Federal Circuit Says PTAB Erred by Accepting Stipulation of Parties

[T]here is no intellectually honest reason for the Federal Circuit to force the Board to ignore a stipulation of parties and pretend that stipulations are contrary to the statutory scheme. The intent of § 317 clearly suggests otherwise.

Last week, the same panel from the United States Court of Appeals for the Federal Circuit issued two different decisions in cases dealing with Intel and Qualcomm. In both cases the Federal Circuit upheld invalidation of claims made by the Patent Trial and Appeal Board (Board) and reversed and remanded with respect to claims that were not invalidated. Once again proving that surviving the Board is only the first hurdle in what is a long game for patent owners, who in this case find themselves returning to the Board for additional consideration already being told by the Federal Circuit that what they did in determining some claims were not invalid (i.e., were valid) was erroneous and without substantial evidence.

Of particular interest is the decision in Intel Corp. v. Qualcomm Inc. (Nos. 2020-1828, 2020-1867), discussing the validity challenge to claims of U.S. Patent No. 8,838,949, which addresses multi-processor systems in which software stored in non-volatile memory coupled to a first processor is to be used by a second processor. Intel Corp. challenged all claims of the ’949 patent as unpatentable for obviousness in three separate inter partes reviews (IPRs). The Board consolidated the proceedings and issued a final written decision holding that Intel had proved unpatentable claims 10, 11, 13–15, and 18–23, but not claims 1–9, 12, 16, and 17. Intel appealed.

With respect to claims 16 and 17, which were written in means-plus-function format, Intel and Qualcomm stipulated that the Board should assess the patentability of claims 16 and 17 even if the Board concluded that there was insufficient corresponding structure for the functions. The Board went on to find that Intel failed to meet its burden to show structure corresponding to the claimed function to which one could compare the prior art disclosure, which required a finding that Intel failed to demonstrate by a preponderance of the evidence that claims 16 and 17 were unpatentable.

The Federal Circuit per Judge Taranto (joined by Judges Prost and Hughes) took issue with the Board’s acceptance of the stipulation of the parties. Taranto wrote: “We hold that the Board’s conclusion was error and that a remand is required, because the Board did not decide for itself whether required structure is present in the specification or whether, even if it is not, the absence of such structure precludes resolution of Intel’s prior-art challenges.”

According to Judge Taranto, when the issue of indefiniteness of claims is raised in an IPR the challenge is not merely a contest between the petitioner and the patent owner, but rather protects the interests of the judicial system, the agency, and the public. Therefore, the Board should have conducted a prior-art analysis without any consideration of or deference to the stipulation of the parties, and entry of a final written decision on the merits absent such an independent consideration was inappropriate. The Board should have determined if there is indefiniteness and if “such indefiniteness renders it impossible to adjudicate the prior-art challenge on its merits, then the Board should conclude that it is impossible to reach a decision on the merits of the challenge and so state in its decision.”


Even though challenges relating to 35 U.S.C. 112 are prohibited in IPRs, the Federal Circuit in Samsung Electronics America, Inc. v. Prisua Eng’g Corp., 948 F.3d 1342, 1353 (Fed. Cir. 2020) opened up IPR for such challenges as a part of normal claim construction endeavors, although claims cannot be invalidated for indefiniteness. Instead, the Board is supposed to find that the claims are indefinite and that the indefiniteness prohibits a determination on validity, thereby doing an end-run around the prohibition against § 112 being raised in IPR. Now, the Federal Circuit goes one step further in Intel v. Qualcomm, finding that § 112 must be considered by the Board as a part of a claim construction even when the parties have entered a stipulation.

If this strikes you as odd, you are paying attention. First, despite not being an appropriate ground for challenge in an IPR, § 112 is now a part of every claim construction and a part of every IPR. When the Board sees indefiniteness, they must find indefiniteness even if they cannot “officially” hold the claim indefinite. Of course, everyone knows what a finding of indefiniteness from the Board means for the longevity and vitality of such a claim. Moreover, agreements between the parties mean nothing.

Riddle me this: If the Board is not supposed to consider stipulations of the parties, and IPR is merely a contest between the parties, why then did Congress specifically authorize parties to settle IPRs?

