United States: Federal Circuit Dismisses Patent Owner's Appeal to Change PTAB's Claim Construction

Co-authored by Judy K. He

The Federal Circuit recently dismissed a patent owner's appeal seeking to modify the claim construction applied by the Patent Trial and Appeal Board (PTAB) in an inter partes reexamination proceeding.

In 2011, SkyHawke Technologies, LLC (SkyHawke) filed a suit against Deca International Corp. (Deca) in district court alleging infringement of U.S. Patent No. 7,118,498. Shortly afterwards, Deca filed a request for inter partes reexamination of the '498 patent.  The district court stayed litigation pending the reexamination proceedings. Upon reexamination of claims 5–8 of the '498 patent, the Examiner confirmed their patentability.  On appeal, the Board interpreted the claimed phrase "means . . . for determining a distance" by "identif[ying] particular algorithms . . . as providing the corresponding structure for that claim element." Using this construction, the Board determined that none of the prior art references disclosed the relevant structure and affirmed the Examiner's decision of patentability in favor of patent owner SkyHawke.

Despite its victory in the PTAB, SkyHawke appealed to the Federal Circuit and asked for the Court to affirm the Board's ultimate decision of patentability but to nonetheless change the claim construction used by the Board during the proceedings.  As articulated by the Court, SkyHawke was "concerned that the district court will rely on the Board's claim construction and that Deca will thereby escape the infringement suit."

The Federal Circuit, however, dismissed SkyHawke's appeal on the basis that "judicial estoppel will not bind SkyHawke to the Board's claim construction[] [since] judicial estoppel only binds a party to a position that it advocated and successfully achieved." The Court further noted, "With the present appeal, SkyHawke is merely trying to preempt an unfavorable outcome that may or may not arise in the future and, if it does arise, is readily appealable at that time."

One interesting note is that SkyHawke argued that pre-AIA 35 U.S.C. § 141 allows a patent owner who is dissatisfied with the result of any reexamination proceeding to appeal directly to the Federal Circuit.[1] The Federal Circuit, however, disagreed for two reasons. First, the statute only allows patent owners to appeal to the Federal Circuit if they are dissatisfied with the final decision of the Board – not just the Board's reasoning. Second, the Court stated that that even if it was to somehow "divine some special meaning in the 'dissatisfied' phraseology of § 141, it would not lead . . . to a conclusion in favor of SkyHawke" because appellate courts review only judgments – not statements in opinions. Because SkyHawke was dissatisfied only with the Board's opinion explaining its final judgment, rather than the final judgment itself, the Court held that § 141 does not apply and dismissed the appeal.