Sipco, LLC v. Emerson Electric Co.

United States Court of Appeals
for the Federal Circuit
______________________

SIPCO, LLC,
Appellant

v.

EMERSON ELECTRIC CO.,
Appellee
______________________

2018-1635
______________________

Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. CBM2016-
00095.
______________________

Decided: September 25, 2019
______________________

JAMES R. BARNEY, Finnegan, Henderson, Farabow,
Garrett & Dunner, LLP, Washington, DC, argued for ap-
pellant. Also represented by KELLY LU; GREGORY J.
GONSALVES, Gonsalves Law Firm, Falls Church, VA.

DOUGLAS HALLWARD-DRIEMEIER, Ropes & Gray LLP,
Washington, DC, argued for appellee. Also represented by
JAMES RICHARD BATCHELDER, JAMES LAWRENCE DAVIS, JR.,
East Palo Alto, CA.
______________________

Before O’MALLEY, REYNA, and CHEN, Circuit Judges.
2 SIPCO, LLC v. EMERSON ELECTRIC CO.

Opinion for the court filed by Circuit Judge CHEN.
Opinion concurring-in-part and dissenting-in-part filed by
Circuit Judge REYNA.
CHEN, Circuit Judge.
SIPCO, LLC (SIPCO) appeals a final written decision
of the Patent Trial and Appeal Board (Board) in a covered
business method (CBM) review of its U.S. Patent No.
8,908,842 (’842 patent). After instituting CBM review, the
Board found claims 1, 7, 9, 16, and 17 of the ’842 patent
ineligible for patent protection under 35 U.S.C. § 101 and
unpatentable for obviousness under 35 U.S.C. § 103.
SIPCO appeals these findings, as well as the Board’s deter-
mination that the ’842 patent was subject to CBM review.
In determining that the ’842 patent qualifies for CBM
review, the Board found that the patent is not excluded
from review under the statutory “technological invention”
exception. See America Invents Act (AIA) § 18(d). Under
37 C.F.R. § 42.301(b), the Board must consider “whether
the claimed subject matter as a whole recites a technologi-
cal feature that is novel and unobvious over the prior art;
and solves a technical problem using a technical solution.”
Applying just the second part of this regulatory standard,
the Board here found that the patent contained no tech-
nical solution to a technical problem.
We reverse the Board’s claim construction of “low
power transceiver” and its finding that the ’842 patent does
not satisfy the second part of the regulation defining “tech-
nological invention.” § 42.301(b). Because the Board did
not address the applicability of § 42.301(b)’s first part, we
vacate and remand for consideration consistent with this
opinion.
SIPCO, LLC v. EMERSON ELECTRIC CO. 3

BACKGROUND
1. The ’842 Patent
The ’842 patent, based on a provisional application
filed in 1997, explains that there are a variety of circum-
stances in which it is desirable to communicate information
from a previously unconnected, remote device to a central
location. ’842 patent at col. 1, ll. 43–45. Rather than set
up a direct communication link from the remote device to
the central location, however, the invention of the ’842 pa-
tent sets up a two-step communication path through a set
of intermediate nodes that takes advantage of the nodes’
already-provided communications link (e.g., a public-
switched telephone network (PSTN)) to the central loca-
tion. Id. at claim 1. The claimed invention completes the
communication path by having the remote device com-
municate wirelessly to an intermediate node. For example,
a user may wish to replace the bank and credit cards he or
she carries with a remote transmitting unit, similar to an
automobile remote key, that has one or more buttons each
associated with a bank or credit card. Id. at col. 5, ll. 9–64.
When the user depresses the button, the remote transmit-
ter transmits the user’s banking card account and PIN in-
formation to, for example, the ATM. Id. at col. 5, ll. 43–61.
The ATM then transmits the information over, for exam-
ple, a PSTN to the central location for verification. Id. at
col. 7, ll. 41–44.
In implementing this two-step system, the inventors
recognized problems that arose. Id. at col. 5, l. 67 – col. 6,
l. 11. For example, contention between two or more remote
devices communicating at the same time caused more dis-
tantly located users to circumvent closer users. Id. at col.
6, ll. 4–7. In addition, an interloper could unlawfully inter-
cept the electromagnetic signals carrying sensitive data.
Id. at col. 6, ll. 7–11. To alleviate these problems, the ’842
patent recites the use of a low-power remote transmitter,
which the specification explains would require the user to
4 SIPCO, LLC v. EMERSON ELECTRIC CO.

be in “close proximity,” “e.g., several feet,” in order for the
user to be able to use it. Id. at col. 5, l. 67 – col. 6, l. 11.
The parties do not dispute the Board’s treatment of
claim 1 as representative. Claim 1 recites the following:
1. A device for communicating information, the de-
vice comprising:
a low-power transceiver configured to wirelessly
transmit a signal comprising instruction data for
delivery to a network of addressable devices;
an interface circuit for communicating with a cen-
tral location; and
a controller coupled to the interface circuit and to
the low-power transceiver, the controller config-
ured to establish a communication link between at
least one device in the network of addressable de-
vices and the central location using an address in-
cluded in the signal, the communication link
comprising one or more devices in the network of
addressable, the controller further configured to re-
ceive one or more signals via the low-power trans-
ceiver and communicate information contained
within the signals to the central location.
Id. at claim 1. Dependent claims 3 and 4 are particularly
relevant to this appeal:
3. The device of claim 2, wherein the remote device
is a [sic] associated with a vending machine.
4. The device of claim 2, wherein the remote device
is associated with an Automated Teller Machine
(ATM).
Id. at claims 3, 4.
SIPCO, LLC v. EMERSON ELECTRIC CO. 5

2. Board’s Institution Decision
In July 2016, Emerson Electric Co. (Emerson) filed a
petition requesting CBM review of the ’842 patent on, inter
alia, §§ 101 and 103 grounds. Emerson argued that the
challenged claims were directed to the patent-ineligible ab-
stract idea of “establishing a communication route between
two points to relay information.” J.A. 215. According to
Emerson, “[t]his concept has been practiced for centuries
in applications such as the Postal Service, Pony Express,
and telegraph, where a route is established to relay mail or
other communications from one point to another.” Id. Em-
erson also argued that the ’842 patent was unpatentable
for obviousness over U.S. Patent No. 5,157,687 (Tymes).
J.A. 261.
The Board instituted on both grounds. J.A. 432. In its
institution decision, the Board analyzed whether the ’842
patent qualified as a “covered business method patent” un-
der AIA § 18(d)(1), which defines the term as “a patent that
claims a method or corresponding apparatus for perform-
ing data processing or other operations used in the prac-
tice, administration, or management of a financial product
or service, except that the term does not include patents for
technological inventions.” The Board determined that
claim 3—associating the device with a vending machine—
and claim 4—associating the device with an ATM—recited
apparatuses “used in the practice, administration, or man-
agement of a financial product or service” under § 18(d)(1).
J.A. 387–89.
The Board then determined that the patent was not
drawn to a “technological invention.” The Board applied
its regulation 37 C.F.R. § 42.301(b), which provides a two-
part test for determining whether a patent is for a “techno-
logical invention”: “whether the claimed subject matter as
a whole recites a technological feature that is novel and un-
obvious over the prior art; and solves a technical problem
using a technical solution.” The Board explained that both
6 SIPCO, LLC v. EMERSON ELECTRIC CO.

