The PTO may not change its claim construction in the final written decision of an inter partes review without giving both of the parties an opportunity to respond. Here, for example, the Board’s assertion that its change in claim construction was non-prejudicial because the petitioner could have argued for a different claim construction earlier was found to be unreasonable. “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.” This would be a good case to consult and cite in response to a detrimental change in claim construction during inter partes review proceedings.
Background / Facts: The patent on appeal here from inter partes review proceedings at the PTO is directed to software tools allowing users to develop, edit, and debug software for a particular programming language. In its institution decision, the Board’s claim construction section indicated that the claimed “data flow diagram” means “a map of the path of data through the executing source code.” The Board’s final written decision, however, newly construed this limitation as “a graphical representation comprised of icons depicting data processing steps and arrows to depict the movement of data through source code,” which varies significantly from its initial interpretation.
Issue(s): Whether it was proper for the Board to change its interpretation of this limitation in the final written decision without affording the parties an opportunity to respond.
Holding(s): No. “IPR proceedings are formal administrative adjudications subject to the procedural requirements of the Administrative Procedure Act (‘APA’). … Although in the past we have discussed [the notice provision of] § 554(b)(3) with respect to the protection it provides to the patent owner, the provision is not so limited in an instituted IPR proceeding. … We have interpreted § 554(b)(3) in the context of IPR proceedings to mean that ‘an agency may not change theories in midstream without giving respondents reasonable notice of the change’ and ‘the opportunity to present argument under the new theory.’ … What concerns us is not that the Board adopted a construction in its final written decision, as the Board is free to do, but that the Board ‘change[d] theories in midstream.’”