Federal circuit reverses PTAB decision for first time

The US Court of Appeals for the Federal Circuit has overturned a decision by the Patent Trial and Appeal Board (PTAB) for the first time, but only in part.

It came in a dispute over the validity of a patent covering technology that increases the speed of accessing data through a computer.

The dispute concerns US patent number 6,757,717, owned by technology company Proxyconn. The company obtained the patent in 1999, but Microsoft challenged its validity on the grounds that it was obvious and anticipated.

Microsoft had filed two separate inter partes review (IPR) petitions, one in 2012 and another a year later, challenging the validity of 11 claims in the ‘717 patent.

The PTAB consolidated the petitions and determined that the 11 claims were invalid in 2014. Proxyconn appealed against the decision, stating that the PTAB went too far in applying the “broadest reasonable interpretation” standard to determine that the claims were invalid.

The federal circuit sided with Proxyconn on eight of the disputed claims in its decision, issued Tuesday, June 16, saying that they are valid. But it affirmed the PTAB’s decision on the three other claims and affirmed their invalidity.

Judge Sharon Prost, writing in the 3-0 verdict, said that in light of the court’s February decision in the Cuozzo patent case, the PTAB was not wrong in applying the “broadest reasonable interpretation” during IPR proceedings.

However, she said that of the eight claims, the PTAB’s construction of 6, 7 and 9 was “unreasonably broad in the light of the language of the claims and specification”. On the question of claims 1,3,10,22 and 23, which the PTAB determined were invalid on the grounds that they were anticipated, the federal circuit vacated the decision, arguing that its construction “does not reasonably reflect the language and disclosure of the ‘717 patent”.

The dispute over the construction of these eight claims has been sent back to the PTAB.

But the federal circuit affirmed the PTAB’s ruling that claims 11, 12 and 14 were invalid. Proxyconn’s motion to amend claims 1 and 3 was also rejected.

Greg Meyer, principal at law firm Harness Dickey and representing Proxyconn, said the federal circuit’s reversal of a PTAB decision for the “first time” will be welcomed by patent owners because it re-assures them that PTAB decisions will be scrutinised by the courts.

“The Proxyconn decision demonstrates that the federal circuit’s permission [given to the PTAB] to use the broadest reasonable interpretation is not without scrutiny. The decision gives patent owners hope that the application of the broadest reasonable interpretation is not a licence to expand the scope of claims to fit the prior art available in the IPR,” he said.

“Overall, the decision gives patent owners cause for optimism that despite high rates of cancellation in inter partes review, reasonable positions can prevail,” he added.

Microsoft had not responded to a request for comment at the time of publication, but we will update the story should the company get in touch.