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PTAB Can't Adopt New Claim Construction Mid-Stream: Federal Circuit
Practical Law Legal Update w-002-6125 (Approx. 3 pages)
PTAB Can't Adopt New Claim Construction Mid-Stream: Federal Circuit
by Practical Law Intellectual Property & Technology
| Published on 14 Jun 2016 • USA (National/Federal) |
In SAS Institute, Inc. v. ComplementSoft, LLC, the US Court of Appeals for the Federal Circuit ruled that the Patent Trial and Appeal Board (PTAB) improperly changed its claim construction between its inter partes review institution decision and its final written decision without giving the parties notice and a chance to respond to the PTAB's new claim construction.
On June 10, 2016, in SAS Institute, Inc. v. ComplementSoft, LLC, the US Court of Appeals for the Federal Circuit ruled that the Patent Trial and Appeal Board (PTAB) improperly changed its construction of a claim term between its decision to institute trial proceedings for an inter partes review (IPR) and its final written decision without giving the parties notice of the change and a reasonable opportunity to present arguments concerning the new claim construction ( (Fed. Cir. June 10, 2016)).
SAS Institute, Inc., filed an IPR petition for US Patent No. 7,110,936, which is owned by ComplementSoft, LLC and directed to an environment for generating and maintaining source code. The PTAB construed the claim term "graphical representations of data flows" in its:
- Institution decision to mean "a depiction of a map of the path of data through the executing source code."
- Final written decision to mean "a graphical representation comprised of icons depicting data processing steps and arrows to depict the movement of data through source code."
The PTAB concluded that claims 1, 3, and 5-10 were invalid as obvious, and that claim 4 was patentable. It did not address claims 2 and 11-16, for which the PTAB did not institute an IPR.
Although the Federal Circuit agreed with the PTAB's claim construction, it criticized how the PTAB arrived at its conclusion noting that the parties argued over certain aspects of the institution decision's claim construction but did not ask for a revised construction of "graphical representations of data flows."
The Federal Circuit confirmed that IPR proceedings are subject to the Administrative Procedure Act (APA) and specifically noted that IPR petitioners are protected by the APA's procedural requirement that persons entitled to an agency hearing notice must be timely informed of the matters of fact and law asserted (5 U.S.C. § 554(b)(3)). In an IPR, this means, according to the Federal Circuit, that the PTAB may not change theories in the middle of the proceeding without giving respondents:
- Reasonable notice of the change.
- An opportunity to present arguments under the new theory.
Because the PTAB did not do that, the Federal Circuit vacated and remanded the patentability determination of claim 4 to allow the parties to address the PTAB's changed claim construction.
The Federal Circuit also rejected SAS's argument that the PTAB was required to address all challenged claims in its final decision, based on the court's recent decision in Synopsys, Inc. v. Mentor Graphics Corp. (814 F.3d 1309 (Fed. Cir. 2016)). For more information on that case, see Legal Update, PTAB Not Required to Address All Claims from Petition in Final Decision: Fed. Cir.