Flo Healthcare v. Kappos – Prosecution Lessons

by Ryan Alley on November 19, 2012

in -, CAFC PTAB appeals

Case No. 2011-1476 (Newman, Plager, Wallach)

What a commotion. Looking at the opinion of the court, Flo Healthcare would appear to be a pedestrian means-plus-function case. The analysis and result are extraordinarily similar to last year’s Inventio v. Thyssenkrupp; Flo Healthcare just comes from the USPTO instead of a district court. Step into Judge Plager and Judge Newman’s accompanying “additional views” opinions, however, and one takes a trip down the rabbit hole of claim construction and appellate review standards.

Flo Healthcare, a consumed predecessor of InterMetro Industries, sued Rioux Vision on several patents including US Patent 6,721,178, disclosing and claiming adjustable medical computer work stations. Rioux sought and obtained (now-defunct) inter partes reexamination of the ‘178 patent. The USPTO confirmed patentability of several claims during reexam but rejected one claimset with means-plus-function(-ish) language over prior art. These claims formed the basis of the appeal and looked like this:

8. A mobile workstation, comprising:
a moveable chassis;
a substantially horizontal tray supported by the chassis that defines a work surface;
a height adjustment mechanism for altering the height of the horizontal tray;
a display screen adjacent to the work surface that is tiltable relative to the work surface;
an input device tray supported adjacent to the work surface; and
a power unit supported by the chassis for supplying power to the display screen.

On appeal before the Board, the patentee argued and succeeded in getting the above-bolded “height adjustment mechanism” interpreted under § 112, sixth paragraph. The Board nonetheless concluded (twice) that the specification broadly disclosed structures associated with height adjustment that were met by the prior art.

On appeal, the Federal Circuit found that the “height adjustment mechanism” did not invoke § 112, ¶ 6. Most importantly, the magical “means” word was not used, creating a rather strong presumption that the term would not be limited to specification structures. Without a “means” term, the panel was unwilling to invoke means-plus-function claim interpretation unless the term could in no way be interpreted to include structure. “Mechanism” had variously been interpreted as structural (Greenberg v. Ethicon Endo-Surgery) and non-structural (MIT v. Abacus); here, however, the panel found the modifying “adjustment” possessed a structural definition:

Dictionary definitions similarly show that the noun “adjustment,” which modifies “mechanism” here, has a reasonably well-understood meaning as a name for a structure. See Random House Unabridged Dictionary 25 (2d ed. 1993) (“3. a device, as a knob or lever, for adjusting: the adjustments on a television set”). [Footnote 5: But cf. Webster’s Ninth New Collegiate Dictionary 57 (1985) (“4. a means (as a mechanism) by which things are adjusted to one another”)] While this definition certainly “qualif[ies] the recited ‘mechanism’ . . . with a function or purpose,” Board Opinion, 2011 WL 289281, at *9, a drafter’s decision to define “a particular mechanism . . . in functional terms is not sufficient to convert a claim element containing that term into a ‘means for performing a specified function’ within the meaning of section 112(6)” because “[m]any devices take their names from the functions they perform.” Greenberg, 91 F.3d at 1583. “Height adjustment mechanism” is just such a term.

The opinion also looked to the written description of the ‘178 patent, which used “height adjustment mechanism” to refer to several different types of structural mechanisms, including ratchet, ball screw, rack and pinion, etc. mechanisms. This further convinced the panel that “height adjustment mechanism” was interpretable as structure and was not “simply a nonce word or a verbal construct that is [used as] . . . a substitute for the term ‘means for.’”

Given that § 112(f) was not invoked, the term “height adjustment mechanism” could not be limited to just those embodiments from the specification. Given that the Board had found anticipation when limiting the term to just the specification, it is little surprise that the panel here also found anticipation. Invalidity of the “height adjustment mechanism” claims as anticipated affirmed.

Although not necessary to dispose of the case and seemingly not raised by any party, Judges Plager and Newman wrote 16 pages worth of separate opinions presenting additional views on a perceived split in Federal Circuit appellate review standards for USPTO claim constructions. Give them a read if you haven’t already; this post explores them below in a comment.

Lessons: If you want to invoke § 112(f) and force the office to meet claim terms with what you disclosed in the written description, recite “means for” or “step of” in a claim. Similar (and more detailed) take-aways are presented in the Inventio post. If Flo Healthcare adds anything to these lessons, it is that “mechanism” can be a nonce word subject to means-plus-function interpretation, as long as one recites the term bare, without any (even quasi-)structural modifier like “adjustment.”