parts of the regulation must be satisfied in order to exempt
the patent from CBM review. J.A. 390. Because the Board
concluded that the patent did not provide a technical solu-
tion to a technical problem and therefore did not meet part
two, the Board did not analyze part one. J.A. 390–92.
Citing the Patent Office’s 2012 Office Patent Trial
Practice Guide, the Board focused on the features of claim
1, as incorporated in dependent claims 3 and 4, and deter-
mined that they are no more than generic and known hard-
ware elements and routine computer functions. J.A. 390–
91. The Board found that “[t]he only wireless transmission
required by claims 3 and 4 is a signal from a low-power
transceiver,” which the Board noted was well-known in the
art at the time of the invention. J.A. 391. The Board stated
that the problem being solved by the ’842 patent was the
financial problem of reducing the cost of having to dispatch
service personnel to fix these machines frequently, rather
than a technical problem. J.A. 392. Ultimately finding
that the features from claim 1 were not drawn to a tech-
nical solution to a technical problem and, therefore, not
drawn to a “technological invention,” the Board determined
that the ’842 patent was subject to CBM review. J.A. 392–
93.
The Board construed, among other terms, “low-power
transceiver.” J.A. 396–99. Emerson did not provide a con-
struction in its petition; SIPCO proposed a construction
that specified that the transceiver “transmits and receives
signals having a limited transmission range.” J.A. 397.
SIPCO supported its proposed construction with citations
to the patent and an exhibit showing that the FCC dis-
cusses “low-power” transceivers in a manner that limits
their range to “a few meters.” J.A. 397–98. The Board dis-
agreed with SIPCO’s proposed construction, finding that
the term “low-power” as used in claim 1 did not necessarily
require that the device transmit and receive signals only
within a “limited transmission range.” J.A. 398.
SIPCO, LLC v. EMERSON ELECTRIC CO. 7

The Board also declined to limit the term based on the
discussion of low-power transmitters found in columns five
and six of the specification, because that discussion related
to “extremely low-power transmitters” rather than “low-
power transceiver[s].” J.A. 398–99. The Board dismissed
the FCC document cited by SIPCO because the sentence
discussing low-power transmitters described the distance
between people and consumer products, not the low-power
transmitters’ transmission range. J.A. 399 (quoting J.A.
2791 (“At any time of day, most people are within a few
meters of consumer products that use low-power, non-li-
censed transmitters.”)). The Board ultimately agreed that
the construction should “encompass” a device that “trans-
mits and receives signals having a limited transmission
range” but declined to limit its construction to that phrase.
Id.
3. Board’s Final Written Decision
The Board’s final written decision reiterated its analy-
sis with respect to whether the ’842 patent was subject to
CBM review. J.A. 6–20. The Board also explained that
after institution, SIPCO filed a statutory disclaimer of
claims 3 and 4 under 35 U.S.C. § 253 and argued that the
disclaimed claims “cannot form the basis for a ruling that
the ’842 patent is a [CBM] patent,” as the ’842 patent
should be “treated as though the disclaimed claims never
existed,” citing language found in Guinn v. Kopf, 96 F.3d
1419, 1422 (Fed. Cir. 1996) (“A statutory disclaimer under
35 U.S.C. § 253 has the effect of canceling the claims from
the patent and the patent is viewed as though the dis-
claimed claims had never existed in the patent.”). The
Board disagreed with SIPCO, finding that the “belated
post-institution disclaimer of claims 3 and 4” did not affect
its conclusion that the ’842 patent is subject to CBM re-
view. J.A. 8. The Board cited a precedential Board CBM
decision in which it had previously explained that “CBM
patent review eligibility is determined based on the claims
of the challenged patent as they exist at the time of the
8 SIPCO, LLC v. EMERSON ELECTRIC CO.

decision whether to institute.” Id. (citing Facebook, Inc. v.
Skky, LLC, Case CBM2016-00091, slip op. 11 (P.T.A.B.
Sept. 28, 2017) (Paper 2) (precedential)) (emphasis added
by the Board). The Board also pointed out that AIA
§§ 18(a)(1)(E) and 18(d)(1) use the present tenses of words
“institute” and “claims,” implying that a patent is subject
to CBM review based on what the patent claims at the time
of the institution decision, not some later time after insti-
tution. J.A. 8–9. The Board noted that it would not have
considered claims 3 and 4 if SIPCO had timely filed a dis-
claimer before institution and observed that Emerson
would still have had the ability to file for inter partes re-
view of the ’842 patent before the one-year statutory bar of
35 U.S.C. § 315(b) had SIPCO done so. J.A. 10.
With respect to the technological invention exception,
the Board cited the statement in Versata Development
Group, Inc. v. SAP America, Inc., 793 F.3d 1306, 1327 (Fed.
Cir. 2015) that “the presence of a general purpose computer
to facilitate operations through uninventive steps does not
change the fundamental character of an invention” to sup-
port its conclusion that “[a] claim does not include a tech-
nological feature if its elements are nothing more than
general computer system components used to carry out the
claimed process.” J.A. 17 (internal quotation marks omit-
ted). The Board then reiterated its determination that the
features of claim 1 as incorporated in dependent claims 3
and 4 “recite no more than generic and known hardware
elements and routine computer functions,” and that the
problem being solved, which the Board characterized as
“[a]utomating service requests of vending machines and
ATMs,” was a financial, not technological, problem. J.A.
18–19.
The Board maintained its “low-power transceiver” con-
struction, concluding that SIPCO was conflating “power”
with “transmission range.” J.A. 23. The Board also cred-
ited Emerson’s expert’s testimony that a change in power
does not necessarily result in a change in transmission
SIPCO, LLC v. EMERSON ELECTRIC CO. 9

range, because the range depends on numerous factors in-
cluding the signal frequency and environment. J.A. 24–25.
The Board concluded that the challenged claims were
patent-ineligible under § 101 because they were directed to
the abstract concept of “establishing a communication
route between two points to relay information” and did not
contain any additional inventive concept. J.A. 30–45. The
Board emphasized its view that the ’842 patent merely au-
tomated service requests using general purpose devices
such as low-power transceivers. J.A. 32. The Board noted
that, “[s]ignificantly, the claims are not directed to a new
type of transceiver, interface circuit, or controller to estab-
lish a communication link between a remote device and the
central location,”; “[i]nstead, the claims are directed to
transmitting data between locations using conventional or
generic computer components.” J.A. 33.
The Board also found, inter alia, the ’842 patent obvi-
ous over Tymes. SIPCO appeals the Board’s determination
that the ’842 patent is subject to CBM review, as well as
the Board determinations as to §§ 101 and 103. We have
jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A).
DISCUSSION
1. “Low-Power Transceiver” Construction
We review factual determinations concerning extrinsic
evidence underlying the Board’s claim construction for sub-
stantial evidence and the ultimate construction de novo. In
re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1280 (Fed.
Cir. 2015). To the extent the Board considered extrinsic
evidence when construing the claims, we need not consider
the Board’s findings on that evidence because the intrinsic
record is clear. See Eidos Display, LLC v. AU Optronics
Corp., 779 F.3d 1360, 1365 (Fed. Cir. 2015).
The Board correctly applied Phillips v. AWH Corp., 415
F.3d 1303, 1312 (Fed. Cir. 2005) (en banc), rather than the
broadest reasonable interpretation standard, when
10 SIPCO, LLC v. EMERSON ELECTRIC CO.

