In issuing a second final decision in Microsoft Corp. v. Proxyconn Inc., IPR2012-00026/ IPR2013-00109, Paper No. 80 (Dec. 9, 2015), the PTAB dealt with a “what do we do now,” both procedurally and substantively, after its initial final decision was reversed in part and remanded “for further proceedings” by the Federal Circuit in an opinion available at 789 F.3d 1292 (Fed. Cir. 2015). The Federal Circuit’s partial reversal and remand stemmed from its conclusion that the PTAB, in its initial final decision, construed two claim terms too broadly and employed that misconstruction in finding claims of the patent at issue invalid. Our prior discussion of the Federal Circuit decision is at this link.

Procedurally, on remand, the PTAB instructed the parties to file briefs addressing “the effect of the Federal Circuit’s decision.” Petitioner Microsoft argued, in essence, that the claims remained invalid under the Federal Circuit’s more narrow construction, albeit in some instances for obviousness rather than for anticipation as initially found. Patent owner Proxyconn, on the other hand, asserted that the PTAB could take no further action other than entering judgment against Microsoft for two reasons: (1) “Microsoft has had a full and fair chance to present its chosen claim construction and arguments for unpatentability, and it has lost”, adding that giving Microsoft a second bite would be “unfair” and constitute a “denial of due process”; and (2) because “the 18-month time period for the Board to make a final determination has expired” due to the passage of time since the initial final decision. The PTAB disagreed with Proxyconn on both issues.

First, the PTAB decided that the Federal Circuit would not have remanded the case “for further proceedings” simply to have the PTAB enter judgment against Microsoft, stating that “[h]ad this been the court’s intent it [the Federal Circuit] could have done so [entered judgment itself].” The PTAB also concluded that substantively addressing Microsoft’s invalidity arguments under the narrower constructions on remand was neither “unfair” to Proxyconn nor a denial of its right to “due process.” In reaching that conclusion, however, the PTAB noted that Microsoft’s arguments were not really new because Microsoft had made those arguments, in the alternative, in its two petitions for IPR and that those arguments were not then addressed by the PTAB simply because there had been no need to under the initial constructions. The Board also noted that the narrower constructions mandated by the Federal Circuit were consistent with the constructions earlier proffered by Proxyconn itself in the IPRs, and thus came as no surprise.

Second, the PTAB interpreted the 18-month deadline as requiring only that the initial final decision be entered within 18 months of institution. The PTAB also observed that, in any event, the 18-month deadline did not “necessarily” apply to trials involving joined IPRs, as was the case here, citing 35 U.S.C. § 316(a)(11), which states ““the Director . . . may adjust the time periods [for issuing a final written decision] in the case of joinder under section 315(c).” It does not appear, though, that the PTAB actually relied on § 316 since the “Director” so far as known never directed such an “adjustment” in the IPRs at issue.

Substantively, the PTAB concluded that the claims it earlier held invalid applying its overly-broad constructions remained invalid under the more narrow constructions from the Federal Circuit. Consistent with Microsoft’s arguments, however, in some instances the PTAB held claims invalid for obviousness rather than for anticipation as initially held.

Although the PTAB’s decision here provides some relatively universal guidance on what to expect on a remand, such as the inapplicability of the 18-month rule, it is unclear how far other aspects of the decision might extend. For example, what course would the PTAB take if the claim constructions determined by the Federal Circuit did not correspond to the constructions proffered by either party?  And, for further example, what would happen if the initial application of art by the petitioner, or the rebuttal by the patent owner, was determined to be irrelevant under the new constructions? Sooner or later the PTAB will confront these issues, but in the meantime one can only speculate.