Microsoft Corp. v. Proxyconn, Inc. v. Michelle K. Lee (USPTO)

Docket No. 2014-1542, -1543

June 16, 2015

Brief Summary: “Broadest reasonable interpretation” standard proper during IPR (in re Cuozzo); however, certain claim construction determinations vacated as inconsistent with claim language and specification. Board’s anticipation finding regarding certain claims affirmed. PTO has discretion to choose “between rulemaking and adjudication”, here choosing adjudication in denying Proxyconn’s motion to amend during IPR.

Summary: Microsoft appealed Board Decision after inter partes review (IPR) that claim 24 of US 6,757,717 (owned by Proxyconn) related to a system for increasing the speed of data access in a packet-switched network is not invalid for anticipation or obviousness. Proxyconn appealed the Board’s claim construction (the “threshold challenge”), unpatentability determinations and denial of its motion to amend. The USPTO (“Director”) intervened to address the Board’s use of the broadest reasonable interpretation standard during IPR. The opinion explains that “because the intrinsic record fully determines the proper construction”, the Board decision was reviewed de novo (Teva, US 2015) (“To the extent the Board considered extrinisic evidence when construing the claims, we need not consider the Board’s findings on that evidence because the intrinsic record is clear.”) Proxyconn argued the broadest reasonable interpretation standard was improper during IPR as the patentee is limited with respect to amendments but the FC rejected this argument (In re Cuozzo Speed Techs., FC 2015). Nonetheless, the FC found the constructon of the term “gateway…between at least two other computers” to be “unreasonably broad in light of the language of the claims and specification”, as was the constructon of “sender/computer” and “receiver/computer” (do not “reasonably reflect the language and disclosure of the ‘717 patent”), and vacated those findings and remanded. Microsoft challenged the Board’s construction of “searching for data with the same digital digest in said network cache memory” but the FC agreed with the Board “[b]ased on the clear language of the specification” (noting the same conclusion would be reached “if we were to apply the traditional claim construction framework set forth in Phillips”). The Board decision that claims 11, 12 and 14 were anticipated by the prior art was affirmed (“nothing in claim 11 requires that the sender/computer ‘understand’ whether a request from the receiver/computer is correlated with a previous transmission”). With respect to Proxyconn’s appeal of the denial of its motion to amend during the IPR, the opinion explained the requirements for amendments under the AIA and the Board’s “informative” (“not binding authority”) 2013 Idle Free decision (e.g., “A patent owner should specifically identify the feature or features added to each substitute claim…and come forward with technical facts and reasoning about those feature(s), including construction of new claim terms, sufficient to persuade the Board that the proposed substitute claim is patentable over the prior art of record, and over prior art not of record but known to the patent owner”). The FC found the Board’s determination that Proxyconn could not amend its claims because it did not explain how the claims would be patentable over a prior art reference that was not relied upon in instituting IPR but was part of the prior art record for the patent (“This is not a case in which the patentee was taken by surprise by the Board’s reliance on an entirely new reference or was not given adequate notice and opportunity to present arguments distinguishing that reference.”) It also explained that the PTO has discretion to choose “between rulemaking and adjudication”, here choosing adjudication, and acknowledged “the PTO…’must retain power to deal with [such motions] on a case-by-case basis if the administrative process is to be effective” (the PTO arguing it “has not ‘had sufficient experience with [motions to amend] to warrant rigidifying its tentative judgment into a hard and fast rule”). Thus, the denial of Proxyconn’s motion to amend was affirmed.

This entry was posted in Anticipation (35 USC 102), Claim Construction, Inter Parties Review (IPR). Bookmark the permalink.

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