Google Inc. v. Simpleair, Inc.

NOTE: This disposition is nonprecedential.

United States Court of Appeals

for the Federal Circuit

______________________

GOOGLE INC.,

Appellant

v.

SIMPLEAIR, INC.,

Appellee

______________________

2016-1901

______________________

Appeal from the United States Patent and Trademark

Office, Patent Trial and Appeal Board in No. IPR2015-

00180.

______________________

Decided: March 28, 2017

______________________

JON WRIGHT, Sterne Kessler Goldstein & Fox, PLLC,

Washington, DC, argued for appellant. Also represented

by BRIAN LEE, MICHAEL V. MESSINGER, JOSEPH E.

MUTSCHELKNAUS.

JONAS BRAN JACOBSON, Dovel & Luner, LLP, Santa

Monica, CA, argued for appellee. Also represented by

JOHN JEFFREY EICHMANN, GREGORY S. DOVEL.

______________________

2 GOOGLE INC. v. SIMPLEAIR, INC.

Before DYK, CLEVENGER, and HUGHES, Circuit Judges.

CLEVENGER, Circuit Judge.

Google Inc. (“Google”) appeals the decision of the Pa-

tent Trial and Appeal Board (“PTAB”), following an inter

partes review (“IPR”), upholding the patentability of U.S.

Patent No. 8,601,154 (“the ’154 patent”), owned by Sim-

pleAir, Inc. (“SimpleAir”). The PTAB’s decision turned on

whether a certain prior art reference cited by Google, in

combination with other art, rendered the ’154 patent’s

claims obvious and therefore unpatentable. Under the

broadest reasonable interpretation (“BRI”) claim con-

struction standard, the PTAB concluded that Google’s

cited prior art reference did not teach a crucial claim

limitation. Without that limitation, Google’s obviousness

challenge failed, and the PTAB did not reach the addi-

tional pertinent questions of whether the proposed combi-

nation of references rendered the claims obvious. Google

timely appealed to this court.

Claim 1, the sole independent claim of the ’154 patent,

reads, in relevant part:

1. A method to transmit data from an information

source via a central broadcast server to remote

computing devices, the method comprising:

(a) generating data at the information

source, wherein the information source is

associated with an online service relating

to the generated data;

(b) identifying one or more users that have

subscribed to receive a notification relat-

ing to the generated data;

(c) transmitting the generated data to a

central broadcast server configured to pro-

cess the generated data . . . transmit the

processed data to receivers communica-

GOOGLE INC. v. SIMPLEAIR, INC. 3

tively coupled with remote computing de-

vices associated with subscribed users,

wherein the central broadcast server:

(i) comprises one or more servers

associated with a parser to parse

the generated data received from

the information source;

(ii) is communicatively coupled to

at least one information gate-

way . . . ; and

(iii) is communicatively coupled to

at least one transmission gate-

way . . . .

‘154 patent, claim 1.

The disputed term at issue on appeal is the “central

broadcast server.” The PTAB construed the term central

broadcast server, as a matter of the BRI standard, to

mean “one or more servers that are configured to receive

data from a plurality of information sources and process

the data prior to its transmission to one or more selected

remote computing device.”

Google asserts on appeal that the PTAB erred in its

BRI claim construction. According to Google, the correct

BRI construction for central broadcast server should not

be limited to receipt of data from a plurality of infor-

mation sources but, instead, should only require receipt

from one, or more, information sources. Under its pre-

ferred claim construction, wherein a central broadcast

server need only be configured to receive from a single

information source, Google’s cited prior art reference

would seem to teach a central broadcast server. There-

fore, if Google’s claim construction view prevails, the case

would require remand for further consideration of

Google’s obviousness challenge.

4 GOOGLE INC. v. SIMPLEAIR, INC.

SimpleAir argues that Google waived its opportunity

to assert its current claim construction because it failed to

articulate the same before the PTAB and, instead, actual-

ly agreed with the PTAB’s BRI interpretation of central

broadcast server.

For the reasons set forth below, we agree with Sim-

pleAir that Google waived the claim construction argu-

ment it now makes. Therefore, we sustain the PTAB’s

BRI construction. As it did before the PTAB, Google also

maintains that its cited prior art reference teaches a

central broadcast server even under the PTAB’s BRI of

“central broadcast server,” i.e., “configured to receive data

from a plurality of information sources.” Google argues

that the PTAB rejected its arguments because it misap-

plied its own claim construction, wrongfully importing

additional, unstated limitations. For the reasons below,

we disagree. Consequently, the PTAB’s conclusion that

Google fails to identify in the prior art a central broadcast

server must stand. Google’s obviousness challenge fails,

and we affirm the PTAB’s decision upholding the patent-

ability of the ’154 patent claims.

