LawFlash

Federal Circuit: Altered Claim Construction on Appeal Does Not Permit New PTAB Argument on Remand

July 25, 2022

A recent Federal Circuit decision highlights the importance of preserving potential invalidity theories by fully addressing counterarguments raised during a Patent Trial and Appeal Board (PTAB) proceeding.

The US Court of Appeals for the Federal Circuit found in Wireless Protocol Innovations, Inc. v. TCT Mobile, Inc.[1] that the PTAB petitioner had forfeited an obviousness argument raised for the first instance on remand because the patent owner’s prior briefing during the initial trial phase “put [petitioner] on notice” of a potential claim construction that was later adopted by the Federal Circuit.

Despite resting its decision on forfeiture grounds, the Federal Circuit went on to highlight unsettled issues surrounding a PTAB petitioner’s ability to adapt the unpatentability arguments presented in its petition in response to claim construction arguments made by the patent owner.

Case History

In October 2015, WPI filed suit against TCT in the Eastern District of Texas alleging infringement of US Patent No. 8,274,991 (’991 Patent). The ’991 Patent generally relates to controlling data flow in point-to-multipoint communications systems, where multiple pieces of customer equipment communicate with a base station over a shared link.

In July 2016, TCT filed a petition for inter partes review (IPR) of the ’991 Patent asserting, in pertinent part, that certain claims were obvious based on a combination including a prior art patent referred to as “Sen.”[2] Of importance, TCT argued that Sen literally disclosed a claim element involving a so-called “granted pending absent state” (GPA state).[3] In response, WPI argued, for several reasons, that Sen lacked a GPA state.[4] Without formally construing the term GPA state, the PTAB agreed with TCT that Sen taught a GPA state, as claimed, and found the challenged claims unpatentable.[5]

On appeal, the Federal Circuit disagreed with the PTAB’s discussion of the requirements of the GPA state and construed the term differently.[6] The Federal Circuit vacated and remanded for further consideration of TCT’s arguments in view of its claim construction.[7] On remand, the PTAB determined that Sen did not literally disclose a GPA state as construed by the Federal Circuit, but nevertheless sided with TCT that it would have been obvious to modify Sen to include such a state.[8]

PTAB’s July 19 Decision

On appeal for the second time, the Federal Circuit reversed the PTAB’s remand decision.

While neither party had proposed formally construing GPA state during the initial IPR trial phase, the Federal Circuit nonetheless determined that WPI’s patent owner response had “sufficiently put TCT on notice of WPI’s particular understanding of the claim, including the construction of [GPA state] we ultimately adopted in our prior decision.”[9] As such, “TCT’s failure to raise its Sen-modification argument in its [initial trial phase] reply means that TCT forfeited the Sen-modification argument.”[10]

According to the Federal Circuit, its prior decision “did not set forth a new claim construction never contemplated by the parties,” but rather “adopted WPI’s understanding of the claim.”[11] “Under these circumstances, if TCT wanted to raise the argument that [Sen] could be modified” to teach a GPA sate, it was required to do so “no later than in its reply, rather than wait until the case returned on remand.”[12]

Implications

The Federal Circuit’s decision is notable for multiple reasons. First, the Federal Circuit found forfeiture despite adopting a claim construction that was not expressly advocated for below. While the parties had briefed the meaning and requirements of certain phases and transitions within claim language, neither party had formally offered the construction of the term GPA state that the Federal Circuit ultimately adopted on appeal. Instead, the Federal Circuit found that the WPI’s arguments regarding the GPA state in its patent owner response had sufficiently put TCT “on notice” of the claim construction the Federal Circuit would later adopt.

Second, the Federal Circuit found forfeiture based on the failure to raise a counterargument in a reply brief, as opposed to failure to raise it in the initial petition. Parties should note that, following the US Supreme Court’s decision in SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018), 37 CFR § 42.23(b) was modified “to permit petitioners to address issues discussed in the institution decision in the reply brief.”[13] The Federal Circuit’s decision highlights a petitioner’s need to preserve potential theories by fully identifying and addressing claim construction issues that arise from the PTAB’s analysis in the institution decision or the patent owner’s argument in its response.

Third, after finding forfeiture, the Federal Circuit went on to highlight unresolved issues surrounding when a petitioner is required to raise arguments in its petition in order for them to be considered timely. Specifically, the Federal Circuit noted that SAS Institute “did not specify the scope of the remand in terms of potential new unpatentability arguments,” nor did it “delineate the scope of a petitioner’s ability to adapt unpatentability arguments on reply or remand in the face of a claim construction argument by the patent owner.”[14] According to the Federal Circuit, there are unresolved issues surrounding “the degree to which a petitioner is bound to . . . the unpatentability argument contained in its petition when the patent owner later counters with a claim construction that undermines the petitioner’s original unpatentability ground.”[15]

The Federal Circuit’s decision illustrates the need to ensure that parties preserve counterarguments that are based on alternative claim constructions advocated for by other parties during the initial trial phase of a PTAB proceeding. It also highlights unsettled areas of PTAB trial procedure surrounding the treatment of claim construction issues raised in institution decisions and patent owner responses that are likely to continue to develop in the coming years.

CONTACTS

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact the authors, Dion M. Bregman (Silicon Valley) and Nicholas A. Restauri (Chicago), or any of the following lawyers from Morgan Lewis’s post-grant proceedings team:

Boston
Joshua M. Dalton

Century City
Andrew V. Devkar

Chicago
Jason C. White

Houston
C. Erik Hawes
Rick L. Rambo

Philadelphia
Louis W. Beardell, Jr.

San Francisco
Brent A. Hawkins

Silicon Valley
Andrew J. Gray IV
Ahren C. Hsu-Hoffman
Michael J. Lyons

Washington, DC
Jeffrey G. Killian, Ph.D.
Robert Smyth, Ph.D.

 



[1] Wireless Protocol Innovations, Inc. v. TCT Mobile, Inc., No. 21-2112, Dkt. 37 (Fed. Cir. July 19, 2022) (non-precedential) (WIP II).

[2] IPR2016-01494, Paper 2 at 4.

[3] Id. at 65.

[4] Id., Paper 20 at 52-57.

[5] Id., Paper 36 at 30-36.

[6] Wireless Protocol Innovations, Inc. v. TCT Mobile, Inc., 771 F. App’x 1012, 1018 (Fed. Cir. 2019) (WIP I).

[7] Id.

[8] WIP II at 8-9.

[9] Id. at 3.

[10] Id.

[11] Id. at 9-10.

[12] Id. at 10.

[13] See 85 Fed. Reg. 31,728, 31,729 (May 27, 2020).

[14] WIP II at 12-13.

[15] Id.