construing terms of this expired patent. J.A. 21; see also In
re Rambus Inc., 694 F.3d 42, 46 (Fed. Cir. 2012). Phillips
explains that “[i]t is a bedrock principle of patent law that
the claims of a patent define the invention to which the pa-
tentee is entitled the right to exclude.” 415 F.3d at 1312
(internal quotation marks omitted). “While not an absolute
rule, all claim terms are presumed to have meaning in a
claim.” Innova/Pure Water, Inc. v. Safari Water Filtration
Sys., Inc., 381 F.3d 1111, 1119 (Fed. Cir. 2004). In Innova,
we rejected a construction that read the term “operatively”
out of the phrase “operatively connected,” explaining that
the construction was not correct because “the term ‘opera-
tively’ [would be] unnecessary and superfluous as the pa-
tentee could have as easily used the term ‘connected’
alone.” Id.
The dispute between the parties is whether “low-
power” is properly read, in light of the specification, to cor-
relate with limited transmission range. We conclude that
the Board’s construction in this case fails to give appropri-
ate meaning to the term “low-power” in “low-power trans-
ceiver.” “Importantly, the person of ordinary skill in the
art is deemed to read the claim term not only in the context
of the particular claim in which the disputed term appears,
but in the context of the entire patent, including the speci-
fication.” Phillips, 415 F.3d at 1313. The specification ex-
plains that the reason that the ’842 patent contemplates a
transmitter 1 having low power is “so that a user will have

1 The specification explains that a transceiver con-
tains both a transmitter and receiving circuitry, and the
parties do not dispute that only the transmitter portion of
the “low-power transceiver” is used in claim 1. See ’842 pa-
tent at col. 8, ll. 7–9, claim 1. Accordingly, we find that the
specification’s disclosure of a “low-power transmitter” is co-
extensive with claim 1’s recitation of “low-power trans-
ceiver.”
SIPCO, LLC v. EMERSON ELECTRIC CO. 11

to be in close proximity, (e.g., several feet) to the receiver
18 of an AFTM 10 in order to use the transmitter.” ’842
patent at col. 5, l. 67 – col. 6, l. 3. It is only if the signal
transmission is limited in range that the problems of un-
wanted circumvention, contention, and unlawful intercep-
tion of the electromagnetic signals described in column six
are alleviated. See id. at col. 6, ll. 4–9.
We recognize here, as we did in Phillips, “that the dis-
tinction between using the specification to interpret the
meaning of a claim and importing limitations from the
specification into the claim can be a difficult one to apply
in practice.” Phillips, 415 F.3d at 1323. However, “the line
between construing terms and importing limitations can be
discerned with reasonable certainty and predictability if
the court’s focus remains on understanding how a person
of ordinary skill in the art would understand the claim
terms.” Id. SIPCO’s specification explicitly ties the low-
power transceiver to a limited transmission distance; ac-
cordingly, a skilled artisan would understand “low-power”
to mean that the transceiver operates at a power level cor-
responding to “limited transmission range 2.”
Emerson contends that the specification’s discussion of
a limited transmission range for its transmitter does not
apply to the claimed “low-power transceiver” because that
discussion uses the word “extremely” before low-power.
But the specification is consistent with our construction,
because it repeatedly ties the low-power transmitter to
having a limited transmission range. See, e.g., ’842 patent
at col. 5, l. 67 – col. 6, l. 3 (“Preferably, the transmitter 20

2 The dissent states that this construction introduces
ambiguities as to how much distance and how much power
correspond to “limited transmission range.” Dissent at 7.
But the parties did not allege, and the Board did not find
that the meaning of “limited transmission range,” or even
“low-power,” was uncertain.
12 SIPCO, LLC v. EMERSON ELECTRIC CO.

is an extremely low power transmitter, so that a user will
have to be in close proximity, (e.g., several feet) to the re-
ceiver . . . .”); id. at col. 6, ll. 4–11 (“This extremely low-
power operation also helps to prevent the unlawful inter-
ception of the electromagnetic signals.”); id. at col. 14, ll.
15–21 (“. . . it may be desirable to use a cellular transmit-
ter, instead of a low-power RF transmitter . . . because the
automobile may break down a relatively significant dis-
tance from the nearest pay-type telephone (e.g., location of
the nearest transceiver).”). The word “extremely” specifies
the amount of distance by which the transmission is lim-
ited—e.g., “several feet.” The specification’s description of
a cellular transmitter being capable of transmitting a fur-
ther distance than a low-power transmitter reinforces this
conclusion. See id. at col. 14, ll. 15–21.
The Board placed considerable emphasis on Dr. Geier’s
expert testimony that “low-power” is not necessarily coex-
tensive with a limited transmission range. See J.A. 23–25.
But in this case, the intrinsic evidence is sufficiently clear
as to the meaning of “low-power” such that consulting ex-
trinsic evidence is unnecessary. See Phillips, 415 F.3d at
1317. In any event, Dr. Geier’s testimony was less than
conclusive, and both he and Emerson’s other expert, Dr.
Heppe, testified that one (according to Dr. Heppe, “typical”)
characteristic of a low-power transmitter is a limited trans-
mission range, and that characteristic is consistent with
the only described use in the specification. See J.A. 2937–
38 (Dr. Geier); J.A. 3152–53 (Dr. Heppe). Moreover, the
record also contains evidence that supports a relationship
between limited transmission range and low transmit
power. See J.A. 3046 (disclosing the Friis equation, which
defines transmission distance as a function of the square
root of transmitted power); J.A. 3149-50 (Dr. Heppe testi-
fying that “signal level, generally speaking, decays as one
over the square distance”).
Accordingly, we reverse the Board’s construction of
“low-power transceiver” and construe it to mean “a device
SIPCO, LLC v. EMERSON ELECTRIC CO. 13