I

SimpleAir maintains that Google waived its argument

that the PTAB incorrectly construed central broadcast

server to require that it be configured to receive data

“from a plurality of information sources.” Some factual

context is necessary before discussing the waiver doctrine.

Google’s IPR was not the first occasion on which to

construe the term “central broadcast server.” In fact, in

three prior district court litigations, courts in the Eastern

District of Texas construed the term—the first two in-

volved related patents, within the same family as the ’154

patent, with a common specification; the third covered the

’154 patent directly. See SimpleAir, Inc. v. Apple Inc., No.

2:09-CV-289-CE, 2011 WL 3880525 (E.D. Tex. Sept. 2,

2011); SimpleAir, Inc. v. Microsoft Corp., No. 2:11-CV-

GOOGLE INC. v. SIMPLEAIR, INC. 5

0416-JRG, 2013 WL 2242163 (E.D. Tex. May 21, 2013);

SimpleAir, Inc. v. Google, Inc., No. 2:13-CV-0937-JRG,

2015 WL 1906016 (E.D. Tex. Apr. 27, 2015). In each of

these actions, the courts construed central broadcast

server to mean the same thing: “one or more servers that

are configured to receive data from a plurality of infor-

mation sources and process the data prior to its transmis-

sion to one or more selected remote computing device,” the

same construction ultimately applied by the PTAB.

Google filed its petition for IPR against the backdrop

of these district court constructions. Notwithstanding the

fact that the courts had previously applied the claim

construction standard outlined in Phillips v. AWH Corp.,

415 F.3d 1303 (Fed. Cir. 2005), rather than the BRI

standard employed by the PTAB, Google provided the

PTAB with the constructions applied by the district courts

for several claim terms, including central broadcast

server, with the requirement that it be configured to

receive data “from a plurality of information sources.”

Google made two statements in its petition perhaps

indicating some resistance to the district court construc-

tions. First, Google noted that “[t]he Board may, of

course, adopt a broader construction than those” reached

by the district court. Joint Appendix at 00142. Second,

Google stated “that the ‘central broadcast server’ in the

’154 patent receives data from ‘the information source’

instead of a plurality of information sources construed by

the district court regarding the [parent] patent.” 1 Id. at

1 Google filed its IPR petition on October 29, 2014,

before the district court issued its claim construction

order applying the same construction of central broadcast

server to the ’154 patent. SimpleAir, Inc. v. Google, Inc.,

No. 2:13-CV-0937-JRG, 2015 WL 1906016 (E.D. Tex. Apr.

27, 2015).

6 GOOGLE INC. v. SIMPLEAIR, INC.

00144. Google did not, however, insist or even request

that the PTAB apply a differing construction.

Consequently, in its Decision to Institute IPR, the

PTAB adopted the district court constructions, agreeing

with the parties that the constructions were “consistent

with the broadest reasonable interpretation of those

terms in light of the ’154 patent specification.” Joint

Appendix at 00293-94. In its discussion of the central

broadcast server claim element, the PTAB specifically

noted that the construction required a plurality of infor-

mation sources.

Throughout the remainder of the IPR proceedings,

there appeared to be no disagreement as to the construc-

tion of central broadcast server. SimpleAir argued that

Google’s cited prior art reference (“Yan”) did not teach one

or more servers configured to receive data from a plurality

of information sources, only one information source;

Google argued Yan did teach a configuration involving

multiple information sources. At the oral hearing, the

PTAB asked Google unequivocally about the district court

constructions:

JUDGE ARBES: Counsel, does the Petitioner

[Google] agree with all of the interpretations in

the District Court order? I believe it was Exhibit

3001.

MR. MESSINGER: Yeah, the Patent Owner—

Petitioner agrees with the District Court interpre-

tations that the Board relied on.

JUDGE ARBES: Okay. So if we were to agree

with the District Court’s analysis that that ap-

plies under broadest reasonable interpretation,

including the reasoning in that opinion, the Peti-

tioner agrees with that?

MR. MESSINGER: Yeah, Petitioner agrees with

that.

GOOGLE INC. v. SIMPLEAIR, INC. 7

Joint Appendix at 00656. Subsequently during the hear-

ing, unprompted by Google, the PTAB asked about the

language of claim 1 and whether it permits a single

information source, rather than necessarily requiring a

plurality of sources for a central broadcast server. Google

seemed to indicate its belief that a central broadcast

server could be configured to receive from only a single

information source, but maintained that, “even if you

consider a plurality of information sources, Yan teaches

that as well.” Joint Appendix at 00658-59. In its final

decision denying Google’s request to cancel the ’154

patent claims, the PTAB explained that the claim con-

structions were uncontested and that “Google agrees that

district court’s interpretations also represent the broadest

reasonable interpretation of the terms for purposes of this

proceeding,” citing the portion of the hearing transcript

quoted above. Joint Appendix at 00007.

