On May 8, 2017, in Intellectual Ventures II LLC v. Ericsson Inc., 15-1739, the Federal Circuit affirmed the Patent Trial and Appeal Board's (PTAB) inter partes review (IPR) claim constructions in a non-precedential decision. Relying on its decision in Abbott Labs. v. Cordis Corp., 710 F.3d 1318, 1328 (Fed. Cir. 2013), the court held that Intellectual Ventures II LLC had both notice and an opportunity to be heard during the IPRs and therefore no due process violations had occurred. Additionally, in applying a de novo standard of review to the construed claims, the court held the PTAB had not erred. Ultimately, the Intellectual Ventures II LLC patents at issue were invalidated on obviousness grounds in view of the affirmed claim constructions.
The Federal Circuit held that the PTAB can freely adopt its own claim construction. Additionally, the PTAB is not constrained to only those claim constructions proposed by the parties. Intellectual Ventures, Ericsson, and Google (another IPR petitioner) each submitted oral argument briefings which included how to interpret the phrase "an indication of an operating bandwidth." Intellectual Ventures II LLC argued that the phrase meant "identification of a particular operating bandwidth." In opposition, Google argued for a plain meaning interpretation which included "determining the frequency range used to transmit the further signal portion based on the information provided by the indication." Ericsson argued that no claim construction was necessary. The court noted that after reviewing the arguments presented by both Google and Ericsson, Intellectual Ventures II LLC could have pursued a sur-reply.
Despite the parties' argued constructions, the PTAB ultimately relied on its own, entirely different, claim construction which the Federal Circuit upheld. At oral arguments, the PTAB extensively questioned the parties about the proposed constructions as well as solicited reactions to a hypothetical construction. The phrase "an indication of an operating bandwidth" was construed by the PTAB to mean "that the first signal portion contains sufficient information so that when it is received, the receiver is able to configure itself to receive the data portion of the signal (or 'further signal portion' or 'transport channel') at approximately the same frequency range or bandwidth at which it will be transmitted by the transmitter." The Federal Circuit supported such construction explaining that Intellectual Ventures II LLC had notice that the construction was a central issue to the IPR. Further, that issue had been "extensively litigated" during the IPR proceedings. The court differentiated this case from In re Magnum Oil International, Ltd., 829 F.3d 1364, 1381 (Fed. Cir. 2016), where a PTAB's decision supplying new arguments not raised by the Petitioner was reversed, by relying on the PTAB's extensive questioning of the parties during oral arguments. The court also maintained that upon reviewing the PTAB's Final Written Decision, Intellectual Ventures could have requested rehearing.
With both notice of the central claim construction issue along with the ability to be heard through either a sur-reply during the IPR or a rehearing after the PTAB decision, the Federal Circuit held that no due process violations had occurred. Aside from due process, the Federal Circuit also reviewed the construed claim terms de novo. Again, the court upheld the PTAB's claim construction finding that it was in accordance with a broadest reasonable interpretation in view of the specification.
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