Comment: The additional view opinions strike me as both unnecessary and less-than-helpful. I say “unnecessary” because in Flo Healthcare the claim construction standard was not outcome-determinative and not well-presented. This superfluousness perhaps only reemphasizes a strong interest by at least two long-sitting judges in revisiting USPTO claim construction and review standards. Until the issue is squarely before the court, however, we do not have any context or facts against which to properly observe doctrinal contours or change.

I say “less than helpful” because I find Judge Plager’s, and to a lesser degree, Judge Newman’s, expositions to be overly focused on the procedural and largely academic question of court-agency review standards, while overlooking or conflating the more substantive and impactful question of claim construction standards before only the USPTO. Judge Plager sees a split in authority between In re Morris and In re Baker Hughes as to what level of deference is due to the USPTO on issues of claim construction:

we now appear to have two contradictory lines of authority on the question of how this court reviews Board claim constructions—a deferential “reasonable” (arbitrary/capricious-type) review, and a no-deference “pure” law type review. The fact that the APA now governs our review of PTO decisions does not provide guidance on which is the right standard. This is because the APA itself provides one standard for “pure” questions of law—which are reviewed without deference—and different, more deferential, standards for questions of fact and for mixed questions of fact and law.

The question then becomes whether claim construction by the Board is to be considered a question of “pure” law—the way this court treats claim construction in district court litigation under Cybor Corp.—and thus to be reviewed without deference; or whether it is something else, a blend of law and fact and judgment—as the Supreme Court said in Markman, a “mongrel practice”—in which case it is at least arguably subject to the “arbitrary and capricious” standard of APA § 706. Interestingly, none of the cases applying the Baker Hughes no-deference standard has paused to explain why that is the preferable standard as a matter of law or policy, or how it relates to the review standard that the Board uses.

As seen, Judge Plager treats all claim construction issues as a single procedural issue – how much deference the Federal Circuit gives USPTO claim constructions on appeal. The judge even sees claim construction within the Office as a procedural question, dedicated to agency discretion: “Whether the Board in reviewing examiner rejections could or should apply a more narrow standard of review is a policy question for the PTO; Morris approved but did not mandate the Board’s use of the ‘broadest reasonable interpretation’ standard.” Thus, claim construction on appeal from the Board turns only on what kind of review the Federal Circuit applies, reasonable deference (where the Federal Circuit presumably affirms broad but not nonsensical constructions) or no deference (where the Federal Circuit presumably applies its “single correct” Phillips-like claim construction).

But it seems to me that Judge Plager is collapsing two different and separate issues –proper claim construction (substantive) and agency deference (procedural) – into one procedural deference issue. Approaching these issues as distinct or unitary review standards might have no real effect on Federal Circuit case outcomes; as shown by the parentheticals and presumptions of the previous paragraph, adopting a different procedural approach might be the same as changing the substantive claim construction rule. But this treatment (1) does not appear uniform with approaches taken in other patent appeals, (2) brings the Morris and Baker Hughes lines of cases, including the recent Abbott Diabetes case, needlessly into conflict with each other and sometimes even themselves, and, (3) by focusing only on court-agency procedure, evades describing or mandating what Examiners and the Board must do in construing claims, at least in cases not appealed to the Federal Circuit (the lion’s share of applications), because this is merely an agency procedural question.

To the first point, in cases appealed from the district court, these are certainly two separate claim construction issues: the procedural deference question (claim construction is a matter of law that receives no deference), and the substantive claim construction question (applying the Federal Circuit’s issued patent claim construction jurisprudence, which might be generally described as looking at the claim plain language, then intrinsic evidence, then extrinsic evidence to arrive at claim meaning). These separate issues are decided by separate cases, Cybor and Phillips, and calls for their revision are typically distinct from one another.

