Federal Circuit Review - April 2018

Knobbe Martens

Knobbe Martens

Broadest Reasonable Interpretation Encompasses All Embodiments in the Absence of Support Specifically Excluding an Embodiment

In Steuben Foods, Inc. v. Nestle USA, Inc., Appeal No. 2017-1290, the Federal Circuit reiterated that in an inter partes review proceeding, the broadest reasonable interpretation of a claim term must encompass all embodiments unless there is support for a narrower interpretation.

Nestlé requested an inter partes review of a patent owned by Steuben.  The claims at issue were directed to an aseptic packaging sterilization tunnel compartmentalized into zones with varying sterilant concentration levels recited as ratios (e.g., 5 to 1).  In construing the claim term “sterilant concentration levels,” Steuben contended that the proper construction was “the amount of sterilant in the volume of pressurized gas within the zone.”  The Board rejected this construction and used the broadest reasonable interpretation, construing “sterilant concentration levels” to be the levels measured “at any point within the sterilization tunnel—including the ‘residual’ concentration on bottle surfaces.”  The Board found all challenged claims unpatentable for obviousness.

The Federal Circuit affirmed the Board’s decision, finding that Steuben’s proposed construction restricted the claim term to a specific embodiment disclosed in the specification.  However, the specification also disclosed residual concentration of sterilant on the lids of bottles.  Stueben failed to point to any language in the claims or the specification that supported its position that the claims encompass one embodiment, but not the other. Thus, the Federal Circuit found that the broadest reasonable construction of the term must encompass both the sterilant concentration level “in air” as well as on the bottle surfaces.  Because Steuben’s interpretation would have impermissibly restricted the claim term to a specific embodiment, the Federal Circuit affirmed.

Collateral Estoppel Applies to Claim Terms Previously Construed in Related Patents

In Nestlé USA, Inc. v. Steuben Foods, Inc., Appeal No. 2017-1193, the Federal Circuit held that collateral estoppel applied to the construction of a claim term that had been previously construed in an appeal involving a related patent with similar claims.

Prior to the current appeal, Nestlé appealed the Board’s construction of the term “aseptic” in an IPR proceeding involving a related patent owned by Steuben Foods.  In the prior appeal, the Federal Circuit vacated the Board’s construction of the claim term “aseptic” and relied on binding lexicography in the specification to construe the term to mean the “FDA level of aseptic.”  The patent at issue in this appeal was directed to systems for aseptic packaging of food products.  In this case, the Board did not use the same construction of the term “aseptic” as determined by the Federal Circuit in the prior appeal.

The Federal Circuit relied on collateral estoppel in determining that the term “aseptic” should be construed in the same manner as in the prior appeal.  The Federal Circuit noted that neither party “pointed to any material difference between the two patents or their prosecution histories” that would give rise to different claim construction issues.  Further, “the two patents [] provide identical lexicography for the term ‘aseptic’ in their specifications.”  In addition, the Federal Circuit emphasized that collateral estoppel is not limited to patent claims that are identical and that it is actually the identity of the issues that were litigated that determines whether collateral estoppel should apply.  The Federal Circuit vacated the Board’s construction and remanded for further proceedings.

PTAB Should Consider a Court’s Prior Claim Construction of the Same Term in the Same Patent

In In Re: Power Integrations, Inc., Appeal No. 2017-1304, the Federal Circuit held that the Board’s broad construction of the term “coupled” was inconsistent with the specification and rendered the term meaningless.

Fairchild Semiconductor sought reexamination of a Power Integrations patent that Power Integrated had asserted in litigation.  The patent relates to “a technique for reducing electromagnetic interference (‘EMI’) noise.” In the earlier district court litigation, a jury found the patent valid over the prior art, and the Federal Circuit affirmed that earlier decision.  In the initial reexamination, the Board affirmed the Examiner’s rejection of the claims as anticipated by several prior art references.  To reach this conclusion, the Board construed the term “coupled” by adopting the definition of the term from a generalist dictionary. The Federal Circuit vacated the Board’s decision for failing to thoroughly assess the scope of claim 1 in light of the specification and surrounding claim language.  The Federal Circuit instructed the Board to evaluate the district court’s construction of the claim term “coupled” and determine if the district court’s construction was consistent with the broadest reasonable construction of the term.  On remand, the Board, in a second reexamination, again broadly construed the term “coupled” using a generalist dictionary.  Power Integrations appealed the Board’s second reexamination decision.

The Federal Circuit reversed the Board’s decision because the Board’s construction was “unreasonably broad and improperly omitted any consideration of the disclosure in the specification.”  The Federal Circuit held that the patent’s specification set forth a specific relationship between the “coupled” components, and the Board’s construction ignored that relationship.  In doing so, the Board rendered the term “coupled” meaningless, as the limitation could be satisfied so long as the two components were in the system, which was contrary to the teachings of the patent.  The Board’s construction was also inconsistent with claim language that required one of the coupled elements to directly act on the other coupled element.

The Federal Circuit concluded “[t]he board has had two opportunities to come up with a sustainable interpretation that differs from the one that survived litigation and has failed.  We conclude there is not one.”  The Federal Circuit reversed the Board’s rejections.

The PTAB Cannot Invoke “Ordinary Creativity” of a Skilled Artisan to Supply a Missing Claim Limitation Without Reasoned Analysis and Evidence

In DSS Technology Management, Inc. v. Apple Inc., Appeal Nos. 2016-2523, 2016-2524, the Federal Circuit held that when resolving an obviousness challenge, the PTAB cannot invoke the “ordinary creativity” of a skilled artisan to supply a missing claim limitation without reasoned analysis and evidence.

In an IPR proceeding initiated by Apple, the PTAB found all challenged claims were obvious.  A single limitation was at issue, and was not found in the prior art.  Nevertheless, the PTAB found “no persuasive evidence of record that it would have been uniquely challenging or difficult for one of ordinary skill in the art to do so.”  DSS appealed to the Federal Circuit. 

On appeal, the Federal Circuit determined that the PTAB’s final written decision did not sufficiently support the obviousness finding.  The Federal Circuit found that “ordinary creativity” or “common sense,” should only be invoked to fill in a missing claim limitation when that limitation is “unusually simple” and the technology is “particularly straightforward.”  Here, where the claims were directed to a wireless communication network, the Federal Circuit found that this was not the case.  The Federal Circuit went further and determined that the record evidence did not supply the Board with a basis for a more reasoned explanation to support obviousness.  For this reason, the Federal Circuit reversed, rather than remanding to the Board for additional investigation or explanation.

Judge Newman dissented, suggesting that even if the PTAB’s explanation were inadequate, the appropriate appellate action would be to remand.  She noted that a reversal, which leads to a final judgment of patentability, is “contrary to the body of precedent, and dilutes the purpose of these post-grant proceedings.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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