N OTE : This disposition is nonprecedential. 

# United States **Court of Appeals**  **for the Federal Circuit**

______________________
INTELLECTUAL VENTURE S II LLC, Appellant

v.

ERICSSON INC., TELEFONAKTIEBOLAGET LM ERICSSON, GOOGLE INC ., Appellees

______________________

2016

- 1739, 2016

- 1740, 2016

- 1741

______________________ Appeals from the United States Patent and Trad emark Office, Patent Trial and Appeal Board in No s

. IPR2014

- 00915, IPR2014

- 00919, IPR2014

- 01031.

______________________

Decided: May 8 , 2017

______________________

P ETER J. M C A NDREWS , McAndrews, Held & Malloy, Ltd., Chicago, IL , argued for appellant. Also represented by G REGORY S CHODDE , A NDREW B. K ARP , S TEVEN J OHN H AMPTON

.

J. A NDREW L OWES , Haynes & Boone, LLP, Richardson, TX, argued for appellees Ericsson Inc., Telefonaktiebolaget LM Ericsson. Also represented by C LINT S. W ILKINS ; D EBRA J ANECE M C C OMAS , Dallas, TX.INTELLECTUAL VENTURE S II LLC v. ERICSSON INC

. 2

D ARYL J OSEFFER , King & Spalding LLP, Washington, DC, argued for appellee Google Inc. Also represented by J OHN C. A LEMANNI , Kilpatrick Townsend & Stockton LLP, Winston

- Salem, NC; D AVID A. R EED , Atlanta GA; S TEVEN M OORE , San Francisco, CA.

______________________
Before R EYNA , W ALLACH , and C HEN , Circuit Judges.

R EYNA , Circuit Judge

. Following institution of inter partes review s , t he United States Patent Trial and Appeal Board found

cer tain claims of Intellectual Ventures’ patents anticipa ted by or obvious over the prior art. Intellectual Ventures appeals from th ose decision s , arguing that the Board denied it procedural due process and misconstrued two claim term s. We find no due process violation and find that the Board’s claim construction was correct

. W e affirm

. B ACKGROUND

T he Intellectual Ventures Patents

Inte llectual Ventures II LLC’s (“Intellectual Ve ntures”) patents

— U.S. Patent Nos. 7,848,353 (“’353 p atent”) and 8,396, 07 9 (“’079 patent”) 1

— disclose a method for selection of appropriate bandwidth in a multi

bandwidth communication system. Wireless communic ati on requires one unit to transmit data and a nother unit

, a base station, to receive it. To communicate properly

, the two units must have synchroniz ed frequenc ies . J.A. 434 (col. 1 ll. 22

– 29); see also J.A. 419 (Figure 1), 423

– 424.

1 The ’079 patent is a continuation of the ’353 p atent, and they share similar specifications. See J.A. 417.INTELLECTUAL VENTURE S II LLC v. ERICSSON INC

. 3

The patents teach a method to synchroniz e base stations and remote units on the appropriate frequency more efficiently than the prior art

. J.A. 4 34 (col. 2 ll. 6

– 8), 426

– 427.

T he patents teach that the base station transmits a signal with two portions, the first of which has a lower “chip rate” than the second. J.A. 426, 2920. The signal’s bandwidth corresponds to the chip rate with which it is transmitted. Id. Thus , the lower the chip rate, the lower the bandwidth. Despite this correlation, the parties agree that chip r ate is not synonymous with bandwidth. R ather , the receiver reconfigures itself by setting its filters to “bandwidths appropriate for the higher chip rate.” J.A. 426 (col. 8 ll. 31

– 32).

Intellectual Ventures argues the Board misconstrued the term “an indi cation of an operating bandwidth, ” which appears in c laim 1 of the ’353 patent and claim 6 of the ’079 patent. Those claims recite:
1. A method for operating bandwidth determin ation in a multi

- bandwidth communication system, the method comprising:

at a r emote unit:
receiving a signal having a first signal portion at a first, predetermined bandwidth, containing an i ndication of an operating bandwidth selected from a plurality of bandwidths used for a further signal portion;
recovering the indication from t he first signal po rtion at the first, predetermined bandwidth; and
recovering information in the further signal po rtion at the operating bandwidth indicated by the indication.
J.A. 437 (col. 8 ll. 17

– 28) (disputed term emphasized).INTELLECTUAL VENTURE S II LLC v. ERICSSON INC

. 4

6. A method performed by a wireless network, the method comprising:
transmitting, by the wireless network, a signal having a first signal portion at a first predete rmined bandwidth and containing an indication of an operating bandwidth selected from a plurality of bandwidths us ed for a further signal portion; and

wherein the indication is recoverable from the first signal portion and information in the further signal portion is recoverable at the operating bandwidth indicated by the indication.
J.A. 427 (col. 9 ll. 13

– 23) (disp uted term emphasized).