that transmits and receives signals at a power level corre-
sponding to limited transmission range.”
2. Financial Product or Service
“[W]e review the Board’s reasoning [as to whether the
particular patents at issue are CBM patents] under the ar-
bitrary and capricious standard and its factual determina-
tions under the substantial evidence standard.”
SightSound Techs., LLC v. Apple Inc., 809 F.3d 1307, 1315
(Fed. Cir. 2015). The parties do not dispute that only one
claim must meet the requirements of § 18(d)(1) in order for
the patent to be considered a CBM patent. See Apple, Inc.
v. Ameranth, Inc., 842 F.3d 1229, 1239 n.6 (Fed. Cir. 2016).
We find that the Board’s conclusion that claims 3 and
4 recite an apparatus “for performing data processing or
other operations used in the practice, administration, or
management of a financial product or service” under AIA
§ 18(d)(1) was not arbitrary and capricious. We have pre-
viously interpreted “the definition of ‘covered business
method patent’ [not to be] limited to products and services
of only the financial industry, or to patents owned by or
directly affecting the activities of financial institutions
such as banks and brokerage houses.” Versata, 793 F.3d at
1325. Rather, we have found that § 18(d)(1) “on its face
covers a wide range of finance-related activities.” Id. In
Versata, we found the “method and apparatus for pricing
products in multi-level product and organizational groups”
to be sufficiently “used in the practice, administration, or
management of a financial product or service” to subject
the patent to CBM review. Id. at 1311, 1325–26.
We placed some limitation on the scope of CBM review
in Unwired Planet, LLC v. Google Inc., 841 F.3d 1376 (Fed.
Cir. 2016), where the Board had found a patent relating to
a “method and system for managing location information
for wireless communications devices” to be subject to CBM
review because, in the Board’s view, “the [recited] ‘client
application’ may be associated with a service provider or a
14 SIPCO, LLC v. EMERSON ELECTRIC CO.

goods provider, such as a hotel, restaurant, or store” and
therefore the patent was “incidental to” or “complementary
to” the financial activity of service or product sales. Id. at
1378–79. We held that the Board’s reliance on activities
merely “incidental to” or “complementary to” a financial ac-
tivity rendered meaningless the limits placed by Congress
on CBM review. Id. at 1382. For example, “[t]he patent for
a novel lightbulb that is found to work particularly well in
bank vaults does not become a CBM patent because of its
incidental or complementary use in banks.” Id. “Likewise,
it cannot be the case that a patent covering a method and
corresponding apparatuses becomes a CBM patent because
its practice could involve a potential sale of a good or ser-
vice[, because] [a]ll patents, at some level, relate to poten-
tial sale of a good or service.” Id. Nor is a patent for
“digging ditches” subject to CBM review simply because
the dirt can subsequently be sold. Id.
SIPCO likens its ’842 patent to the examples provided
in Unwired Planet, arguing that the claimed device is only
“associated with” an ATM or vending machine and the
“mere possibility that certain remote devices of the ‘842 pa-
tent could communicate financial data is not nearly suffi-
cient to demonstrate that it is directed to financial products
or services.” SIPCO’s Op. Br. 59. But the claimed appa-
ratus need only be “used in” the practice, administration,
or management of a financial product or service. See AIA
§ 18(d). As the Board explained, claims 3 and 4 recite the
remote device being associated with an ATM or vending
machine. ’842 patent at claims 3, 4. The patent expressly
contemplates that the information communicated through
the claimed system is financial information that identifies
the user’s bank account and the user’s identity. See, e.g.,
id. at col. 5, ll. 40–64, col. 6, ll. 13–16. The Board is correct
in its assessment that the concept of communicating finan-
cial information from a device associated with an ATM to a
central location is “central to the operation of the claimed
device” in claim 3. See J.A. 14–15 (citing ’842 patent at col.
SIPCO, LLC v. EMERSON ELECTRIC CO. 15

1, ll. 43–65, col. 2, ll. 23–25, col. 3, ll. 12–14, col. 3, ll. 22–
23, col. 4, ll. 32–37, col. 6, ll. 19–28, FIGs. 1A, 5). We there-
fore do not find that the Board abused its discretion when
it determined that the claimed apparatus was “used in” the
practice, administration, or management of a financial
product or service.
SIPCO also argued before the Board and on appeal that
because it disclaimed claims 3 and 4 the Board should not
have relied on them in analyzing whether the ’842 patent
is CBM eligible. SIPCO’s Op. Br. at 62. But SIPCO ulti-
mately conceded at oral argument that a patent may be
CBM eligible based on a single claim and that the Board
could have properly relied on claims 3 or 4. Oral Arg. at
2:02–09, 5:24–51, http://oralarguments.cafc.uscourts.gov/
default.aspx?fl=2018-1635.mp3.
Accordingly, the Board’s conclusion that the ’842 pa-
tent could be CBM eligible because claims 3 and 4 recite an
apparatus “for performing data processing or other opera-
tions used in the practice, administration, or management
of a financial product or service” under § 18(d)(1) is not ar-
bitrary and capricious.
3. Technological Invention Exception
We review the Board’s reasoning as to whether the ’842
patent qualifies as a “technological invention” under
§ 18(d)(1) under the arbitrary and capricious standard and
its factual determinations for substantial evidence.
SightSound, 809 F.3d at 1315. Section 18(d)(1) excludes
“patents for technological inventions” from CBM review.
We previously explained in Versata that, “[u]nhelpfully,
Congress did not . . . define a ‘technological invention,’ but
instead instructed the USPTO to ‘issue regulations for de-
termining whether a patent is for a technological inven-
tion,’” in order to assist in implementing CBM review.
Versata, 793 F.3d at 1323 (quoting § 18(d)(2)); see id. The
Patent Office, in turn, issued 37 C.F.R. § 42.301, which de-
fines “technological invention” in the following way:
16 SIPCO, LLC v. EMERSON ELECTRIC CO.

In determining whether a patent is for a technolog-
ical invention solely for purposes of the Transi-
tional Program for Covered Business Methods
(section 42.301(a)), the following will be considered
on a case-by-case basis: [1] whether the claimed
subject matter as a whole recites a technological
feature that is novel and unobvious over the prior
art; and [2] solves a technical problem using a tech-
nical solution.
§ 42.301(b).
If each part of this definition is satisfied, then the pa-
tent is not eligible for CBM review. We discuss each part
with respect to the ’842 patent below.
a. Part Two
Because the Board misread and mischaracterized the
features of claim 1 in its analysis of dependent claims 3 and
4, it did not appreciate that the claims provide a technical
solution to a technical problem. Its ruling on this issue was
thus arbitrary and capricious.
We explained in Versata that § 42.301’s “[d]efini[tion
of] a term in terms of itself does not seem to offer much
help.” 793 F.3d at 1326. In fact, “neither the statute’s punt
to the USPTO nor the agency’s lateral of the ball offer an-
ything very useful in understanding the meaning of the
term ‘technological invention.’” Id. In Versata, we deter-
mined that a method of determining a price that could be
achieved “in any type of computer system or programming
or processing environment,” and using “no specific, uncon-
ventional software, computer equipment, tools or pro-
cessing capabilities” did not recite a technical solution to a
technical problem. Id. at 1327. Citing Alice Corp. Pty. Ltd.
v. CLS Bank International, 573 U.S. 208 (2014), we stated
that “the presence of a general purpose computer to facili-
tate operations through uninventive steps does not change
SIPCO, LLC v. EMERSON ELECTRIC CO. 17

