IP Alerts

IP Alert
IP Alert: PTAB Decision Vacated for Failure to Consider Arguments Raised in Petitioner's Reply

September 14, 2018

On August 27, in Ericsson, Inc. v. Intellectual Ventures I LLC, the Federal Circuit held that the Patent Trial and Appeal Board (PTAB) abused its discretion in refusing to consider part of Ericsson’s reply brief, when the PTAB had altered its claim construction after Ericsson filed its institution petition. The court therefore vacated and remanded the PTAB’s decision.

Intellectual Ventures (“IV”) owns U.S. Patent No. 5,602,831, which is directed to wireless communications systems. The ’831 patent generally claims a signaling method with multiple features, including an “interleaving” step and a “varying data packet size” step. Ericsson challenged the patent in an inter partes review (IPR) proceeding and asserted two prior art references, the Reed and Mahany patents. Ericsson asserted that Reed disclosed “interleaving” and that Mahany taught “varying data packet size.”

In its petition, Ericsson argued that the claims should be construed under the “broadest reasonable interpretation” standard. The PTAB agreed and, construing the claims under this standard, instituted the IPR proceedings.

IV then filed its patent owner’s response, arguing for the first time that the claims should be construed under the narrower standard clarified in Phillips v. AWH Corp. because the patent had expired prior to institution. (See our earlier IP alert discussing this issue). Ericsson filed a reply acknowledging the narrower construction standard and presenting additional arguments based on this narrowed standard.

In its institution decision, based on its construction of two “interleaving” terms, the PTAB found that Ericsson had not established a reasonable likelihood of success in showing certain claims to be unpatentable over the combination of Reed and Mahany, noting that Reed did not show a certain aspect of the interleaving step. Ericsson argued to the contrary in its reply, contending there was “no substantial difference” between Reed’s technique and the technique claimed under the revised construction, and therefore Reed did contain such disclosure. The PTAB declined to consider this portion of Ericsson’s argument, stating that the reply is “not an opportunity for Petitioner to identify, for the first time, new and different prior art elements that are alleged to satisfy the claim requirements.” Ultimately, the PTAB ruled against Ericsson, and Ericsson appealed.

Applying the abuse of discretion standard of review, the Federal Circuit vacated the PTAB’s decision and remanded it for consideration of Ericsson’s arguments. The Federal Circuit noted that the PTAB does have discretion to strike arguments improperly raised for the first time in a reply. But the court found that Ericsson’s petition had generally raised the argument concerning Reed, such that the reply brief did not in fact raise new arguments. Additionally, the PTAB had revised its claim construction after instituting the IPR. The court determined that Ericsson should have been given an opportunity to respond to the altered claim construction. Notwithstanding the outcome of this case, the court cautioned that it was not altering the PTAB’s general practice of limiting the content of replies.

Under this decision, petitioners may have greater freedom to develop the grounds asserted in the petition through their reply brief. Patent owners have another reason to exert every effort to convince the PTAB not to institute post-grant proceedings, because once trial is instituted, petitioners may be allowed to expand the arguments in the petition.

For more information on this decision, please contact Fitch Even partner David A. Gosse, author of this alert.

Fitch Even law clerk Vincent R. Meyer contributed to this alert.


Fitch Even IP Alert®

Hosted on the FirmWisesm Platform | Designed by Charette Design