Intellectual Ventures II LLC v. Ericsson Inc.

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
INTELLECTUAL VENTURES II LLC,
Appellant
v.
ERICSSON INC., TELEFONAKTIEBOLAGET LM
ERICSSON, GOOGLE INC.,
Appellees
______________________
2016-1739, 2016-1740, 2016-1741
______________________
Appeals from the United States Patent and Trade-
mark Office, Patent Trial and Appeal Board in Nos.
IPR2014-00915, IPR2014-00919, IPR2014-01031.
______________________
Decided: May 8, 2017
______________________
PETER J. MCANDREWS, McAndrews, Held & Malloy,
Ltd., Chicago, IL, argued for appellant. Also represented
by GREGORY SCHODDE, ANDREW B. KARP, STEVEN JOHN
HAMPTON.
J. ANDREW LOWES, Haynes & Boone, LLP, Richardson,
TX, argued for appellees Ericsson Inc., Telefonaktiebo-
laget LM Ericsson. Also represented by CLINT S. WILKINS;
DEBRA JANECE MCCOMAS, Dallas, TX.
2 INTELLECTUAL VENTURES II LLC v. ERICSSON INC.
DARYL JOSEFFER, King & Spalding LLP, Washington,
DC, argued for appellee Google Inc. Also represented by
JOHN C. ALEMANNI, Kilpatrick Townsend & Stockton LLP,
Winston-Salem, NC; DAVID A. REED, Atlanta GA; STEVEN
MOORE, San Francisco, CA.
______________________
Before REYNA, WALLACH, and CHEN, Circuit Judges.
REYNA, Circuit Judge.
Following institution of inter partes reviews, the
United States Patent Trial and Appeal Board found
certain claims of Intellectual Ventures’ patents anticipat-
ed by or obvious over the prior art. Intellectual Ventures
appeals from those decisions, arguing that the Board
denied it procedural due process and misconstrued two
claim terms. We find no due process violation and find
that the Board’s claim construction was correct. We
affirm.
BACKGROUND
The Intellectual Ventures Patents
Intellectual Ventures II LLC’s (“Intellectual Ven-
tures”) patents—U.S. Patent Nos. 7,848,353 (“’353 pa-
tent”) and 8,396,079 (“’079 patent”) 1—disclose a method
for selection of appropriate bandwidth in a multi-
bandwidth communication system. Wireless communica-
tion requires one unit to transmit data and another unit,
a base station, to receive it. To communicate properly,
the two units must have synchronized frequencies. J.A.
434 (col. 1 ll. 22–29); see also J.A. 419 (Figure 1), 423–424.
1 The ’079 patent is a continuation of the ’353 pa-
tent, and they share similar specifications. See J.A. 417.
INTELLECTUAL VENTURES II LLC v. ERICSSON INC. 3
The patents teach a method to synchronize base stations
and remote units on the appropriate frequency more
efficiently than the prior art. J.A. 434 (col. 2 ll. 6–8), 426–
427.
The patents teach that the base station transmits a
signal with two portions, the first of which has a lower
“chip rate” than the second. J.A. 426, 2920. The signal’s
bandwidth corresponds to the chip rate with which it is
transmitted. Id. Thus, the lower the chip rate, the lower
the bandwidth. Despite this correlation, the parties agree
that chip rate is not synonymous with bandwidth. Ra-
ther, the receiver reconfigures itself by setting its filters
to “bandwidths appropriate for the higher chip rate.” J.A.
426 (col. 8 ll. 31–32).
Intellectual Ventures argues the Board misconstrued
the term “an indication of an operating bandwidth,” which
appears in claim 1 of the ’353 patent and claim 6 of the
’079 patent. Those claims recite:
1. A method for operating bandwidth determina-
tion in a multi-bandwidth communication system,
the method comprising:
at a remote unit:
receiving a signal having a first signal portion at a
first, predetermined bandwidth, containing an in-
dication of an operating bandwidth selected from
a plurality of bandwidths used for a further signal
portion;
recovering the indication from the first signal por-
tion at the first, predetermined bandwidth; and
recovering information in the further signal por-
tion at the operating bandwidth indicated by the
indication.
J.A. 437 (col. 8 ll. 17–28) (disputed term emphasized).