the fundamental character of [the] invention.” Versata,
793 F.3d at 1327.
In Apple, we found a Board decision not to be arbitrary
and capricious where it determined that a method of gen-
erating a second menu from categories and items selected
from a first menu did not provide a technical solution to a
technical problem. 842 F.3d at 1234, 1239–40. The patent
owner had argued that the patent was intended to solve “a
problem in restaurant ordering when customers wanted
something unusual and unanticipated.” Id. at 1239. The
Board found this to be more of a business problem than a
technical problem. Id.
In Trading Technologies, we found a Board decision not
to be arbitrary and capricious where it determined that a
software method for financial trading, including receiving
bid and offer information and displaying the information to
the user, did not provide a technical solution to a technical
problem. Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d
1084, 1091 (Fed. Cir. 2019) (Trading Techs. I); Trading
Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1378, 1383 (Fed. Cir.
2019) (Trading Techs. II). The patent owner argued that
the patent addressed technical problems relating to effi-
ciency, speed, usability, intuitiveness, and visualization of
prior art graphical user interface tools. Trading Techs. I at
1089; see also Trading Techs. II at 1383. We agreed that
the claims related to the practice of a financial product—
helping a trader gain a market advantage—rather than a
technological invention. Trading Techs. I at 1089–90;
Trading Techs. II at 1383. Because the “invention ma[de]
the trader faster and more efficient, not the computer,” it
was not a technical solution to a technical problem. Trad-
ing Techs. I at 1090 (emphasis in original); see also Trading
Techs. II at 1383.
The question of whether a patent is for a “technological
invention” is fact-specific and must be considered on a case-
by-case basis. See § 42.301(b). This case differs from those
18 SIPCO, LLC v. EMERSON ELECTRIC CO.

we have previously analyzed because the problem solved
by the claims is technical in nature. The Board limited its
characterization of the “problem” being solved to an exam-
ple problem provided in the background that is resolved by
the claims—automating machine service requests. See
J.A. 19. But it is clear from both the claims and the speci-
fication that the claimed invention implements a commu-
nication system that connects an unconnected, remote
device with a central station. See SIPCO’s Reply Br. at 22.
The claims do so by taking advantage of a set of intermedi-
ate nodes (“a network of addressable devices”) that are al-
ready connected to the central station over an existing
communication network, for example PSTN. ’842 patent at
claim 1. The first step of the communication path from the
user and remote device to the intermediate node is made
over a wireless connection, and the second step is from the
intermediate node to the central station over the existing
communication network. Id.
In the context of leveraging an existing communica-
tions network to serve as an intermediary for communica-
tion between a remote device and a central location,
however, the ’842 patent explains that certain problems
arise in communicating information at this first step, e.g.,
unlawful interference, contention, and unwanted circum-
vention of the electromagnetic signals. Id. at col. 5, l. 65 –
col. 6, l. 11. Accordingly, the technical problem resolved by
the claims was how to extend the reach of an existing com-
munication system from a central location to a remote, un-
connected device while protecting against unwanted
interference with the transmitted signals. The claims solve
this problem with a technical solution: the creation of a
two-step communication system that communicates infor-
mation through a low-power, i.e., limited transmission
range, transceiver over a first, wireless step, that taps into
SIPCO, LLC v. EMERSON ELECTRIC CO. 19

the intermediate node’s existing network connection to
transport information to the central location. 3
Emerson maintains that even if the ’842 patent solves
this technical problem, it does so with conventional compo-
nents. But in that sense, this case is similar to Bascom
Global Internet Services, Inc. v. AT&T Mobility LLC, 827
F.3d 1341 (Fed. Cir. 2016), which arose in a different con-
text and answered a different legal question but remains
instructive here. In Bascom, prior art systems either lo-
cated the Internet content filter at the user’s computer and
were customizable to the user but easily thwarted by com-
puter-savvy teenagers or employees, or located the filter at

3 Our decision in Chamberlain Group, Inc. v.
Techtronic Industries Co., Nos. 18-2103, 18-2228, 2019 WL
3938278, --- F.3d --- (Fed. Cir. Aug. 21, 2019) is not to the
contrary. In Chamberlain, we determined that claims re-
citing wireless communication of status information about
a movable barrier operator (e.g., garage door opener) were
directed to an abstract idea of communicating information
wirelessly, and that the mere limitation of that abstract
idea to the field of movable barrier operators did not con-
stitute an inventive concept sufficient to transform the ab-
stract idea into a practical application of the idea under
Alice. Id. at *2–5. Unlike in Chamberlain, SIPCO’s
claimed invention does not simply use “well understood,”
off-the-shelf wireless technology for its intended purpose of
communicating information. See id., at *4–5. Instead,
SIPCO’s claim 1 provides a more specific implementation
of a communication scheme through its two-step communi-
cation path that combines an established communications
network with a short-range wireless connection between a
low-power transceiver and an intermediate node on the es-
tablished network. SIPCO’s two-step solution extends the
reach of the existing network while overcoming problems
of interference, contention, and interception.
20 SIPCO, LLC v. EMERSON ELECTRIC CO.

a remote server that could not be customizable to the user.
Id. at 1343–45. The claimed invention took advantage of
the technical capability of the TCP/IP communication net-
work and moved the filter to a server operated by the In-
ternet Service Provider (ISP). Id. at 1344. Because the ISP
could associate an individual user with a specific request
to access a website, the claimed invention was able to pro-
vide individual-customizable Internet content filtering re-
motely, preventing it from being easily circumvented by its
users. Id. at 1344–45. We determined that the claims were
drawn to the abstract idea of Internet content filtering un-
der step one of Alice’s § 101 analysis, but determined that
nothing in the record refuted Bascom’s argument that the
claims were drawn to an inventive concept because they
recited a “technology-based solution (not an abstract-idea-
based solution implemented with generic technical compo-
nents in a conventional way) to filter content on the Inter-
net that overcomes existing problems with other Internet
filtering systems.” Id. at 1351. “By taking a prior art filter
solution (one-size-fits-all filter at the ISP server) and mak-
ing it more dynamic and efficient (providing individualized
filtering at the ISP server), the claimed invention repre-
sents a ‘software-based invention[ ] that improve[s] the
performance of the computer system itself.’” Id. “The
claims [thus] carve out a specific location for the filtering
system (a remote ISP server) and require the filtering sys-
tem to give users the ability to customize filtering for their
individual network accounts.” Id. at 1352. We determined
this to be the case despite the fact that each piece of tech-
nology Bascom employed in its invention, e.g., a computer,
a server, was conventional in nature. Id.
By implementing a two-step communication path that
takes advantage of both a wireless step from a remote de-
vice to a set of intermediate nodes and another step that
may be, for example, over PSTN from the intermediate
nodes to the central location, and also incorporating the use
of a low-power transceiver to overcome the technical
SIPCO, LLC v. EMERSON ELECTRIC CO. 21

