Skyhawke Technologies, LLC v. Deca Int Corp. , 828 F.3d 1373 ( 2016 )

United States Court of Appeals
for the Federal Circuit
______________________
SKYHAWKE TECHNOLOGIES, LLC,
Appellant
v.
DECA INTERNATIONAL CORP.,
Cross-Appellant
______________________
2016-1325, 2016-1326
______________________
Appeals from the United States Patent and Trade-
mark Office, Patent Trial and Appeal Board in No.
95/001,750.
______________________
ON MOTION
______________________
Before TARANTO, CHEN, and HUGHES, Circuit Judges.
HUGHES, Circuit Judge.
ORDER
Deca requested inter partes reexamination of a patent
owned by SkyHawke. SkyHawke ultimately prevailed,
with the Patent Trial and Appeal Board finding the
contested claims not obvious over the cited prior art.
SkyHawke appeals, arguing that the Board decision
should be affirmed but that the claim construction relied
2 SKYHAWKE TECHS, LLC v. DECA INT’L CORP.
on by the Board to reach that decision should be corrected
by this court.
Deca moves to dismiss SkyHawke’s appeal for lack of
jurisdiction. SkyHawke opposes the motion. For the
reasons set forth below, we grant the motion to dismiss.
I
SkyHawke sued Deca in United States district court
for infringement of U.S. Patent 7,118,498. In response,
Deca filed a request for inter partes reexamination of the
’498 patent at the Patent Office. The district court stayed
the litigation pending the outcome of the reexamination.
The Patent Office granted reexamination, finding
substantial new questions of patentability for claims 5
through 8 of the ’498 patent. The Examiner initially
rejected all claims based on several grounds of obvious-
ness. But, the Examiner subsequently reversed course,
confirming the patentability of all of the claims. Deca
appealed this finding to the Board, which affirmed the
Examiner’s confirmation of all claims. As part of its
decision, the Board performed a lengthy analysis of the
meaning of the phrase “means . . . for determining a
distance” recited in claim 5. The Board identified particu-
lar algorithms in the ’498 patent as providing the corre-
sponding structure for that claim element, as required for
a means-plus-function claim under 35 U.S.C. § 112 ¶ 6.
Based on this claim construction, the Board concluded
that none of the prior art references disclosed the algo-
rithmic structure corresponding to the “means . . . for
determining a distance” of claim 5. On this basis, the
Board affirmed the Examiner’s confirmation of patentabil-
ity of claims 5–8.
SkyHawke filed an appeal from the Board’s judgment.
SkyHawke requests the following relief: “Correction of
the PTAB’s claim construction and affirmance of the
PTAB’s ultimate decision upholding the examiner’s with-
SKYHAWKE TECHS., LLC v. DECA INT’L CORP. 3
drawal of the rejection of claims 5-8” of the ’498 patent.
Form 26 Docketing Statement of SkyHawke, ECF No. 12.
Deca subsequently filed what is essentially a condi-
tional cross-appeal, which it intends to dismiss if
SkyHawke’s principal appeal is dismissed. See Motion to
Dismiss, ECF No. 13, p. 4 n.2.
II
Courts of appeals employ a prudential rule that the
prevailing party in a lower tribunal cannot ordinarily
seek relief in the appellate court. See Deposit Guar. Nat’l
Bank v. Roper, 445 U.S. 326, 333–34 (1980); see also
Camreta v. Greene, 563 U.S. 692, 702–04 (2011) (distin-
guishing Article III standing and prudential rule). Even
if the prevailing party alleges some adverse impact from
the lower tribunal’s opinions or rulings leading to an
ultimately favorable judgment, the matter is generally
not proper for review. See California v. Rooney, 483 U.S.
307, 311–13 (1987).
SkyHawke’s appeal fits cleanly into this prudential
prohibition. SkyHawke alleges a generalized concern that
the Board made “an erroneous, overly-narrow claim
construction, impacting SkyHawke’s patent rights and its
statutory right to exclude others from practicing its
invention.” Opposition, ECF No. 14, p. 1. But SkyHawke
does not seek to alter the judgment of the Board in this
case.
