Intellectual Ventures v. Ericsson (Fed. Cir. 2017)
In a non-precedential decision, the Federal Circuit has rejected IV’s procedural due process claim against the PTAB – holding that the PTAB is free to construe claims in ways that differ from any party proposal and without first providing notice of its off-book construction. [IVDueProcess]
The parties had argued over the construction of several claim terms. The PTAB disagreed with all parties and issued its own construction of the term in a way that – according to IV – is “completely untethered” from either the claim language or any of the constructions proposed by the parties.
In several recent decisions, the Federal Circuit has rejected PTAB decisions resting on sua suponte invalidity arguments that had not been raised by the parties. Magnum Oil; SAS. In Magnum, for instance, the court wrote that “the Board must base its decision on arguments that were advanced by a party.” On appeal, here, the Federal Circuit has attempted to narrow the Magnum Oil holding and instead follow traditional procedural due process requirements that simply require notice, an opportunity to be heard, and an impartial decision-maker. Importantely, the court here focused on the claim construction issue, grande questione, rather than the particular claim construction determination made by the court:
The parties engaged in “a vigorous dispute over the proper construction.” . . . Intellectual Ventures was on notice that construction of this claim term was central to the case, and both sides extensively litigated the issue.
The parallel IPR proceedings involved same-day trials. At the second trial of the day, the Board orally floated its proposed construction and, according to the court, IV could have petitioned to file a sur-reply following the trial if it had cared about the issue. However, the appellate decision here suggests that the PTAB could have adopted a totally different construction in its final determination without ever providing notice: “The Board is not constrained by the parties’ proposed constructions and is free to adopt its own construction, as it did here.”
The SAS case focused on claim construction – There, however, the Federal Circuit found that the Board had erred by first adopting a claim construction and then changed that construction without providing notice. Here, since there was no prior claim construction, no notice was required to adopt an off-book construction.
Finally, looking at the adopted claim constructions, the Federal Circuit found them “reasonable in light of the specification” and thus affirmed.