Sas Institute, Inc. v. Complementsoft, LLC.
825 F.3d 1341
| Fed. Cir. | 2016Background
- ComplementSoft owns U.S. Patent No. 7,110,936, an IDE for generating/maintaining source code focused on "data manipulation languages" with components including a document manager, editor, parser layer, and visualizer that shows program- and data-flow diagrams.
- SAS Institute petitioned for inter partes review (IPR) challenging all claims of the ’936 patent; the PTAB instituted IPR on some claims (1 and 3–10) but not others (2 and 11–16).
- The Board found claims 1, 3, and 5–10 unpatentable as obvious, but found claim 4 patentable. The Board construed key terms at institution and adopted a different construction for "graphical representations of data flows" in its final written decision.
- SAS appealed: (1) Board misconstructed a claim term and changed its construction midstream without giving parties an opportunity to respond; (2) Board failed to address claims it declined to institute. ComplementSoft cross-appealed two constructions.
- The Federal Circuit affirmed the Board’s challenged constructions, held the Board was not required to decide claims it did not institute (following Synopsys), but vacated and remanded the patentability determination of claim 4 because the Board changed its construction after institution without providing notice and an opportunity to respond.
Issues
| Issue | Plaintiff's Argument (SAS) | Defendant's Argument (ComplementSoft) | Held |
|---|---|---|---|
| Proper construction of "graphical representations of data flows" in claim 4 | Board erred; new, narrower construction adopted in final decision prejudiced SAS because it was different from the institution construction and parties lacked chance to respond | Specification supports interpreting the term as the patent’s defined "data flow diagram" (icons and arrows depicting data movement) | Court agreed with Board’s substantive construction but vacated claim 4 determination and remanded because Board changed its construction after institution without giving SAS adequate notice/opportunity to respond (APA due-process violation) |
| Whether Board may change claim constructions between institution and final decision without further notice | Board’s change deprived SAS of a meaningful opportunity to address the new theory | Board can adopt constructions in final decision | Court held Board may not change theories midstream without timely notice and opportunity to respond (5 U.S.C. § 554(b)(3)); remanded for proceedings on new construction |
| Scope of "data manipulation language" in claim 1 | SAS argued for broader or different meaning to capture prior art; wanted institution construction applied | ComplementSoft argued it should exclude object-oriented languages without data-manipulation features; prosecution disclaimer limited scope | Court affirmed Board’s construction: a programming language used to access data in a database (e.g., retrieve/insert/delete/modify), rejecting a prosecution-history-based exclusion of embedded DML in other languages |
| Whether final written decision must address every claim challenged in the IPR petition | SAS: Board must resolve every claim raised in the petition in the final written decision | ComplementSoft/PTAB: final decision need only address instituted claims; regulation permits partial institution | Court held Synopsys controls: Board need only decide claims for which review was instituted; no requirement to address claims the Board declined to institute |
Key Cases Cited
- Info-Hold, Inc. v. Applied Media Techs. Corp., 783 F.3d 1262 (Fed. Cir.) (claim construction reviewed de novo where based on intrinsic evidence)
- Teva Pharms. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831 (U.S.) (subsidiary factual findings based on extrinsic evidence reviewed for substantial evidence)
- Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292 (Fed. Cir.) (review standard for Board’s factual findings based on extrinsic evidence)
- Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir.) (claim construction principles: read claims in light of specification)
- In re Cuozzo Speed Techs., LLC, 793 F.3d 1268 (Fed. Cir.) (IPR uses broadest reasonable interpretation standard)
- Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 1309 (Fed. Cir.) (Board need only address claims for which it instituted review)
- Dell Inc. v. Acceleron, LLC, 818 F.3d 1293 (Fed. Cir.) (agency may not change theories midstream without notice and opportunity to respond under APA)
- Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064 (Fed. Cir.) (same principle regarding notice when Board changes theories)
- Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314 (Fed. Cir.) (prosecution disclaimer requires clear and unmistakable disavowal)
- Avid Tech., Inc. v. Harmonic, Inc., 812 F.3d 1040 (Fed. Cir.) (cases refusing to find disclaimer where prosecution statements are ambiguous)