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Federal Circuit Holds the PTAB Must Apply Narrower Phillips Claim Construction Standard to Patents that Expire During Pendency of Re-exam

Posted in Patent Law

By:  Eric Caligiuri

In In re CSB-System Int’l, Inc., No. 15-1832 (Fed. Cir. Aug. 9, 2016), the Court of Appeals for the Federal Circuit recently held that patents that expire during a pending re-examination before the Patent Trial and Appeal Board (“PTAB”) should be examined under the Phillips standard of claim  construction, and not the broadest reasonable interpretation (“BRI”) standard.  Typically, in District Court litigation claims in issued patents are construed using the framework set forth in Phillips v. AWH Corp., which considers the plain meaning of the claim terms themselves in light of the intrinsic record.  However, during re-examination proceedings for unexpired patents, the PTAB uses the BRI standard.  The reason for using the broader BRI standard in re-examinations is that a patent owner before the Patent and Trademark Office (“PTO”) with an unexpired patent may amend the claims to narrow their scope, thus negating any unfairness that may otherwise result from adopting the broader BRI standard.eric_caliguiri_web

The patent at issue in In re CSB-System Int’l is U.S. Patent No. 5,631,953 (the “’593 patent”), entitled “circuit arrangement for integration of EDP systems in the utilization of telephone systems.”  The ’953 patent generally discloses a circuit arrangement for the integration of EDP systems in the utilization of telephone systems connected to the public telephone network ISDN or Euro ISDN.  The aim is to connect telephone installations to an EDP installation in such a way that all the functions of the EDP system can be used during the use of
the telephone installation.

As to the dispute, a third-party had requested ex parte reexamination of the ’953 patent, which was granted. As part of the reexamination proceeding, the patent examiner construed several of the ’953 patent’s claim terms. Pertinent here, the examiner refused to depart from the plain meaning of the term “personal computer” by not, as CSB had argued, inserting a limitation which would exclude personal computers that emulate terminals.  The examiner also declined to adopt CSB’s construction of the claim term “LAN server,” which sought to read in that the “LAN server” must provide shared services to other components on the LAN and to respond to requests from clients.

Based in part on the claim constructions, the examiner rejected some of the claims of the ’953 patent as anticipated by the prior art, and other claims as obvious in light of the prior art.  CSB appealed to the PTAB, and during the pendency of that appeal, the ’953 patent expired. The PTAB nonetheless decided to apply the BRI standard when analyzing the claim constructions entered by the examiner.  The PTAB ultimately agreed with the claim constructions and affirmed the examiner’s rejection of all claims of the ’953 patent.  CSB appealed the PTAB’s ruling to the Federal Circuit, arguing in part that the PTAB and the examiner had applied the wrong claim construction standard.

The Federal Circuit held that when a patent expires during a reexamination proceeding, the PTO should thereafter apply the narrower Phillips standard for claim construction. The Federal Circuit held as much regardless of whether this means that the PTAB applies a different standard than the examiner.  The Federal Circuit reasoned that “the BRI standard is not a monolithic standard that the Board can use even after a patent expires.” Instead, once a patent expires, the PTO and PTAB should apply the Phillips standard for claim construction.

However, while the Federal Circuit held that the PTAB erred in using the BRI standard, the PTAB’s use of the BRI standard did not produce a different result than the result reached using the Phillips standard.  The Federal Circuit held that even under the Phillips standard, there is no basis for limiting the claims as narrowly as CSB argued.  Specifically, the Federal Circuit did not agree with the narrow constructions for “personal computer” and “LAN server” proposed by CSB, even under the Phillips standard.  Thus, in the end, the Federal Circuit affirmed the PTAB’s decision to reject all claims of the ’953 patent in view of prior art presented during reexamination.