Intellectual Ventures also argues the Board misco nstrued the term “reconfigurable filters.” Th e ’353 patent’s specification describe s how the receiver configures itself to receive communications at both the lower and higher bandwidths by using one or more filters

. J.A . 436 (col. 6 ll. 54

– 58)

. The specification also incorporate s by refe rence the implementation of “different filters, or re

configuration of the same filter(s) .” Id. (col. 6 ll. 58

– 64). Several dependent claims state that the filters “are reco nfigurable.” J.A. 437

– 438.

The Prior Art
The Board found the challenged claims obvious over three prior art references. Because I ntellectual Ventures ’ arguments on appeal do not depend on the scope or co ntent of the prior art, we describe each reference only briefly here.

The McFarland reference, U.S. Patent No. 7,397,850

, describes a multi

- bandwidth wireless communication system us ing Orthogonal Frequency Division Multiple xing (“OFDM”). J.A. 1043. OFDM systems break wide bandwidth systems into smaller frequency sub

- channels.INTELLECTUAL VENTURE S II LLC v. ERICSSON INC

. 5

Trompower, U.S. Patent No. 5,950,124

, describes an apparatus and process for improving the performance of cellular communication using certain systems param eters, such as chip rate. See J.A. 1096. Like the Intelle ctual Ventures patents, the chip rate in Trompower corresponds to the bandwidth. J.A. 2528, ¶ 51. Pierzga

, U.S. Patent Pub. No. 2001/0055320 , tea ches an improvement to an OFDM system. J.A. 7688. It describes an “adjustable” OFDM system that can “alter its data rate and bandwidth” to “account for a change in the number of services, or bandwidth required for each se rvice.” J.A. 7723, ¶ [0076].

Boa rd Proceedings
In 2014, the Board granted two IPR petition s from E ricsson Inc. and Telefonaktiebolaget LM Ericsson ( toget her , “Ericsson”). The first petition challeng ed claims 6

– 10 and 28

– 32 of the ’079 patent as obvious over McFarland and Trompower (IPR2014

- 00915)

. The second petition challeng ed claims 1

– 8 and 21

– 27 of the ’353 patent as obvious over Pierzga and McFarland (IPR2014

- 00919). The Board also granted Google Inc. ’s IPR petition cha llenging claims 9

– 20 and 29

– 34 of the ’353 patent as obvi ous over McFarland and Trompower (IPR2014

- 01031)

. In their briefing before the Board , the parties dispu ted the construction of “an indication of an operating bandwidth.” Intellectual Ventures contended that the
term means “identification of a particular o perating bandwidth

. ” J.A. 4219. Google argued the plain and ordi nary meaning should control. J.A. 7358 ; see also J.A. 7359 (“A POSITA would understand that the plain and ordinary meaning of ‘indication of an operating ban dwidth’ encompasses determining the frequency range used to transmit the further signal portion based on the information provided by the indication.” ) . Ericsson a rgued that Intellectual Ventures’ definition was undulyINTELLECTUAL VENTURE S II LLC v. ERICSSON INC

. 6

narrow and that no construction was needed because the ’079 patent do es not explain how bandwidth is computed from chip rate. J.A. 761

– 762. On August 25, 2015 , the Board held a combined oral argument for Ericsson’s two petitions

. It held a separate oral argument for Google ’s petition later that same day

. In both argument s, the parties extensively discussed “an indication of an operating bandwidth.” See , e.g. , J.A. 45

– 46, 49, 66

. The Board characterized the exchange as “a vigorous dispute over the proper construction.” J.A. 8. D uring the Google argument (held after the Ericsson argument) , the Board asked whether it would be “sufficient for us to say that enough information is conveyed from the transmitter to the receiver so that the receiver can configure itself to receive that which is transmitted.” J. A. 7541

