The US Court of Appeals for the Federal Circuit vacated several Patent Trial & Appeal Board (PTAB) decisions as violating due process and the Administrative Procedure Act (APA), referencing the parties’ inability to respond to the PTAB’s sua sponte construction of a term on which the parties had previously agreed. Qualcomm Inc. v. Intel Corp., Case Nos. 20-1589; -1594 (Fed. Cir. July 27, 2021) (Moore, C.J.)

After Qualcomm sued Intel over a patent directed to techniques for generating a power tracking supply voltage for a circuit that processes multiple radio frequency signals simultaneously, Intel filed six inter partes review (IPR) petitions challenging the validity of Qualcomm’s patents. In each petition, Intel proposed that the claim term “a plurality of carrier aggregated transmit signals” meant “signals for transmission on multiple carriers at the same time to increase the bandwidth for a user.” Qualcomm proposed a different construction: “signals from a single terminal utilizing multiple component carriers which provide extended transmission bandwidth for a user transmission from the single terminal.” Neither party disputed that the signals were required to increase user bandwidth, either at the PTAB or in a parallel proceeding before the US International Trade Commission (USITC) where the USITC adopted a construction—including the increased bandwidth requirement.

However, during the oral hearing, one of the administrative patent judges (APJs) asked Intel counsel about the inclusion of the bandwidth limitation in the claim construction. No other APJ raised, or asked Qualcomm, any questions about the increased bandwidth requirement in the claim construction. The day after the hearing, the PTAB sua sponte ordered additional briefing on the meaning of other claim terms that had been extensively discussed at the hearing.

The PTAB ultimately issued six final written decisions concluding that all challenged claims were unpatentable. In doing so, the PTAB omitted any requirement that the signals increase or extend bandwidth in construing the term “a plurality of carrier aggregated transmit signals” to mean “signals for transmission on multiple carriers.” The PTAB also held that “means for determining a single power tracking signal” (power tracker limitation) was a means-plus-function limitation and that an integrated circuit (IC) board, the “power tracker 582,” was the corresponding structure.

Qualcomm timely appealed, arguing that 1) it was not afforded notice of, or an adequate opportunity to respond to, the PTAB’s construction of “a plurality of carrier aggregated transmit signals” and 2) that the PTAB’s construction of the power tracker limitation was erroneous for failing to include an algorithm in the corresponding structure.

NOTICE AND OPPORTUNITY TO RESPOND TO THE PTAB’S CONSTRUCTION

The Federal Circuit has discussed the administrative and notice requirements provided by the APA and due process in IPR proceedings: “[a] patent owner in [an IPR] is undoubtedly entitled to notice of and a fair opportunity to meet the grounds of rejection” (Belden v. Berk-Tek). The Court observed that for IPRs, the PTAB must “timely inform” the patent owner of “the matters of fact and law asserted” and, in terms of notice, “must provide ‘all interested parties opportunity for the submission and consideration of facts [and] arguments” Due process further requires that a party be given an opportunity “to submit rebuttal evidence . . . as may be required for a full and true disclosure of the facts.’” On the other hand, the Court has also held that the PTAB may adopt a claim construction of a disputed term that neither party proposes without running afoul of the APA (Praxair), but the PTAB is not bound to adopt either party’s construction of a disputed claim term and does not necessarily violate the APA if it strays from disputed proposed constructions (WesternGeco).

Here, however, the Federal Circuit observed that the increased bandwidth requirement was not previously in dispute. In other words, the PTAB was not adopting its own construction of a disputed term but rather was diverging from the agreed-upon increased bandwidth requirement for the term. It “is difficult to imagine either party anticipating that already-interpreted terms were actually moving targets” and therefore unreasonable to expect parties to “have briefed or argued, in the alternative, hypothetical constructions not asserted by their opponent,” the Court noted. The Court also found it unreasonable to expect parties to brief or argue agreed-upon matters of claim construction, particularly when another agency, the USITC, already adopted the increased bandwidth requirement as part of the construction of the claim element in issue. In such a situation, it was incumbent on the PTAB to provide notice of, and an adequate opportunity to respond to, its construction.

Intel argued that even assuming a procedural violation, 1) Qualcomm did not demonstrate prejudice, 2) the oral hearing provided Qualcomm notice and an opportunity to respond and 3) the option to move for rehearing provided an adequate opportunity to respond. The Federal Circuit disagreed. The Court found that because Qualcomm had argued throughout the proceeding that the prior art did not disclose the increased bandwidth requirement, the PTAB’s removal of the requirement eliminated an element on which Intel bore the burden of proof, prejudicing Qualcomm.

The Court also disagreed that Qualcomm had notice and an opportunity to respond, adequate or otherwise. The Court found that the exchange between Intel counsel and one of the judges did not provide Qualcomm an opportunity to respond, especially because the PTAB did not announce a construction or ask any questions of Qualcomm in this regard, and because the PTAB-ordered post-hearing briefing was limited to other terms.

As to Intel’s third argument, the Federal Circuit noted that it has generally held that a party need not seek rehearing in order to seek relief from a PTAB decision on appeal (In re: Magnum Oil Tools Int’l) and to require otherwise would effectively require an aggrieved party to seek rehearing before appealing the PTAB’s failure to provide notice and an opportunity to respond. In any case, the Court noted that under the Supreme Court of the United States’ decision in Darby v. Cisneros, it is “not free to impose an exhaustion requirement as a rule of judicial administration where the agency action has already become ‘final’ under the APA.”

ALGORITHM OF CIRCUIT CLAIMED UNDER MEANS-PLUS-FUNCTION

The Federal Circuit found no error in the PTAB’s construction of the power tracker limitation, which both parties agreed was a means-plus-function term. The PTAB had determined the function to be “determining a single power tracking signal,” and identified a specific power tracker, which it found to be a circuit rather than a computer, as the corresponding structure. Qualcomm argued that the corresponding structure, in addition to the IC on which the power tracker may be implemented, must include algorithms for programming that circuit. The Court confirmed its past precedent that “[i]n a means-plus-function claim in which the disclosed structure is a computer, or microprocessor, programmed to carry out an algorithm, the disclosed structure is not the general purpose computer, but rather the special purpose computer programmed to perform the disclosed algorithm,” and that “[b]ecause general purpose computers can be programmed to perform very different tasks in very different ways, simply disclosing a computer as the structure designated to perform a particular function does not limit the scope of the claim to ‘the corresponding structure, material, or acts’ that perform the function, as required by section 112 paragraph 6” (WMS Gaming, Aristocrat, In re Katz, Rain Computing). The Court noted that its case law “does not require a specific algorithm when the identified structure is not a general purpose computer or processor” (Nevro). Here, Qualcomm did not argue that the power tracker was a general purpose computer or microprocessor, and the intrinsic record revealed that the power tracker was circuitry. Thus, because the structure was not a general-purpose computer, it did not trigger the algorithm requirement of WMS Gaming.