Federal Circuit Extends the Prosecution Disclaimer Doctrine to IPR Proceedings

On May 11, 2017, the Federal Circuit for the first time addressed whether statements made by a patent owner during an inter partes review (IPR) proceeding can be relied on to support a finding of prosecution disclaimer during claim construction.  In Aylus Networks, Inc. v. Apple Inc., No. 2016-1599, slip op. (Fed. Cir. May 11, 2017) (precedential), the Federal Circuit held that they can.

Prosecution disclaimer precludes patentees from recapturing through claim interpretation specific meanings disclaimed during prosecution.  Aylus, slip op. at 8.  The issue in Aylus arose after Apple filed petitions for IPR with the Patent Trial and Appeal Board in response to an action for patent infringement filed in the Northern District of California.  Id. at 6.  In the proceedings before the Board, the patent owner submitted preliminary responses to the petitions, and successfully avoided institution with respect to two of the claims asserted in the district court litigation.  Id.  Apple subsequently filed a motion for summary judgment of non-infringement with respect to those two claims, which the district court granted based on certain statements made by the patent owner in its preliminary responses to Apple’s petitions for IPR.  Id. at 8.

On appeal, the patent owner argued that “statements made during an IPR cannot be relied on to support a finding of prosecution history disclaimer.” Id.  The Federal Circuit disagreed, commenting that the doctrine of prosecution disclaimer “is deeply rooted in Supreme Court precedent,” “has become a fundamental precept in . . . claim construction jurisprudence” and has been applied in “other post-issuance proceedings,” including reissue and reexamination proceedings. Id. at 9-10 (quotations omitted).  “Extending the prosecution disclaimer doctrine to IPR proceedings,” the Federal Circuit concluded, “will ensure that claims are not argued one way in order to maintain their patentability and in a different way against accused infringers” and “will promote the public notice function of the intrinsic evidence and protect the public’s reliance on definitive statements made during IPR proceedings.” Id. at 10 (quotations omitted).

Relying on the Supreme Court’s decision in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016), the Federal Circuit then rejected the patent owner’s argument that IPR proceedings are unlike reissue and reexamination proceedings because they are adjudicative proceedings.  Id. at 11.  “In Cuozzo,” the Federal Circuit observed, “the Supreme Court recognized that an IPR proceeding involves the reexamination of a patent.”  Id. (citing Cuozzo, 136 S. Ct. at 2143-44).  The Federal Circuit also rejected an argument that the statements at issue “were not part of an IPR proceeding because they were made in a preliminary response,” finding that “for purposes of prosecution disclaimer,” the distinction between the pre- and post-institution phases of an IPR are “a distinction without a difference.”  Id. at 13.  And in the end, the Federal Circuit concluded that the particular statements at issue constituted “a clear and unmistakable surrender of claim scope.”  Id. at 13-19.

The Federal Circuit’s decision in Aylus thus creates an important potential defense for those accused of infringement in district court proceedings, and a trap for unwary patent owners fighting to maintain the validity of their patents in IPR proceedings.

Other Notable Decisions – Week of May 12, 2017

Intellectual Ventures II LLC v. Ericsson Inc., Nos. 2016-1739, 2016-1740, 2016-1741 (Fed. Cir. May 8, 2017) (non-precedential): In Intellectual Ventures, the Federal Circuit rejected a patent owner’s due process challenge following an adverse patentability determination by the Patent Trial and Appeal Board in inter partes review proceedings.  The Federal Circuit disagreed with the patent owner’s arguments that the Board denied it due process by adopting a claim construction that no party previously advanced, reasoning that the patent owner “was on notice that the claim term was central to the case, and both sides extensively litigated the issue” and that the patent owner did not request “leave to file a sur-reply” or “seek rehearing.”  “Given the continuous focus on [the claim term] before and during oral arguments and [the patent owner’s] opportunity to seek a sur-reply or rehearing,” the Federal Circuit found “no due process violation.”  Nevertheless, the Federal Circuit went on to clarify that “after the Board adopts a construction, it may not change theories without giving the parties an opportunity to respond” but noted that “[n]o such change occurred here.”

Rovalma, S.A. v. Bohler-Edelstahl GmbH & Co. KG, No. 2016-2233 (Fed. Cir. May 11, 2017) (precedential): In Rovalma, the Federal Circuit rejected a patent owner’s argument that the Patent Trial and Appeal Board exceeded its statutory authority  by relying on the patent owner’s own submissions in determining unpatentability in inter partes review proceedings.  The Federal Circuit found no reason to read its past precedent to establish such a rule, “even as evidence of the knowledge a relevant skilled artisan would bring to reading the prior art asserted by the petitioner.”  Nevertheless, because the Federal Circuit could not “sufficiently determine how the Board reached the conclusion that the challenged claims would have been obvious” (the Federal Circuit found that the Board failed to sufficiently explain the basis for its obviousness determinations), it could not conclude that the patent owner was provided with adequate notice of and opportunity to address the inferences that the Board drew from the patent owner’s own submission and remanded the case.

Nova Chems. Corp. (Canada) v. Dow Chem. Co., No. 2016-1576 (Fed. Cir. May 11, 2017) (precedential): In Nova, the Federal Circuit affirmed a district court’s award of approximately $2.5 million in attorneys’ fees to a defendant in a case involving an equity action to set aside a prior judgment against the plaintiff based on two alleged frauds on the court.  The Federal Circuit found that “despite the extraordinary relief that [the plaintiff] sought, the district court erred to the extent that it based its exceptional-case determination on [the plaintiff’s] filing of the action itself.”  The Federal Circuit nevertheless concluded that the attorneys’ fees award was proper, finding no abuse of discretion in the district court’s independent determination that the case was objectively baseless and noting that “[t]he substantive strength of a party’s litigating position can—i.e., whether it is objectively baseless—independently support an exceptional-case determination.”

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