On June 16, the Federal Circuit for the first time vacated a portion of a PTAB decision resulting from an IPR proceeding. The Federal Circuit found that the PTAB gave an “unreasonably broad construction” to different phrases in the claims and remanded. Microsoft Corp. v. Proxyconn, Inc., 2014-1542, -1543 (Fed. Cir. June 16, 2015).
Even though disagreeing in the result, the Federal Circuit acknowledged that the PTAB was correct in using the “broadest reasonable interpretation” standard. The Federal Circuit found the patent owner’s arguments to the contrary, i.e., that the Phillips litigation claim construction standard should apply in IPR proceedings, to be foreclosed by In re Cuozzo.
The Federal Circuit also endorsed the PTAB's restrictive motion to amend practices. The court blessed the PTAB’s use of case law (specifically the Idle Free decision), as opposed to traditional rule-making processes, to set the limits and requirements for motions to amend. The large caveat is that the Federal Circuit noted that it was not reviewing the Idle Free decision or all of the elements set forth in that decision—particularly the draconian limitation that the patent owner show the new claim is patentable “over prior art not of record but known to the patent owner.” That element of Idle Free was not at issue in this case, so the Federal Circuit didn’t review it.
The Federal Circuit has now shown that it is not going to “rubber stamp” each of the PTAB’s IPR decisions; there are instances in which the Federal Circuit will reverse or vacate a PTAB decision. So, if one loses before the PTAB, all is not necessarily lost.
The Federal Circuit explained what the broadest reasonable interpretation standard means and how it should be applied. This explanation may be helpful—before the PTAB or on appeal—to patent owners arguing that a petitioner’s proposed constructions are overly broad.As for motions to amend, even though the Federal Circuit for the time being seems to be deferring to the PTAB’s seemingly strict practices, be prepared for change: Those practices may change substantially with the new rules package that is due towards the “end of July.”