problems of interference, interception, and contention of
electromagnetic signals sent over the first, wireless step,
SIPCO’s invention is drawn to a technology-based solution,
just as Bascom’s was. Because SIPCO’s claims combine
certain communication elements in a particular way to ad-
dress a specific technical problem with a specific technical
solution, we reverse the Board’s finding that the patent
does not satisfy the second part of its “technological inven-
tion” regulation.
b. Part One
The Board did not analyze whether the ’842 patent sat-
isfies the first part of § 42.301(b) because it found that the
patent did not satisfy the second part. Emerson concedes
as much. Oral Arg. at 31:14–20. Rather than address this
issue in the first instance on appeal, the Board should ad-
dress the first part of § 42.301(b) under the proper con-
struction. Robertson v. Timmermans, 603 F.3d 1309, 1313
(Fed. Cir. 2010) (“[W]e think the better course is to give the
Board the opportunity to apply the correct law rather than
decide these issues ourselves in the first instance.”).
Emerson argues that remand is unnecessary because
the Board already analyzed whether the ’842 patent was
obvious under § 103. But we have previously questioned
whether it makes sense to interpret the first part of
§ 42.301(b)—which references the word obvious—as coex-
tensive with § 103. Most notably, in Versata, we observed
that “[a]t this early stage of the process, when the USPTO
is first determining whether the patent at issue is even a
CBM, there would seem to be little cause to determine
what will be one of the ultimate questions if review is
granted—did the USPTO err in the first instance when it
originally determined that the invention was novel and
nonobvious?” 793 F.3d at 1326. We therefore decline to
assume that this is how the Board would apply § 42.301(b)
in this case. Instead, on remand the Board should explain
22 SIPCO, LLC v. EMERSON ELECTRIC CO.

what part one of the regulation means and then apply it as
so explicated. 4
CONCLUSION
For the reasons stated above, we reverse the Board’s
construction of “low-power transceiver,” affirm the Board’s
finding that claims of the patent are “used in . . . a financial
product or service” under AIA § 18(d)(1), and reverse the
Board’s finding that the patent does not “solve[] a technical
problem using a technical solution” under its regulation
§ 42.301(b). Because part two of § 42.301(b) is satisfied, we
remand to the Board for consideration of part one con-
sistent with this opinion. Because the Board on remand
must revisit its decision as to whether the ’842 patent qual-
ifies for the CBM review, we vacate all of the Board’s un-
patentability determinations. We have considered the
parties’ remaining arguments and find them unpersuasive.
REVERSED-IN-PART, AFFIRMED-IN-PART, AND
VACATED-AND-REMANDED-IN-PART
No costs.

4 The parties agree that the AIA does not define
what is or is not a technological invention.
See, e.g., Oral Arg. at 9:10-9:39, 16:45–52 (“Q: Does the
statute provide any guidance as to what a technological in-
vention is? A: Well, no your Honor.”); see also AIA § 18(d).
The omission of any definition for the phrase “technological
invention” underscores the importance of meaningful guid-
ance from the Patent Office on § 42.301(b). See Kisor v.
Wilkie, 139 S. Ct. 2400, 2417 n.5 (2019) (emphasizing that
regulations which “parrot[] the statutory text” rather than
putting the public on notice of an agency’s interpretation in
advance are not entitled to deference).
 United States Court of Appeals
for the Federal Circuit
______________________

SIPCO, LLC,
Appellant

v.

EMERSON ELECTRIC CO.,
Appellee
______________________

2018-1635
______________________

Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. CBM2016-
00095.
______________________
REYNA, Circuit Judge, concurring-in-part and dissenting-
in-part.
I respectfully dissent from the majority’s decision that
rejects the Board’s claim construction in favor of its own
construction. The record is clear in two respects. First, the
majority reaches its own construction by improperly read-
ing a functional limitation into the claim from a preferred
embodiment. Second, the Board’s construction rests on fac-
tual findings that are supported by substantial evidence,
including expert testimony on the meaning of the claim
term “low-power transceiver” to a person of ordinary skill
in the art. In the end, the majority does not explain why
the Board’s construction is so “clearly at odds with the
claim construction mandated by” the intrinsic record that
2 SIPCO, LLC v. EMERSON ELECTRIC CO.

the extrinsic evidence on which the Board relied can be dis-
counted entirely. Phillips v. AWH Corp., 415 F.3d 1303,
1318 (Fed. Cir. 2005). The majority explains only that it
prefers a different construction. Because the majority’s
opinion is contrary to basic tenants of claim construction
set forth in Phillips, and the deference owed to underlying
factual findings under Teva, I respectfully dissent.
I.
To be sure, the parties disputed before the Board the
construction of the term “low-power transceiver.” SIPCO
argued that “low-power transceiver” should be construed
as a “transceiver that transmits and receives signals hav-
ing a limited transmission range.” J.A. 22, 485. Emerson
argued that the plain and ordinary meaning of “low-power”
should apply: “a transceiver that consumes less power, e.g.,
by transmitting and receiving low power signals.” J.A. 23,
588. Emerson further argued that SIPCO’s construction
impermissibly imports a “limited transmission range” lim-
itation into the claims. J.A. 23, 588. Neither party pro-
posed the construction now adopted by the majority.
The Board addressed point-by-point the same argu-
ments that SIPCO advances on appeal. The Board ulti-
mately rejected SIPCO’s proposed construction, finding
that SIPCO’s arguments conflated “power” with “transmis-
sion range.” J.A. 23. For example, the Board considered
SIPCO’s reliance on a Federal Communications Commis-
sion bulletin purportedly defining low-power transmitters
as having a range of only a few meters but found that the
bulletin did not support SIPCO’s argument after examin-
ing that evidence. J.A. 26.
The Board adopted the plain and ordinary meaning of
“low-power” and construed “low-power transceiver” as re-
ferring to a transceiver that consumes less power. Id. This
construction, the Board concluded, encompasses a device
SIPCO, LLC v. EMERSON ELECTRIC CO. 3

that transmits and receives signals having a limited trans-
mission range, but is not limited by that feature. J.A. 26.
The record evidence supports the Board’s construction.
Notably, the Board received evidence and weighed the
testimony and credibility of SIPCO’s and Emerson’s ex-
perts. The Board credited the testimony of Emerson’s ex-
pert, James T. Geier, in making its factual finding that a
person of ordinary skill in the art would have understood
that changing the transmission power does not necessarily
change the transmission range. J.A. 23 (citing J.A. 2655–
58 ¶¶ 34–39 (Geier Rebuttal Decl.)); see also J.A. 25 (ex-
plaining that Mr. Geier’s cross-examination testimony was
consistent with his declaration testimony on the fact that
“changing the ‘power’ does not necessarily change the
‘transmission range,’ which depends [sic] numerous fac-
tors, including the signal frequency and environment”).
The majority rejects the plain and ordinary meaning of
“low-power transceiver” and reverses the Board, constru-
ing the term to mean “a device that transmits and receives
signals at a power level corresponding to limited transmis-
sion range.” Maj. Op. 12–13. The majority concludes that
the meaning of “low-power” is sufficiently clear in the in-
trinsic record to make evaluation of the extrinsic evidence
unnecessary. Maj. Op. 12. According to the majority, the
specification explains that the reason for using low-power
transmitters is so the user must be in close proximity to the
receiver to avoid the problems of unwanted circumvention
and unlawful interception of the signals. Maj. Op. 10–11.
The majority thus concludes that the “specification explic-
itly ties the low power transceiver to a limited transmission
distance,” and that a person of ordinary skill in the art
would understand “‘low-power’ to mean ‘having a limited
transmission range.’” Maj. Op. 11. The majority goes on to
further conclude that the term “extremely” in the phrase
“extremely low-power” refers to the “amount of distance by
which the transmission is limited—e.g., ‘several feet.’”
Maj. Op. 12. (emphases in original). And despite finding
4 SIPCO, LLC v. EMERSON ELECTRIC CO.

