The saga of Enfish v. Microsoft continues. The Enfish litigation provides a textbook example of the multi-pronged defense now common with the advent of post-grant review and the evolving law concerning unpatentable subject matter. Many are no doubt aware of the significant Federal Circuit decision on patentable subject matter (i.e. Section 101) which this litigation spawned. Less familiar are the parallel developments in the PTAB. Most recently, the Federal Circuit affirmed the PTAB’s determination that some, but not all, of the claims of the asserted patents were invalid in light of prior art. Microsoft Corp.v. Enfish, LLC, No. 2015-1734 (Fed. Cir. Nov. 30, 2016) (non-precedential).
Our story begins in 2012 with a suit by Enfish against Microsoft and a number of other parties directed to use of Microsoft’s .NET Framework. Initially, the district court concluded that a number of the asserted claims were indefinite, all but one of the claims anticipated, and all claims invalid under Section 101. The single unanticipated claim was found not infringed. On appeal, the Federal Circuit affirmed the non-infringement judgment, but reversed and remanded the invalidity determinations under Sections 101 and 102. Famously, the Federal Circuit concluded that the claims, directed to self-referential database tables, recited “specific improvement[s] to the way computers operate,” and were—for that reason—not merely abstract ideas.
Seeking to outflank Enfish, Microsoft filed multiple petitions for inter partes review. On these, Microsoft enjoyed mixed success before the PTAB. The PTAB declined to institute review on all challenged claims. With respect to those claims on which it instituted review, the PTAB found only roughly a third to be unpatenable. Both Microsoft and Enfish appealed these determinations. The Federal Circuit ultimately affirmed the PTAB in all respects. Enfish’s principal argument to overturn these determinations of unpatentability was that the PTAB had misconstrued a critical claim term. The disputed term was “object identification number” or “OID.” The PTAB had rejected arguments that this number must “identify,” rather than “define” an object, and that it must be absolutely “unique,” be “system-generated,” and be “immutable.”
The Federal Circuit observed initially that the asserted patents had expired while the appeal was pending. The Federal Circuit concluded that the governing construction standard under such circumstances was the Phillips standard normally applied in district court. The Federal Circuit elected to employ this standard despite the fact that the PTAB had applied the “broadest reasonable construction” standard because, at the time of its decision, the patents had yet to expire. The Federal Circuit, however, neatly sidestepped the potentially explosive consequences of a court of review using one claim construction standard to evaluate decisions of the PTAB made using a completely different standard, conveniently declaring (without any analysis) that the results under either standard would be the same.
Turning to the merits of Enfish’s appeal, the Federal Circuit first announced that Enfish had forfeited any argument that the OID must “identify” an object. Enfish had not argued for a construction before the PTAB that included the “identification” requirement and, for this reason, the court concluded such argument was “not merely a new or additional argument supporting the construction it urged before the Board, but an argument for a construction different from any Enfish clearly and timely urged before the tribunal we review.”
…Enfish relied on expert testimony and other extrinsic evidence to support its argument… Microsoft introduced contrary testimony and evidence to rebut Enfish’s position. Given the absence of intrinsic evidence, and conflicting extrinsic record, the Board was entitled to reject Enfish’s proposed construction.
As to Enfish’s remaining claim construction arguments, the court found no support in the claim language itself for the additional requirements argued for by Enfish. The Federal Circuit disagreed with Enfish’s contention that these requirements were compelled by the patent specification. The Federal Circuit also concluded that the PTAB had properly rejected Enfish’s expert testimony concerning the proper construction of this term.
The court’s discussion of conflicting expert testimony concerning claim construction points to a significant difference between proceedings in the PTAB and in district court. For years, based upon skeptical (if not hostile) comments from the Federal Circuit, practitioners have been schooled to avoid as much as possible use of extrinsic evidence in district court claim construction proceedings, and especially expert testimony. In the PTAB, however, use of experts who remark on the proper construction of claim terms is commonplace.
The Federal Circuit’s decision on the appeal of the PTAB decisions had an almost immediate impact on the district court litigation between Enfish and Microsoft. Shortly after the Federal Circuit’s decision affirming the PTAB’s claim construction, Enfish sought leave in the district court to amend its infringement contentions. The district court observed that the Federal Circuit employed the Phillips standard in its review of the PTAB’s claim construction, which led the district court to conclude that “the construction adopted by the Federal Circuit also applies to the action before this Court.” Because this PTAB construction differed from the construction earlier rendered by the district court, the district court concluded that “good cause” existed for Enfish’s requested amendment of its infringement contentions.