4 INTELLECTUAL VENTURES II LLC v. ERICSSON INC.
6. A method performed by a wireless network, the
method comprising:
transmitting, by the wireless network, a signal
having a first signal portion at a first predeter-
mined bandwidth and containing an indication of
an operating bandwidth selected from a plurality
of bandwidths used for a further signal portion;
and
wherein the indication is recoverable from the
first signal portion and information in the further
signal portion is recoverable at the operating
bandwidth indicated by the indication.
J.A. 427 (col. 9 ll. 13–23) (disputed term emphasized).
Intellectual Ventures also argues the Board miscon-
strued the term “reconfigurable filters.” The ’353 patent’s
specification describes how the receiver configures itself to
receive communications at both the lower and higher
bandwidths by using one or more filters. J.A. 436 (col. 6
ll. 54–58). The specification also incorporates by refer-
ence the implementation of “different filters, or re-
configuration of the same filter(s).” Id. (col. 6 ll. 58–64).
Several dependent claims state that the filters “are recon-
figurable.” J.A. 437–438.
The Prior Art
The Board found the challenged claims obvious over
three prior art references. Because Intellectual Ventures’
arguments on appeal do not depend on the scope or con-
tent of the prior art, we describe each reference only
briefly here.
The McFarland reference, U.S. Patent No. 7,397,850,describes a multi-bandwidth wireless communication
system using Orthogonal Frequency Division Multiplex-
ing (“OFDM”). J.A. 1043. OFDM systems break wide
bandwidth systems into smaller frequency sub-channels.
INTELLECTUAL VENTURES II LLC v. ERICSSON INC. 5
Trompower, U.S. Patent No. 5,950,124, describes an
apparatus and process for improving the performance of
cellular communication using certain systems parame-
ters, such as chip rate. See J.A. 1096. Like the Intellec-
tual Ventures patents, the chip rate in Trompower
corresponds to the bandwidth. J.A. 2528, ¶ 51.
Pierzga, U.S. Patent Pub. No. 2001/0055320, teaches
an improvement to an OFDM system. J.A. 7688. It
describes an “adjustable” OFDM system that can “alter its
data rate and bandwidth” to “account for a change in the
number of services, or bandwidth required for each ser-
vice.” J.A. 7723, ¶ [0076].
Board Proceedings
In 2014, the Board granted two IPR petitions from Er-
icsson Inc. and Telefonaktiebolaget LM Ericsson (togeth-
er, “Ericsson”). The first petition challenged claims 6–10
and 28–32 of the ’079 patent as obvious over McFarland
and Trompower (IPR2014-00915). The second petition
challenged claims 1–8 and 21–27 of the ’353 patent as
obvious over Pierzga and McFarland (IPR2014-00919).
The Board also granted Google Inc.’s IPR petition chal-
lenging claims 9–20 and 29–34 of the ’353 patent as
obvious over McFarland and Trompower (IPR2014-
01031).
In their briefing before the Board, the parties disput-
ed the construction of “an indication of an operating
bandwidth.” Intellectual Ventures contended that the
term means “identification of a particular operating
bandwidth.” J.A. 4219. Google argued the plain and
ordinary meaning should control. J.A. 7358; see also J.A.
7359 (“A POSITA would understand that the plain and
ordinary meaning of ‘indication of an operating band-
width’ encompasses determining the frequency range
used to transmit the further signal portion based on the
information provided by the indication.”). Ericsson ar-
gued that Intellectual Ventures’ definition was unduly
6 INTELLECTUAL VENTURES II LLC v. ERICSSON INC.
narrow and that no construction was needed because the
’079 patent does not explain how bandwidth is computed
from chip rate. J.A. 761–762.
On August 25, 2015, the Board held a combined oral
argument for Ericsson’s two petitions. It held a separate
oral argument for Google’s petition later that same day.
In both arguments, the parties extensively discussed “an
indication of an operating bandwidth.” See, e.g., J.A. 45–
46, 49, 66. The Board characterized the exchange as “a
vigorous dispute over the proper construction.” J.A. 8.
During the Google argument (held after the Ericsson
argument), the Board asked whether it would be “suffi-
cient for us to say that enough information is conveyed
from the transmitter to the receiver so that the receiver
can configure itself to receive that which is transmitted.”
J.A. 7541–7542. Google’s counsel said yes. J.A. 7542.
