Federal Circuit Panel Begrudgingly Upholds PTAB’s Claim Construction But Vacates Finding Of Obviousness On Other Grounds

PPC Broadband, Inc. v. Corning Optical Commc’ns RF, LLC.  

In PPC Broadband, Inc. v. Corning Optical Commc’ns RF, LLC, 2015-1361 (Fed. Cir. Feb. 22, 2016), PPC appealed the PTAB’s decisions in four consolidated IPRs finding that each challenged claim in three patents were invalid for obviousness.  The appealed IPRs were IPR2013-00340, IPR2013-00345, IPR2013-00346, and IPR2013-00347.  The patents at issue—U.S. Patent Nos. 8,287,320, 8,313,060, and 8,313,353—are related and cover coaxial cable connectors with a “continuity member” that, through contact, extends electrical grounding through the post and nut of the connector to improve signal transmission.

The term “continuity member” or “electronic continuity member” was present in every claim at issue.  The PTAB determined that the broadest reasonable interpretation of these terms required “only … contact with the coupler/nut and the post to establish an electrical connection there” and not “consistent or continuous contact in time (i.e., always connected)” as argued by PPC.  Upon this determination, the PTAB ruled that the prior art references rendered each claim obvious.  The PTAB also considered secondary considerations raised by PPC, but found that these did not outweigh the “strong evidence” of obviousness.

The Federal Circuit panel vacated-in-part, affirmed-in-part, and remanded.  In reviewing the PTAB’s claim construction, the Court drew a sharp distinction between the PTAB’s BRI construction of the terms and the district court claim construction standard under Phillips.  It agreed with PPC that, if construed under Phillips, the terms would require a consistent or continuous temporal contact, not merely an unbroken physical connection.  Nevertheless, the Court agreed that the PTAB’s BRI construction was proper and, because In re Cuozzo was binding precedent, upheld the constructions.  However, the Federal Circuit still vacated a majority of the claims because they also contained a limitation that the continuity member must “maintain electrical continuity.”  The Court held that this explicitly required a continuous temporal connection, and the PTAB had made no findings that the cited references disclosed such a feature.  The Federal Circuit panel affirmed the construction of two other terms under the PTAB’s broadest reasonable interpretation standard and affirmed the invalidity of claims 1-7, 9-15, 17-30 and 32 of the ’320 patent, which lacked the “maintain electrical continuity” limitation.

Finally, the Federal Circuit panel stated that the PTAB erred in reviewing PPC’s evidence on secondary considerations, specifically on commercial success.  In the IPR, PPC proffered evidence that its “SignalTight” connectors were commercial embodiments of the claims, but the PTAB concluded that it had not established that the product met all of the claims’ elements.  The Court held that substantial evidence did not support this finding because the PTAB provided no explanation for its reasoning.  The Court further stated that where evidence shows the products are what is claimed in the patent, there is a presumption that commercial success is due to the invention.  This presumption is applicable in IPR proceedings precisely because it can be rebutted by the challenger.  Here, the challenger did not do so.

The PPC decision illustrates the dichotomy between “broadest reasonable interpretation” and the Phillips standard and the disparate results that may follow.  The Federal Circuit panel in PPC plainly disagreed with In re Cuozzo, stating that the BRI standard produces “not necessarily the correct construction.”  The Supreme Court will address this disparity in its current term.  The PPC decision also reinforces that the PTAB must provide explicit reasoning in making evidentiary findings.  Here, the Court rejected the PTAB’s determination where the only evidence presented weighed against its determination.

By: Jason Williams (Jones Day Bio)