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SAS Institute, Inc. v. ComplementSoft, LLC

PTAB’s Sua Sponte Re-Interpretation of Claims in Final Decision Unlawful Under APA

SAS Institute, Inc. v. ComplementSoft, LLC, (Fed. Cir. June 10, 2016) (Newman (CIP/DIP), Chen, STOLL) (PTAB) (3 of 5 stars)

Fed Cir affirms IPR determination that all but one claim were unpatentable, and vacates/remands determination of patentability for remaining claim. The opinion discusses how the PTAB properly construed ComplementSoft’s claims. There was no error in limiting “graphical representations of data flows” to the disclosure of the specification. ComplementSoft’s argument for prosecution history disclaimer surrounding the term “data manipulation language” was unsupported by the record. However, the Fed Cir vacated on procedural grounds the Board’s confirmation of one claim’s patentability. The patentability determination was based on a claim construction that, though correct, significantly differed from the claim construction given by the Board in its Institution Decision. ComplementSoft had not challenged the construction in its Patent Owner’s Response, so SAS had no way to know that the Board was contemplating a change and thus did not address it in Reply. Such procedure deprived SAS of its APA right to respond to an agency’s change in legal theory. “It is difficult to imagine either party anticipating that already-interpreted terms were actually moving targets, and it is thus unreasonable to expect that they would have briefed or argued, in the alternative, hypothetical constructions not asserted by their opponent.” Slip op. at 17–18. On remand, the Board will re-evaluate the patentability of the claim at issue after hearing from the parties. Finally, there was no error in the Board declining to address in its written decision patent claims on which it did not institute IPR, per Synopsys, 814 F.3d 1309 (Fed. Cir. 2016).

Concurrence-in-part: In Judge Newman’s view, the AIA requires the PTAB to determine the patentability of all claims challenged in a petition, and the contrary view taken in Synopsys was erroneous.

KEYWORDS: BROADEST REASONABLE INTERPRETATION; PROSECUTION HISTORY DISCLAIMER (NO); AMERICA INVENTS ACT; ADMINISTRATIVE PROCEDURE ACT; REMAND