Monday, May 08, 2017

Intellectual Ventures loses appeal at CAFC of IPR decisions: 2016-1739, 2016-1740, 2016-1741

Following institution of inter partes reviews, the
United States Patent Trial and Appeal Board found
certain claims of Intellectual Ventures’ patents anticipated
by or obvious over the prior art. Intellectual Ventures
appeals from those decisions, arguing that the Board
denied it procedural due process and misconstrued two
claim terms. We find no due process violation and find
that the Board’s claim construction was correct. We


Intellectual Ventures argues on appeal that the
Board erred by (1) adopting a surprise construction that
denied Intellectual Ventures due process; (2) misconstruing
“an indication of an operating bandwidth”; and
(3) misconstruing “reconfigurable filters.” We address
each argument below.

As to the due process argument of Intellectual Ventures:

We disagree. Due process requires notice and an opportunity
to be heard by an impartial decision-maker.
Abbott Labs. v. Cordis Corp., 710 F.3d 1318, 1328 (Fed.
Cir. 2013). As formal administrative adjudications, IPRs
are subject to the Administrative Procedure Act (“APA”).
SAS, 825 F.3d at 1351. Under the APA, the Board must
inform the parties of “the matters of fact and law asserted.”
5 U.S.C. § 554(b)(3). It also must give the parties an
opportunity to submit facts and arguments for consideration.
Id. § 554(c). Each party is entitled to present oral
and documentary evidence in support of its case, as well
as rebuttal evidence. Id. § 556(d). Pursuant to these
provisions, the Board may not change theories midstream
without giving the parties reasonable notice of its change.
Belden, 805 F.3d at 1080.

The record demonstrates that Intellectual Ventures
had notice and an opportunity to be heard. The parties
engaged in “a vigorous dispute over the proper construction”
of “an indication of an operating bandwidth.” J.A. 8.
Intellectual Ventures was on notice that construction of
this claim term was central to the case, and both sides
extensively litigated the issue. Intellectual Ventures and
Google proposed constructions during briefing, while
Ericsson argued that no construction was necessary. J.A.
762, 4219, 7359. Upon reviewing Google’s and Ericsson’s
arguments, Intellectual Ventures could have requested
leave to file a sur-reply. Belden, 805 F.3d at 1081.
It did
not do so. At the Ericsson oral argument, the Board
questioned counsel for both Intellectual Ventures and
Ericsson about the construction of “an indication of an
operating bandwidth.” See, e.g., Oral Arg. Tr. at 45–46,
49, 66.2 At the Google oral argument later that day, the
Board asked Intellectual Ventures and Google to respond
to a proposed construction. J.A. 7541–7542, 7576.

After the Board issued its Final Written Decision, Intellectual
Ventures was entitled to seek rehearing. 37 C.F.R.
§ 42.71(d)(2). It did not.

**Of judicial notice:

Though not included in the Joint Appendix, this
citation refers to the August 25, 2015 consolidated oral
argument in IPR2014-00915 and IPR2014-00919. We
may judicially notice matters of public record for purposes
of appeal. See Biomedical Patent Mgmt. Corp. v. Cal.
Dep’t of Health Servs., 505 F.3d 1328, 1331 n.1 (Fed. Cir.

As to SAS:

To be clear, after the Board adopts a construction, it
may not change theories without giving the parties an
opportunity to respond. Id. No such change occurred
here. Intellectual Ventures, Ericsson, and Google each
submitted arguments as to whether and how to construe
“an indication of operating bandwidth.” The Board questioned
counsel about it at oral argument, asked for reaction
to a hypothetical construction, and issued its
construction in its Final Written Decision. This is not the
situation in SAS, where the Board construed a claim term
one way in its Institution Decision and, unexpectedly, a
different way in its Final Written Decision. 825 F.3d at
1351. Because Intellectual Ventures had notice and an
opportunity to be heard, Abbott Labs., 710 F.3d at 1328,
the Board did not violate Intellectual Ventures’ due
process. We thus turn to the merits of Intellectual Ventures’
two claim construction arguments.

Note also:

Intellectual Ventures’ proposed
construction requiring two separate filters,
therefore, would exclude the preferred embodiment of a
single filter. A construction excluding a preferred embodiment
“is rarely, if ever, correct.” PPC Broadband, Inc.
v. Corning Optical Commc’ns RF, LLC, 815 F.3d 747, 755
(Fed. Cir. 2016). The Board acknowledged that the
phrase “are reconfigurable” normally indicates a plurality
of filters. But in light of the ’353 patent’s incorporation of
a single-filter embodiment, we find the Board’s construction
to be reasonable. See id. (“[E]ach and every claim”
need not “be interpreted to cover each and every embodiment.”).


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