that the intrinsic evidence is so clear that it does not need
to consider the Board’s factual findings, the majority pro-
ceeds to reweigh the extrinsic evidence and make its own
factual findings, contrary to the Board’s. Maj. Op. 12. The
majority’s newly proffered construction is contrary to well-
established claim construction precedent.
II.
The majority errs in two ways: (1) by importing a limi-
tation—transmission range—into the claims from a pre-
ferred embodiment; and (2) by disregarding the Board’s
factual findings without a sufficiently clear intrinsic rec-
ord.
First, the majority reaches its own construction of “low-
power transceiver” by relying on limitations that are not in
the claims. We have long held that “even though ‘claims
must be read in light of the specification of which they are
a part, it is improper to read limitations from the written
description into a claim.’” Bradium Techs. LLC v. Iancu,
923 F.3d 1032, 1049 (Fed. Cir. 2019) (quoting Wenger Mfg.,
Inc. v. Coating Mach. Sys., Inc., 239 F.3d 1225, 1237 (Fed.
Cir. 2001)); see also Silicon Graphics, Inc. v. ATI Techs.,
Inc., 607 F.3d 784, 792 (Fed. Cir. 2010) (“A construing
court’s reliance on the specification must not go so far as to
import limitations into claims from examples or embodi-
ments appearing only in a patent’s written description []
unless the specification makes clear that the patentee in-
tends for the claims and the embodiments in the specifica-
tion to be strictly coextensive.” (internal quotations
omitted)).
As the majority recognizes, we have noted the difficulty
in drawing a “fine line between construing the claims in
light of the specification and improperly importing a limi-
tation from the specification into the claims.” Cont’l Cir-
cuits LLC v. Intel Corp., 915 F.3d 788, 797 (Fed. Cir. 2019)
(quoting Retractable Techs., Inc. v. Becton, Dickinson &
Co., 653 F.3d 1296, 1305 (Fed. Cir. 2011)). Nevertheless,
SIPCO, LLC v. EMERSON ELECTRIC CO. 5

“the line between construing terms and importing limita-
tions can be discerned with reasonable certainty and pre-
dictability if the court’s focus remains on understanding
how a person of ordinary skill in the art would understand
the claim terms.” Phillips, 415 F.3d at 1323.
The majority here loses that focus, crosses that line,
and, commits “one of the cardinal sins of patent law—read-
ing a limitation from the written description into the
claims.” Id. at 1320 (quoting SciMed Life Sys., Inc. v. Ad-
vanced Cardiovascular Sys., Inc., 242 F.3d 1337, 1340
(Fed. Cir. 2001)); see also id. at 1321 (“[W]e have expressly
rejected the contention that if a patent describes only a sin-
gle embodiment, the claims of the patent must be con-
strued as being limited to that embodiment.”).
The majority’s construction (“a device that transmits
and receives signals at a power level corresponding to lim-
ited transmission range”) replaces the ordinary meaning of
the “power” limitation in the claim language and instead
ascribes a functional limitation to “low-power transceiver”
in terms of transmission range, such that a low power
transceiver that transmits more than two feet—for exam-
ple, two and a half feet—is excluded. See Maj. Op. 10–12.
To reach this conclusion, the majority relies primarily on a
single passage in the written description describing a sin-
gle preferred embodiment depicted in Figure 1. As to this
embodiment, and in relevant part, the written description
states:
In use, a user would simply depress a transmit but-
ton 22, which would result in the transmitter 20
transmitting an electromagnetic signal 30 to a re-
mote AFTM 10[.] Preferably, the transmitter 20 is
an extremely low power transmitter, so that a user
will have to be in close proximity, (e.g., several feet)
to the receiver 18 of an AFTM 10 in order to use the
transmitter. This would help alleviate problems
which may otherwise occur if a user approaching
6 SIPCO, LLC v. EMERSON ELECTRIC CO.

an AFTM 10 is circumvented by a second, more dis-
tantly located user who depresses his transmit but-
ton. This extremely low-power operation also helps
to prevent the unlawful interception of the electro-
magnetic signals[.] In addition, in an alternative
embodiment, the transmitted signal may be en-
crypted for further protect [sic] against such unlaw-
ful interception.
’842 patent col. 5 l. 65–col. 6 l. 11 (emphases added).
This is the critical passage from which the majority
concludes that the written description links “low-power” to
having a “limited transmission range” limitation. See Maj.
Op. 11–12. According to the majority, “[i]t is only if the sig-
nal transmission is limited in range that the problems of
unwanted circumvention, contention, and unlawful inter-
ception of the electromagnetic signals . . . are alleviated.”
Maj. Op. 11. But this is not correct because the specifica-
tion recognizes that transmission need not be extremely
low-power if the transmission signal is encrypted. Thus,
based on a single “preferred” embodiment, the majority
limits the entire claim based on transmission range and
thereby alters the scope of the patent. 1
The majority’s construction alters the scope by remov-
ing the “low power” limitation from the claim language and

1 The majority overlooks other embodiments in the
specification. Another embodiment is a vending machine
whereby the machine sends a signal to itself that is then
relayed to the central location that it, for example, is low
on or out of potato chips. See ’842 patent col. 7 l. 61–col. 9
l. 3. The majority fails to explain why, in this embodiment,
close proximity to the receiver is necessary to avoid un-
wanted circumvention or unlawful interception of the po-
tato chip notification.
SIPCO, LLC v. EMERSON ELECTRIC CO. 7

replacing it with a relationship between power and trans-
mission range extrapolated from a preferred embodiment.
In doing so, it introduces at least three ambiguities.
First, the specification does not clearly define a rela-
tionship between power and transmission range. While the
specification describes an embodiment that relates “ex-
tremely low power” to the requirement that a user be in
close proximity, “e.g., several feet,” of the receiver, the spec-
ification is silent on how a person of ordinary skill in the
art would understand “limited transmission range” and
power level. If, as the majority contends, “extremely” spec-
ifies the “amount of distance,” it is unclear how to objec-
tively determine the distance required by “limited
transmission range” in the majority’s construction where
“extremely” is absent and “several feet” is the sole example
given for transmission range. See Interval Licensing LLC
v. AOL, Inc., 766 F.3d 1364, 1373 (Fed. Cir. 2014) (declin-
ing to “cull out a single ‘e.g.’ phrase from a lengthy written
description to serve as the exclusive definition of a facially
subjective claim term” and holding that claim term to be
indefinite). Second, the relationship between power and
“limited transmission range” introduced by the majority’s
construction is not defined by the specification and is am-
biguous because it allows for inverse relationships or a re-
lationship impacted by other factors—so long as “power”
and “limited transmission range” correspond in some way.
In other words, there is nothing to tell a person of ordinary
skill in the art a numerical value for the transmission
range that would result from a “corresponding” numerical
value for power level. Third, the majority’s construction
does not specify whether the device is limited in the trans-
mission range of signals it transmits, or whether the device
also has limits on the transmission range of signals it can
receive. A construction that introduces such ambiguities
cannot be correct.
Here, the patentee chose to define the subject matter
of his invention in terms of “power,” and our law gives him
8 SIPCO, LLC v. EMERSON ELECTRIC CO.

