The Federal Circuit recently vacated PTAB final written decisions that rested on a claim construction contradicted by the patent’s prosecution history. Specifically, in D’Agostino v. Mastercard Int’l Inc., No. 2016-1592, 2016-1593 (Fed. Cir. December 22, 2016), the court vacated the Board’s IPR decisions of unpatentability of method claims in two patents directed to processes for generating limited-use transaction codes to be given to a merchant by a customer for the purchase of goods and services.  The court determined that the Board’s decisions rested on an unreasonable claim interpretation of a “single-merchant” claim limitation, noting that, contrary to the Board’s claim interpretation, “[t]he prosecution history reinforces the evident meaning of the single-merchant limitation as requiring limiting, to one, the number of merchants that may use the transaction code, without identifying the merchant.” The court’s decision serves as a good example of how the prosecution history may aid a patentee in defending against patentability challenges in AIA trials.

The two patents at issue were U.S. Patent Nos. 7,840,486 B2 and 8,036,988 C1.  Each claim of the patents either contained a limitation “limit[ing] a number of transactions to one or more merchants” or “limiting transactions to a single merchant.”  Claims containing the one-or-more-merchants limitation could not be patentable if claims containing the more restrictive single-merchant limitation were found unpatentable.  Accordingly, both the Board and the court focused on the patentability of the single-merchant limitation.  The Board found that a prior art reference, Cohen (U.S. Patent No. 6,422,462), met the single-merchant limitation through an embodiment that limited credit card transactions to a particular chain of stores.  As a result, the Board determined that Cohen anticipates or renders obvious all claims.

The court concluded, however, that the text of the claims reciting the single-merchant limitation requires a temporal separation between when the account holder sets at one the number of authorized merchants and when identification of a particular merchant occurs. The court noted that, during prosecution of the application, the patentee distinguished one reference as not disclosing limiting “a transaction to a single merchant prior to any particular merchant being identified.”  The court further noted that, during the reexamination prosecution, the patentee distinguished the claims over Cohen by arguing that “a particular store or chain of stores limitation is an identity limitation whereas a single merchant limitation is a numerical limitation.” The court therefore concluded that the single-merchant limitation “requires, simply that, when the transaction code is requested, the request limits the number of authorized merchants to one but does not then identify the merchant, such identification occurring only later.”

Arguments made by the patentee during the reexamination were “relevant as reinforcing the evident meaning of the claim language at issue, whether or not it would meet standards for disclaimer or disavowal.”  In support, the court relied on Cordis Corp. v. Medtronic Ave, Inc., 339 F.3d 1352, 1359 (Fed. Cir. 2003), in which the prosecution history of a patent during reexamination did not reach the level of clear and unmistakable disclaimer but nonetheless influenced the proper claim construction.  Practitioners should remember that prosecution history during reexamination may be useful even when it does not rise to the level of a disavowal of claim scope.