On November 25, 2015, the Court of Appeals for the Federal Circuit (“CAFC”) issued an opinion in Straight Path IP Group, Inc. v. Sipnet EU S.R.O., marking the first time that the CAFC has completely reversed and remanded a final written decision of the Patent Trial and Appeal Board (“PTAB”).1  This CAFC opinion provides guidance on proper claim construction and emphasizes the importance of preserving arguments for appeal.
 
Background

On April 11, 2013, Sipnet EU S.R.O. (“Sipnet”) filed a petition to institute an inter partesreview of claims 1-7 and 32-42 of U.S. Patent No. 6,108,704 (the “’704 patent”) owned by Straight Path IP Group, Inc. (“Straight Path”).2  The PTAB instituted inter partesreview for all of the challenged claims in October 2013.3  The PTAB entered a final written decision on October 9, 2014 adopting Sipnet’s construction of disputed claim language and cancelled the challenged claims based on that construction.4  Straight Path appealed the PTAB decision to the CAFC arguing that (1) the PTAB had erroneously construed the claim limitation “is connected to the computer network;” and (2) the PTAB failed to construe the claim term “process.”5
 
The Board Cannot Adopt a Claim Construction Contrary to its Plain Meaning Absent a “Redefinition or Disavowal” in the Intrinsic Record

Straight Path’s patent is entitled “Point-to-Point Internet Protocol” and describes protocols for establishing communication links through a network.6  Specifically, the ’704 patent describes a protocol which exchanges Internet Protocol (IP) addresses between processing units to establish a “point-to-point communication link” between the processing units over the Internet.7  Claim 1 of the ’704 patent is representative of the challenged claims and includes the claim limitation “program code for transmitting, to the server, a query as to whether the second process is connected to the computer network.”8  The construction of this particular limitation gave rise to the dispute between the parties.9
   
While both Sipnet and Straight Path agreed that the claim language required the second unit to be on-line, they disagreed as to how that condition could be fulfilled.10  Sipnet argued that “connected to the computer network” merely required that the second unit be “registered with the server.”11  Conversely, Straight Path asserted that the express claim language carries “necessary temporal requirements” that enable “realtime point-to-point communication” and thus the query seeks to determine whether the second unit is connected at the instant in time the query is sent.12  Straight Path opposed Sipnet’s construction explaining that simply registering an address does not satisfy the requirement of being “on-line” because a unit may subsequently go off-line.13
  
In construing “connected to the computer network,” the PTAB relied on the specification of the  ’704 patent to provide context for the disputed claim terms.14  As support, the PTAB cited a single passage: “the second processing unit 22, upon connection to the Internet 24 through a connection service provider, is processed by the connection server 26 to be established in the database 34 as an active on-line party.”15  The PTAB ultimately sided with Sipnet and held that “under the broadest reasonable construction, ‘connected to the computer network’ encompasses a processing unit that is ‘active and on-line at registration.’”16  Based on this construction, the PTAB cancelled all of the challenged claims.17
     
On appeal, the majority of the three-judge CAFC panel (the “Majority”) determined that the PTAB had adopted an erroneous claim construction even under the broadest-reasonable interpretation standard.18  In pertinent part, the Majority found it improper for the PTAB to disregard the facially clear meaning of the claim terms and faulted it for immediately turning to the specification:
 

We start with the claim language— which has a meaning that can only be called plain. . . . It is not a reasonable interpretation of the claim language, considering its plain meaning, to say that it is satisfied by a query that asks only for registration information, regardless of its current accuracy.19

   
The Majority opined that “it is [] difficult to conclude that the specification reasonably supports a different meaning” when claim language has a plain meaning.20  The Majority then advised that proper construction requires staying true to the claim language and that a court’s focus should remain on how a person of ordinary skill in the art would understand the claim terms.21  The Majority thus concluded that the PTAB erred by construing the disputed claim terms in a way that gave the specification language invention-defining effect.22  In looking to the claim language itself, the Majority determined that the proper construction of “is connected to the computer network” required that the second unit be connected at the time the query is sent instead of the  construction proffered by the PTAB wherein “is connected” referred to being “active and online at registration.”23  The Majority reasoned:

The present tense “is” in “is connected to the computer network”  plainly says that the query transmitted to the server seeks to determine whether the second unit is connected at that time, i.e., connected at the time that the query is sent.  The question asked by the query is whether the device ‘is’ connected, not whether it was connected or whether it is still registered as being connected even if that registration information is no longer accurate.24 

The Majority also reaffirmed the well-established rule that redefinition or disavowal in the intrinsic record is required where claim language is plain.25  The Majority explained that the claims and specification have “distinct but related roles” in claim construction and that the specification should be used to “identif[y] and resolv[e] genuine uncertainties about claim language” and to state “redefinitions” and “disavowals.”26  Turning to the case at bar, the Majority ruled that “the specification does not provide a basis for reasonably adopting a construction that contradicts the plain meaning of the claim language” and highlighted that its construction was confirmed by the prosecution history.27
 
As indicated above, this opinion was not unanimous.  Judge Dyk filed a dissenting opinion arguing that the disputed claim limitation did not “require absolute currency in a real-time assessment of connectivity.”28  He opined that the word “is” has a common usage (one that does not imply absolute accuracy or currency) that supports the PTAB’s interpretation of the limitation.29  Judge Dyk also criticized the majority’s claim construction as being inconsistent with the previous CAFC decision in Paragon Solutions, LLC v. Timex Corp.30  According to Judge Dyk, the CAFC “faithfully followed Phillips”31  in deciding Paragon by looking to the specification to interpret the claim limitation in dispute in that case.32  In particular, Judge Dyk pointed to language from Phillips that the specification is “the single best guide to the meaning of a disputed term” and that the specification “is always highly relevant to the claim construction analysis.”33
 
The CAFC Will Not Consider Unpreserved Arguments

Straight Path also argued in its Appeal Brief that the PTAB erred by not construing the “critical and disputed” claim element “process.”34  However, the CAFC rejected this argument and refused to hear the “process”-based challenge because Straight Path did not preserve that contention.35  “[Straight Path] did not request a construction of ‘process’ in its preliminary response to Sipnet’s petition to institute inter partes review, in its response after the Board instituted the review, or at the oral hearing before the board.”36  The Court explained that the PTAB did not commit error by failing to construe “process” because Straight Path’s challenge depended entirely on its newly proposed construction which it had failed to preserve before the PTAB.37

Conclusion

This case demonstrates that the CAFC is willing to overturn a PTAB decision, particularly in the area of claim construction where courts, patent judges, and the CAFC can often disagree.  Determining the meaning of claim language can be difficult, so practitioners should take the time to review and apply relevant PTAB and CAFC precedent to facilitate the finding of the correct construction.