Statements Made by Patent Owner During IPR Can Support Finding of Prosecution Disclaimer

Aylus Networks, Inc. v. Apple Inc., (Fed. Cir. May 11, 2017) (Before Moore, Linn, and Stoll, J.) (Opinion for the court, Stoll, J.)

The Federal Circuit affirmed the district court’s finding of summary judgment for Apple Inc. (“Apple”). The Court held that statements made by a patent owner during an inter partes review (“IPR”) proceeding, whether before or after an institution decision, can be relied upon to support a finding of prosecution disclaimer.

Aylus Networks, Inc. (“Aylus”) owns the ’412 patent, which “provides systems and methods for implementing digital home networks having a control point located on a wide area network.” The patent teaches various network architectures for streaming and displaying media content using combinations of networked components. These networked components include: (1) a media server (“MS”); (2) a media renderer (“MR”); (3) a control point (“CP”) logic that includes logic to negotiate media content delivery with at least one of an MS and an MR; and (4) control point proxy (“CPP”) logic.

Aylus sued Apple for infringement of the ’412 patent. Apple filed two separate petitions for IPR with the Patent Trial and Appeal Board (the “Board”), each challenging different claims of the ’412 patent. The Board instituted an IPR on all claims of the ’412 patent, except claims 2, 4, 21, and 23. Following institution, Aylus filed notice of voluntary dismissal in the district court, dismissing with prejudice its infringement contentions as to all of the asserted claims, except claims 2 and 21. Apple then filed a motion for summary judgment, arguing that it does not practice the limitation “wherein the CPP logic is invoked to negotiate media content delivery between the MS and the MR.” The district court construed this limitation in claims 2 and 21 to “require that only the CPP logic is invoked to negotiate media content delivery between the MS and the MR, in contrast to claims 1 and 20 which require both the CP and CPP to negotiate media content delivery.” The court relied on statements by Aylus in its preliminary responses to Apple’s IPR petitions, finding the statements “akin to prosecution disclaimer.” Based on its claim construction, the court granted Apple summary judgment of noninfringement of claims 2 and 21. Aylus appealed, arguing that the statements made during an IPR cannot be relied on to support a finding of prosecution disclaimer. Alternatively, Aylus argued that its statements did not constitute a clear and unmistakable disclaimer of claim scope.

The Court first addressed whether statements made by a patent owner during an IPR can support a finding of prosecution disclaimer during claim construction. It explained that “when the patentee unequivocally and unambiguously disavows a certain meaning to obtain a patent, the doctrine of prosecution history disclaimer narrows the meaning of the claim consistent with the scope of the claim surrendered.” Such disclaimer can occur through amendment or argument. Prosecution has become “a fundamental precept in [the Court’s] claim construction jurisprudence” which “promotes the public notice function of the intrinsic evidence and protects the public’s reliance on definitive statements made during prosecution.” Prosecution disclaimer ensures that claims are not construed one way in order to obtain their allowance and in a different way against accused infringers. Although this doctrine arose in the context of pre-issuance prosecution, the Court noted that it has also applied it in other post-issuance proceedings before the Patent and Trademark Office (“PTO”). For example, the Court has applied the doctrine based on statements made during reissue and reexamination proceedings. Therefore, the Court found that it should apply the doctrine in IPR proceedings before the PTO. It reasoned that this extension will promote the public notice function of the intrinsic evidence and protect the public’s reliance on definitive statements made during IPR proceedings.