– 7542. Google’s counsel said yes . J.A. 7542

. Intellectual Ventures ’ counsel disputed the Board’s pr oposed construction but conceded that “there’s no special requirement for the form of an indication of oper ating bandwidth.” J.A. 7572. Intellect ual Ventures’ counsel further claimed that the indication could be an “arbi trary” number because “[t]he question is whether or not an operating bandwidth is actually identified, how that is done is not the issue; whether it’s done is the issue. ” Id.
In its Final Written Decision, the Board construed “an indica tion of an operating bandwidth ” to mean “that the first signal portion contains sufficient information so that when it is received, the receiver is able to configure itself to receive the data portion of the signal (or ‘further signal portion’ or ‘transport channel’) at approximately the same frequency range or bandwidth at which it will be tran smitted by the transmitter.” J.A. 21. In a footnote, the Board “express[ed] no opinion as to whether the re ceiver must be set to the exact same lower cut

- off frequency and upper cut

- off frequency as the transmitter .” Id. n.15. “T he key consideration ,” according to the Board, “ is thatINTELLECTUAL VENTURE S II LLC v. ERICSSON INC

. 7

the receiver is able to receive the data that the transmitted transmits.” I d.

The Board also stated that the ’353 patent discloses two alternative embodiments, one with a single reconfig urable filter and one with two reconfigurable filters. J.A. 107

– 108. It found that “the claim language does not preclude the use of a single, common filter that can be used in the logic for recovering the first signal portion, as well as the logic for recovering the further signal portion.” J.A. 108. It thus determined that “McFarland discloses a reconfigurable filter within the meaning of cla im 16.” Id.
Applying th ese construction s , the Board found that all challenged claims of Intellectual Ventures’ patents would have been obvious over various pairings of McFarland, Trompower, and Pierzga . J.A. 61, 132, 201.

Intellectual Ventures timely appeals, and we h ave j urisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A)

. D ISCUSSION Intellectual Ventures argues on appeal that the Board erred by (1) adopting a surprise construction that denied Intellectual Ventures due process; (2) misconstr uing “an indication of an operating bandwidth”; and (3) misconstruing “reconfigurable filters .” We address each argument below.

Due Process

Intellectual Ventures argues that the Board denied it procedural due process by constru ing “an indication of an operating bandwidth” to mean something no party argued for or expected

. Intellectual Ventures contends that neither Ericsson nor Google offered a construction of the term in their petitions for IPR and that the Board never “previewed ” its construction until the Google oral arg ument. According to Intellectual Ventures , the Board’sINTELLECTUAL VENTURE S II LLC v. ERICSSON INC

. 8

construction is completely untethered from the claim language or any proposed construction.

Intellectual Ventures cites two of our recent decision s in suppo rt: In re Magnum Oil Internationa l, Ltd. , 829 F .3d 1364, 1381 (Fed. Cir. 2016) and SAS Inst itute , Inc. v. ComplementSoft, LLC , 825 F.3d 1341, 1351 (Fed. Cir. 2016)

. In Magnum Oil , we reversed the Board’s decision when the Board “adopt[ed] arguments on behalf of pet itioners that could have been, but were not, raised by the petitioner during an IPR.” 829 F.3d at 1381. Because the petitioner bears the burden of proving unpatentability, we held that “the Board must base its decision on arguments that were advanced by a party, and to which the opposing party was given a chance to respond.” Id. In SAS

, we

were con cerned not that “the Board adopted a constru ction in its final written decision, as the Board is free to do, but that the Board ‘change[d] theori es in midstream.’” 825 F.3d at 1351 (quoting Belden Inc. v. Berk

- Tek LLC

, 805 F.3d 1064, 1080 (Fed. Cir. 2015)). Intellectual Ve ntures argues that the Board acted contrary to our dec isions in Magnum Oil and SAS by ignoring Intellectual Ventures’ proposed construction and adopting a constru ction in its Final Written Decision that no party previously advanced.

We disagree. D ue process requires notice and an o pportunity to be heard by an impartial decision

- maker. Abbott Labs. v. Cordis Corp. , 710 F.3d 1318 , 1328 (Fed. Cir. 2013). As formal administrative adjudications , IPRs

are subject to the Administrative Procedure Act (“APA”). SAS , 825 F.3d at 1351. Under the APA, the Board must inform the parties of “the matters of fact and law asser ted.” 5 U.S.C. § 554(b)(3). It also must give the parties an opportunity to submit facts and arguments for consider ation. Id

. § 554(c). Each party is entitled to present oral and documentary evidence in support of its case, as well

as rebuttal evidence. Id. § 556(d). Pursuant to these provisions, the Board may not change theories midstreamINTELLECTUAL VENTURE S II LLC v. ERICSSON INC

. 9

without giving the parties reasonable notice of its change. Belden , 805 F.3d at 1080.

