Bat vs BatIn a recent decision appealing the PTAB’s finding of claims unpatentable in two different, but related re-examination proceedings, the Federal Circuit vacated and remanded the Board’s decisions based on reinterpretation of claim terms construed under the PTAB’s broadest reasonable interpretation (BRI) standard during the re-examination process (In re Varma, Appeal 2015-1502 and 2015-1667, Fed. Circ., March 10, 2016).  This decision is one of several recent decisions in which the Federal Circuit has taken the opportunity to reinterpret the PTAB’s broadest “reasonable” interpretation of the claims during a post grant proceeding and change the interpretation to be more “reasonable” in light of the specification and actual claim language.

IBM and SAS Institute Inc. filed a request for inter partes re-exam against InvestPic LLC patent U.S. 6,349,291. The Patent Office granted the request, in-part, preliminarily determining that a subset of the claims (including claims 1, 11, and 29) challenged were unpatentable as being either anticipated by or obvious over References A and B. Separately, SAS alone successfully requested ex parte reexamination of other claims (including claims 22 and 25) of the ’291 patent on the basis that those claims are obvious over the combination of References A, B, and C. Generally, the claims are directed to a method for calculating, analyzing, and displaying investment data using a selected sample of investment data, generating a distribution function using a resampling method having a bias parameter in the resampling that specifies the degree of randomness in the resampling process, and generating a plot of the distribution function.

After the initial rejection of the claims in the inter partes re-exam, Varma amended claims 1 and 11 to specify that the “bias parameter determines a degree of randomness in a sample selection in a resampling process,” and amended claim 29 to specify that the investment sample was directed to “two or more selected investments.”  During the ex parte re-exam, claims 22 and 25 were amended to recite “two or more selected investments.” At issue across the two re-exams was use of the term “bias parameter” in amended claims 1 and 11, and use of the term “two or more selected investments” in amended claims 22, 25 and 29.  The examiner maintained the rejection of the amended claims over the cited references in both re-exam proceedings, asserting that Reference A disclosed the bias parameter in claims 1 and 11 and Reference A did not limit the number of investments used and, therefore, was applicable to claims 22, 25 and 29.

We do not see why the same-meaning principle is inapplicable here just because the amended versions of the claims were introduced in two different reexamination proceedings

Varma appealed the examiner’s decisions to the Board.  The Board affirmed the examiner’s interpretation of the claims and the rejection over the art in both re-exam proceedings.  Varma appealed the Board’s decisions to the Federal Circuit.  Varma argued that the “bias parameter” was used in selecting samples from a sample space, which was not disclosed in Reference A.  Varma also argued that the investment sample of claims 22 and 29 must require two or more investments, which was not disclosed in Reference A or the combination of References A, B and C.

The Court agreed with Varma’s constructions of the claims and rejected the Board’s interpretations of the claim terms.  In reaching its conclusion, the Court interpreted the claims using the BRI, but concluded that the Patent Office’s claim interpretations were not “reasonable” interpretations in light of the claims, the prosecution history, and the disclosure in the specification.  For the “bias parameter” element, the Board disregarded the timing of when the bias step is carried out during the claimed method, which was not disclosed in the art.  Although the Board put forth two possible interpretations of the term, “two or more selected investments,” the Court concluded that neither interpretation was reasonable when the claims were read in light of the specification and the prosecution history.  The Court held that the prosecution history and clear language of the claim contradicted and undermined the Board’s interpretation because the Board’s possible interpretations disregarded a critical element recited in the claims and argued by the patentee.

In unifying the two different re-exam proceedings, the Court explained that where there may be a chance for inconsistent interpretation of a claim term between two proceedings (e.g., claim 29 of the inter partes re-exam and claims 22 and 25 of the ex parte re-exam), the claim term should have the same meaning in both proceedings: “we do not see why the same-meaning principle is inapplicable here just because the amended versions of the claims were introduced in two different reexamination proceedings…”

This decision is important because it reminds both patent practitioners and the Board that it is incumbent on each party to use caution to ensure consistency in claim interpretation across multiple proceedings since a claim term must be similarly applicable for each claim in the patent.  This decision also shows that the Federal Circuit is continuing to give the PTAB’s “broadest reasonable interpretation” of claims “reasonable” consideration, and if necessary, reinterpretation, on appeal.