The Precedent: Federal Circuit Corrects PTAB's Grammar-Based Claim Construction in Netflix, Inc. V. DivX, LLC

Why It Matters

The ruling demonstrates that courts will favor ordinary English rules over narrow interpretations, expanding claim scope and influencing how parties approach inter‑ partes reviews and patent drafting.

Key Takeaways

• Federal Circuit applied “nearest antecedent” rule for claim language.
• Phrase now limits encrypted video frames, not encryption info location.
• Prior art now satisfies limitation, prompting remand for obviousness.
• Decision warns patentees to specify storage location explicitly.
• PTAB constructions vulnerable to de novo Federal Circuit review.

Pulse Analysis

The Netflix v. DivX decision highlights how the Federal Circuit treats claim construction as a pure grammar exercise when the patent record offers no special definition. By applying the “nearest sensible referent” rule, the court linked the disputed phrase to the closest antecedent—"encrypted portions of frames of video"—instead of the more restrictive "encryption information." This approach restored the broader reading of the claim, showing that even subtle linguistic choices can determine whether a limitation is met by prior art.

For practitioners involved in inter partes reviews, the ruling signals that PTAB constructions are not final. The Federal Circuit’s willingness to revisit claim language de novo means that petitioners can challenge narrow PTAB readings by emphasizing ordinary English usage and intrinsic evidence. As a result, parties must be prepared to argue both the grammatical context and the specification’s broader narrative, especially when the outcome hinges on a single phrase that can swing obviousness determinations.

Patent drafters should take this precedent as a cautionary tale: if a specific storage location or functional relationship is critical, it must be explicitly recited in the claims or clearly described in the specification. Ambiguities invite broader interpretations that may favor accused infringers and make patents more vulnerable in IPR proceedings. By tightening claim language, companies can reduce the risk of adverse PTAB rulings and protect the commercial value of their streaming‑technology patents.