Rooney is instructive. In that case involving a chal-
lenge to the validity of a search warrant, the State of
California prevailed as to the validity of the search war-
rant but disagreed with a portion of the appellate court’s
reasoning. See Rooney, 438 U.S. at 310–11. Fearing that
the appellate court’s reasoning might harm the State’s
position at trial, it petitioned the Supreme Court for
review. See id. at 311–12. The Supreme Court refused to
hear the case on the merits. See id. at 314. The Supreme
4 SKYHAWKE TECHS, LLC v. DECA INT’L CORP.
Court found the State’s concern for some future, potential
harm to be too attenuated from the judgment actually
entered by the appellate court. See id. at 312–13. The
Supreme Court explained:
Even if everything the prosecution fears comes to
bear, the State will have the opportunity to appeal
such an order [excluding some evidence], and this
Court will have the chance to review it, with the
knowledge that we are reviewing a state-court
judgment on the issue[.]
Id. at 313.
SkyHawke’s appeal is nearly identical to the state’s
appeal in Rooney. SkyHawke is primarily concerned that
the district court will rely on the Board’s claim construc-
tion and that Deca will thereby escape the infringement
suit.
However, SkyHawke will be able to appeal any such
unfavorable claim construction by the district court
should that situation arise. While administrative deci-
sions by the U.S. Patent and Trademark Office can
ground issue preclusion in district court when the ordi-
nary elements of issue preclusion are met, see B & B
Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293,
1302–10 (2015) (holding that Trademark Trial and Appeal
Board decisions on trademark registrations can ground
issue preclusion in district courts for the question of
likelihood-of-confusion when the ordinary elements of
issue preclusion are met), we cannot foresee how the
claim construction reached by the Board in this case could
satisfy those ordinary elements. See Kircher v. Putnam
Funds Tr., 547 U.S. 633, 647 (2006) (no preclusion based
on judgment that is not subject to appeal); Penda Corp. v.
United States, 44 F.3d 967, 972–73 (Fed. Cir. 1994) (“It is
axiomatic that a judgment is without preclusive effect
against a party which lacks a right to appeal that judg-
ment”). Moreover, issue preclusion requires that “the
SKYHAWKE TECHS., LLC v. DECA INT’L CORP. 5
issues were actually litigated.” In re Trans Tex. Holdings
Corp., 498 F.3d 1290, 1297 (Fed. Cir. 2007). Because the
Board applies the broadest reasonable construction of the
claims while the district courts apply a different standard
of claim construction as explored in Phillips v. AWH
Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc), the issue
of claim construction under Phillips to be determined by
the district court has not been actually litigated. In-
formatively, we have held that issue preclusion does not
require the Patent Office to use the claim construction
determined by a district court. See Trans Texas, 498 F.3d
at 1296–98 (holding that the Patent Office is not bound by
district court claim construction because Patent Office
was not a party to the district court proceeding); Power
Integrations v. Lee, 797 F.3d 1318, 1326 (Fed. Cir. 2015)
(noting that the Patent Office is not bound by the district
court claim construction due to the different claim con-
struction standards applied in the two fora). Likewise,
judicial estoppel will not bind SkyHawke to the Board’s
claim construction, because judicial estoppel only binds a
party to a position that it advocated and successfully
achieved, see Zedner v. United States, 547 U.S. 489, 504
(2006). SkyHawke clearly did not advocate the claim
construction ultimately adopted by the Board. Finally,
the claim construction adopted by the Board cannot create
prosecution history disclaimer, at least because a party
can avoid such disclaimer by opposing such statements
when made by the Patent Office, cf. Biogen Idec, Inc. v.
GlaxoSmithKline LLC, 713 F.3d 1090, 1096 (Fed. Cir.
2013) (An applicant “can challenge an examiner’s charac-
terization [of the claims] in order to avoid any chance for
disclaimer . . . .”), which SkyHawke has done here.