The record demonstrates that Intellectual Ventures had notice and an opportunity to be heard. The parties engaged in “a vigorous dispute over the proper constru ction” of “an indication of an operating bandwidth.” J.A. 8. Intellectual Ventures was on notice that construction of this claim term was central to the case, and both sides

ex tensively litigated the issue. Intellectual Ventures and Google proposed constructions during briefing, while Ericsson argued that no construction was necessary. J.A. 762, 4219, 7359. Upon reviewing Google’s and Ericsson’s arguments, Intellectual Ventur es could have requested leave to file a sur

- reply. Belden , 805 F.3d at 1081. It did
not do so. At the Ericsson oral argument, the Board questioned counsel for both Intellectual Ventures and Ericsson about the construction of “an indication of an operati ng bandwidth.” See, e.g. , Oral Arg. Tr. at 45

– 46, 49, 66. 2 At the Google oral argument later that day, the Board asked Intellectual Ventures and Google to respond to a proposed construction. J.A. 7541

– 7542, 7576. After the Board issued its Final Writte n Decision, Intellectual Ventures was entitled to seek rehearing. 37 C.F.R. § 42.71(d)(2). It did not.

Given the continuous focus on “an indication of an o perating bandwidth” before and during oral arguments and Intellectual Ventures’ opportunity to seek a sur

- reply or

2 Though not included in the Joint Appendix, this citation refers to the August 25, 2015 consolidated oral argument in IPR2014

- 00915 and IPR2014

- 00919. We may judicially notice matters of public record for purposes of appeal. See Biomedical Patent Mgmt. Corp. v. Cal. Dep’t of Health Servs. , 505 F.3d 1328, 1331 n.1 (Fed. Cir. 2007).INTELLECTUAL VENTURE S II LLC v. ERICSSON INC

. 10

rehearing , we find no due process violation . In Magnum Oil , the Board supplied completely new arguments that the petitioner never raised. 829 F.3d at 1381. Not so here, where the Board questioned counsel extensively

ov er the construction of “an indication of an operating bandwidth” after receiving briefs that c ontested both whether and how the Board needed to construe the term. The Board is not constrained by the parties’ proposed construction s and is free to adopt its own construction, as it did here. See SAS , 825 F.3d at 1351.
To be clear, a fter the Board adopts a construction, it may not change theo ries without giving the parties an opportunity to respond. Id. N o such change occurred here. Intellectual Ventures

, Ericsson, and Google each submitted arguments as to whether and how to construe “an indication of operating bandwidth.” The Board que stioned counsel about it at oral argument, asked for rea ction to a hypothetical construction, and issued its construction in its Final Written Decision. This is not the situation in SAS , where the Board construed a claim term one way in its Institution Decision and , unexpectedly, a different way in its Final Written Decision

. 825 F.3d at 1351. Because Intellectual Venture s had notice and an opportunity to be heard, Abbott Labs. , 710 F.3d at 1328
, the Board did not violate Intellectual Ventures’ due

process. We thus turn to the merits of Intellectual Ve ntures’ two claim construction arguments.

“An Indication of an Operating Bandwidth”

Cl aim construction rel yingon on ly intrinsic evidence

, as here, is a legal determination we review de novo

. Teva Pharm. USA, Inc. v. Sandoz, Inc.

, 135 S. Ct

. 831
, 840−42

, (2015).

T he Board constru ed “an indication of an operating ba ndwidth” to mean “that the first signal portion contains sufficient information so that when it is received, the receiver is able to configure itself to receive the dataINTELLECTUAL VENTURE S II LLC v. ERICSSON INC

. 11

portion of the signal (or ‘further signal portion’ or ‘transport channel’) at approxim ately the same frequency range or bandwidth at which it will be transmitted by the transmitter.” J.A. 21. T he Board “express[ed] no opinion as to whether the receiver must be set to the exact same lower cut

- off frequency and upper cut -o ff frequency as th e transmitter. ” J.A. 21 n.15. It said, “T he key consider ation is that the receiver is able to receive the data that the transmitted transmits.” Id

. On appeal, Intellectual Ventures agrees with the Board that “bandwidth” means “a frequency range.” It also agrees with the Board that “operating bandwidth” means “the frequency rage or bandwidth that is used for the transport channel.” Thus, the real dispute is over the term “indication.” The Board’s example of a bandwidth included specific lower and upper cut

- off frequencies. J.A. 17. Intellectual Ventures asserts that based on this example, “an indication of an operating bandwidth ” must identify particular frequency limits. Thus, according to Intellectual Ventures , the Board erred by not adopting it s proposed claim construction: “an identification of a pa rticular bandwidth.” J.A. 699

– 701.

