Federal Circuit Vacates and Remands PTAB Decision, Finding Apple Was Denied Opportunity to Respond

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Tuesday vacated and remanded a final written decision from the Patent Trial and Appeal Board (PTAB) in an inter partes review (IPR) proceeding. The court concluded that the Board erred by denying petitioner Apple Inc. an adequate opportunity to respond to a new claim construction argument raised by patent owner Smart Mobile Technologies LLC after the IPR was instituted.

Apple challenged U.S. Patent No. 9,191,083, owned by Smart Mobile, which is described as a “portable and wireless enabled” network box designed to transmit and receive multiple data streams simultaneously. The technology at issue involves using a “plurality of antennas” to handle these simultaneous data streams. After instituting the IPR, the Board ultimately determined that Apple had not shown by a preponderance of the evidence that the challenged claims of the ‘083 patent were unpatentable as obvious.

On the first issue, the Board construed the term “plurality of antennas” to require “a set of antennas in which at least some of the antennas are for both transmitting and receiving.” This interpretation meant that the claims required at least some of the antennas to be bidirectional, capable of both sending and receiving signals. The Board rejected Apple’s argument that the claim language could also cover a system with two distinct sets of antennas, one dedicated to transmitting and a separate, non-overlapping set dedicated to receiving.

The Federal Circuit agreed with the Board’s claim construction, in which, writing for the court, Judge Stoll explained that “the plain language of the claims, read in the context of the Specification,” supported the Board’s conclusion. The court observed that the patent’s specification “repeatedly and consistently describes using the same antennas for both transmitting and receiving data streams.” For example, the court pointed to language in the patent describing a “dual antenna, dual T/R unit” and figures that used double-ended arrows to depict the flow of information, suggesting bidirectional capability. The court affirmed that while it is improper to import limitations from the specification into the claims, the Board’s interpretation was consistent with the intrinsic evidence. The court therefore adopted the Board’s construction requiring at least some bidirectional antennas.

However, the Federal Circuit ruled in Apple’s favor on the procedural issue. Apple argued that the Board had improperly refused to consider its alternative argument that, even under the Board’s more narrow construction, a prior art reference known as Paulraj satisfied the bidirectional antenna limitation. Apple had raised this argument for the first time in its reply brief, which was filed after Smart Mobile had introduced its proposed claim construction in its patent owner response.

The Board had dismissed Apple’s reply arguments, finding they were “not grounded in or supported by the Petition or within the scope of reasonable reply arguments.” The Federal Circuit held that this refusal was a critical error, relying on its 2023 precedent in Axonics, Inc. v. Medtronic, Inc.

The court explained that “this case falls squarely under Axonics.” In Axonics, the Federal Circuit established that “where a patent owner in an IPR first proposes a claim construction in a patent owner response, a petitioner must be given the opportunity in its reply to argue and present evidence…under the new construction.” This rule is grounded in the Administrative Procedure Act (APA), which requires that a party in an administrative proceeding be given adequate notice and a fair opportunity to respond to arguments made against it.

Smart Mobile did not offer its interpretation of the “plurality of antennas” term until its patent owner’s response, which was filed after the Board had already instituted the IPR. By refusing to consider Apple’s arguments concerning the Paulraj reference, which were made in direct response to Smart Mobile’s new claim construction, the Board denied Apple its procedural rights. “In so refusing, the Board erred,” the court wrote.

The Federal Circuit concluded that by adopting a claim construction proposed after the institution and then preventing Apple from responding to it, the Board failed to provide Apple with the “adequate notice and an opportunity to respond” mandated by the APA and the Axonics decision. The court emphasized that a petitioner must be “afforded a reasonable opportunity in reply to present argument and evidence under that new construction.”

For these reasons, the Federal Circuit vacated the PTAB’s final written decision and remanded the case, awarding no costs to either party. The court instructed the Board to consider remanding Apple’s reply arguments and the evidence it presented regarding the Paulraj reference.

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Author: billperry