On July 15, 2016, the Federal Circuit, in a precedential order, dismissed an appeal by SkyHawke Technologies, holding that a patent owner cannot appeal from a Patent Trial and Appeal Board (“PTAB”) decision holding its claims patentable, even if the PTAB adopted an overly restrictive claim construction.
SkyHawke initially sued Deca International Corp. in 2010, alleging infringement of two patents related to GPS positioning on a golf course. Deca requested inter partes reexaminations of the patents, which were granted. The PTAB canceled the challenged claims in one of the patents, but, in the other reexamination, the PTAB upheld the challenged claims because the prior art failed to disclose the corresponding structure of a means-plus-function limitation.
This essentially ratified SkyHawke’s position, but with a wrinkle: SkyHawke had argued for a broader definition of the corresponding structure than the PTAB adopted.31 SkyHawke appealed, seeking “[c]orrection of the PTAB’s claim construction and affirmance of the PTAB’s ultimate decision upholding the examiner’s withdrawal of the rejection of claims 5-8.” 32
On motion by Deca, the Federal Circuit dismissed for lack of jurisdiction. Writing for the court, Judge Hughes cited the “prudential rule” that the winning party in a dispute cannot appeal from the favorable judgment.33 While the statute in question provides appeals for parties “dissatisfied with the final decision” of the Board,34 the “final decision” in this case was the Board’s affirmance, not the reasoning expressed in its opinion.35 The court also dismissed as unfounded SkyHawke’s concern that the PTAB’s narrow reading of the claims would allow defendants to escape an infringement suit. If a district court enters a judgment of non-infringement based on the PTAB’s construction, the court explained, SkyHawke can appeal from that judgment, and the court will review the construction then.36 There would be no issue preclusion because the actual issue (claim construction under Phillips) had not been litigated;37 no judicial estoppel because SkyHawke had not advocated for the construction adopted by the PTAB; and no prosecution disclaimer because SkyHawke had opposed any narrowing statements by the USPTO.38 In this sense, SkyHawke prevailed despite having its appeal dismissed; it now has a precedential appellate opinion explaining that the PTAB’s narrow claim construction is not binding on a district court.
Therefore, the decision serves as a warning more to unsuccessful patent challengers than to patent owners. A losing petitioner may believe that the Board’s reading of the claims precludes a finding of infringement, but considering SkyHawke, this is no reason to forego an appeal. The patent owner will be free to argue a broader construction than the Board adopted, even though the defendant will not be free to argue that the claims are invalid over the prior art, as the inter partes review statute prevents petitioners from later arguing invalidity on grounds they “raised or reasonably could have raised” during the proceeding.39 Although, if the Board adopted a narrow claim construction argued by the patent owner, judicial estoppel may prevent the patent owner from arguing for a broader construction later in court.40
SkyHawke presents just one issue among the many that may arise when infringement and validity are addressed in separate proceedings by separate tribunals. As always, parties should exercise caution when deciding whether and how to take advantage of the PTAB’s post-grant procedures.