We agree with SimpleAir that Google waived its ob-

jection to the PTAB’s construction of central broadcast

server. “[A] party may not introduce new claim construc-

tion arguments on appeal or alter the scope of the claim

construction positions it took below. Moreover, litigants

waive their right to present new claim construction dis-

putes if they are raised for the first time after trial.”

Conoco, Inc. v. Energy & Envtl. Int’l, L.C., 460 F.3d 1349,

1358–59 (Fed. Cir. 2006); see also In re Baxter Int’l, Inc.,

678 F.3d 1357, 1362 (Fed. Cir. 2012) (“Absent exceptional

circumstances, we generally do not consider arguments

that the applicant failed to present to the Board.” (inter-

nal citation omitted)). At no point did Google specifically

ask the PTAB to construe the claim term differently than

the district courts had. Indeed, on multiple occasions

Google expressly assented to the district court construc-

tions.

Google makes two arguments for why we should not

apply waiver in this case. Google first argues that it

sufficiently raised its present claim construction position

8 GOOGLE INC. v. SIMPLEAIR, INC.

before the PTAB, but the PTAB failed to acknowledge any

disagreement. “An issue is preserved for appeal . . . so

long as it can be said that the tribunal was fairly put on

notice as to the substance of the issue.” Nike, Inc. v.

Adidas AG, 812 F.3d 1326, 1342 (Fed. Cir. 2016) (internal

quotation marks omitted). Based on the facts already

outlined, we find Google’s contention that it “argued from

the very beginning” that central broadcast server “needs

to receive information only from a single information

source” to be unavailing. Google Reply Brief at 4–5. The

two comments made in its initial IPR petition were no

more than vague insinuations, seeds of doubt that Google

perhaps hoped would lead the PTAB to arrive at a differ-

ent construction on its own volition. They were insuffi-

cient to place SimpleAir and the PTAB on notice of

Google’s alternative view.

Moreover, Google’s statements during the oral hear-

ing, although more clearly indicating potential disagree-

ment regarding the central broadcast server construction,

also failed to sufficiently preserve the issue for appeal. It

does not appear Google would have even mentioned the

central broadcast server construction had one of the

PTAB judges not raised the issue sua sponte; in fact,

immediately prior to the discussion, Google proclaimed its

full support for adopting all of the district court construc-

tions. We cannot say these off-the-cuff arguments fairly

placed the PTAB on notice of Google’s contrary claim

construction view, or that the PTAB even recognized a

true dispute existed. In such circumstances, a finding of

waiver is warranted. See MCM Portfolio LLC v. Hewlett-

Packard Co., 812 F.3d 1284, 1294 n.3 (Fed. Cir. 2015)

(“MCM candidly admits that it only raised this argument

in a few scattered sentences at the oral hearing below. We

have found that ‘if a party fails to raise an argument

before the trial court, or presents only a skeletal or unde-

veloped argument to the trial court, we may deem that

argument waived on appeal.’ We deem MCM’s argument

GOOGLE INC. v. SIMPLEAIR, INC. 9

waived.” (quoting Fresenius USA, Inc. v. Baxter Int’l, Inc.,

582 F.3d 1288, 1296 (Fed. Cir. 2009))); Wallace v. Dep’t of

the Air Force, 879 F.2d 829, 832 (Fed. Cir. 1989) (“Ordi-

narily, appellate courts refuse to consider issues not

raised before an administrative agency. . . . [T]he issue

must be raised with sufficient specificity and clarity that

the tribunal is aware that it must decide the issue, and in

sufficient time that the agency can do so.”).

Google also maintains that it can appeal any issue

that was “actually decided” in the IPR proceedings, citing

Lifestyle Enterprise, Inc. v. United States, 751 F.3d 1371,

1377 (Fed. Cir. 2014). The statement made in Lifestyle

(as dicta and in a highly distinguishable factual setting)

does not apply here, where the PTAB did not engage in a

full claim construction analysis specifically because the

parties agreed that the district court claim constructions

should apply. Google cites no authority wherein a party

was permitted to pursue a new claim construction argu-

ment on appeal, after failing to raise it adequately with

the trial court or tribunal in the first instance.

“A party’s argument should not be a moving target.”

