It goes without saying that claim construction is an important issue, but the PTAB's recent decision in Netflix, Inc. v. DIVX, LLC, IPR2020-00558, Paper 66 (PTAB Feb. 22, 2024), shows not only that reasonable minds can differ about the proper construction of patent claims, but also that different interpretations can result in conflicting patentability determinations.
The Netflix IPR was filed in 2020. The challenged patent claimed a playback device for playing protected content from several alternative streams. On August 26, 2020, the PTAB instituted review and issued a Final Written Decision, determining that Petitioner had failed to prove the claims unpatentable. The PTAB addressed one of Petitioner's main arguments, but did not decide two other issues raised by Patent Owner—(1) the proper construction of limitation [1] of claim 1 ("locating encryption information that identifies encrypted portions of frames of video within the requested portions of the selected stream of protected video") and (2) whether the combination of prior art would have rendered obvious video frames in alternative streams that are encrypted using a set of common keys. On appeal, the Federal Circuit rejected the PTAB's analysis, vacated the decision, and remanded the case for further proceedings.
On remand, the PTAB took up the task of construing limitation [1] of claim 1. The issue was debated at length. The majority adopted a restrictive reading of the claim limitation that required "locating encryption information within the requested portions of the selected steam of protected video." Slip op. at 24. In reaching this conclusion, the majority relied on its reading of the language of the claim, finding it "reasonable" that the second and third clauses would both modify the first clause. Slip op at 13. The majority inserted commas in the claim language to aid its interpretation: "locating encryption information, that identifies encrypted portions of frames of video, within the requested portion of the selected stream of protect video." Id. (emphasis added). In addition, the majority found no support in the specification for the placement of encryption information outside of the requested portions of the selected stream of protected video. Slip op. at 24. And it found persuasive the testimony that an ordinarily skilled artisan would understand the invention in accordance with the majority's construction. The majority also resorted to consulting extrinsic grammar and style manuals to analyze how the position of words in a sentence establishes their relationship with each other. Slip op. at 23.
The dissent disagreed, arguing that the majority's use of commas and finding that its construction "seems more likely" was insufficient to impose a restrictive construction when an alternative, broader construction was also supported by the intrinsic record. Dissent at 4. Both the dissent and majority seemed to accept that the claim limitation was amenable to multiple interpretations. Dissent at 2. The dissent noted he was not surprised that Patent Owner would argue for a narrow construction, noting "[i]t is perhaps axiomatic that patent owners seek to read a claim broadly for purposes of infringement and narrowly for purposes of validity or patentability." Id. Thus, while the dissent agreed that the encryption portions of the frames of video could be found within the selected stream of protected video, he would not require it to be so. Dissent at 9.
Applying their respective constructions, the majority and dissent reached the opposite conclusion on the question whether the asserted prior art rendered the patent obvious. The majority concluded that Petitioner had not established that the claims were unpatentable as obvious; the dissent determined that the claims would have been obvious in light of the prior art.
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