The Federal Circuit has, for the first time, reversed the PTAB in an IPR decision. In Microsoft v. Proxyconn, 2014-1542, -1543 (Fed. Cir. June 16, 2015), the Court found that the PTAB’s claim construction, under the “broadest reasonable interpretation” was unreasonably broad.  The Court notes that “claims should always be read in light of the specification and the underlying patents.”  “Even under the broadest reasonable interpretation, the board's construction ‘cannot be divorced from the specification and the record evidence,’ and ‘must be consistent with the one that those skilled in the art would reach,’" the court said.  (Internal citations omitted).  "A construction that is 'unreasonably broad’ and which does not ‘reasonably reflect the plain language and disclosure will not pass muster.’”  

One of the terms at issue was “gateway… connected to said packet-switched network in such a way that network packets sent between at least two other computers.”  The patent owner argued that the “two other computers” should be construed as only the sender/computer and the receiver/computer.  The Board adopted Microsoft’s construction of “any two computers connected on the network to the gateway, including the caching computer.” The Board then found the claim anticipated. 

In reversing, the Court found that the Board erred in concluding that the “two other computers” could include the caching computer. The Court found the claim’s explicit requirement of a caching computer and “two other computers” and the specification’s treatment of the caching computer and the “two other computers” supported a more narrow construction. While confirming the “broadest reasonable interpretation” claim construction standard, the Court reinforced the “reasonable” aspect of this standard.  The Court reversed two additional constructions and remanded to the Board for additional validity findings. 

The Court also affirmed the Board's denial of patent owner's Motion to Amend.