Federal Circuit Rules that PTAB May Not Cancel “Challenged” Claims for Indefiniteness in an IPR Proceeding

Friday, February 21, 2020

On February 4, 2020, the U.S. Court of Appeals for the Federal Circuit (the “Federal Circuit”) ruled that the Patent Trial and Appeal Board (the “PTAB”) may not cancel “challenged” claims for indefiniteness in an inter partes review (IPR) proceeding, but may review them for novelty or nonobviousness. Samsung Elecs. Am., Inc. v. Prisua Eng’g Corp., Case Nos. 19-1169, -1260 (Fed. Cir. Feb. 4, 2020). The Federal Circuit distinguished claims “challenged” in the petition from “new” substitute claims proposed in a motion to amend, because “the statutory provisions governing challenged claims in an IPR differ importantly from those governing substitute claims,” and “it is undisputed that the Board may review newly added claims for compliance with section 112.”

The case involves a patent (“the ’591 Patent”) that is directed to a “new and unique form of enhancing” a user’s multimedia entertainment experience. After being sued, Samsung petitioned for IPR of claims 1–4, 8, and 11 of the ’591 patent on four separate grounds. The Board declined to institute IPR of claims 1-4 and 8, because it concluded that it could not determine the scope of those claims due to § 112 issues, and a petition can not challenge claims under § 112. Specifically, the Board determined that claim 1 was indefinite and also invoked “means-plus-function” treatment. Instead, the Board instituted only on claim 11.

The Board’s institution decision issued prior to the Supreme Court’s decision in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018), in which the Supreme Court held that when the Board institutes an IPR, it may not pick and choose which claims it will address, but must address the patentability of every claim challenged by the petitioner. After the Supreme Court’s decision, the Board modified its institution decision to include all of the challenged claims and grounds presented in the petition.

In its final written decision, the Board found claim 11 invalid for obviousness, but held that Samsung had not established anticipation or obviousness of claims 1-4 and 8. With regard to claims 1-4 and 8, the Board reiterated its initial determination that the term “digital processing unit” in claim 1 was a means-plus-function claim without corresponding structure. In addition, the Board found that the claims were indefinite under IPXL Holdings, LLC v. Amazon.com, Inc., 430 F.3d 1377, 1384 (Fed. Cir. 2005), because the claims were ambiguous as to whether they covered a system or a method.

On appeal, Samsung argued that the Board should have canceled the claims it found to be indefinite or, in the alternative, should have assessed whether these indefinite claims were unpatentable as anticipated or obvious.

Should Claims Have Been Cancelled as Indefinite?

Regarding the first issue raised by Samsung, i.e., whether the Board should have canceled claims 1-4 and 8 as indefinite, the Federal Circuit held that the Board “may not cancel claims for indefiniteness in an IPR proceeding. The Federal Circuit supported its holding by citing the Supreme Court’s decision in Cuozzo Speed Techs., LLC v. Lee, in which the Supreme Court stated that the U.S Patent and Trademark Office would be acting “outside its statutory limits” by “canceling a patent claim for ‘indefiniteness under § 112’ in inter partes review.” 136 S. Ct. 2131, 2141–42 (2016).

Samsung argued that the Board could cancel claims for indefiniteness pursuant to other statutory provisions. For example, the Board may review newly added claims (i.e., substitute claims proposed in a motion to amend) for compliance with section 112. However, the Federal Circuit determined that this argument “overlooks the distinction the inter partes review statute draws between challenged claims and new claims that are added in an IPR proceeding.” “Because the statutory provisions governing challenged claims in an IPR differ importantly from those governing substitute claims, the term ‘unpatentablity’ necessarily has a different scope as to each.”

In short, the Federal Circuit held that the Board may not cancel “challenged” claims for indefiniteness in an IPR, but “new” substitute claims are fair game. The Federal Circuit explained that, while Samsung’s position “is that there is no limit to the Board’s authority to make unpatentability determinations at the conclusion of an IPR proceeding,” such an argument “is at odds with both the statutory language and the case law, and we reject it.”

Despite a Finding of Indefiniteness, Can the PTAB Assess Whether Claims are Unpatentable as Anticipated or Obvious?

The Federal Circuit then turned to Samsung’s secondary argument that the Board should have assessed the patentability of claims 1 and 4–8 under sections 102 or 103 of the Patent Act.

The Federal Circuit agreed with Samsung that the term “digital processing unit” is not a “means-plus-function” limitation subject to analysis under § 112 ¶ 6. The court explained that, pursuant to its ruling in Williamson v. Citrix Online, LLC, 792 F.3d 1339, 1348 (Fed. Cir. 2015) (en banc), because the reference to the digital processing unit does not contain the words “means,” there is a rebuttable presumption that the term was not subject to means-plus-function treatment. Further, the court stated that such a presumption can be overcome, but only if, according to Williams, “the challenger demonstrates that the claim term fails to ‘recite sufficiently definite structure’ or else recites ‘function without reciting sufficient structure for performing that function.’”

In addition, the court held that “the term ‘digital processing unit’ clearly serves as a stand-in for a ‘general purpose computer’ or a ‘central processing unit,’ each of which would be understood as a reference to structure in this case, not simply any device that can perform a particular function.” Accordingly, the Federal Circuit rejected the Board’s “conclusion that the term ‘digital processing unit,’ as used in claim 1, invoked means-plus-function claiming, and that for that reason claims 1 and 4–8 cannot be analyzed for anticipation or obviousness.”

The Federal Circuit then addressed Samsung’s argument that, despite a finding of indefiniteness, the Board could nonetheless assess whether the claims are unpatentable as anticipated or obvious. It ruled that the Board, on remand, should address Samsung’s argument that it may analyze the patentability of a claim even if that claim is indefinite under the reasoning of IPXL. The court explained that questions about IPXL-type indefiniteness do “not necessarily preclude the Board from addressing the patentability of the claims on section 102 and 103 grounds. In the remand proceedings, the Board should determine whether claim 1 and its dependent claims are unpatentable as anticipated or obvious based on the instituted grounds.”

Finally, with respect to the merits of claim 11, the Federal Circuit affirmed, holding that substantial evidence supported the Board’s position that claim 11 is unpatentable for obviousness.