Intrinsic Record Thwarts Theory of Interchangeability
In Apple Inc. v. Wi-Lan Inc. Appeal No. 20-2011, the Federal Circuit held that construing a broad claim term to be re-defined as a disclosed species on a theory that the terms are interchangeable requires that the intrinsic record clearly manifest a departure from the term’s plain and ordinary meaning.
Apple, Inc. sued Wi-LAN, Inc. seeking a declaratory judgment of non-infringement and invalidity for all claims of the ‘145 and ‘757 patents. During claim construction, the parties disputed the construction of “subscriber unit.” Apple argued that the written description defined “subscriber unit” as a “fixed or portable customer premises equipment” (CPE), pointing to (1) the patents’ interchangeable use of CPE and subscriber unit, (2) the patents’ use of CPE as the sole embodiment of the “subscriber unit,” (3) the patentee’s preliminary amendment that replaced claims reciting CPE with claims reciting “subscriber unit,” and (4) the patentee’s interchangeable use of subscriber unit with other similar terms in related patents. The district court rejected Apple’s construction of a subscriber unit as being a CPE, granted summary judgment of non-infringement concerning certain products in view of a license, and denied JMOL of non-infringement for other products. However, two rounds of trial on damages occurred, with Wi-Lan ultimately securing damages based on a reasonable royalty rate that relied on a “key patent” theory of apportionment. Apple appealed the district court’s construction of subscriber unit, denial of JMOL, and damages. Wi-Lan cross-appealed the summary judgment decision regarding non-infringement and damages.
The Federal Circuit affirmed the district court’s construction. The Federal Circuit held that the intrinsic record did not support Apple’s claim that the written description re-defined a subscriber unit as CPE. Applying the standard for lexicography, the court held that the written description did not clearly show that the two terms were used interchangeably to describe the same facet of a device or embodiment. Rather, the written description revealed that a CPE is a type of subscriber unit, which failed to demonstrate that the terms were interchangeable. Further, the written description failed to demonstrate that the invention was limited to a CPE as there were no “words or expressions of manifest exclusion or restriction.” Lastly, the court noted replacing one claim term with another during prosecution does not alone indicate that the terms are equivalents or interchangeable. The Federal Circuit upheld the district court’s claim construction determination as there was no indication of deviation from the term’s plain and ordinary meaning.
Additionally, the Federal Circuit affirmed the denial of JMOL regarding non-infringement, reversed the grant of summary judgment of non-infringement after concluding that the license had expired, and remanded for a third trial on damages after holding that the “key patents” apportionment methodology was flawed.
Claims Survive IPR Challenge Under Narrow Construction Because It Was the Broadest Reasonable Interpretation
In Quanergy Systems, Inc. v. Velodyne Lidar Usa, Inc. Appeal No. 20-2070, the Federal Circuit held that, even under the broadest reasonable interpretation standard, a claim term’s narrowed construction to refer to a specific detection method was proper in view of its exclusive use in the written description as referring to the specific method as well as its foundational relationship to the claims.
Quanergy filed two petitions for inter partes review challenging claims relating to a laser imaging detection and ranging (“lidar”) system. Velodyne marketed products incorporating time-of-flight (ToF) lidar systems that derive distance from the time it takes for light to return to a detector. In both petitions, Quanergy argued that the claims were obvious over prior art that derived distance from the location of the detection of reflected light. Despite applying the broadest reasonable construction to the term “lidar,” the PTAB construed the term to mean ToF lidar and concluded that the challenged claims were not obvious over the prior art’s description of lidar that relied upon location of detection rather than time to detection. Additionally, the PTAB found that objective indicia of nonobviousness outweighed any presumed showing of obviousness and emphasized a nexus between this evidence and Velodyne’s marketed products. Quanergy appealed to the Federal Circuit, arguing, inter alia, that the PTAB erred in its claim construction and presumption of a nexus.
The Federal Circuit affirmed the PTAB’s decision. With respect to the PTAB’s construction of “lidar,” the Federal Circuit reasoned that it was proper for the PTAB to interpret this term as ToF lidar because the written description focused “exclusively” on pulsed ToF lidar and such a method was “foundational to the claimed invention.” Furthermore, the Federal Circuit rejected the argument that this limited the term to a preferred embodiment because the written description introduced ToF lidar right from the start and the concept underlay the entire description.
The Federal Circuit also held that substantial evidence supported the PTAB’s conclusion that the prior art did not disclose or suggest ToF lidar and concluded that substantial evidence supported the PTAB’s presumption of a nexus and “thorough” analysis of objective indicia of nonobviousness. The Federal Circuit agreed with the PTAB that Velodyne’s products embodied the claimed invention, that a presumption of nexus was proper, and that Quanergy did not rebut this presumption with its “skeletal, undeveloped argument to the Board.”