CAFC Affirms PTAB Finding that Certain Uniloc Claims are Invalid, But Says Apple Failed to Prove Other Claims Unpatentable

On May 12, the U.S. Court of Appeals for the Federal Circuit (CAFC) affirmed the decision of the Patent Trial and Appeal Board (PTAB/ Board) in an inter partes review (IPR), holding the PTAB properly construed the claim language.

In April 2018, Apple Inc. filed a petition for IPR, alleging that all 25 claims of U.S. Patent No.  8,539,552 (“the ‘552 patent”) owned by Uniloc 2017 LLC were unpatentable. Apple Inc. v. Uniloc 2017 LLC, No. IPR2018-00884, Petition at 1 (P.T.A.B.). During the IPR, the PTAB held claims 1-17 and 23-25 of the ‘552 invalid for obviousness in view of U.S. Patent No. 6,324,279 (“Kalmanek”). Uniloc then appealed the decision. On appeal, Uniloc argued that the Board’s decision to invalidate the claims of the ‘552 patent resulted from an erroneous construction of a claim term. In its cross-appeal, Apple argued that the PTAB erred in holding that Apple failed to show the remaining claims of the ‘552 patent, claims 18-22, would have been obvious in view of Kalmanek. The CAFC upheld the PTAB on all issues.

The ‘552 Patent

Modern telecommunications systems using Voice over Internet Protocol (“VoIP”) offer users various optional features, namely caller-ID, call waiting, multi-line service and different levels of service quality known as the “codec specification.” The ‘552 patent is directed to a system and method to police those optional features. The proliferation of intelligent client devices in communication networks requires providers to maintain control over the use of their networks’ features in order to continue revenue generation. To achieve that control, the system disclosed in the ‘552 patent employs an enforcement mechanism with the provider’s core network through which clients send “signaling messages” for setting up their communication sessions. In this system, the enforcement point sits between the sender of the communication and the intended recipient, which allows the provider to inspect the signaling messages sent between the two and ensure that both are authorized to use particular features.

The ‘552 patent has five independent claims: claims 1, 6, 18, 23, and 24. The independent claims are similar in many respects. Each requires “determining” whether a client device is authorized to invoke or receive a particular service and “filtering” the signaling message based on authorization. In addition, claims 1, 6, 18 and 23 require “intercepting” the signaling message before determining and filtering steps are completed. Claims 1,6, 23, and 24 require an authorization related to at least one service type, whereas claim 18 requires authorization to at least two service types. The services relevant to appeal are caller-ID and codec specification.

The Kalmanek Patent

Kalmanek discloses a system for exchanging signaling messages between a calling party and a called party, both of which are outside the direct control of the service provider. The signaling messages are routed through at least one “gate controller” that has access to authentication databases and customer profile information. The gate controller can authenticate the identity of the calling party and authorize the service sought by the calling party and can take similar action regarding the called party. The services covered by Kalmanek include caller-ID and “enhanced levels of call quality.”

Kalmanek divides its call network into two parts, the originating and terminating sides. There is a gate controller on the originating side and a gate controller on the terminating side. To initiate a call, the calling party creates a message referred to as the “SETUP message.” The calling party’s message is sent along a path: first to the originating gate controller, then to the terminating gate controller, and finally to the called party. The called party responds by creating an acknowledgement message, known as the “SETUPACK message.” The called party sends that message along a return path: first to the terminating gate controller, then to the originating gate controller and finally to the calling party.

The IPR

In its petition for IPR, Apple asserted that the “intercepting” term in the independent claims should be construed to mean “the signaling [message] is received by a network entity located between two endpoints of the call.” Uniloc disagreed, arguing that the term “intercepted” should be construed to exclude the receipt of a signaling message by the intended recipient of a signaling message.