Intellectual Ventures’ counsel disputed the Board’s pro-
posed construction but conceded that “there’s no special
requirement for the form of an indication of operating
bandwidth.” J.A. 7572. Intellectual Ventures’ counsel
further claimed that the indication could be an “arbitrary”
number because “[t]he question is whether or not an
operating bandwidth is actually identified, how that is
done is not the issue; whether it’s done is the issue.” Id.In its Final Written Decision, the Board construed “an
indication of an operating bandwidth” to mean “that the
first signal portion contains sufficient information so that
when it is received, the receiver is able to configure itself
to receive the data portion of the signal (or ‘further signal
portion’ or ‘transport channel’) at approximately the same
frequency range or bandwidth at which it will be trans-
mitted by the transmitter.” J.A. 21. In a footnote, the
Board “express[ed] no opinion as to whether the receiver
must be set to the exact same lower cut-off frequency and
upper cut-off frequency as the transmitter.” Id. n.15.
“The key consideration,” according to the Board, “is that
INTELLECTUAL VENTURES II LLC v. ERICSSON INC. 7
the receiver is able to receive the data that the transmit-
ted transmits.” Id.The Board also stated that the ’353 patent discloses
two alternative embodiments, one with a single reconfigu-
rable filter and one with two reconfigurable filters. J.A.
107–108. It found that “the claim language does not
preclude the use of a single, common filter that can be
used in the logic for recovering the first signal portion, as
well as the logic for recovering the further signal portion.”
J.A. 108. It thus determined that “McFarland discloses a
reconfigurable filter within the meaning of claim 16.” Id.Applying these constructions, the Board found that all
challenged claims of Intellectual Ventures’ patents would
have been obvious over various pairings of McFarland,
Trompower, and Pierzga. J.A. 61, 132, 201.
Intellectual Ventures timely appeals, and we have ju-
risdiction pursuant to 28 U.S.C. § 1295(a)(4)(A).
DISCUSSION
Intellectual Ventures argues on appeal that the
Board erred by (1) adopting a surprise construction that
denied Intellectual Ventures due process; (2) misconstru-
ing “an indication of an operating bandwidth”; and
(3) misconstruing “reconfigurable filters.” We address
each argument below.
Due Process
Intellectual Ventures argues that the Board denied it
procedural due process by construing “an indication of an
operating bandwidth” to mean something no party argued
for or expected. Intellectual Ventures contends that
neither Ericsson nor Google offered a construction of the
term in their petitions for IPR and that the Board never
“previewed” its construction until the Google oral argu-
ment. According to Intellectual Ventures, the Board’s
8 INTELLECTUAL VENTURES II LLC v. ERICSSON INC.
construction is completely untethered from the claim
language or any proposed construction.
Intellectual Ventures cites two of our recent decisions
in support: In re Magnum Oil International, Ltd., 829
F.3d 1364, 1381 (Fed. Cir. 2016) and SAS Institute, Inc. v.
ComplementSoft, LLC, 825 F.3d 1341, 1351 (Fed. Cir.
2016). In Magnum Oil, we reversed the Board’s decision
when the Board “adopt[ed] arguments on behalf of peti-
tioners that could have been, but were not, raised by the
petitioner during an IPR.” 829 F.3d at 1381. Because the
petitioner bears the burden of proving unpatentability, we
held that “the Board must base its decision on arguments
that were advanced by a party, and to which the opposing
party was given a chance to respond.” Id. In SAS, we
were concerned not that “the Board adopted a construc-
tion in its final written decision, as the Board is free to do,
but that the Board ‘change[d] theories in midstream.’”
825 F.3d at 1351 (quoting Belden Inc. v. Berk-Tek LLC,
805 F.3d 1064, 1080 (Fed. Cir. 2015)). Intellectual Ven-
tures argues that the Board acted contrary to our deci-
sions in Magnum Oil and SAS by ignoring Intellectual
Ventures’ proposed construction and adopting a construc-
tion in its Final Written Decision that no party previously
advanced.
We disagree. Due process requires notice and an op-
portunity to be heard by an impartial decision-maker.
Abbott Labs. v. Cordis Corp., 710 F.3d 1318, 1328 (Fed.
Cir. 2013). As formal administrative adjudications, IPRs
are subject to the Administrative Procedure Act (“APA”).
