Federal Circuit Vacates PTAB Decisions Because the PTAB Failed to Provide Patent Owner Notice and Opportunity to Respond to Its Sua Sponte Claim Construction

In Qualcomm Incorporated v. Intel Corporation, No: 20-1589 (Fed. Cir. July 27, 2021), the Federal Circuit vacated and remanded six PTAB final written decisions, finding the PTAB failed to provide patent owner, Qualcomm, adequate notice of, and an opportunity to respond to, the PTAB’s sua sponte claim construction.

Background

Intel petitioned for six inter partes reviews challenging the validity of Qualcomm’s U.S. Patent No. 9,608,675. The patent discloses a power tracker that determines a power tracking signal based on certain components of “a plurality of carrier aggregated transmit signals.” In each petition, Intel proposed to construe “a plurality of carrier aggregated transmit signals” to include an increased bandwidth requirement, a construction that Qualcomm never disputed. In a parallel proceeding, the International Trade Commission similarly construed the term to include the increased bandwidth requirement.

At the PTAB oral hearing, one judge asked Intel a single question about increasing bandwidth and commented that “we’ll think about whether that’s necessary.” Slip op. at 6. The judges did not ask Qualcomm any questions about that requirement. After the hearing, the PTAB ordered an additional briefing on a topic extensively discussed at the hearing—but did not request any briefing on the increased bandwidth requirement. 

The PTAB Decision 

The PTAB concluded that all the challenged claims were unpatentable. In so concluding, the PTAB construed the term “a plurality of carrier aggregated transmit signals” to mean “signals for transmission on multiple carriers,” omitting the increased bandwidth requirement that the parties had agreed upon. Id. at 7. Additionally, the PTAB held that “means for determining a single power tracking signal” was a means-plus-function limitation with the disclosed power tracker as the corresponding structure.

The Federal Circuit’s Decision

On appeal, Qualcomm argued that the PTAB failed to provide notice of, and an adequate opportunity to respond to, the PTAB’s sua sponte construction of “a plurality of carrier aggregated transmit signals.” Qualcomm argued that the PTAB therefore violated its procedural right under the Administrative Procedure Act (APA). On appeal, Qualcomm also challenged the PTAB’s construction of the power tracker limitation for failing to include an algorithm in the corresponding structure.  

Regarding Qualcomm’s APA challenge, the Federal Circuit reiterated that the APA requires that the PTAB provide all interested parties with notice of asserted matters and an opportunity to respond. The Court clarified that the PTAB may adopt a claim construction of a disputed term that neither party proposed without violating the APA. But here, the PTAB’s construction of “a plurality of carrier aggregated transmit signals” diverged from the increased bandwidth requirement that the parties agreed upon. According to the Court, “it is unreasonable to expect parties to brief or argue agreed-upon matters of claim construction.” Id. at 9.

Intel argued that Qualcomm’s procedural challenge failed because it did not show prejudice. Even if a showing of prejudice was required, the Court held, Qualcomm demonstrated prejudice because, by removing the increased bandwidth requirement, the PTAB “eliminated an element on which Intel bore the burden of proof.” Id. at 10. And without notice of such elimination, Qualcomm had no reason to brief that requirement.

The Court also rejected Intel’s argument that the oral hearing provided notice to Qualcomm and an opportunity to respond. To support its conclusion, the Court noted (1) the single question raised by one judge to Intel and an offhand comment at the oral hearing, which it determined were insufficient to provide notice; (2) the PTAB’s next-day sua sponte order, which did not request additional briefing on the increased bandwidth requirement; and (3) Qualcomm did not have an opportunity to supply any evidence in response to the PTAB’s construction.

Intel further argued that Qualcomm had the opportunity to seek rehearing after receiving the Final Written Decisions. The Court rejected that argument, holding that “a party need not seek rehearing in order to seek relief from a Board decision on appeal.” Id. at 13.

On appeal, Qualcomm also challenged the PTAB’s construction of the power tracking signal limitation as a means-plus-function element having the power tracker circuit as the corresponding structure. According to Qualcomm, the corresponding structure must also include algorithms for programming the circuit. On this point, the Court disagreed with Qualcomm.

The Court explained that where the disclosed structure for a means-plus-function term is a computer programmed to carry out an algorithm, the disclosed structure “is not the general purpose computer, but rather the special purpose computer programmed to perform the disclosed algorithm.” Id. at 15. The algorithm requirement also applies in cases where “the corresponding structure amounts to nothing more than a general-purpose computer,” such as a processor or transceiver. Id. at 15-16. Here, however, the power tracker was circuitry and not a general-purpose computer, and therefore did not trigger the algorithm requirement. The Court refused to extend the algorithm requirement to circuitry, noting that unlike a general-purpose computer, circuitry did not “require special programming to perform particular functions.” Id. at 16. The Court therefore affirmed the PTAB’s construction of the power tracker limitation that identified the power tracker circuit as the corresponding structure.

Because the Court found the PTAB failed to provide Qualcomm adequate notice of, and opportunity to respond to, its sua sponte claim construction removing a claim requirement that was agreed-upon by the parties, the Federal Circuit found that the PTAB violated Qualcomm’s procedural rights under the APA. The Court thus vacated the PTAB’s Final Written Decisions and remanded for further proceedings.