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IP Alert: PTAB Cannot Invalidate Original Patent Claims Under 35 U.S.C. 112 in an IPR

February 11, 2020

On February 4, in Samsung Electronics America, Inc. v. Prisua Engineering Corp., the Federal Circuit held that the Patent Trial and Appeal Board (PTAB) may not invalidate claims for indefiniteness in an inter partes review (IPR) proceeding. The America Invents Act (AIA) limits the scope of a petition for IPR to grounds that “could be raised under section 102 or 103.” The Samsung decision emphasizes that this limitation further prevents PTAB final written decisions from invalidating existing claims under 35 U.S.C. § 112 for indefiniteness.

Samsung filed a petition at the PTAB, asserting that claims 1–4, 8, and 11 of Prisua’s U.S. Patent No. 8,650,591 were invalid. The PTAB held claim 11 of the patent invalid for obviousness under 35 U.S.C. § 103, but declined to analyze whether claims 1–4 and 8 were invalid over the asserted grounds after concluding that claims 1–4 and 8 were indefinite. Accordingly, the PTAB held that Samsung had not established that claims 1–4 and 8 were unpatentable under any of the asserted grounds.

The PTAB concluded that claim 1, and dependent claims 2–4 and 8, were indefinite for two reasons. First, the PTAB found that claim 1 improperly incorporates both apparatus and method limitations, rendering the claim indefinite under the Federal Circuit’s prior IPXL Holdings v. Amazon.com case. Second, the PTAB found that the term “digital processing unit” recited in claim 1 was subject to analysis as a means-plus-function term under section 112, sixth paragraph. Applying means-plus-function analysis, the PTAB found that the ’591 patent failed to disclose corresponding structure and therefore rendered the term indefinite.

Samsung presented two challenges on appeal: first, challenging the PTAB’s decision not to declare claims 1–4 and 8 invalid for indefiniteness; and second, arguing that the PTAB should have applied the prior art to claims 1–4 and 8 even if they were indefinite. The Federal Circuit disagreed with Samsung’s first argument and therefore affirmed the PTAB’s refusal to declare claims 1–4 and 8 invalid for indefiniteness. The Federal Circuit agreed, however, with Samsung’s second argument and remanded for analysis of invalidity under the asserted grounds.

On the first issue, the Federal Circuit rejected statutory interpretations that would have allowed the PTAB to declare claims invalid for indefiniteness in the final decision on an IPR proceeding. The court explained the outcome is consistent with reasoning offered by the U.S. Supreme Court in Cuozzo Speed Techs., LLC v. Lee, that the PTAB would be acting “outside its statutory limits” by “canceling a patent claim for indefiniteness under section 112 in [an] inter partes review.” Accordingly, the Federal Circuit held that the PTAB cannot side-step the limitations on its statutory authority and hold claims invalid under section 112 even if an indefiniteness question is raised when construing the patent claims of the patent at issue in an IPR. The court explained that “the proper course for the Board to follow, if [the PTAB] cannot ascertain the scope of a claim with reasonable certainty for purposes of assessing patentability, is to decline to institute the IPR or, if the indefiniteness issue affects only certain claims, to conclude that it could not reach a decision on the merits with respect to whether petitioner had established the unpatentability of those claims under sections 102 or 103. It would not be proper for the Board to cancel claims on a ground that is unavailable in an IPR.”

The AIA distinguishes, however, between original patent claims and substitute claims (amended or new claims) introducing during the IPR proceedings. Regarding new or amended claims, the court noted that the PTAB’s statutory authority extends to other possible grounds of unpatentability, including indefiniteness under section 112.

On the second issue, the Federal Circuit agreed that the PTAB should have assessed the patentability of claims 1–4 and 8 under the grounds asserted by Samsung. The court rejected the PTAB’s conclusion that “digital processing unit” in claim 1 invoked means-plus-function analysis, and thus reversed the PTAB’s corresponding reasoning for stating patent claims 1 and 4–8 could not be analyzed for anticipation under section 102 or for obviousness under section 103. Further, the court concluded that the IPXL indefiniteness issues do not prevent analysis of invalidity under additional grounds.

Regarding the proper interpretation of “digital processing unit,” the Federal Circuit held that this term clearly serves as a stand-in for “general purpose computer” or a “central processing unit,” and that it therefore connotes sufficient structure to avoid means-plus-function interpretation. The Federal Circuit noted that the PTAB’s analysis was inconsistent. For claim 1, the PTAB concluded that “digital processing unit” failed to convey structure, but it also held that the asserted art disclosed structure corresponding to the same phrase in claim 11. 

In regard to the so-called IPXL rationale, the court ruled the PTAB prematurely ended its analysis. Indefiniteness under IPXL is based on the reasoning that infringement analysis is impossible if claims include both method and apparatus limitations. But invalidity can be shown if the prior art includes either a method or apparatus with the required limitations. Thus, indefiniteness under IPXL does not prevent analysis of invalidity under separate obviousness or anticipation grounds. Accordingly, the Federal Circuit remanded for consideration of statutorily authorized grounds for invalidity (anticipation or obviousness) based on the prior art as applied in Samsung’s IPR petition.

The Samsung case establishes that the PTAB cannot render claims invalid for indefiniteness during IPR proceedings instituted against existing claims. Although this seemingly benefits patent owners who have one less issue to fear during IPR proceedings, petitioners also benefit because it is now more settled that IPR decisions will not create estoppel against raising indefiniteness in subsequent proceedings—for example, in district court.

The Samsung case is also interesting in view of other recent developments related to PTAB procedure. This is the second decision in as many weeks where the Federal Circuit has opined on issues related to the scope of the PTAB’s authority to hear a case. In Koninklijke Philips v. Google, decided on January 30, 2020, the Federal Circuit held that the PTAB erred by instituting an IPR based on a combination of references not advanced in the petition. Both of these cases place limits on the PTAB’s authority to institute an IPR, but neither case addresses whether such IPR institution decisions are reviewable. This seemingly runs contrary to the AIA’s “no appeal rule” for PTAB institution decisions. The Supreme Court interpreted that “no appeal rule” strictly, restricting appeals from institution decisions, in the Cuozzo Speed Technologies Techs. v. Lee case.

Subsequent Federal Circuit cases have chipped away at the Cuozzo decision, for example allowing appeals related to the one-year time bar that prevents petitioners from seeking an IPR more than a year after they have been served with a complaint for patent infringement. One of those cases, Thryv, Inc. v. Click-to-Call Technologies, LP, is now pending at the Supreme Court. The Supreme Court’s decision in that case could limit the Federal Circuit’s power to review cases such as the present Samsung case. Fitch Even attorneys will continue to monitor developments related to this case.

For more information on this case, please contact Fitch Even partners David A. Gosse and Kendrew H. Colton, coauthors of this alert.

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