On the second point, when coming from the Board, I always thought the issues had also been treated as plural: the procedural question (the Board’s claim construction gets no deference), and the substantive claim construction question (the claims are construed accordance with the Federal Circuit’s separate USPTO claim construction jurisprudence, broadest reasonable interpretation, which might generally be described as focused more on the plain language of the claim with fewer restrictions from intrinsic or extrinsic evidence). Under this viewpoint, Baker Hughes and Morris can be understood as cases setting forth different standards for two distinct issues, deference on appeal and proper claim construction analysis, respectively, akin to Cybor and Phillips. Other appeals from the USPTO have seemed to take a similar approach, including cases like American Academy of Science Tech Center, which is cited for its review standard by the supposedly conflicting Suitco Surface. These cases (and commentary) often phrase broadest reasonable interpretation as a substantive instruction to be followed by the USPTO, not a procedural mechanic that arises only upon court review. Where a case addresses the two issues separately, it does not nicely fit into Judge Plager’s rubric:

A recent case in this court suggests a third possible standard for review of Board claim constructions that bridges this concern, a standard to my knowledge not previously articulated. In Abbott Diabetes Care, Inc., the court began its discussion of the case saying, “[c]laim construction is a legal question, reviewed de novo. . . . In contrast to district court proceedings involving an issued patent, claims under examination before the PTO are given their broadest reasonable interpretation consistent with the specification.” Though that leaves open exactly what standard the court itself was intending to apply, the court later said, “[w]e conclude, therefore, that under the broadest reasonable construction, [the term at issue] is properly interpreted to mean [what the court understood it to mean]. Accordingly we vacate the Board’s decisions . . . and remand for the Board to apply the correct claim construction.”

On its face, this appears to be a blend of the other two standards—non-deferential review by the court, but with the court applying the broadest reasonable interpretation of the claim consistent with the administrative practice, rather than a single “correct” interpretation. In effect, the decision of the Board would become irrelevant since the court reapplies “de novo” the Board standard to the facts of the case. (Later in its conclusion, however, the opinion notes that the Board’s construction of a particular term in dispute was “unreasonable and inconsistent with the specification,” which sounds more like Morris’s “reasonableness” test.

. . . Under what circumstances this third standard will produce results that differ from those that might be reached under either the Morris or Baker Hughes standards is an existential question about which I offer no view.

On my third point, it’s of very little real-world use to the patent system to address correct claim construction only through a procedural artifact of court-agency review and without specifically instructing the USPTO how it should construe claims. Judge Plager concludes that patents being subject to differing interpretations in prosecution and litigation is a “problem.” Surely this problem can only be fully remedied by treating claim construction as a substantive issue on which the Federal Circuit mandates the USPTO’s approach, not a procedural issue that appears only on appeal to a court. And surely the Federal Circuit more clearly pronounces a proper substantive claim construction analysis – whether it be BRI or a litigation standard – to the USPTO through de novo review, as it always seems to have done. If Judge Plager is concerned about competing claim constructions before the courts and Office, it’s probably much more effective and clear to simply switch substantive analyses or walk back existing ones (like Abbott Diabetes arguably did).

Judge Newman’s additional views seem somewhat clearer to me, not because they explicitly treat deference and claim construction as separate procedural and substantive issues, but because they seem exclusively focused on the deference issue. Judge Newman would continue giving no deference in claim construction, regardless of from where a patent issue is appealed:

To aid in assuring that patentability is governed by the same law in the Patent Office as in the courts, the Federal Courts Improvement Act of 1982 eliminated the separate appellate paths of the Court of Customs and Patent Appeals and the regional circuit courts of appeal. The charge to the Federal Circuit was ambitious: to bring certainty and predictability to the patent system and thus to provide enhanced incentive to invention and innovation, by assuring that the same law is applied in all tribunals. To this end, the court gives objective, de novo review to rulings of patent law, whatever their source. E.g., Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448, 1455 (Fed. Cir. 1998) (claim interpretation is a question of law, and receives de novo determination on appeal).

. . . It is irrelevant by what path the examiner and the applicant reached their final resolution; that resolution is judicially reviewed for correctness in law. Similarly when patentability is challenged in litigation, the patent grant is judicially reviewed for correctness in law. Questions of law receive de novo determination, however the questions reach the court.

Judge Newman recognizes a separate “broadest reasonable interpretation” substantive approach for claims before and on appeal from the USPTO but does not detail how it differs from litigation constructions:

The “broadest reasonable interpretation” applies to the initial consideration of patentability, not to the final decision. This protocol was discussed in Application of Kebrich, 201 F.2d 951, 954 (CCPA 1953) (“the tribunals [of the Patent Office] and the reviewing courts in the initial consideration of patentability will give claims the broadest interpretation which, within reason, may be applied.”)

. . . Although the internal procedures of administrative and litigating tribunals are historically different. . .

In the reexamination appeal now before us, the PTO states in its brief that “During reexamination – as in ex parte prosecution – claims are given their broadest reasonable interpretation consistent with the specification . . .” That is correct.