Aylus argued that statements made during an IPR are unlike those made during a reissue or reexamination proceeding because an IPR is adjudicative rather than administrative. The Court rejected this argument, invoking Cuozzo Speed Technologies, LLC v. Lee. In Cuozzo, the Supreme Court recognized that an IPR involves the reexamination of a patent. Supreme Court explained that, in some “significant respects, inter partes review is less like a judicial proceeding and more like a specialized agency proceeding.” For example, (1) parties that initiate an IPR need not have a concrete stake in the outcome; (2) a petition is not required to remain in an IPR, and the PTO may continue to conduct an IPR after a petitioner has settled; (3) the PTO can intervene in a later judicial proceeding to defend its decision; and (4) unpatentability in an IPR must be established by a preponderance of the evidence, whereas invalidity in a district court must be established by clear and convincing evidence. Because an IPR proceeding involves reexamination of an earlier administrative grant of a patent, the Court held that statements made by a patent owner during an IPR can be considered during claim construction and relied upon to support a finding of prosecution disclaimer. However, to invoke the doctrine of prosecution disclaimer, any such statements must “be both clear and unmistakable.”

Aylus also argued that its statements were not part of an IPR proceeding because they were made in a preliminary response, before the Board issued its institution decision. The Court again disagreed. While an “IPR does not begin until it is instituted,” the differences between the two phases of an IPR are immaterial for purposes of prosecution disclaimer. A patent owner’s preliminary response filed prior to an institution decision and a patent owner’s response filed after institution are both official papers filed with the PTO and made available to the public. In both, the patent owner can define claim terms and make representations about claim scope. Despite when the statements are made, the public is “entitled to rely on those representations when determining a course of lawful conduct, such as launching a new product or designing-around a patented invention.” Therefore, the Court held that statements made by a patent owner during an IPR proceeding, whether before or after an institution decision, can be considered for claim construction and relied upon to support a finding of prosecution disclaimer.

Finally, the Court considered whether Aylus’s statements constitute a clear and unmistakable surrender of claim scope. Apple filed two IPR petitions and Aylus filed a preliminary response in each proceeding. Aylus told the PTO that there were “a number of substantial differences between the challenged claims and the asserted references.” Aylus stated that “the challenged claims require selectively invoking the CP logic and/or CPP logic based on whether the MS and/or MR can communicate with the UE [user endpoint device] through the local network” (emphasis added). It explained that “this is a key aspect of the claimed invention, which addresses an important objective, namely: reducing the use of expensive bandwidth (e.g., wide area cellular networks) by implementing a least-cost routing decision about how to negotiate media content delivery that utilizes the less costly local wireless network whenever possible” (emphasis added). Aylus repeated these same statements later in its response when distinguishing the specific prior art references cited in the petition. The Court held that Aylus’s repeated statements that claims 2 and 21 “require that . . . only the control point proxy logic[] be invoked” and that “only ‘the CPP is invoked’” represent an unequivocal and unambiguous disavowal of the CP logic’s invocation.

Aylus argued that these statements are not a clear and unmistakable surrender of claim scope because they “can reasonably be interpreted to mean that ‘only’ the CPP logic is required to be invoked in those claims—not that the CP logic is precluded from being invoked.” It further argued that this interpretation is best understood in the context of surrounding statements. The Court explained that it has held that “when a prosecution argument is subject to more than one reasonable interpretation, it cannot rise to the level of a clear and unmistakable disclaimer.” However, it found that Aylus’s interpretation was not reasonable. The surrounding statements did not change the plain meaning of Aylus’s disavowing statements. At oral argument, Aylus even conceded that the plain meaning of these statements suggests that the CP logic cannot be invoked. Therefore, the Court held that Aylus’s statements in the IPR proceeding are a clear and unmistakable surrender of methods invoking the CP logic in claims 2 and 21. Based on this disclaimer, the Court found no error in the district court’s claim construction.

Statements made by a patent owner during an IPR can be considered during claim construction and relied upon to support a finding of prosecution disclaimer. No distinction should be made between statements made before or after an institution decision. However, to invoke prosecution disclaimer, the statements must constitute a clear and unmistakable surrender of claim scope. If a prosecution argument is subject to more than one reasonable interpretation, it cannot rise to the level of a clear and unmistakable disclaimer.

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  1. Peter Bucklitsch May 20, 2017 6:01 am

    This report is truly horrifying. To me, a layman, Apple has “aquired” free access to valuable patented technology because Aylus made an error in their initial response. What on earth is happening with US patents? Would any sane inventor register a patent in the US?

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