Therefore, SkyHawke will have the opportunity to ar-
gue its preferred claim construction to the district court,
and SkyHawke can appeal an unfavorable claim construc-
tion should that situation arise. With the present appeal,
SkyHawke is merely trying to preempt an unfavorable
6 SKYHAWKE TECHS, LLC v. DECA INT’L CORP.
outcome that may or may not arise in the future and, if it
does arise, is readily appealable at that time. Therefore,
we see nothing in the present case that warrants devia-
tion from the standard rule counseling against our review
of prevailing party appeals.
SkyHawke argues that the language of pre-AIA 35
U.S.C. § 141 (2006) requires us to take jurisdiction over
this appeal contrary to the ordinary rule. 1 Pre-AIA § 141
provides that a patent owner “who is in any reexamina-
tion proceeding dissatisfied with the final decision in an
appeal to the Board . . . may appeal the decision only to”
this court. Id. SkyHawke argues that it is dissatisfied
with the claim construction leading to the Board’s final
decision, so the present appeal fits properly within the
scope of pre-AIA § 141.
But we disagree. Although the ordinary rule in De-
posit Guaranty and Rooney is most clearly applicable with
respect to appeals taken from United States district
courts, where the statute providing for such appeals
refers to “appeals from all final decisions,” 28 U.S.C.
§ 1291 (2012), we see no material difference from the
statute here that provides for appeals when “dissatisfied
with the final decision” of the Board. SkyHawke points us
to no authority to suggest that Congress intended the use
of “dissatisfied with” in conjunction with “final decision”
to broaden the appeal rights from Board decisions to
include those of prevailing parties who are merely dissat-
isfied with the Board’s reasoning.
Even if we were to divine some special meaning in the
“dissatisfied” phraseology of § 141, it would not lead us to
a conclusion in favor of SkyHawke. Our predecessor court
1 Pre-AIA § 141 is applicable in this case because
the underlying proceeding at the Board was an inter
partes reexamination.
SKYHAWKE TECHS., LLC v. DECA INT’L CORP. 7
clarified that the opinion of the Board is not the “decision”
for purposes of § 141. See In re LePage’s Inc., 312 F.2d
455, 459 (C.C.P.A. 1963) (Rich, J., concurring). Rather,
“[t]he decision is the act of the board in saying whether
each ground of rejection of the examiner which is ap-
pealed to it is right or wrong.” Id. This comports with the
general notion that appellate courts “review[ ] judgments,
not statements in opinions.” Rooney, 483 U.S. at 311.
But SkyHawke is not dissatisfied with the Board’s judg-
ment, only with its opinion explaining that judgment.
While SkyHawke relies heavily on the decision of our
predecessor court in In re Priest, 582 F.2d 33 (C.C.P.A.
1978), that decision does not justify treating this case as
outside the ordinary rule counseling against prevailing
party appeals. The court in Priest emphasized that it was
exercising jurisdiction over the patentee’s appeal from the
Board, despite the Board’s upholding of the claims at
issue, based strictly on the unique factual scenario pre-
sented there. What the court identified as distinctive
about the scenario was that the Board itself stated clearly
that it would not have upheld the claims at issue, but for
its own adoption of a new claim construction. See id. at
36 (“‘We have held [patentee] has complied with Section
112 of the Statute but only for the reason as stated by
us . . . .’”) (quoting Board); id. at 33 (first sentence of
opinion describing Board’s decision as “conditionally
‘reversing’” examiner); id. at 38 (last sentence of opinion
again stating that Board’s claim construction was “a
condition of said reversal”). That unique factual scenario
is not present here. Moreover, because the rule is pruden-
tial not jurisdictional, the court in Priest was within its
rights to depart from the ordinary rule against prevailing
party appeals but would not have been required to do so.
We see nothing in the present appeal that would warrant
such a departure.
8 SKYHAWKE TECHS, LLC v. DECA INT’L CORP.
III
For these reasons, we decline to review SkyHawke’s
appeal. Accordingly,
IT IS ORDERED THAT:
(1) The motion is granted. SkyHawke’s appeal 2016-
1325 is dismissed.
(2) Each party shall bear its own costs.
FOR THE COURT
July 15, 2016 /s/ Peter R. Marksteiner
Date Peter R. Marksteiner
Clerk of Court