Finnigan Corp. v. Int’l Trade Comm’n, 180 F.3d 1354,

1363 (Fed. Cir. 1999). More specifically:

The argument at the trial and appellate level

should be consistent, thereby ensuring a clear

presentation of the issue to be resolved, an ade-

quate opportunity for response and evidentiary

development by the opposing party, and a record

reviewable by the appellate court that is properly

crystallized around and responsive to the asserted

argument.

Interactive Gift Exp., Inc. v. Compuserve Inc., 256 F.3d

1323, 1347 (Fed. Cir. 2001) (quoting Finnigan, 180 F.3d at

1363). Google failed to argue its proposed construction of

central broadcast server before the PTAB, thereby depriv-

10 GOOGLE INC. v. SIMPLEAIR, INC.

ing SimpleAir, the PTAB, and this court a meaningful

opportunity to address the merits of Google’s arguments.

We agree with SimpleAir that Google’s objection to

the PTAB’s claim construction of central broadcast serv-

er—i.e., that a central broadcast server need not be con-

figured to receive data from a plurality of information

sources—is barred by the doctrine of waiver. 2

II

Google also argues that the PTAB, when reviewing

the Yan reference to determine whether it taught a cen-

tral broadcast server, did not faithfully apply its own

construction.

First, Google argues that the PTAB imported an un-

stated requirement that the central broadcast server

receive data “directly” from a plurality of information

sources. Google argues that the PTAB’s determination

that Yan failed to teach a central broadcast server was

incorrect as a matter of law because of the PTAB’s reli-

ance on this implicit “direct” receipt limitation that is

absent from the claim construction.

We reject Google’s mischaracterization of the PTAB’s

ruling, in attempt to create legal error. While it was

indeed Google’s position during the IPR that Yan taught

servers configured to receive data indirectly from a plural-

ity of information, the PTAB was not persuaded by and

rejected the argument. The PTAB did not, however,

create a requirement that a central broadcast server

receive data directly from the information sources. In-

stead, the PTAB found that Yan described a server “con-

2 SimpleAir also argued that Google’s claim con-

struction arguments were barred by judicial estoppel.

Because we find waiver applies, we decline to reach this

argument.

GOOGLE INC. v. SIMPLEAIR, INC. 11

figured to receive all Netnews data from a single infor-

mation source – a local host.” Joint Appendix at 00014.

“What a reference teaches is a question of fact.” In re

Beattie, 974 F.2d 1309, 1311 (Fed. Cir. 1992). We find no

legal error in the PTAB’s review of Yan’s teachings and

uphold its factual determination as supported by substan-

tial evidence.

Second, Google argues that the PTAB imported an-

other unnecessary requirement that multiple servers

must be “interconnected” in order to function together as a

central broadcast server. Google maintains that Yan

teaches individual servers that receive data from individ-

ual information sources, and together they would consti-

tute a central broadcast server, but for the PTAB’s

improper requirement that the servers be interconnected.

Again, we disagree that the PTAB implied an un-

called-for limitation. The PTAB explained that “Google

has not explained sufficiently how two separate servers,

each of which is configured to receive data from a differ-

ent single information source, disclose a central broadcast

server, which must be configured to receive information

from multiple information sources.” Joint Appendix at

00019. The PTAB did not affirmatively require that

separate servers be interconnected in order qualify as a

central broadcast server. Rather, it found that Google

failed to satisfy its burden of proof to show that the indi-

vidual servers described in Yan were indeed “configured

to receive data from a plurality of information sources,”

despite seemingly being entirely independent (not inter-

connected, not networked, etc.). This finding is supported

by substantial evidence.

The PTAB certainly did not require that, to be a cen-

tral broadcast server, individual constituent servers

specifically must be “interconnected.” But even assuming

that the PTAB did imply an additional limitation requir-

ing some sort of relationship among individual servers, we

12 GOOGLE INC. v. SIMPLEAIR, INC.

find such a requirement appropriate. The ’154 patent

itself describes “a network of servers 33 in the central

broadcast server 34, such as the FTP server 102 and the

SMTP server 104 illustrated in FIG. 2.” ’154 patent, col. 8

ll. 9–15 (emphasis added). Nothing in the ’154 patent

supports the view that two unrelated servers would

constitute a central broadcast server. To the extent it did

so, the PTAB was justified in reading in a relationship

requirement to prevent the untenable result that “any

two separate servers would be a central broadcast server

no matter how they are configured or related to one

another.” Joint Appendix at 00019.

CONCLUSION

For the reasons set forth above, we affirm the PTAB’s

decision.

AFFIRMED

COSTS

No costs.