Prost, Chief Judge.
Arista Networks, Inc. ("Arista") petitioned for an inter partes review ("IPR") of certain claims of U.S. Patent No. 7,340,597 ("the '597 patent"), which is owned by Cisco Systems, Inc. ("Cisco"). After instituting an IPR, the Patent Trial and Appeal Board ("Board") upheld some of those challenged claims as patentable but invalidated others. Both Arista and Cisco appeal various aspects of the Board's decision. Having considered the parties' arguments, we reverse and remand as to Arista's appeal, and we affirm Cisco's cross-appeal.
Computer networks are made up of various network devices (e.g., computers, servers, routers, and switches) that are connected to each other. Within a network, devices can easily access information and services provided by other devices in the network. This convenience of access has drawbacks, however, as it increases the risk of an external attack on one or more network devices. For example, if an external attacker compromises one network device,
The '597 patent, titled "Method and Apparatus for Securing a Communications Device using a Logging Module," relates generally to ensuring network device security by using a logging module with restricted configurability to detect and communicate changes to a network device's configuration. '597 patent col. 2 ll. 35-37, 45-47, col. 3 ll. 43-49.
The '597 patent includes four independent claims. Claim 1 and dependent claim 29 are illustrative. Claim 1 states:
Id. at claim 1. Claim 29 states:
Id. at claim 29.
In one embodiment, a network communications device includes a "logging module" that monitors and reports configuration changes. Id. at col. 3 ll. 43-48, col. 6 ll. 7-10. When the logging module detects a configuration change, it can indicate that change in various ways, for example, by way of "an indicator lamp, a message to a display, a message to another network device, broadcast message to specially-configured security devices, or other such mechanisms." Id. at col. 7 ll. 25-30.
In some embodiments, the logging module communicates a configuration change by "broadcast[ing] the change in the configuration of communications interface ... to one or more security monitors on the network." Id. at col. 7 ll. 39-41; see also id. at col. 8 ll. 52-54. Such broadcasting occurs by way of a multicast address. Id. at col. 11 ll. 45-50. To monitor these broadcasts, in some embodiments, a given security monitor must "subscribe to this multicast address." Id. at col. 11 ll. 50-51, col. 13 ll. 57-67 (describing the process of configuring a security monitor, including "subscribing to a logging module's multicast address in order to receive broadcasts from the logging module").
The named inventor of the '597 patent is Dr. David Cheriton, who at the time of the invention was employed by Cisco as a technical advisor and chief product architect. Dr. Cheriton assigned "the entire right, title and interest throughout the world in [his] invention" to Cisco, requesting that the U.S. Patent and Trademark Office ("PTO") "issue all patents granted for said invention" to Cisco. J.A. 598; see also '597 patent (listing Cisco as the assignee). In the same assignment document, Dr. Cheriton agreed "generally to do everything possible to aid said assignee, their successors, assigns and nominees, at their request and expense, in obtaining and enforcing patents for said invention in all countries." J.A. 598. Cisco compensated Dr. Cheriton for his employment and, according
Shortly thereafter, Dr. Cheriton and at least thirteen other Cisco employees left Cisco to found Arista. Dr. Cheriton served as Arista's Chief Scientist for several years. He also served as a director of Arista and was one of its largest shareholders. He resigned from Arista in March 2014.
In response to Arista's IPR petition, which Arista filed on April 1, 2015, the Board instituted review of certain claims of the '597 patent. In its Final Written Decision, the Board upheld claims 29, 63, 64, 73, and 86 as patentable, but invalidated claims 1, 14, 39-42, 71, 72, 84, and 85 as anticipated or obvious. Arista Networks, Inc. v. Cisco Sys., Inc., IPR2015-00978, Paper 32 at 26 (P.T.A.B. Sept. 28, 2016) ("Final Written Decision"). In doing so, the Board declined to apply the doctrine of assignor estoppel, which in Cisco's view should have prevented Arista from challenging the patent's validity.
Arista timely appealed with respect to the claims upheld by the Board, and Cisco timely cross-appealed regarding the invalidated claims. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A).
In its appeal, Arista contends that the Board erred in construing the term "broadcast," and that this error caused the Board to improperly reject Arista's obviousness challenge to claims 29, 63, 64, 73, and 86 of the '597 patent. Meanwhile, Cisco's cross-appeal requires us to address the reviewability of the Board's refusal to apply the doctrine of assignor estoppel and, if reviewable, whether the Board should have analyzed the merits of Cisco's arguments regarding assignor estoppel. We address each issue in turn.