35 U.S.C. 317 authorizes the termination of the entire proceeding upon agreement of petitioner and patent owner provided the Office has not already issued a decision on the merits. That being true, and given that a global resolution becomes “business confidential information” pursuant to § 317(b), exactly how is a stipulation between the parties somehow antithetical to the purpose of the statutory scheme? An agreement to keep everything confidential and terminate proceedings at the Board is not problematic, but a stipulation between the parties is dubious?

Judge Taranto cites 35 U.S.C. 317 to support the conclusion that the Board must not accept the stipulation of parties, because Office can proceed with an IPR even when no petitioners remain in the case. While that is true, the citation is entirely misleading. The statute says that the Board “may” continue to hear a case even if a no petitioner remains in the case, which means the discretion lies with the Board.

The word “may” is permissive, which allows the Board to continue a case, or not. The fact that this even needs to be said is rather astonishing, but the court’s reliance on § 317 for support to justify the curious proposition that the Board cannot recognize party stipulations is inappropriate. Doing so because IPR is intended to protect the public, the judiciary, and the agency is absurd. Post grant proceedings are supposed to be cheaper, faster litigation substitutes, which means they are precisely disputes between parties. To the extent that there is a benefit to the public, or the agency, is incidental, not the primary feature.

Simply stated, there is no justification anywhere in the AIA for the Federal Circuit to require the Board to continue an IPR if there is no petitioner present. The discretion is with the Board, not the Federal Circuit. This necessarily means there is no intellectually honest reason for the Federal Circuit to force the Board to ignore a stipulation of parties and pretend that stipulations are contrary to the statutory scheme. The intent of § 317 clearly suggests otherwise. To the extent stipulations are to be rejected they are to be rejected at the discretion of the Board, not at the whim of the Federal Circuit.


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5 comments so far.

  • [Avatar for Anon]
    January 3, 2022 01:17 pm

    As to “And as for courts observing other jurisdictions, well, yes, it is standard amongst the sovereign States that are Member States of the EPC. So why not also States who are fellow members of the PCT?

    You really seem intent on clenching tight your eyes to the fact that at its core, patent law is a Sovereign-centric law, eh?

  • [Avatar for MaxDrei]
    January 3, 2022 12:36 pm

    Anon has his finger on a good point there. It happens all the time, in fiercely contested oppositions at the EPO, for example, that Opponent quietly develops a potent attack on validity and gives the patent owner an indication of it, whereupon the parties settle and the opponent withdraws, leaving the public in ignorance, intimidated by a patent apparently strong enough to see off all attacks on its validity and an Opponent well pleased with its royalty-free licence under the patent.

    What do you think? In the public interest, should the PTO have the freedom to continue the enquiry into the validity of the patent, of its own motion? That said, it does seem to me rather odd for the appeal instance (here the Fed Ct) to be given that discretion.

    And as for courts observing other jurisdictions, well, yes, it is standard amongst the sovereign States that are Member States of the EPC. So why not also States who are fellow members of the PCT?

  • [Avatar for Anon]
    January 3, 2022 10:09 am

    As for the stipulations at point in this case, would it not be prudent to remember that parties may stipulate to matters of fact, but are not at liberty to ‘stipulate’ any waiver of law (as in, the requirements necessary for a point of law)?

    It would not be up to any two parties – for example, to stipulate that both parties would be willing to ignore the existence of a an item of prior art that would be dispositive for a legal matter of anticipation or obviousness (for example, both parties may find such art ‘problematic’ for a whole host of other reasons).

  • [Avatar for Anon]
    January 3, 2022 09:50 am


    Do you really think that such Out-of-Sovereign musings is how judges operate?

    Or are you merely slinging feces at vertical structures again?

  • [Avatar for MaxDrei]
    January 2, 2022 01:33 pm

    Just curious, but how is the USPTO supposed to know how to exercise the discretion, given to it by 35USC317, to continue the proceedings even after the Parties have settled? If it exercises that discretion egregiously, what power does the court have, to set the PTO straight?

    At this moment in time, I’mwondering just how much huddling is going on, between the patent judges in the USA and those in EPC-land. I mean, over this Holiday Season the EPO i) put out an invitation to the interested circles to argue away the EPC grace period and ii) an EPO Board of Appeal, out of the blue, decided that Examiner insistence to an Applicant, to conform the specification to the allowable claims, is ultra vires. And now we have the Federal Circuit doing something that reminds me of standard practice at the EPO under Rule 84(2) of the EPC.