PTAB Finds it Can Revisit Grounds on Remand From Federal Circuit

In Microsoft Corp. v. Proxyconn, Inc., the PTAB entered its first decision on remand from the Federal Circuit, which it labeled a final written decision under 35 U.S.C. § 318(a.). IPR2012-00026, IPR2013-00109, Paper 80 (Dec. 9, 2015). The decision sheds some light on how the PTAB may handle issues that remain following remand from the Federal Circuit.

The Federal Circuit’s June 19, 2015 decision, among other things, reversed in-part the Board’s original final written decision. It found that the PTAB erred in construing two terms of certain challenged claims, and remanded the case to the PTAB “for proceedings consistent with th[e] opinion.” Id. at 2-3. On remand, the PTAB found that the challenged claims remained unpatentable under the different claim constructions. Additionally, the PTAB found that a subset of the claims were obvious under the different constructions, whereas its original final written decision found that these claims were anticipated and did not reach obviousness.

The PTAB directed the parties to brief simultaneously “the effect of the Federal Circuit’s decision on the Board’s Final Written Decision,” limiting each party to 15 pages without a reply. Id. at 3. In its brief, Proxyconn argued that the PTAB “ha[d] no other option but to conclude that Microsoft failed to prove that the claims are patentable.” Id. at 4. According to Proxyconn, the PTAB was bound because: (1) “Microsoft had a full and fair chance to present its chosen claim construction and arguments for unpatentability, and lost”; and (2) “the 18-month time period [under 35 U.S.C. § 316(a)(11)] for the Board to make a final determination has expired.” Id. at 4-5 (quotations omitted). The PTAB rejected Proxyconn’s arguments.

First, the PTAB found that the Federal Circuit would not have “remanded the case to the Board ‘for proceedings consistent with this opinion’” if the PTAB was required to enter judgment for Proxyconn. Id. at 5 (citing Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1295 (Fed. Cir. 2015)). Noting Ariosa Diagnostics v. Verinata Health, Inc., Nos. 2015-1215, 2015-1226, 2015 WL 7148267, at *8 (Fed. Cir. Nov. 16, 2015), a recent decision where the Federal Circuit recognized the PTAB’s discretion to control its own proceedings on remand, the PTAB found that “[h]ad this been the court’s intent [to enter judgment for Proxyconn], it could have done so.” Id.

The PTAB also found that reconsidering the merits on remand was not unfair to Proxyconn. While the PTAB’s first final written decision did not reach obviousness on the subset of claims, Microsoft’s arguments that the claims were obvious under the different claim constructions were not new. Id. at 5-10. The PTAB noted that Microsoft had identified where these arguments could be found in the petitions and supporting materials. Id. at 5, 6, 10.

Addressing Proxyconn’s second argument, the PTAB found that that the 18-month deadline does not require it to find for Proxyconn. The PTAB explained that “the 18-month deadline does not apply necessarily to joined cases, such as this one.” Id. at 6.  Additionally, “even if the 18-month deadline were applicable,” the PTAB found it met the deadline because “the Board’s [original] Final Written Decision was entered within 18 months of the institution of trial.” Id.

This decision shows that, when reversed by the Federal Circuit on a particular invalidity ground, on remand the PTAB may find unpatentability on a ground not previously relied on in the original final written decision. We do not know yet whether the PTAB’s position will hold up on appeal, but petitioners should consider including alternative grounds in petitions (e.g., a ground that is stronger under a different claim construction) as insurance in the event of a reversal.