On appeal, Arista argues that the Board erred in its construction of the term "broadcast" as used in the '597 patent.
The ultimate construction of a claim is a question of law reviewed de novo. SimpleAir, Inc. v. Sony Ericsson
Before the Board, Arista argued that "broadcast" should be construed as "a transmission to one or more devices." J.A. 65 (IPR Pet.). Meanwhile, Cisco proposed construing the term to mean "transmitting data to one or more devices without specifying what device(s) will ultimately receive the data." J.A. 531 (Cisco's Prelim. Resp.).
The Board, in its Institution Decision, "decline[d] to adopt either party's proposed construction." Arista Networks, Inc. v. Cisco Sys, Inc., IPR2015-00978, Paper 7 at 6 (P.T.A.B. Oct. 6, 2015) ("Institution Decision"). Instead, the Board construed "broadcast" according to what it concluded was the "ordinary and customary meaning to one of skill in the art" — namely, "a transmission of a message simultaneously to all destinations in a network." Id.
After receiving the construction provided in the Institution Decision, Cisco argued that the Board's construction would exclude the multicast address embodiment of broadcasting described in the patent.
In an IPR, "[a] claim in an unexpired patent that will not expire before a final written decision is issued shall be given its broadest reasonable construction in light of the specification of the patent in which it appears." 37 C.F.R. § 42.100(b) (2017); Cuozzo Speed Techs., LLC v. Lee, ___ U.S. ___, 136 S.Ct. 2131, 2146, 195 L.Ed.2d 423 (2016).
In this case, both parties agree that: (1) the patent includes multicasting via a multicast address as a type of broadcasting; (2) this is the only disclosed example of broadcasting in the '597 patent; (3) this does not necessarily transmit a message to all destinations on a network; and (4) the Board's construction, which requires a transmission to all network destinations, therefore excludes this embodiment.
The specification supports the parties' understanding of the term "broadcast" as used here. First, the specification points to multicasting using a multicast address as the only example of broadcasting. It explains that "[t]he multicast address is used by the logging module to broadcast security information (such as changes in the configuration of the network device) to the one or more security monitors on the network." '597 patent col. 11 ll. 46-50 (emphasis added). The specification also makes clear that this does not necessarily require transmitting a message to all network devices, given that "[a] security monitor must subscribe to this multicast address in order to monitor the logging module's broadcasts." Id. at col. 11 ll. 50-51 (emphasis added); see also J.A. 1306 ¶ 64 (Decl. of Cisco's expert, Dr. Stephen Wicker) ("Multicasting differs from network broadcasting in that a multicast message is not necessarily sent to all hosts on a network, and instead can be sent to a group of hosts."). We therefore agree with the parties that the Board's construction cannot stand. Not only does it ignore the patentee's use of "broadcast," it excludes the only disclosed embodiment of broadcasting (i.e., multicasting by way of a multicast address), which allows for transmission to fewer than all devices. See GE Lighting Sols., LLC v. AgiLight, Inc., 750 F.3d 1304, 1311 (Fed. Cir. 2014) ("We normally do not construe claims in a manner that would exclude the preferred embodiment, especially where it is the only disclosed embodiment.").
With this in mind, we are nonetheless faced with competing proposed constructions on appeal. Arista contends that "broadcast" should be construed to mean "a transmission to one or more devices." Meanwhile, Cisco proposes: "transmitting data to one or more devices without specifying which devices will ultimately receive the data." Cross-Appellant's Br. 77 (emphasis added). We address each construction in turn.
Arista argues that its proposed construction — "a transmission to one or more devices" — tracks the language of the specification. Appellant's Br. 34 (citing, e.g., '597 patent col. 11 ll. 45-50 ("The multicast address is used by the logging module to broadcast security information
Cisco's proposed construction fares only slightly better. Cisco contends that its construction reflects the key difference between a broadcast and other network communications — namely, that in a broadcast, the sender does not know who ultimately receives the sender's transmission. Specifically, Cisco explains that because intermediate network devices maintain the lists of devices subscribed to a particular group address, the device that initially sends a broadcast to that group address will not know which devices ultimately receive the broadcast. But we are not convinced that the additional limitation Cisco proposes should be incorporated into the construction. Cisco's argument relies heavily on its expert's testimony, but that testimony is not based on the '597 patent's specification. In short, nothing in the specification suggests that Cisco's proposed negative limitation is a required part of the contemplated "broadcast." We therefore see no reason to limit the term as Cisco proposes.