SAS, 825 F.3d at 1351. Under the APA, the Board must
inform the parties of “the matters of fact and law assert-
ed.” 5 U.S.C. § 554(b)(3). It also must give the parties an
opportunity to submit facts and arguments for considera-
tion. Id. § 554(c). Each party is entitled to present oral
and documentary evidence in support of its case, as well
as rebuttal evidence. Id. § 556(d). Pursuant to these
provisions, the Board may not change theories midstream
INTELLECTUAL VENTURES II LLC v. ERICSSON INC. 9
without giving the parties reasonable notice of its change.
Belden, 805 F.3d at 1080.
The record demonstrates that Intellectual Ventures
had notice and an opportunity to be heard. The parties
engaged in “a vigorous dispute over the proper construc-
tion” of “an indication of an operating bandwidth.” J.A. 8.
Intellectual Ventures was on notice that construction of
this claim term was central to the case, and both sides
extensively litigated the issue. Intellectual Ventures and
Google proposed constructions during briefing, while
Ericsson argued that no construction was necessary. J.A.
762, 4219, 7359. Upon reviewing Google’s and Ericsson’s
arguments, Intellectual Ventures could have requested
leave to file a sur-reply. Belden, 805 F.3d at 1081. It did
not do so. At the Ericsson oral argument, the Board
questioned counsel for both Intellectual Ventures and
Ericsson about the construction of “an indication of an
operating bandwidth.” See, e.g., Oral Arg. Tr. at 45–46,
49, 66. 2 At the Google oral argument later that day, the
Board asked Intellectual Ventures and Google to respond
to a proposed construction. J.A. 7541–7542, 7576. After
the Board issued its Final Written Decision, Intellectual
Ventures was entitled to seek rehearing. 37 C.F.R.
§ 42.71(d)(2). It did not.
Given the continuous focus on “an indication of an op-
erating bandwidth” before and during oral arguments and
Intellectual Ventures’ opportunity to seek a sur-reply or
2 Though not included in the Joint Appendix, this
citation refers to the August 25, 2015 consolidated oral
argument in IPR2014-00915 and IPR2014-00919. We
may judicially notice matters of public record for purposes
of appeal. See Biomedical Patent Mgmt. Corp. v. Cal.
Dep’t of Health Servs., 505 F.3d 1328, 1331 n.1 (Fed. Cir.
2007).
10 INTELLECTUAL VENTURES II LLC v. ERICSSON INC.
rehearing, we find no due process violation. In Magnum
Oil, the Board supplied completely new arguments that
the petitioner never raised. 829 F.3d at 1381. Not so
here, where the Board questioned counsel extensively
over the construction of “an indication of an operating
bandwidth” after receiving briefs that contested both
whether and how the Board needed to construe the term.
The Board is not constrained by the parties’ proposed
constructions and is free to adopt its own construction, as
it did here. See SAS, 825 F.3d at 1351.
To be clear, after the Board adopts a construction, it
may not change theories without giving the parties an
opportunity to respond. Id. No such change occurred
here. Intellectual Ventures, Ericsson, and Google each
submitted arguments as to whether and how to construe
“an indication of operating bandwidth.” The Board ques-
tioned counsel about it at oral argument, asked for reac-
tion to a hypothetical construction, and issued its
construction in its Final Written Decision. This is not the
situation in SAS, where the Board construed a claim term
one way in its Institution Decision and, unexpectedly, a
different way in its Final Written Decision. 825 F.3d at
1351. Because Intellectual Ventures had notice and an
opportunity to be heard, Abbott Labs., 710 F.3d at 1328,
the Board did not violate Intellectual Ventures’ due
process. We thus turn to the merits of Intellectual Ven-
tures’ two claim construction arguments.
“An Indication of an Operating Bandwidth”
Claim construction relying on only intrinsic evidence,
as here, is a legal determination we review de novo. Teva
Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 840−42,
(2015).
The Board construed “an indication of an operating
bandwidth” to mean “that the first signal portion contains
sufficient information so that when it is received, the
receiver is able to configure itself to receive the data
INTELLECTUAL VENTURES II LLC v. ERICSSON INC. 11
portion of the signal (or ‘further signal portion’ or
‘transport channel’) at approximately the same frequency
range or bandwidth at which it will be transmitted by the
transmitter.” J.A. 21. The Board “express[ed] no opinion
as to whether the receiver must be set to the exact same
lower cut-off frequency and upper cut-off frequency as the
transmitter.” J.A. 21 n.15. It said, “The key considera-
tion is that the receiver is able to receive the data that the
transmitted transmits.” Id.On appeal, Intellectual Ventures agrees with the
Board that “bandwidth” means “a frequency range.” It
also agrees with the Board that “operating bandwidth”
means “the frequency rage or bandwidth that is used for
the transport channel.” Thus, the real dispute is over the
term “indication.” The Board’s example of a bandwidth
included specific lower and upper cut-off frequencies. J.A.