Yet at other times, Judge Newman suggests that claims should not get different interpretations when adjudicated before different bodies:

there has arisen the situation illustrated in this appeal, where the same issue can be finally adjudicated to different appellate outcomes, depending on the tribunal from which it came.

I cannot find any other Federal Circuit case where the ‘178 patent was at issue, so I’m assuming Judge Newman’s point is actually the more limited point that, while “broadest reasonable interpretation” is fine before a patent has been subject to Federal Circuit review, once the court has ruled on claim construction, no court or agency should be able to revisit that construction (or any other matter of law).

Finally, if you’re still reading, the opinion is interesting in its footnote 7, where it determines that remand and reopening of prosecution is not required, even though the court affirmed on a different ground, because the court’s different ground was the one advanced by the Examiner. Put another way, the Board affirmed on a new ground, but the Federal Circuit effectively vacated that new ground and reinstated the original ground, requiring no reopening.

6 November 19, 2012 at 2:18 pm

“Superfluousness”

That word is superflous.

Ryan Alley November 19, 2012 at 3:10 pm

“That word is superflous.”

The whole word, or just the middle “u”?

Kip November 19, 2012 at 5:37 pm

1. Footnote 7 annoys a stickler-for-procedure like me. The footnote essentially deprives the applicant of the right to fully brief and argument the ultimately-affirmed-rejection to Board on rehearing and to the CAFC on appeal.

2. I think Plager’s discussion of the two issues (A) standard for claim construction and (B) standard of review for claim construction is really confusing. The discussion is especially confusing when he discusses Abbott Diabetes. He states that Abbott suggests a dual or mixed approach – but it does not such thing.

But I don’t think Plager is committing as elementary of a mistake as you suggest. You state that Morris is directed to (A) standard for claim construction. But it also states a (B) standard of review of claim construction – “reasonableness.” Notice that the “reasonableness” standard doesn’t include the rest of the “broadest reasonable interpretation yadda-yadda” qualifications. It’s simply a “reasonableness” standard of review, akin to other deferential review of agency decisions. Many other decisions, and the PTO, have cited Morris for this distinct point about the standard of review (as distinct from the original standard for claim construction)

3. I read Newman’s opinion to be broader than you suggest. Newman does not really believe that the BRI is a rule of claim construction. Instead, she thinks of it a procedural device within the PTO. As far as I can tell, this means that, in Newman’s view, the PTO and the courts should always reach the same claim constructions. All the BRI rule does is allow the examiner to begin with a broad construction, to feel out the applicant. But that overly broad construction cannot be sustained at the Board or the Federal Circuit. I don’t know how else to interpret “The ‘broadest reasonable interpretation’ applies to the initial consideration of patentability, not to the final decision.”

Of course, I don’t think that anyone else at the Fed. Cir. agrees with Newman about this last point.

Ryan Alley November 20, 2012 at 12:45 am

Thanks for the substance as always, Kip.

“You state that Morris is directed to (A) standard for claim construction. But it also states a (B) standard of review of claim construction – “reasonableness.””
In Morris, I see no discussion of a procedural “standard of review.” The case seems very squarely addressing substantive claim construction “methodology” before the USPTO, which is BRI. Looking at the depth of the opinion, the Morris panel uses de novo review sub silentio. Judge Newman says as much on page 7 of her views, that Morris effectively used de novo appellate review of a BRI standard. Of course, Judge Plager wrote Morris and Flo. If he thinks Morris was using a different standard of review from other cases like American Academy that explicitly announce de novo review, it’s tough to argue with that. I just wish he would have pointed out exactly what Morris did that evidenced the different standard. Morris, if anything, seems to go through the record in *more* detail and with *less* deference than cases explicitly using de novo review.

Judge Plager may not be making an elementary mistake at all. If someone were to want the pretty well established de novo standard of appellate review revisited, I think this is how they would do it, by “finding” a conflict with it.

I don’t know how else to interpret “The ‘broadest reasonable interpretation’ applies to the initial consideration of patentability, not to the final decision.”
I do interpret this differently. Judge Newman is saying BRI applies at any point before a patent is granted, at the USPTO or CAFC; this is the initial consideration of patentability. The final decision is post-grant, in litigation, and we use a different standard. I don’t know how else to interpret her very next sentence “the tribunals [of the Patent Office] and the reviewing courts in the initial consideration of patentability will give claims the broadest interpretation which, within reason, may be applied.” How else does one get to a “reviewing court” in the “initial consideration”? Thus, I see Judge Newman’s opinion as accepting BRI in passing while directly addressing and defending de novo review of BRI during pre-grant appeals.