With this in mind, we reject Cisco's proposed limitation and instead construe the term based on the specification's consistent focus on broadcasting via a multicast address. See '597 patent col. 11 ll. 45-51, col. 14 ll. 15-17, col. 15 l. 66-col. 16 l. 1. We therefore construe the terms "broadcast" and "broadcasting" to mean, respectively, "a transmission to one or more devices using a multicast address" and "transmitting to one or more devices using a multicast address."
Given that the Board conducted its patentability analysis under an incorrect claim construction, we find it appropriate to remand this case for the Board to consider, in the first instance, the patentability of the claims raised in Arista's appeal, in light of the construction provided herein.
In its cross-appeal, Cisco argues that the Board's decision to invalidate some claims should be reversed based on assignor estoppel. In Cisco's view, the facts presented here represent a textbook case of assignor estoppel. Indeed, in the related ITC investigation, the ITC held that assignor estoppel barred Arista's challenge to the '597 patent's validity. See In re Certain Network Devices, Related Software and Components Thereof (I), Inv. No. 337-TA-944, USITC Pub. 575521 at 132 (Feb. 2, 2016) (Initial Determination), available at Fed. Cir. Appeal No. 16-2563, ECF No. 133 (App. 888.143-888.149), aff'd, 873 F.3d 1354 (Fed. Cir. 2017).
Before reaching the question of whether assignor estoppel should apply in the IPR context, we must first ensure that this issue is reviewable in light of the Supreme Court's analysis of 35 U.S.C. § 314(d) in Cuozzo Speed Technologies v.
Under § 314(d), "[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable." In Cuozzo, the Supreme Court analyzed this "no appeal" provision in the context of a challenge to the Board's decision to institute review of two claims based on a certain prior art combination, where the challenger raised that combination with respect to a third, dependent claim. Cuozzo, 136 S.Ct. at 2138-39. There, the patent owner argued that by instituting review on grounds not cited for those claims, but instead based on a conclusion that the petitioner had implicitly challenged the claims on that ground, the Board violated the requirement that an IPR petition "may be considered only if... the petition identifies, in writing and with particularity, each claim challenged, the grounds on which the challenge to each claim is based, and the evidence that supports the grounds for the challenge to each claim." § 312(a)(3).
In finding the Board's institution decision unreviewable, the Court explained that "where a patent holder merely challenges the Patent Office's `determin[ation] that the information presented in the petition... shows that there is a reasonable likelihood' of success `with respect to at least 1 of the claims challenged,' § 314(a), or where a patent holder grounds its claim in a statute closely related to that decision to institute inter partes review, § 314(d) bars judicial review." Cuozzo, 136 S.Ct. at 2142 (emphasis added). The Court reasoned that the challenge in that case — that the petition was not pleaded "with particularity" under § 312 — was "little more than a challenge to the Patent Office's conclusion, under § 314(a), that the `information presented in the petition' warranted review." Id. The Court also noted, however, that it was not deciding "the precise effect of § 314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond `this section.'" Id. at 2141 (emphasis added).
Just three months after Cuozzo, a panel of this court in Husky applied the decision to the question of whether assignor estoppel could bar a party from filing an IPR petition. Husky Injection Molding Sys. Ltd. v. Athena Automation Ltd., 838 F.3d 1236, 1241 (Fed. Cir. 2016). The panel concluded that "the question whether assignor estoppel applies in full force at the [PTO] does not fall into any of the three categories the Supreme Court specifically mentioned as reviewable," including that the question does not "depend on other less closely related statutes." Id. at 1245. In doing so, the panel explained that this question "necessarily requires an interpretation of 35 U.S.C. § 311(a)," and that an interpretation of § 311 "to either include or foreclose assignor estoppel is very `closely related' to any decision to initiate inter partes review." Id. at 1246 (emphasis in original).
