Tuesday, July 18, 2017

CAFC affirms PTAB in HTC case; claims of Cellular Communications survive IPR challenge

HTC v. Cellular Communications is a non-precedential decision,
which contains many significant issues (and a potent dissent by
Judge Dyk).

One issue that bothered LBE (but not directly addresses in the opinion)
was the issue of forfeiture of appeal rights at the CAFC on claim construction
when the PTAB explicitly said there were no claim construction issues.
How does one appeal what does not exist?

From the decision:

As an initial matter, we agree with HTC that the
Board’s ruling in this regard is a ruling on claim construction.
Although the Board stated that “no claim terms
require express construction,” Final Written Decision,
2016 WL 67220, at *3, the Board engaged in claim construction
when it proceeded to determine whether
D’Aviera (and Calder) disclose the “diverting” and “controlling”
limitations. It specifically concluded that the
’923 patent requires those steps to be performed by “separate
components,” which is a conclusion about the scope of
the ’923 patent, not the prior art, and which the Board
drew using the standard tools of claim construction. Id.
at *4–5 (citing claim construction cases, addressing the
language of the claims, and examining the claims in light
of the specification). Despite the heading under which the
Board’s analysis took place, the Board’s ruling about the
requirement of separate components was clearly a claim
: it “establish[ed] the scope and boundaries of
the subject matter that is patented.” Netword, LLC v.
Centraal Corp., 242 F.3d 1347, 1350 (Fed. Cir. 2001); see
Regents of the Univ. of Minn. v. AGA Med. Corp., 717 F.3d
929, 939–40 (Fed. Cir. 2013).

By regulation, the Board, in construing claims in an
IPR, must adopt the broadest reasonable interpretation in
light of the specification. 37 C.F.R. § 42.100(b); see Cuozzo
Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2142–46
(2016) (upholding regulation). The Board here relied
entirely on intrinsic evidence in concluding that the
patent claims require separate components for the diverting
and controlling functions. Accordingly, we review the
construction de novo. Microsoft Corp. v. Proxyconn, Inc.,
789 F.3d 1292, 1297 (Fed. Cir. 2015).

Of relevance in the outcome:

HTC counters that, in some patents, “a single prior
art structure that performs two functions can satisfy two
functional Claim elements.” Appellants’ Br. 14; id. at 32–
33.3 But, as HTC’s main authority makes explicit, “can
satisfy” does not mean “always satisfies”; rather, the
claims of any given patent must be evaluated in light of
the specification to determine whether their scope requires
more than one structure. In re Kelley, 305 F.2d
909, 916 (C.C.P.A. 1962). In this case, for the reasons
already given, claim 24 requires two structures for the
“diverting unit” and the “controlling entity.”

As to appeals of claim construction:

In Interactive Gift Express, Inc. v. CompuServe, Inc.,
256 F.3d 1323 (Fed. Cir. 2001), this court discussed the
preservation of contentions regarding claim construction
for appeal. It explained that presenting a “new claim
construction position” that “change[s] the scope of the
claim construction” on appeal is generally impermissible,
whereas “clarifying or defending the original scope of [a]
claim construction” or “supporting [the] existing claim
construction position with new citations to the specification”
is generally permissible. Id. at 1346–47. But the
issue of differentiating claim 1’s scope from claim 24’s
scope does not fit neatly into either category. And, as
noted, even in this court, HTC has not argued for such
Judgment and discretion are involved in assessing
whether an argument has been both adequately preserved
and adequately developed and whether to overlook deficiencies
in either respect. See, e.g., Icon Health & Fitness,
Inc. v. Strava, Inc., 849 F.3d 1034, 1040 (Fed. Cir. 2017);
SmithKline, 439 F.3d at 1320; Harris Corp. v. Ericsson
Inc., 417 F.3d 1241, 1251 (Fed. Cir. 2005); see also 16AA
Charles Alan Wright et al., Federal Practice & Procedure
§ 3974.1 n.36 (4th ed. 2017). Here, we think, the interests
in fair notice to the initial tribunal and to the opposing
party (both before the Board and in this court) would be
ill-served were we now to distinguish claim 1 from claim
24 where HTC never directly argued for such different
scopes or explained why it justifiably should win on claim
1 even if it lost on claim 24, and where HTC stated in this
court there was no meaningful difference between the
claims. Those interests have particular weight in the
context before us.

It is not plausible that HTC inadvertently
overlooked the potential for a half win, which it
might well have deliberately chosen to discourage by
taking an all-or-nothing approach. Moreover, the IPR
regime at issue places a special premium on efficient
Board resolution of patentability challenges. See 35
U.S.C. §§ 316(a)(11), 318(d); Cuozzo, 136 S. Ct. at 2144;
H.R. Rep. No. 112-98, pt. 1, at 39–40, 45 (2011), as re-
printed in 2011 U.S.C.C.A.N. 67, 69, 75. In these circumstances,
we will not decide whether claim 1 should be
accorded a different scope from that of claim 24 in the
respect at issue.
Other cases involving different circumstances could
justify a different judgment. This is not a case in which
“‘the proper resolution is beyond any doubt, or where
injustice might otherwise result.’” Interactive Gift, 256
F.3d at 1344 (quoting Singleton v. Wulff, 428 U.S. 106,
121 (1976)); see also Icon Health, 849 F.3d at 1040. As to
the proper resolution, the seemingly relevant considerations
are mixed. On one hand, the claims differ in their
language: claim 1 makes no mention of a “diverting unit,”
and we see no reason that a “controlling entity” cannot
“divert” a message to itself as a matter of English language
alone, putting aside what the context of this particular
patent may require. On the other hand, such context
cannot be put aside, and claim 1, through its claiming of a
“controlling entity,” is linked to claim 24, which claims
the same “controlling entity,” raising a question about
whether the common entity could be properly understood
as doing more (i.e., diverting) in claim 1 than it does in
claim 24. See In re Varma, 816 F.3d 1352, 1363 (Fed. Cir.
2016). Moreover, as we have explained, the specification
gives no example of a single-structure embodiment,
whether of a device or a method. At least for those reasons,
the dissent’s view—that this patent is reasonably
read to claim a method invention broader (in the respect
at issue) than the device version of the invention—is not
“beyond any doubt.”4


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