”

BRI v. Phillips
•26
 PPC Broadband, Inc. v. Corning Optical Communications RF, LLC,
2015-136, 2016 WL 692368 at *5 (Fed. Cir. Feb. 22, 2016).
However, claim construction in IPRs is not governed by
Phillips. Under Cuozzo, claims are given their broadest
reasonable interpretation consistent with the
specification, not necessarily the correct construction
under the framework laid out in Phillips.
Thus, while the Board’s construction is not the correct
construction under Phillips, it is the broadest reasonable
interpretation of “continuity member,” and because this
is an IPR, under our binding precedent, we must uphold
the Board’s construction [of the claim terms].”

FOR ATTENDANCE TRACKING
PURPOSES PLEASE ENTER THE
PHRASE
“PTAB”
INTO THE WEBEX POLL

Motion to Amend Claims
•28
“The Director shall prescribe regulations – setting forth
standards and procedures for allowing the patent owner
to move to amend the patent . . . to cancel a challenged
claim or propose a reasonable number of substitute
claims.”
35 U.S.C. § 316(a)(9)
“During an inter partes review instituted under this
chapter, the patent owner may file 1 motion to amend
the patent in 1 or more of the following ways: (A) Cancel
any challenged patent claim. (B) For each challenged
claim, propose a reasonable number of substitute
claims.
35 U.S.C. § 316(d)(1)

•29
 Guidance from the Office:
 Idle Free Systems, Inc. v. Bergstrom, Inc., IPR2012-
00027, Paper 26 (June 11, 2013)
 Approved by Federal Circuit in Microsoft Corp. v. Proxyconn, Inc.,
789 F.3d 1292 (Fed. Cir. 2015)
 MasterImage 3D, Inc. v. RealD Inc., IPR2015-00040,
Paper 42 (July 15, 2015)
 Approved by Federal Circuit in Nike, Inc. v. Adidas AG, 812 F.3d
1326 (Fed. Cir. 2016)
 Designated Precedential

•30
 Patent Trial and Appeal Board Motion to Amend Study
 Dated April 30, 2016
 As of the date of the study, the Board reported instituting and
completing 1539 trials
 In those cases, the Board decided the merits of a motion to amend
in 118 trials (8%)
 Of those, the motion was granted (or granted-in-part) in only 6
cases (5% of the 118 trials)

•31

Reviewability of Institution
 AIA proceedings and statutory scheme
 Federal Circuit Case law
 Reviewability at Supreme Court
 Special Case: Partial Institution
•32

Two Stages of AIA Proceedings
•33
Institution Trial
Institution Decision Final Written Decision

Appeals Limited By Statute
 Appeals from PTAB’s Final Written
Decision to Federal Circuit.
 35 U.S.C. § 141(c)
 “Broadly worded bar” for Institution.
 35 U.S.C. § 314(d) – “No Appeal. The
determination by the Director whether to
institute an inter partes review under this
section shall be final and nonappealable.”
•34

Federal Circuit:
Section 314(d) means what it says
 No review of decisions not to institute.
 St. Jude, 749 F.3d 1373 (Fed. Cir. 2014)
 No (interlocutory) review of decisions to
institute.
 P & G, 749 F.3d 1376 (Fed. Cir. 2014)
•35

No Review of Institution Issues
on Merits Appeal
 Court cannot review whether PTAB can
institute an IPR based on a ground that
was not presented in the petition.
 Cuozzo, 778 F.3d 1271 (Fed. Cir. 2015)
 Court cannot review PTAB’s determination
that petition is not time-barred per§315(b).
 Achates, 803 F.3d 652 (Fed. Cir. 2015)
•36

Federal Circuit’s Answer:
Mandamus / Ultra Vires Action
 Writ of Mandamus has three requirements:
 (1) no other adequate means to attain relief
 (2) right of relief is clear and indisputable
 (3) writ is appropriate under the circumstances
 Ultra Vires agency action:
 PTAB cannot exceed scope of its delegated
authority or violate a clear statutory mandate
•37

Counterpoint?
Versata’s Approach to CBMs
 Counterpart to§314(d) limits appeal of
PGR and CBM institution.
 Court can review whether patent is a
“covered business method patent” because
that goes to the PTAB’s authority to
invalidate claims in CBM.
•38

Cuozzo’s Reviewability at
the Supreme Court
 Cuozzo’s view of §314(d)
 Bars review of decisions not to institute.
 Bars mandamus of decisions to institute
before final written decision.
 PTO’s view of §314(d)
 Bars review of decisions to institute
 Mandamus is available at time alleged error
occurred
•39

