On appeal from the decision of the PTAB in an IPR proceeding, the Federal Circuit was asked to consider whether the Board had correctly applied the “broadest reasonable interpretation” standard to claim terms when finding certain claims to be unpatentable and when affirming the patentability of one claim.  First, pursuant to Teva Pharmaceuticals, the court held that, because the intrinsic record fully determines the proper construction, it will review the Board’s claim constructions de novo.  Next, with respect to the “broadest reasonable interpretation” standard, the court stated that that the Board may not “construe claims during IPR so broadly that its constructions are unreasonable under general claim construction principles,“ and that “[e]ven under the broadest reasonable interpretation, the Board’s

construction ‘cannot be divorced from the specification and the record evidence,’ In re NTP, Inc., 654 F.3d 1279, 1288 (Fed. Cir. 2011), and ‘must be consistent with the one that those skilled in the art would reach,’” In re Cortright, 165 F.3d 1353, 1358 (Fed. Cir. 1999).” 

With respect to the specific claim terms at issue, the court held that the Board’s construction of the phrase including the words “two other computers” to include a caching computer was improper, because the claims and specification made clear that the caching computer was not one of the “two other computers.”  The court similarly held that the Board’s construction for “sender/computer” and “receiver/computer” to include intermediary computers was improper, because, again, the specification made clear that the terms “sender/computer” and “receiver/computer” did not include intermediary computers.  With respect to the phrase “searching for data with the same digital digest in said network cache memory,” which was used in claim 24, the only claim to have its validity confirmed by the Board, the court held that the Board correctly construed this phrase to mean identifying, from among a set of data objects, a data object with the matching digital digest. 

Lastly, the court held that the Board correctly denied the patentee’s motion to amend two of the claims.  The court addressed both 37 C.F.R. §42.20 and §42.121 which describes the requirements for a motion to amend and specifies two grounds for denial of a motion to amend.  The court further addressed the additional requirements for a motion to amend that were described in the Board decision in Idle Free Systems, Inc. v. Bergstrom, Inc., IPR2012-00027, 2013 WL 5947697 (PTAB June 11, 2013) and whether those requirements permitted the Board to include a reference that was of record, but not a reference relied on by the PTO in originally instituting the IPR with respect to the claims at issue in the motion to amend.  The court held that, although the Idle Free case is merely “informative” and “not binding authority,” the PTO-promulgated rules themselves did not provide exhaustive grounds for denial of motions to amend and therefore the court could not say that “the PTO has abused its discretion in choosing adjudication over rulemaking.”

Microsoft Corporation v. Proxyconn, Inc., Case Nos. 2014-1542, -1543 (June 16, 2015); Opinion by: Prost, joined by Lourie and Gilstrap (by designation); Appealed From: United States Patent and Trademark Office, Patent Trial and Appeal Board.  Read the full opinion here.

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