the freedom to do so. See Thorner v. Sony Computer Entm’t
Am. LLC, 669 F.3d 1362, 1367 (Fed. Cir. 2012) (“The pa-
tentee is free to choose a broad term and expect to obtain
the full scope of its plain and ordinary meaning unless the
patentee explicitly redefines the term or disavows its full
scope.”). This is not a case where the patentee has acted as
his own lexicographer to ascribe a special meaning to “low-
power.” Indeed, the patentee carefully stated the intent
not to limit the claims by making them strictly coextensive
with descriptions of embodiments and instead sought to
“cover all alternatives, modifications, and equivalents” of
the claimed invention. ’842 patent col. 4 ll. 19–26; see also
id. col. 14 ll. 6–9. I therefore disagree with the majority’s
importation of results-oriented, functional language from a
preferred embodiment and rewriting of the claim.
The Board correctly pointed out that none of the claims
contain functional language. J.A. 25. And “[w]here the
function is not recited in the claim itself by the patentee,
we do not import such a limitation.” Ecolab, Inc. v. Envi-
rochem, Inc., 264 F.3d 1358, 1367 (Fed. Cir. 2001). Limited
range is not claimed as a part of the invention, and neither
is the function of preventing unlawful interception of elec-
tromagnetic signals.
Second, the Board’s factual findings are supported by
substantial evidence and require our deference. See Teva
Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 841–42
(2015). How a person of ordinary skill in the art would un-
derstand “low-power transceiver” was an issue of disputed
fact between the parties and their experts that the Board
properly resolved in construing the term according to its
plain and ordinary meaning based on the evidence pre-
sented. See id. at 840 (“[C]laim construction has eviden-
tiary underpinnings and . . . courts construing patent
claims must sometimes make credibility judgments about
witnesses.” (internal quotations removed)). As the Board
found, “low-power” is not a complex term; it has a well-un-
derstood plain meaning. In the context of transmitters, it
SIPCO, LLC v. EMERSON ELECTRIC CO. 9

is a transmitter that consumes less power. See J.A. 23. By
extension, the Board relied on extrinsic evidence that the
term “low-power transceiver” is well known in the art and
carries an ordinary meaning of a “transceiver that con-
sumes less power.” Id.
The Board recognized that the use of low-power trans-
ceivers can impact transmission range, but it credited the
testimony of Dr. Geier that the meaning of “low-power
transceiver” is not limited by this feature. Dr. Geier testi-
fied that while you could have less range with lower-power
transmitters, the transmission range depended on numer-
ous other factors, such as signal frequency, environment,
and sensor sensitivity. Dr. Geier testified that transmis-
sion power does not necessarily result in a change of the
transmission range. The majority rejects Dr. Geier’s testi-
mony by reweighing the evidence and making its own fac-
tual finding that his testimony was “less than conclusive.”
Maj. Op. 12. But whether “power” necessarily affects
transmission range is a subsidiary issue of fact resolved by
the Board that requires our deference. See Knowles Elecs.
LLC v. Cirrus Logic, Inc., 883 F.3d 1358, 1362 (Fed. Cir.
2018) (noting that we review the Board’s underlying fac-
tual findings based on extrinsic evidence, such as expert
testimony, for substantial evidence).
Despite reweighing the extrinsic evidence itself, the
majority asserts that the intrinsic record is so clear that
the Board’s reliance on Emerson’s expert testimony should
be dismissed. Maj Op. 9, 12 (citing Eidos Display, LLC v.
AU Optronics Corp., 779 F.3d 1360, 1365 (Fed. Cir. 2015)
(“To the extent the district court considered extrinsic evi-
dence in its claim construction order or summary judgment
order, that evidence is ultimately immaterial to the out-
come because the intrinsic record is clear.”)). It is also true
that we have held that we may affirm a Board decision that
is supported on the intrinsic record alone. See Profectus
Tech. LLC v. Huawei Techs. Co., 823 F.3d 1375, 1381 (Fed.
Cir. 2016) (citing Cambrian Sci. Corp. v. Cox Commc’ns,
10 SIPCO, LLC v. EMERSON ELECTRIC CO.

Inc., 617 F. App’x 989, 993 (Fed. Cir. 2015) (affirming claim
construction without addressing extrinsic evidence be-
cause “the intrinsic evidence fully determines the proper
construction of the contested claim term”)). Further,
“[e]xtrinsic evidence may not be used ‘to contradict claim
meaning that is unambiguous in light of the intrinsic evi-
dence.’” Id. (citing Phillips, 415 F.3d at 1324). But here,
the intrinsic record is not so clear. The term “low-power
transceiver” as used in the patent is susceptible to more
than one reasonable interpretation, the majority’s con-
struction is not unambiguously supported by the intrinsic
record, and the Board’s construction is not contradicted by
the claim language or the intrinsic evidence.
In my view, the extrinsic record in this case is particu-
larly relevant to understand how a person of ordinary skill
in the art would understand the disputed term at the time
the patent issued. See Teva, 135 S. Ct. at 841–42. This is
particularly true post-Aatrix, which restricted this court’s
ability to decide legal issues and disregard existing under-
lying factual disputes. See Aatrix Software, Inc. v. Green
Shades Software, Inc., 882 F.3d 1121, 1128 (Fed. Cir. 2018)
(noting that in deciding questions of law “there can be sub-
sidiary fact questions which must be resolved en route to
the ultimate legal determination”).
The majority’s claim construction analysis redefines
the term “low-power transceiver” by importing a functional
limitation from the written description and introducing
ambiguity into the claim. As a result, the majority con-
strues “low-power transceiver” to mean a transceiver that
can only transmit and receive signals within a “limited
transmission range.” Maj. Op. 12–13. This rewriting of the
claim alters the scope and recites an invention that is dif-
ferent from the invention claimed in the ’842 patent.
For the foregoing reasons, I dissent.
SIPCO, LLC v. EMERSON ELECTRIC CO. 11

III.
While I disagree with the majority’s decision to reverse
on claim construction, I share the majority’s concern about
the Board’s avoidance of the first prong of the regulatory
definition of “technological invention” under 37 C.F.R.
§ 42.301. Remand is necessary so that the Board may in
the first instance interpret § 42.301(b)(1).