In Hamilton Beach Brands, Inc. v. f’real Foods, LLC, No. 2018-1274 (Fed. Cir. Nov. 16, 2018), the Federal Circuit opined on whether, under the Administrative Procedure Act (“APA”), the Board’s claim constructions rendered in a final written decision must be the same as constructions raised during an IPR proceeding. The petitioner in the IPR proceeding argued that the Board impermissibly changed claim construction theories midstream without providing adequate notice and opportunity to respond. The court disagreed, determining that the Board’s constructions were “similar enough” to constructions raised during the IPR proceeding.
The court distinguished SAS Institute
Prior to institution, neither party sought construction of certain “nozzle” terms recited in the challenged claim. The Board instituted review without construing any terms. During trial, the patent owner proposed constructions for the “nozzle” terms. The petitioner disputed the patent owner’s constructions. In its final written decision, the Board determined that construction of the “nozzle” terms was necessary and adopted constructions that, according to the Federal Circuit, “were similar, but not identical” to patent owner’s proposals.
Citing SAS Institute, Inc. v. ComplementSoft, LLC, 825 F.3d 1341 (Fed. Cir. 2016), reversed on other grounds, SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018), the petitioner argued that the Board impermissibly changed theories midstream by adopting a construction in its final written decision that neither party requested or anticipated. The court distinguished the present case from SAS. The court explained that in SAS, “the parties had agreed to the construction adopted by the Board at institution, and without any further discussion during briefing or at oral hearing, the Board adopted a different claim construction in its Final Written Decision.” The court noted that the present case is different. The Board did not adopt any construction at institution, and the construction of the “nozzle” terms was disputed by parties during trial. The court found that the petitioner “received adequate notice in [patent owner’s] post-institution response regarding the nozzle terms, as shown by the fact that [petitioner] argued against [patent owner’s] proposed constructions in its reply brief and during the oral hearing.”
The court determined that the Board’s constructions are “similar enough” to constructions previously raised in the IPR proceeding
The court acknowledged that the Board’s constructions of the “nozzle” terms are not identical to those proposed by the patent owner. However, the court determined that such constructions “are similar enough to [patent owner’s] proposed constructions so as to not constitute changing theories midstream in violation of the APA.” In a footnote, the court reproduced the language of the Board’s constructions and the prior constructions proposed by the patent owner. For the claim term “nozzle oriented towards the splash shield,” patent owner proposed a construction of “having at least one nozzle oriented towards a soiled area of the splash shield.” The Board construed the term as “a nozzle pre-positioned such that it points at the splash shield.” For the claim term “directing rinsing fluid onto the splash shield using the nozzle,” the patent owner proposed a construction of “directing rinsing fluid onto a soiled area of the splash shield using the pre-positioned nozzle as oriented towards that soiled area.” The Board construed the term to mean “spraying rinsing fluid onto the splash shield from the pre-positioned nozzle.” Beyond reproducing the language of the constructions, the court did not provide any detailed analysis as to why the Board’s and patent owner’s constructions were “similar enough.”
The court determined that the petitioner had adequate notice and opportunity to respond to the Board’s constructions and ultimately affirmed the Board’s decision on patentability.
Conclusion
An APA violation does not arise merely because the Board’s constructions in a final written decision differ from prior constructions raised during the IPR proceeding. The Board has some latitude in rendering its constructions and is not strictly limited to what was proposed by the parties during the proceeding. Nevertheless, prior constructions are relevant to the APA inquiry. In Hamilton Beach, the court considered the prior constructions raised during the proceeding, but offered limited explanation as to why such constructions were “similar enough” to the Board’s constructions. The likelihood of success of an APA challenge alleging inadequate notice of claim construction may hinge on the similarities and differences between the Board’s constructions and constructions raised during the IPR proceeding.