PTAB’s sua sponte claim construction without adequate notice and opportunity to respond violates patent owner’s procedural rights under APA
| August 26, 2021
Qualcomm Inc. v. Intel Co.
Decided on July 27, 2021
Moore, Reyna, and Stoll. Opinion by Moore.
Summary
The Federal Circuit vacated and remanded inter partes review (IPR) final written decisions from the Patent Trial and Appeal Board, holding that the Board violated the patent owner’s rights to notice and opportunity under Administrative Procedure Act (APA) to respond to the Board’s sua sponte construction of an undisputed claim term.
Details
The appeal stems from six IPR proceedings before the Board where Intel challenged certain claims of U.S. Patent No. 9,608,675 (“the ‘675 Patent”) owned by Qualcomm.
The ‘675 patent relates to power tracking for generating a power supply voltage for a circuit that processes multiple transmit signals sent simultaneously. One of various claim terms at issue in the IPR is “plurality of carrier aggregated transmit signals,” which appears in representative claim 1, among other challenged claims:
1. An apparatus comprising:
a power tracker configured to determine a single power tracking signal based on a plurality of inphase (I) and quadrature (Q) components of a plurality of carrier aggregated transmit signals being sent simultaneously, wherein the power tracker receives the plurality of I and Q components corresponding to the plurality of carrier aggregated transmit signals and generates the single power tracking signal based on a combination of the plurality of I and Q components, wherein the plurality of carrier aggregated transmit signals comprise Orthogonal Frequency Division Multiplexing (OFDM) or Single Carrier Frequency Division Multiple Access (SC-FDMA) signals;
a power supply generator configured to generate a single power supply voltage based on the single power tracking signal; and
a power amplifier configured to receive the single power supply voltage and the plurality of carrier aggregated transmit signals being sent simultaneously to produce a single output radio frequency (RF) signal.
(Emphasis added.)
Intel’s proposed interpretation of the term was:
“signals for transmission on multiple carriers at the same time to increase the bandwidth for a user.”
Qualcomm’s version was:
“signals from a single terminal utilizing multiple component carriers which provide extended transmission bandwidth for a user transmission from the single terminal.”
The increased bandwidth requirement, included in both parties’ interpretations despite a slight difference in wording, is not explicitly recited in the patent claims although the specification indicates that the invention may enable increased bandwidth among other advantages. Unlike other parts of claim interpretations, the requirement was not extensively discussed over the course of an oral hearing held after the briefing. The parties appeared to have agreed upon this issue.
The Board found that all the challenged claims were unpatentable in its final written decisions, construing the term to simply mean “signals for transmission on multiple carriers.” Without the increased bandwidth requirement, the broader scope of the claim term was found obvious over the asserted prior art. Qualcomm appealed, arguing that the Board’s construction of the claim term was made without notice or opportunity to respond.[1]
On appeal, the Federal Circuit found that the Board violated Qualcomm’s rights to notice and a fair opportunity to be heard mandated by due process and the APA. The relevant APA provisions require that the PTO in an IPR proceeding:
- timely inform the patent owner of the matters of fact and law asserted;
- provide all interested parties opportunity for the submission and consideration of facts and arguments and hearing and decision on notice; and
- allow a party to submit rebuttal evidence as may be required for a full and true disclosure of the facts.
(Alterations and citation omitted.)
The Federal Circuit distinguished cases where the Board adopted its own claim construction as to a disputed term. Because the inclusion of the increased bandwidth requirement was not disputed, the present case is governed by SAS Institute, Inc. v. ComplementSoft, LLC, where the Federal Circuit set aside the Board’s final decision deviating from its previously adopted, agreed-upon claim construction for want of a notice and opportunity to respond, because neither party could possibly have imagined that undisputed claim terms were actually “moving targets,” such that the parties had no reason to set forth alternative arguments as to hypothetical constructions not asserted by their opponent.
Intel’s counterarguments were: (1) Qualcomm did not show prejudice; (2) the oral hearing provided Qualcomm notice and an opportunity to respond; and (3) Qualcomm had an option to move for rehearing which would be an adequate opportunity to respond. The Federal Circuit rejected all of them, finding:
(1) Qualcomm was prejudiced.
Qualcomm consistently argued throughout the proceeding that the increased bandwidth requirement was missing in the prior art. Removal of that requirement from the claim construction released Intel from its burden of proof. Also, without notice of the Board’s omission of the requirement in reaching the final decision, Qualcomm was deprived of the opportunity to provide further brief or evidence in support of its claim interpretation.
(2) The oral hearing did not provide Qualcomm notice and opportunity to respond.
During the oral hearing, the increased bandwidth requirement was only mentioned in a single question directed to Intel, whereas Qualcomm was never asked about the requirement. No announcement of the Board’s construction or criticism of the parties’ agreed-upon requirement was presented. Further, the requirement was not included in a sua sponte order made after the hearing, where the Board requested additional briefing on a completely separate claim term.
(3) Qualcomm does not need to seek rehearing before appealing the Board’s decision lacking a requisite notice and opportunity to respond.
The general principle is that a party has the right to appeal a final written decision in an IPR without first requesting a rehearing before the Board. Moreover, an exhaustion requirement should not be imposed where finality of the agency action, such as the final written decision, already exists under the APA. As such, even though rehearing would allow for a more efficient use of judicial resources, it is not a requirement before appealing the final written decision.
Takeaway
- In an IPR, the Board may sua sponte enter its own construction of an undisputed claim term different from those agreed upon by the litigating parties if they are afforded a fair notice and opportunity to respond.
- A litigant in an IPR should be cautious of a potential “moving target” even if there has been an agreement on claim construction with an opposing party.
- Why did Intel not dispute the increased bandwidth requirement in the IPR? Before the IPR institution, the parties had been litigating the same patent in other venues, including an International Trade Commission (“ITC”) investigation. Intel’s version of the claim interpretation in the IPR is actually the same construction which Qualcomm had offered and the ALJ had adopted in the ITC investigation. Intel once asserted the ITC interpretation as “overbroad” under Phillips but nevertheless chose to prove the claim invalidity under broadest reasonable interpretation (applied in the IPR where the petition was filed before the changes to the claim construction standard). The increased bandwidth requirement also appeared in extrinsic evidence cited by Intel. The parallel litigation situation apparently led to the parties’ agreement on the narrower claim interpretation.
[1] Qualcomm also challenged, and the Federal Circuit affirmed, the Board’s construction of a means-plus-function claim term, which is not discussed in this report.
Tags: Administrative Procedure Act > Notice and Opportunity to Respond > PTAB's sua sponte claim construction
EXAMINER’S NEW MOTIVATION TO COMBINE REFERENCES MAY CONSTITUTE “NEW GROUND OF REJECTION,” PREVENTING FINALITY OF THE REJECTION
| December 18, 2013
in re Lutz Biedermann – CAFC Opinion
Decided October 18, 2013
Panel: Linn (Opinion author), Moore and O’Malley
Summary
While the Examiner’s motivation to combine prior art references in his rejection was the efficiency of a square thread, the principal reason the Board affirmed the combination of these references was the use of square threads to avoid splaying. The Federal Circuit held that these are different grounds of rejection, and form the bases or underpinnings of different rejections. Therefore, the Federal Circuit found that because the Board made new findings and adopted different reasons to support a new ground of rejection, it had improperly deprived the applicant of both notice and an opportunity to respond.
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Tags: Due process > Motivation > New Ground of Rejection > Notice and Opportunity to Respond > obviousness
