The America Invents Act of 2012 gave accused infringers a robust set of options for challenging patents before the Patent Trial and Appeal Board (PTAB), an adjudicatory body of the Patent and Trademark Office. These challenges–– inter partes reviews, covered business method reviews, and post-grant reviews–– have raised fears among patent owners, especially because patent claims have frequently been cancelled based upon standards that have stripped patents of their presumption of validity.

A dominant factor in this trend is the PTAB’s policy of applying the “broadest reasonable interpretation” to patent claims. The broader the scope of a claim the more likely it will be deemed invalid for encompassing a subject matter already known in the prior art. Courts, on the other hand, must presume that a patent is valid and apply a construction based on the claim language, the patent specification and the prosecution history. The courts also sometimes consider extrinsic evidence such as expert testimony. These considerations often lead courts to a narrower claim construction, which can reduce a challenger’s opportunity to invalidate a patent.

I have discussed this disparity in claim construction in “Harmonizing Standards for District Court and PTAB Claim Construction.” I explained that, when the Supreme Court took claim construction away from juries in its 1996 decision in Markman v. Westview Instruments, it cited “the importance of uniformity in the treatment of a given patent as an independent reason to allocate all issues of construction to the court.”

The new PTAB proceedings threaten this goal of uniform treatment. The Federal Circuit’s recent decision in Microsoft Corporation v. Proxyconn, Inc. may serve to alleviate these fears somewhat if seen as continuing a trend toward shrinking the differences between claim construction in the district courts and the PTAB.

Microsoft brought an inter partes review against U.S. Patent No. 6,757,717 (the ’717 patent) owned by Proxyconn. The PTAB found all of the challenged claims unpatentable except claim 24. Microsoft appealed the confirmation of claim 24, and Proxyconn appealed the invalidation of the remaining claims.

The Federal Circuit gave short shrift to Proxyconn’s challenge to the PTAB’s use of broadest reasonable construction. The Court considered itself bound by its own prior decision, In re Cuozzo Speed Techs., LLC, upholding the PTAB’s use of that standard. Indeed, the Federal Circuit has since denied a rehearing of the Cuozzo appeal, reinforcing its approval of the PTAB’s use of broadest reasonable interpretation.

The good news for patent owners, however, is that “broadest reasonable interpretation” might not be so different from a court’s claim construction. The Federal Circuit warned that, when applying broadest reasonable interpretation, the claim construction may not be so broad as to be unreasonable.

The Court’s discussion of proper claim construction is of great interest. The lack of reliance on the prosecution history in a PTAB claim interpretation has been a major difference between claim construction in court and claim construction in the PTAB. In Proxyconn, the Court instructed: “The PTO should also consult the patent’s prosecution history in proceedings in which the patent has been brought back to the agency for a second review.”

This bodes well for a future in which the claim construction in court and in the PTAB might be close enough that a claim construction in one forum may be considered or even used in the other.

In the challenged ’717 patent, claim 6 recited a gateway, two other computers and a caching computer. Microsoft argued that the “two other computers” could be any computers connected on the network to the gateway, including the caching computer itself. The Board agreed with this broad interpretation and ruled the claim unpatentable as anticipated.

The Federal Circuit, likewise using broadest reasonable interpretation, nevertheless overruled the PTAB’s claim construction. Looking to the specification, the Court found the phrase “two other computers” used three times and each time it was describing computers distinct from the gateway and the caching computer. On this basis, the construction was held to be unreasonably broad and the unpatentability ruling as to claims 6, 7 and 9 was vacated and remanded.

Claim 1 recited a sender/computer and a receiver/computer. Even though this claim does not recite a gateway or a caching computer, the Court again looked to the specification which “consistently refers to the sender/computer, receiver/computer, gateway, and caching computers as separate and independent components of an overall system.”

Even though in a basic embodiment shown in the specification the receiver/computer can be configured to perform the caching functions, the Court explained that performance of the caching function did not mean the term “receiver /computer” is the same as or is broad enough to include the separately identified “gateway” and “caching computer.” Further, to construe “sender/computer” and “receiver/computer” as encompassing an intermediate gateway or caching computer was not reasonable. The determination of unpatentability based on the PTAB’s broad interpretation was vacated and remanded.

It is instructive that the terms “sender/computer” and “receiver/computer” benefited from an interpretation that might have been denied to a claim referring simply to a sending or receiving function performed by the computer in the claimed system. Patent drafters should take note of the potential for making structural distinctions between processors performing different functions by attaching a name and using the name consistently in a specification to describe a certain component of a system.

The Board had held that the “search” described in Claim 24 required the ability to identify a data object from a set of potentially many data objects. Microsoft argued that “search” should be more broadly construed to simply mean “check for.” The broader interpretation would encompass a comparison with even a single data object to determine if it is the searched-for item. The Court, however, viewed comparison as being merely an aspect of searching and agreed with the Board that searching further requires a set of many potential data objects. The Board’s construction was affirmed as reasonable.

Finally, this decision comments on PTAB procedures for addressing a patent owner’s motion to amend claims. The Court gave the Board latitude to determine how to act on such motions on a case-by-case basis rather than requiring the Board to spell out all the details in its regulations. In particular, a patent owner may be required to show that a new or amended claim is patentable over all of the cited prior art, not just the art previously cited against the original claim being amended or replaced.