Kip November 20, 2012 at 4:02 am

In further review, I agree with both of your points. You’re razor sharp, as always.

First, I know law review articles, CAFC cases, and PTO powerpoint slides, that cite Morris for a mere “reasonableness” standard of review. But when I go back and read Morris, it seems like the court was just being lazy when quoting the standard for claim construction. That is, the court was quoting the “reasonableness” part of the BRI inquiry, without quoting the rest. It was not clearly setting forth a deferential standard of review. I’m happy to agree with this because I would hate for the PTO to get deference on this issue.

Second, your explanation of Newman’s comments makes sense of things that previously puzzled me. It still seems strange to say that the BRI rule is not a rule of claim construction. But, regardless of that quibble, I agree that Newman seems to accept the BRI rule for PTO final decisions (and their review). Of course, I wrote a whole article arguing that the PTO should stop using that broader standard.

Third, perhaps the most interesting part of the opinion here in Plager’s footnote stating that the PTO is free to use a narrower standard of claim construction. That raises the question of whether claim construction is substantive or procedural – because the PTO has no substantive rulemaking power. So, if claim construction is substantive, then Plager is wrong and the PTO cannot establish the BRI rule or any other rule as the standard for claim construction. Note that neither 37 CFR 1.104 nor any other part of 37 CFR establishes the BRI rule (with the exceptions of the IDS and postgrant validity trial rules, for which the PTO has limited grants of extra powers).

Moreover, I don’t know of any case suggesting that the PTO had this freedom, before this case. Nor do I know when the PTO sat down, considered its options, and exercised its freedom to go with the BRI rule (as opposed to some other rule). Traditionally, I always thought of the BRI rule as a mandate, not a discretionary option.

It will be interesting to see further developments.

MaxDrei November 23, 2012 at 11:11 am

For somebody in Europe, Flo is an interesting case with which to test the EPO way of doing claim construction. I will explain it below, and hope to stimulate here a reaction, the better to understand the differences in thinking between the two jurisdictions.

Under the EPC, clarity (Article 84) is to be examined pre-issue by the EPO but is not challengeable after issue. This worries litigators but strikes me as a feature of the EPC that has unforeseen beneficial consequences.

With those attacking validity post-issue, grounds for revocation other than lack of clarity (ie definiteness, 35 USC 112) have to be invoked. For those trying the case, the claim is deemed to be clear and so they just have to get on and construe it (in the light of the specification and drawings) as if it were definite. That will yield a claim construction that is the most reasonable one after having taken into account all the relevant facts.

It’s different in the EPO prior to grant. Typically an Examiner will adopt a BRI line, to provide basis for novelty and obviousness objections. When Applicant asserts that the Examiner’s claim construction is unreasonable the Examiner can, in response, invite Applicant to resort to an amendment of the claim to make it clearer, and thereby novel, and thereby meeting the requirements for patentability under the EPC. In fact, EPO Examiners are very strict on clarity because they know that, once the claim goes to issue, its clarity can’t be challenged.

The European system runs like clockwork, very efficiently, with a minimum of lawyering. You don’t need two different ways to construe the settled claim. You don’t need two different standards of appellate review. And all of this is achieved simply by depriving parties of the opportunity to put definiteness in issue any time after issue.

Anybody see a snag? Where’s the flaw?

Incidentally, all the lawyering in Flo would have been avoided if 112/6 had not contained that M+F clause. Just imagine how many billed hours have been generated over the years by the insertion into the patent statute, long ago, of that silly misguided little clause.

Ryan Alley November 29, 2012 at 9:16 pm

Thanks for the comment Max. I have one comment and one question. First, as to being stricter on clarity, in my experience, this still results in many EPO claims being extremely functional in nature (e.g., “a gate adapted for [providing novel function”) and thus very broad. If anything, USPTO Examiners can be even stricter on clarity in such situations. As for my question, do you think that an indefiniteness rejection would have changed the result or forced a claim amendment here?

MaxDrei November 30, 2012 at 5:36 pm

Thanks Ryan. As to your comment, Europe says that clarity and scope are different things. Narrow claims are just as likely at the EPO to attract clarity objections as wide claims. Just because the claim under exam at the EPO is startlingly wide does not legitimate an objection that the claim is insufficiently clear.

As to your question, because I do not practise before the USPTO I do not see how I can answer it. BTW, there is no possibility under the EPC to object that a claim is “indefinite”.

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