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IP Alert: Federal Circuit Looks to Expert Testimony to Construe Patent with Ambiguous Intrinsic Record

December 27, 2022

On December 15, in Uniloc 2017 LLC v. Netflix, Inc. (nonprecedential), the Federal Circuit affirmed a Patent Trial and Appeal Board (PTAB) determination that a claim of Uniloc’s U.S. 6,584,229 patent was unpatentable as obvious. In the appeal, Uniloc contended that the PTAB erred by relying on the testimony of Netflix’s technical expert leading to an incorrect claim construction. The Federal Circuit disagreed with Uniloc and upheld the PTAB’s claim construction. The Federal Circuit found that the PTAB’s reliance on the testimony of Netflix’s technical expert, albeit extrinsic evidence, was proper because the patent itself was ambiguous. The decision is notable because it is an example where the court found it proper to look beyond the intrinsic record (i.e. beyond the patent’s claims, specification, and prosecution history) to consider extrinsic evidence, such as expert testimony, to guide claim construction.

The ’229 patent is directed to a method for encoding videos, which are a sequence of moving frames. According to the ’229 patent, frames can be divided into macroblocks, each of which is made up of hundreds of pixels. To digitally store or transmit videos, the frame data is encoded and compressed. The ’229 patent claims a coding method that improved coding efficiency by encoding at the macroblock-level rather than the individual pixel-level. The ’229 patent teaches dividing frames into two macroblock-based regions. One region is a stationary background region containing a portion of the frame that remains unchanged in a video sequence. The other region is a moving object region that contains the changing portion of the frame. The ’229 patent teaches using pixel-level coding only on the moving object region and macroblock-level coding on the background region, thus achieving more efficient coding.

In relevant part, the ’229 patent recites:

1. A method, for use in an macroblock-based object oriented coding of a image signal, wherein the image signal has a stationary background region and an object region and contains a current frame and a previous frame, each frame including a plurality of macroblocks, comprising the steps of:

a) dividing the stationary background region and the object region from an inputted video in a macroblock-by-macroblock basis by using a difference between the previous frame and the current frame;

Uniloc argued that “dividing on a macroblock-by-macroblock basis” requires the dividing to be performed macroblock-by-macroblock (i.e., comparing the difference between the previous and current frame one macroblock at a time). Netflix argued that the claim requires only that the dividing result in separate macroblock-based regions, regardless of whether the difference between the previous and current frame is determined on a macroblock-by-macroblock basis.

Looking first at the patent claim, the court found the disputed claim language was ambiguous because it could be read to support either construction equally. In reaching this conclusion, the court rejected Uniloc’s argument that the preamble clarified that the dividing was done one macroblock at a time because “each frame included[ed] a plurality of macroblocks.” The court reasoned that the preamble’s reference to a frame including macroblocks did not require the dividing to be done one macroblock at a time.

Uniloc also argued that its construction was proper because the specification provided an example in which the dividing was done by macroblocks, not by another criteria. The court disagreed, noting that claim language is not to be limited by preferred embodiments or specific examples in the specification. Instead, the court emphasized that the term “macroblock-by-macroblock basis” was not used anywhere else in the specification. The court found that other language in the specification describing frames divided into a “background region and a foreground object region by unit of macroblock” did not clarify the disputed claim language. According to the court, the meaning of “macroblock-by-macroblock” was not dispositively clarified by the intrinsic evidence, and thus the term remained ambiguous.

Given the ambiguity, the Federal Circuit held that the PTAB properly looked beyond the intrinsic record by relying on Netflix’s expert witness’s testimony. The court noted that where the PTAB looks beyond the intrinsic evidence and consults extrinsic evidence, appellate review of the PTAB’s subsidiary factual findings only requires a showing of substantial evidence supporting the PTAB’s finding. The substantial evidence standard is satisfied if a reasonable mind might accept the evidence as adequate to support the finding. The court found that Netflix’s expert set forth ample evidence that he qualified as a person of ordinary skill in the art and that he reviewed the claim language and specification through that lens. The expert further explained the technology and how a person of ordinary skill in the art would understand the technology in a way that supported Netflix’s construction. In contrast, Uniloc did not offer any expert testimony, and the Federal Circuit rejected unsupported technical arguments offered in Uniloc’s reply brief on appeal.

This decision highlights that where a dispute might turn on claim construction issues, as is often the case, expert testimony may be helpful to support a proposed construction. Expert testimony may be particularly persuasive where there is a risk that intrinsic evidence will be deemed ambiguous with respect to claim construction issues. If so, a party should consider supporting its claim constructions with extrinsic evidence, including testimony from a technical expert.

For more information on this holding, please contact Fitch Even partner Joseph F. Marinelli or associate Alvaro Cure Dominguez, authors of this alert.

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