Intellectual Ventures also points to claim 12 of the ’079 patent, which depends from claim 11. Claim 12 recites that “the receiver configured to recover info rma tion in the further signal portion comprises a filter having a bandpass appropriate for the indicated operating ba ndwidth.” J.A. 427 (col. 9 ll. 44

– 51). According to Intellectual Ventures

, “ [a] selected bandpass range could only be ‘appropriate’ if the indicated operating bandwidth is identified with particularity.” Opening Br. 24.
The Board construes claims according their broadest reasonable interpretation consistent with the specific ation. Cuozzo Speed Techs., LLC v. Lee , 136 S. Ct. 2131, 2142 (201 6). We discern no error in the Board’s broad but reasonable construction. At oral argument, IntellectualINTELLECTUAL VENTURE S II LLC v. ERICSSON INC

. 12

Ventures’ counsel conceded that “there’s no special r equirement for the form of an indication,” which could be an “arbitrary” number. J.A. 7572. Th i s concession is in stark contrast with Intellectual Ventures’ position on appeal. Moreover, the Board recognized that the tran smitted data must be “at approximately the same freque ncy or range or bandwidth” for the receiver to work. J.A. 21. The ’079 patent specification does not require greater specificity; it requires only an “appropriate” bandpass. J.A. 426 (col. 8 l. 66). The Board’s construction comports with the specification by requiring the first signal portion to contain “sufficient informat ion” to allow configuration. The lower and upper cut

- off frequencies might not need to be “the exact same,” J.A. 21 n.15, but they do need to be “approximately the same” for the patents to work. T he Board’s construction is reasonable in light of the spec ific ation.
“Reconfigurable Filters”
Dependent claim 3 of the ’353 patent states, “the filter filtering the first signal portion and the filter filtering the further signal portion are reconfigurable.” J.A. 437 (col. 8 ll. 37

– 39) . Similarly, d ependent cl aim s 16 and 23 of the ’353 patent state, “the filter having a bandpass appropr iate for the first, predetermined bandwidth and the filter having a bandpass appropriate for the indicated operating bandwidth are reconfigurable.” J.A. 438 ( col. 9 ll. 27

– 30; col. 10 ll. 7– 10). The Board determined that “the claim language does not preclude the use of a single, common filter that can be used in the logic for recovering the first signal portion, as well as the logic for recovering the further signal portion.” J .A. 108.
We agree with the Board. The ’353 patent specific ation anticipates that a user may use the same filter for two functions. J.A . 436 (col. 6 ll. 54

– 58) (“[I]t is necessary to provide different filters (or to differently configure the filter(s)).”) . The specification a lso incorporate s by refe r-INTELLECTUAL VENTURE S II LLC v. ERICSSON INC

. 13

ence the implementation of “different filters, or re

configuration of the same filter(s)” in a preferred embod iment. Id. (col. 6 ll. 58

– 59 ). Intellectual Ventures’ pr oposed construction requiring two separate fil ters, therefore, would exclude the preferred embodiment of a single filter

. A construction excluding a preferred embo diment “is rarely, if ever, correct.” PPC Broadband, Inc.

v. Corning Optical Commc’ns RF, LLC , 815 F.3d 747, 755 (Fed. Cir. 2 01 6 ). The Board acknowledged that t he phrase “are reconfigurable” normally indicate s a plurality of filters. But in light of the ’353 patent’s incor poration of a single

- filter embodiment, we find the Board’s constru ction to be reasonable. See id. (“[E]a ch and every claim” need not “be interpreted to cover each and every embod iment.”).

C ONCLUSION
We have considered the remainder of Intellectual Ventures’ arguments and find them to be unpersuasive. The Board did not deny Intellectual Ventures procedur al due process

, and it correctly construed the disputed
terms. W e thus affirm the Board’s decision

. AFFIRMED

COSTS

No costs.