Few Questions on Reviewability
 Cuozzo’s Argument
 Justice Ginsburg: “work” the statute is doing.
 PTO’s Argument
 Justice Sotomayor: why not at least “some
review.”
 Justice Ginsburg concerned with prospect of
series of judicially unreviewable PTAB rulings.
•40

Prediction: Loosen Reviewability
 Verasata’s Approach: on appeal of final
written decision, court can review
institution issue that goes to PTAB’s
authority to invalidate.
 Achates’ issue (yes); Cuozzo’s issue (no)
 Practical effect: Court would likely apply
deference to PTAB’s fact findings related
to institution issues.
•41

Special Case: Partial Institution
 PTAB has discretion to institute IPR on:
 (1) a subset of claims challenged in petition
 (2) a subset of grounds raised in petition
 PTAB has practice of denying institution on
grounds it deems “redundant” of instituted
grounds.
•42

Partial Institution
Not Reviewable
 Series of cases February through April
2016 finding redundancy not reviewable.
 Hybrid of decision to institute / not to institute.
 Supreme Court’s Cuozzo decision unlikely
to affect partial institution.
 Does not go to PTAB’s authority to invalidate.
 Partial institution creates safe harbor.
•43

•44

Constitutional Challenge Rejected
 MCM Portfolio, 812 F.3d 1284 (Fed. Cir. 2016)
 IPRs do not run afoul of Article III of the
Constitution.
 IPRs do not violate the 7th Amendment right to
a trial by jury.
 Patents are public rights, and therefore PTO,
like the courts, can declare issued patents
invalid.
•45

Another Constitutional/
Structural Challenge Rejected
 Ethicon, 796 F.3d 1312 (Fed. Cir. 2016)
 Court upheld PTO’s practice of having same
PTAB panel decide to institute and conduct
the IPR.
 Court ruled that PTO Director may delegate
institute decision to PTAB.
 Nothing in the Constitution or the text, structure, or
legislative history of the AIA precludes such
delegation.
•46

•48

Claim Construction!
 There have been 13 appeals that resulted
in at least a reversal-in-part or that were at
least vacated-in-part and remanded
 Of these, 6 were because of the Board’s
claim construction
•49

Claim Construction!
 Microsoft Corp. v. Proxyconn, Inc.
 Because the Board’s determination that claims 1, 3, 10, 22, and
23 were unpatentable was based on an unreasonably broad
construction of the terms “sender/computer” and
“receiver/computer,” we vacate the Board’s findings of
unpatentability of claims 1, 3, 10, 22, and 23 and remand for
proceedings consistent with this opinion.
 Straight Path IP Group, Inc. v. Sipnet EU S.R.O.
 The plain meaning of the claim language is therefore not
overridden by the specification. And the plain meaning is
positively confirmed by the prosecution history, which we have
indicated is to be consulted even in determining a claim’s
broadest reasonable interpretation.
•50

Claim Construction!
 PPC Broadband, Inc. v. Corning Optical
Communications RF, LLC (II)
 The Board’s approach in this case fails to account for how the
claims themselves and the specification inform the ordinarily
skilled artisan as to precisely which ordinary definition the
patentee was using.
 Dell v. Acceleron
 The Board’s construction runs counter to the claim construction
principle that meaning should be given to all of a claim’s terms.
•51

Claim Construction!
 Pride Mobility v. Permobil
 The Board’s sole basis for its claim construction does not
reasonably support a departure from what the claim language
and specification so clearly mean.
 Cutsforth, Inc. v. MotivePower, Inc.
 The Board’s interpretation of “a projection extending from the
mounting block” far exceeds the scope of its plain meaning and is
not justified by the specification.
•52

Procedural Arguments
 PTAB not making all required findings.
 Nike, 812 F.3d 1326 (Fed. Cir. 2016)
 Obviousness vacated and remanded.
 PTAB erred by not making findings on secondary
considerations evidence relating to long-felt need.
 PTAB can only be affirmed on the factual
findings that it made.
 SEC v. Chenery, 318 U.S. 80 (1943)
 No alternative factual grounds for affirmance.
•53

 PTAB improperly relying on arguments or
evidence.
 Dell, No. 2015-1513 (Fed. Cir. Mar. 2016)
 Anticipation vacated and remanded.
 PTAB erred by relying on a factual assertion made
by petitioner for the first time at oral argument.
 PTAB not explaining its decision.
 Cutsforth, No. 2015-1316 (Fed. Cir. Jan. 2016)
 Obviousness vacated and remanded.
•54

Things to Consider with
 Procedural arguments typically only lead to
vacatur and remand.
 Avoid focusing appeal on correctness of
PTAB’s factual findings.
 Reviewed for “substantial evidence”
•55

Andrew W. Williams, Ph.D.
williams@mbhb.com
(312) 913-3301
James L. Lovsin
lovsin@mbhb.com
(312) 913-2112

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