Cisco Systems, Inc. v. Lionra Technologies Ltd.

The Director granted Patent Owner's request, reversed the Final Written Decision finding claims 1-3, 5-10, 12-15, and 17-21 unpatentable as obvious, and held that Petitioner failed to prove unpatentability. The Board abused its discretion by relying on a new obviousness theory (Paatela, rather than Nelson, for the "each concurrently with each other" aspect) first presented in the Reply. Axonics did not excuse it, because Petitioner itself first proposed the district court construction that Patent Owner then applied, so Petitioner had notice and cannot claim otherwise. A petitioner that says in the petition that no term needs construction, then proposes a construction in district court, cannot use Axonics to justify a new reply theory when the patent owner merely holds it to that construction. Practitioners should align petition and district court claim construction positions from the start, because the Director treats inconsistent "wait and see" positioning as improper. Decision under review: the Board's Final Written Decision (Paper 26) held claims 1-3, 5-10, 12-15, and 17-21 of the '471 patent unpatentable as obvious over Cornett, Paatela, and Nelson. The dispute centered on the 'concurrently writing' limitation of claim 13 (similarly claim 1). Background: the Petition said no term needed construction and relied on Nelson for the concurrent writing. Petitioner then proposed a district court construction requiring each individual header to be written 'each concurrently with each other' to the protocol stack layer memory. Patent Owner agreed to it and the district court adopted it. Patent Owner relied on it in its Response, and Petitioner shifted to Paatela in the Reply. Axonics: the Board relied on Axonics (a petitioner must have notice and an opportunity to respond to a new claim construction). The Director distinguished it: Patent Owner raised no additional requirement but applied Petitioner's own district court construction, so Petitioner was not denied notice or an opportunity to respond. Petitioner should have advanced the district court construction in its Petition. Having failed to, it cannot fault Patent Owner. Pairing a 'no construction needed' position in the Petition with a proposed construction in court was a 'wait and see' approach that treats the Board as a parallel forum, citing Magnolia Medical Techs., Inc. v. Kurin, Inc., IPR2026-00097, Paper 17 (precedential). Order: Director Review granted; the Final Written Decision is reversed; Petitioner does not establish by a preponderance of the evidence that claims 1-3, 5-10, 12-15, and 17-21 are unpatentable. Petitioner had notified the Office that it was withdrawing from participating. KEY QUOTE: "Petitioner should have advanced the district court construction in its Petition and, having failed to do so, it cannot now fault Patent Owner for that failure." (Paper 29, p. 5)