Yesterday, the Federal Circuit issued its opinion in Network-1 Technologies, Inc. v. Hewlett-Packard Company, a case we have been tracking because it attracted an amicus brief. In the opinion, a panel of the court composed of Judges Prost, Newman, and Bryson unanimously affirmed-in-part and reversed-in-part a district court’s construction of claim terms. The court also vacated the district court’s granting of JMOL based on estoppel due to a previous inter partes review proceeding. Finally, the court affirmed the district court’s judgment that the asserted claims were not improperly broadened. Based on its holdings, the court remanded the case back to the district court. Here is a summary of the opinion.
As explained in our argument preview, this case involves an appeal and a cross appeal. While the appeal presents run-of-the-mill claim construction disputes, the cross-appeal presents the question of whether the district court erred in concluding that HP was estopped from presenting an obviousness challenge because HP could have but did not raise that challenge during a prior inter partes review. Its resolution requires interpretation of 35 U.S.C. § 315(e)(2), which bars any assertion “that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”
Chief Judge Prost wrote the opinion for the panel, which as mentioned affirmed-in-part, reversed-in-part, vacated-in-part, and remanded the case back to the district court. Chief Judge Prost summarized the relevant facts as follows:
After Network-1 filed its complaint [against Hewlett-Packard (“HP”)] in the district court, another defendant, Avaya Inc. (“Avaya”), petitioned for IPR of the ’930 patent. . . . HP was time-barred under 35 U.S.C. § 315(b) from having its own petition instituted. But because § 315(b) creates an exception from the time bar for joinder under 35 U.S.C. § 315(c), HP was nonetheless able to join [in asserting the same grounds as Avaya]. In its final written decision, the Board held that neither claim 6 nor claim 9 was unpatentable over the instituted grounds. We affirmed. . . . This case finally proceeded to trial in November 2017. At trial, . . . HP argued that each of the asserted claims was rendered obvious [on grounds different from those asserted in its IPR joinder with Avaya]. . . . [T]he jury found that HP did not infringe . . . [and] that HP had shown all asserted claims of the ’930 patent are invalid. . . Network-1 filed, in relevant part, a motion for a new trial related to infringement, and a motion for JMOL and motion for a new trial related to validity. The district court denied the motion for a new trial on infringement. . . . As to the ’930 patent’s validity, however, the district court granted Network-1’s motion for JMOL. The district court concluded that because of HP’s joinder to the Avaya IPR, HP should have been estopped under 35 U.S.C. § 315(e) from raising the remaining obviousness challenges, which it determined “reasonably could have been raised” in the Avaya IPR. . . . Network-1 appealed. HP cross-appealed.
The court first addressed the issues of claim construction raised by Network-1 on appeal and then the issues of IPR estoppel and claim broadening raised by HP on cross-appeal.
First, the court affirmed the district court’s construction of the claim term “low level current,” but reversed its construction of “main power source.”
Network-1 argued that it was error for the district court to find that the term “low level current” contained a lower bound of current capable of starting up a device. The panel here held that, because the specification of the ’930 patent discloses a lower boundary of current and discusses a device “beginning to start up” at the low current level, the district court did not err in its construction.
The court did, however, agree with Network-1 that the district court erred in excluding AC power sources from the term “main power source.” The court concluded that the ordinary meaning of “main power source” includes both AC and DC power sources.
The court also concluded that Network-1 had established that it was prejudiced by the erroneous construction of the term “main power source,” and thus it was entitled to a new trial on infringement.
Next, the court turned to HP’s cross-appeal and the issue of IPR estoppel. The court concluded that HP was not estopped under 35 U.S.C. § 315(e) from presenting obviousness challenges as a consequence of its joinder to the Avaya IPR.
At trial, HP argued for invalidity based on public use of “the Fisher system,” and by the patents and printed publications referred to as “the Fischer patents,” Woodmas, and Chang. The district court concluded that all grounds except for the Fisher system could have reasonably been raised in HP’s joinder to Avaya’s IPR, and thus HP was estopped from presenting them to the jury as a result of 35 U.S.C. § 315(e).
The panel concluded that the district court “misapplied the estoppel provision under 35 U.S.C. § 315(e)(2).” The court maintained that “the joinder provision does not permit a joining party to bring into the proceeding new grounds that were not already instituted.” Because HP could not bring in new grounds to Avaya’s IPR proceedings, the court held that the new grounds asserted at trial were not ones HP “reasonably could have raised” during the IPR. Thus, it concluded that HP was not statutorily estopped under § 315(e). The court declined to reinstate the jury verdict, however, and instead vacated the district court’s JMOL decision on validity with respect to estoppel.
Finally, the court addressed HP’s argument on cross-appeal that claim 6 and other asserted claims were invalid under 35 U.S.C. § 305 because Network-1 improperly broadened claim 6 through the addition of claim 15 and 16 in reexamination.
Prior to the reexamination, claim 6 of the ’930 patent was construed in two separate district court actions to require the “secondary power source” to be physically separate from the “main power source.” During the reexamination, Network-1 added claims 15 and 16, which depended from claim 6 and added that the secondary power source is the same source and device physically as the main power source.
The panel rejected HP’s argument that this sequence of events constituted improper broadening. The court highlighted that claim 6 itself was not amended. Further, the court pointed out that HP admitted that the district court’s construction of claim 6 is consistent with how earlier district courts construed the term prior to reexamination. The panel held that, since the scope of claim 6 had not changed, HP’s improper claim broadening argument failed.
Furthermore, the court emphasized that its “precedent is clear that ‘dependent claims cannot broaden an independent claim from which they depend.’” Thus, the court affirmed the district court’s conclusion that claim 6 and the other asserted claims were not invalid due to improper claim broadening.