17. Intellectual Ventures asserts that based on this
example, “an indication of an operating bandwidth” must
identify particular frequency limits. Thus, according to
Intellectual Ventures, the Board erred by not adopting its
proposed claim construction: “an identification of a par-
ticular bandwidth.” J.A. 699–701.
Intellectual Ventures also points to claim 12 of the
’079 patent, which depends from claim 11. Claim 12
recites that “the receiver configured to recover infor-
mation in the further signal portion comprises a filter
having a bandpass appropriate for the indicated operating
bandwidth.” J.A. 427 (col. 9 ll. 44–51). According to
Intellectual Ventures, “[a] selected bandpass range could
only be ‘appropriate’ if the indicated operating bandwidth
is identified with particularity.” Opening Br. 24.
The Board construes claims according their broadest
reasonable interpretation consistent with the specifica-
tion. Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131,
2142 (2016). We discern no error in the Board’s broad but
reasonable construction. At oral argument, Intellectual
12 INTELLECTUAL VENTURES II LLC v. ERICSSON INC.
Ventures’ counsel conceded that “there’s no special re-
quirement for the form of an indication,” which could be
an “arbitrary” number. J.A. 7572. This concession is in
stark contrast with Intellectual Ventures’ position on
appeal. Moreover, the Board recognized that the trans-
mitted data must be “at approximately the same frequen-
cy or range or bandwidth” for the receiver to work. J.A.
21. The ’079 patent specification does not require greater
specificity; it requires only an “appropriate” bandpass.
J.A. 426 (col. 8 l. 66). The Board’s construction comports
with the specification by requiring the first signal portion
to contain “sufficient information” to allow configuration.
The lower and upper cut-off frequencies might not need to
be “the exact same,” J.A. 21 n.15, but they do need to be
“approximately the same” for the patents to work. The
Board’s construction is reasonable in light of the specifica-
tion.
“Reconfigurable Filters”
Dependent claim 3 of the ’353 patent states, “the filter
filtering the first signal portion and the filter filtering the
further signal portion are reconfigurable.” J.A. 437 (col. 8
ll. 37–39). Similarly, dependent claims 16 and 23 of the
’353 patent state, “the filter having a bandpass appropri-
ate for the first, predetermined bandwidth and the filter
having a bandpass appropriate for the indicated operating
bandwidth are reconfigurable.” J.A. 438 (col. 9 ll. 27–30;
col. 10 ll. 7–10). The Board determined that “the claim
language does not preclude the use of a single, common
filter that can be used in the logic for recovering the first
signal portion, as well as the logic for recovering the
further signal portion.” J.A. 108.
We agree with the Board. The ’353 patent specifica-
tion anticipates that a user may use the same filter for
two functions. J.A. 436 (col. 6 ll. 54–58) (“[I]t is necessary
to provide different filters (or to differently configure the
filter(s)).”). The specification also incorporates by refer-
INTELLECTUAL VENTURES II LLC v. ERICSSON INC. 13
ence the implementation of “different filters, or re-
configuration of the same filter(s)” in a preferred embodi-
ment. Id. (col. 6 ll. 58–59). Intellectual Ventures’ pro-
posed construction requiring two separate filters,
therefore, would exclude the preferred embodiment of a
single filter. A construction excluding a preferred embod-
iment “is rarely, if ever, correct.” PPC Broadband, Inc.
v. Corning Optical Commc’ns RF, LLC, 815 F.3d 747, 755
(Fed. Cir. 2016). The Board acknowledged that the
phrase “are reconfigurable” normally indicates a plurality
of filters. But in light of the ’353 patent’s incorporation of
a single-filter embodiment, we find the Board’s construc-
tion to be reasonable. See id. (“[E]ach and every claim”
need not “be interpreted to cover each and every embodi-
ment.”).
CONCLUSION
We have considered the remainder of Intellectual
Ventures’ arguments and find them to be unpersuasive.
The Board did not deny Intellectual Ventures procedural
due process, and it correctly construed the disputed
terms. We thus affirm the Board’s decision.
AFFIRMED
COSTS
No costs.