901 F.3d 1374
Fed. Cir.2018Background
- Intellectual Ventures owns U.S. Patent No. 5,602,831 (the ’831 patent), which claims varying the number of packets interleaved into packet blocks based on receiver signal-drop characteristics to mitigate burst errors in mobile wireless reception. The patent expired in 2015.
- Ericsson petitioned for inter partes review (IPR) challenging claims 1–3, 6–9, and 12–14 as obvious over Reed and Mahany; the Board instituted on those grounds and initially applied the broadest reasonable interpretation standard.
- After institution, the Board adopted Phillips claim constructions (applicable because the patent had expired) that required forming blocks by interleaving packets together, i.e., inter-packet interleaving.
- The Board’s Final Written Decision rejected Ericsson’s obviousness theory, finding Reed taught only intra-packet interleaving (interleaving R-blocks within an S-block) and not interleaving packets (S-blocks with S-blocks); the Board refused to consider portions of Ericsson’s Reply arguing the difference was insubstantial, treating that argument as a new theory excluded by 37 C.F.R. § 42.23(b).
- The Federal Circuit concluded the Board abused its discretion by improperly excluding those Reply arguments because Ericsson’s Reply expanded on arguments raised in the Petition and addressed a claim construction the Board adopted after institution; the case was vacated and remanded for consideration of the excluded Reply material.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Board properly excluded portions of Ericsson’s Reply as raising new theories | Ericsson: Reply merely applied known interleaving art to show Reed’s interleaving of R-blocks is insubstantially different from interleaving S-blocks; this follows from Petition and patent admissions about interleaving | Board/Intellectual Ventures: Reply advanced a new, untimely theory and cited new argumentation beyond the Petition, so it may be excluded under § 42.23(b) | Court: Exclusion was erroneous. Reply built on Petition content and claim construction adopted post-institution; Board abused its discretion by refusing to consider those Reply arguments |
| Whether Reed teaches “interleaving packets together” as required by claims | Ericsson: Reed discloses interleaving and one skilled in the art would find interleaving of larger data portions (S-blocks) obvious from Reed’s teachings | Intellectual Ventures/Board: Reed discloses only intra-packet interleaving (R-blocks within S-blocks), not inter-packet interleaving as claimed | Court: Remanded — Board must reconsider with Reply arguments considered; Court did not finally decide obviousness |
| Whether the Board violated procedural fairness by changing claim construction after institution without allowing further response | Ericsson: Board’s change to Phillips construction materially altered issues and warranted consideration of Ericsson’s Reply on that new construction | Board: Followed discretion in claim construction but defended exclusion of new reply material | Court: Noted the change made Reply significance greater; due process required Ericsson opportunity to respond; strengthens reversal of exclusion |
| Whether prior precedent supports Board’s exclusion of reply arguments | Board: Cited Ariosa and Intelligent Bio-Systems to justify excluding new theories on reply | Ericsson: Distinguished Ariosa/Intelligent Bio-Systems because it did not rely on new art or evidence and merely expanded Petitioner’s original rationale | Court: Agreed with Ericsson’s distinction and held Board’s exclusion inconsistent with circumstances here |
Key Cases Cited
- Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (claim construction principles for expired patents)
- Randall Mfg. v. Rea, 733 F.3d 1355 (Fed. Cir. 2013) (Graham factual inquiries for obviousness)
- Graham v. John Deere Co., 383 U.S. 1 (1966) (framework for obviousness analysis)
- HTC Corp. v. Cellular Commc’ns Equip., LLC, 877 F.3d 1361 (Fed. Cir. 2017) (standard of review for Board factual findings and legal conclusions)
- In re Mouttet, 686 F.3d 1322 (Fed. Cir. 2012) (review standards for obviousness determinations)
- Bilstad v. Wakalopulos, 386 F.3d 1116 (Fed. Cir. 2004) (abuse of discretion standard for agency procedural decisions)
- Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359 (Fed. Cir. 2015) (upholding Board exclusion of reply that relied on previously unidentified portions of prior art)
- Intelligent Bio-Systems, Inc. v. Illumina Cambridge Ltd., 821 F.3d 1359 (Fed. Cir. 2016) (upholding exclusion where petitioner presented an entirely new rationale supported by new evidence)