Since Husky, however, this court, sitting en banc, addressed the reviewability standard articulated in Cuozzo. Wi-Fi One, 878 F.3d at 1372-75. In Wi-Fi One, we explained that Cuozzo held that the bar on judicial review in § 314(d) applies
Husky's application of Cuozzo's "less closely related statutes" exception cannot be reconciled with the reasoning of this court's subsequent decision in Wi-Fi One. We therefore must rely on the reasoning of the en banc court in Wi-Fi One to analyze whether the issue presented in this cross-appeal is reviewable.
Applying the now-governing reasoning in Wi-Fi One, it is clear that we may review the Board's decision as to whether § 311(a) contemplates application of assignor estoppel.
We next turn to the merits of Cisco's argument that assignor estoppel should apply in the IPR context. "Assignor estoppel prevents a party who assigns a patent to another from later challenging the validity of the assigned patent." Mentor Graphics Corp. v. Quickturn Design Sys., Inc., 150 F.3d 1374, 1377 (Fed. Cir. 1998); see also Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co., 266 U.S. 342, 349, 45 S.Ct. 117, 69 S.Ct. 316 (1924) ("[A]n assignor of a patent right is estopped to attack the utility, novelty or validity of a patented invention which he has assigned or granted as against any one claiming the right under his assignment or grant."). The doctrine often arises in factual scenarios similar to the facts of this case, where an employee invents something during his or her tenure with a company, assigns the rights to that invention to his or her employer, then leaves the company to join or found a competing company. See, e.g., Westinghouse, 266 U.S. at 345-46, 45 S.Ct. 117; Shamrock Techs., Inc. v. Med. Sterilization, Inc., 903 F.2d 789, 790 (Fed. Cir. 1990); Diamond Sci. Co. v. Ambico, Inc., 848 F.2d 1220, 1222 (Fed. Cir. 1988). In such situations, the employee's new company may be estopped because "[a]ssignor estoppel also prevents parties in privity with an estopped assignor from challenging the validity of the patent." Mentor Graphics, 150 F.3d at 1379; see also Diamond Sci., 848 F.2d at 1224 ("The estoppel also operates to bar other parties in privity with the assignor, such as a corporation founded by the assignor.").
As discussed above, Dr. Cheriton invented the subject matter of the '597 patent while employed by Cisco, and he assigned his rights to that invention to Cisco. He then left Cisco to co-found Arista, a competitor to Cisco.
Despite the factual similarities between this case and our other assignor estoppel cases, the Board declined to apply the doctrine in this case, suggesting that the doctrine is unavailable in the IPR context. Institution Decision at 7-8; Final Written Decision at 10-11. The Board provided two rationales for declining to apply assignor estoppel. First, it quoted a now-precedential Board decision, which held that § 311(a) "presents a clear expression of Congress's broad grant of the ability to challenge the patentability of patents through inter partes review." Institution Decision at 7 (quoting Athena Automation
The question before us, as is often the case, is one of congressional intent: did Congress intend for assignor estoppel to apply in IPR proceedings?
Cisco's primary argument in favor of applying assignor estoppel is that assignor estoppel is a well-established common-law doctrine that should be presumed to apply absent a statutory indication to the contrary. With this principle in mind, Cisco particularly takes issue with the Board's reasoning that Congress would have expressly provided for application of equitable defenses if it so desired.
There is some merit to Cisco's argument. In Westinghouse, the Court characterized assignor estoppel as "a rule well settled by 45 years of judicial consideration and conclusion" in the district and circuit courts, reaching back as early as 1880. Westinghouse, 266 U.S. at 349, 45 S.Ct. 117; see also Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249, 260, 66 S.Ct. 101, 90 S.Ct. 47 (1945) (Frankfurter, J., dissenting) ("The principle of fair dealing as between assignor and assignee of a patent whereby the assignor will not be allowed to say that what he sold as a patent was not a patent had been part of the fabric of our law throughout the life of this nation."). But, in Lear, Inc. v. Adkins, the Supreme Court appeared to cast some doubt on the doctrine's continued viability. 395 U.S. 653, 664-66, 89 S.Ct. 1902, 23 L.Ed.2d 610 (1969). And although this court has held that the doctrine survived Lear, we did so recognizing that court decisions post-Lear "reveal[ed] some uncertainty about the continued vitality of the doctrine." Diamond Sci., 848 F.2d at 1223; see also id. ("Although Lear involved the licensing, rather than the assignment, of a patent, the opinion reviewed the history of `patent estoppel' in general, and indicated that the Court's previous decisions had sapped much of the vitality, if not the logic, from the assignment estoppel doctrine as well.").