In its final written decision, the PTAB construed the term “intercepting” to mean that “the signaling message is received by a network entity located between the endpoints of the call.” Apple Inc. at *5 (P.T.A.B. Sept. 18, 2019). The Board then concluded that Kalmanek “explicitly disclosed the called party’s device, not the gate controller, is the intended recipient of the setup message” and that the setup messages in Kalmanek are passed through or intercepted by the gate controllers. In view of this claim construction, the PTAB held all claims of the ‘552 patent, with the exception of claims 18-22, were unpatentable. The Board noted that claim 1 and claim 18 require similar steps, but that claim 18 requires those steps to be completed with respect to two services, namely caller-ID and codec specification. However, the PTAB recognized that Apple’s petition had relied entirely on its allegations about claim 1’s filtering step. The Board reasoned that because Apple’s allegations about the filtering step did not address the codec service, Apple’s petition failed to raise a viable invalidity theory against claim 18. In its reply brief Apple attempted to “re-characterize” its assertions in its petition concerning claim 18’s filtering step, though the Board rejected this. In fact, the Board further held that even if Apple had addressed the codec service in its allegations as to claim 18’s filtering step, it would still have lost on the merits. The board reasoned that this was because claim 18 of the ‘552 patent requires that the step of “determining” whether a user is authorized to invoke or receive at least two services be performed in response to a single message, whereas Apple’s petition relied upon two separate messages in Kalmanek to perform the determining step.

Intrinsic Evidence Outweighs Dictionary Definitions

On appeal, Uniloc contended that the Board’s construction of the term “intercepting” in the independent claims was erroneous and that the Board incorrectly invalidated claims 1-17 and 23-25 of the ‘552 patent as a result. Uniloc argued that under the plain and ordinary meaning   of “intercepting,” the entity that “intercepts” a message cannot be the intended recipient of the message. In support of this argument, Uniloc cited several dictionary definitions and relied upon the following analogy: “A player making an interception in football is not the intended receiver of the ball but instead seizes the ball on its way to the intended receiver.” Therefore, Uniloc’s contention was that the Board, in relying on this faulty definition, improperly permitted the network entity intercepting the signaling message to be an intended recipient of the message even if there is an additional intended recipient downstream.

The CAFC conceded that Uniloc was correct that the signaling message can have only one true “intended recipient,” as the claims of the ‘552 patent use the term. However, the court reasoned, relying on the prosecution history, that just because the receiving client device is the ultimate “intended recipient” does not mean the sending client device cannot intentionally direct the message to the intercepting entity. Citing Finisar, the CAFC reasoned that “the pieces of intrinsic evidence [from the prosecution history] outweigh Uniloc’s reliance on dictionary definitions.” See Finisar Corp. v. DirecTV Grp., Inc., 523 F.3d 1323, 1328 (Fed. Cir. 2008). Therefore, the CAFC held that the claims encompass the situation in which a sending client device intentionally sends a signaling message to the intermediate network entity that performs the interception and that contrary to Uniloc’s contention, the construction is not at odds with the plain meaning of the claims. Accordingly, the CAFC affirmed the Board’s holding that claims 1-17 and 23-25 of the ‘552 patent would have been obvious in view of Kalmanek.

Apple’s Cross-Appeal Fails

On cross-appeal, Apple challenged the Board’s holding that it failed to raise a viable invalidity theory for claim 18 and that Apple’s invalidity theory for claim 18 was incorrect on the merits. However, the CAFC was not convinced. The CAFC found it unnecessary to reach the procedural issue of whether Apple raised a viable invalidity theory against claim 18 in its petition, because even assuming there was no defect in Apple’s petition, Apple would still have lost on the merits of whether it showed claim 18 would have been obvious in view of Kalmanek. Apple argued that Kalmanek’s gate controllers perform claim 18’s determining step on the SETUP message in relation to the codec specification. However, the CAFC agreed with the Board’s interpretation that “the determination of [which] codec is authorized in Kalmanek is made by the called party rather than the gate controllers and the determination is made after the SETUP message has already been forwarded to the caller.” Accordingly, the CAFC affirmed the Board’s holding that claims 18-22 of the ‘552 patent are valid.