With this history in mind, we recognize that "Congress is understood to legislate against a background of common-law adjudicatory principles." Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 108, 111 S.Ct. 2166, 115 L.Ed.2d 96 (1991). "Thus, where a common-law principle is well established, ... the courts may take it as given that Congress has legislated with an expectation that the principle will apply except `when a statutory purpose to the contrary is evident.'" Id. (quoting Isbrandtsen Co. v. Johnson, 343 U.S. 779, 783, 72 S.Ct. 1011, 96 S.Ct. 1294 (1952)); see also Impression Prods., Inc. v. Lexmark Int'l, Inc., ___ U.S. ___, 137 S.Ct. 1523, 1536, 198 L.Ed.2d 1 (2017). But see United States v. Craft, 535 U.S. 274, 288, 122 S.Ct. 1414, 152 L.Ed.2d 437 (2002) ("The common-law rule was not so well established ... that we must assume that Congress considered the impact of its enactment on the question now before us.").
Section 311(a) states, in relevant part: "(a) In General. — Subject to the provisions of this chapter, a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent...." § 311(a) (emphasis added).
Arista contends that § 311(a) unambiguously leaves no room for assignor estoppel in the IPR context, given that the statute allows any person "who is not the owner of a patent" to file an IPR.
Cisco contends that this statute does not directly speak to the question of assignor estoppel in IPRs. Instead, Cisco views § 311(a) as reflecting two principles: first, that an IPR must begin as an adversarial proceeding, rather than as a means for a patent owner to confirm the patentability of certain claims; and second, that there is no Article III-like standing requirement for filing an IPR. In our view, however, the statute, by its terms, does more — it delineates who may file an IPR petition. The plain language of § 311(a) demonstrates that an assignor, who is no longer the owner of a patent, may file an IPR petition as to that patent.
This conclusion is consistent with Congress's express incorporation of equitable doctrines in other related contexts. For example, a statute governing International Trade Commission investigations states that "[a]ll legal and equitable defenses may be presented in all cases." 19 U.S.C. § 1337(c); cf. 15 U.S.C. § 1069 (providing in the Lanham Act context that "[i]n all
Finally, Cisco contends that allowing assignor estoppel in other forums, such as in the ITC and in district court, while not allowing it in the IPR context creates an inconsistency that invites forum shopping. We, however, do not view this as an inconsistency, but rather as an intentional congressional choice. Such a discrepancy between forums — one that follows from the language of the respective statutes — is consistent with the overarching goals of the IPR process that extend beyond the particular parties in a given patent dispute. See Cuozzo, 136 S.Ct. at 2144 ("[I]nter partes review helps protect the public's `paramount interest in seeing that patent monopolies ... are kept within their legitimate scope.'" (quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 816, 65 S.Ct. 993, 89 S.Ct. 1381 (1945))). Moreover, any policy choices regarding forum shopping are better left to Congress than to this court. Cf. SAS Inst., 138 S.Ct. at 1358 ("Policy arguments are properly addressed to Congress, not this Court."); Click-to-Call Techs., LP v. Ingenio, Inc., 899 F.3d 1321, 1350 (Fed. Cir. 2018) (Taranto, J., concurring) ("If there turns out to be a problem in the statute's application according to its plain meaning, it is up to Congress to address the problem.").
In sum, we conclude that § 311(a), by allowing "a person who is not the owner of a patent" to file an IPR, unambiguously dictates that assignor estoppel has no place in IPR proceedings.
Separately, Cisco contends that the Board's decision not to apply assignor estoppel in the IPR context is arbitrary and capricious, given that the Board applies other equitable and non-statutory doctrines (such as collateral estoppel, prosecution laches, and obviousness-type double patenting) in the IPR context. In light of our holding that § 311(a) expresses Congress's clear intent that assignor estoppel should not apply in the IPR context, however, this argument is unavailing. The Board's practice is consistent with the unambiguous language of the statute.
For the foregoing reasons, with respect to Cisco's cross-appeal, we affirm the Board's holding that assignor estoppel does not bar Arista from challenging the validity of the '597 patent in this IPR. With regard to Arista's appeal, we reverse the Board's construction of the term "broadcast" and remand to the Board for further proceedings consistent with the construction provided above.
The parties shall bear their own costs.