Predicting Cuozzo in Advance of SCOTUS Oral Arguments

supreme-court-scotus-topThe United States Supreme Court will hear oral arguments in Cuozzo Speed Technologies v. Lee on Monday, April 25, 2016. This case will give the Supreme Court its first opportunity to weigh in on the controversial administrative trial procedures created by the America Invents Act (AIA), which went into effect on September 16, 2012.

In advance of this much anticipated hearing, I reached out to a number of industry insiders with a simple question: What do you expect the Supreme Court to do in Cuozzo? Their answers follow.

Of course, once oral arguments are complete we will circle back over the ensuing days and weeks with further articles and prognostications in advance of what could be a momentous decision by the Supreme Court.


stoll-robert-160-200Bob Stoll
Partner, Drinker Biddle & Reath LLP
Former Commissioner for Patents, USPTO

Predicting the Supreme Court’s outcomes on patent cases has never been easy, and the questions presented in Cuozzo, which emanates from a divided panel at the CAFC, is no exception. There are good arguments on both sides of the two questions asked.

On the first question, did the USPTO err in applying the “Broadest Reasonable Interpretation” (BRI) when evaluating claim construction in post grant proceedings at the office instead of the “plain and ordinary meaning” standard used in courts, I believe that court will hold that the USPTO did not err. The office had been applying BRI for decades and there is no hint in the AIA that any other standard should be used. But the rationale for BRI is that claims can be amended at the USPTO and not in court. With the limited grant of amendments in most IPRs, I am not sure the rationale for BRI still has merit unless the USPTO modifies its amendment policies to easily allow narrowing claims in post grant procedures.

As to whether a Board decision to institute an IPR proceeding is judicially reviewable, I am torn. 314(d) clearly prohibits review of the decision to institute the IPR. If this were limited to cases without a final decision, the SC would probably support the provision. But as it would limit the judicial review of final decisions, that would seem contrary to law and I can’t see the SC supporting that.


erich-spangenberg-160-200Erich Spangenberg
CEO at nXn Partners

Even though I find the position stated by Judge Michel in his amicus brief to be the most intellectually appealing position, I expect that the court will rule that Phillips is the proper standard for the PTAB to use. I anticipate that the court will find the decision to institute can be reviewed.


bart-eppenauer-160-200Bart Eppenauer
Managing Partner, Shook, Hardy & Bacon L.L.P.
Former Chief Patent Counsel for Microsoft Corporation

IPRs are becoming the vehicle of choice for challenging a patent’s validity.  The volume of IPR petitions far exceeds original expectations when the AIA enacted IPR and other post grant proceedings.  Now, litigation defendants commonly file an IPR to shift the forum for adjudicating patent validity from a district court to the Patent Office.  Without question, the landscape for scrutinizing the validity and value of patents covering billions of dollars of research and development has changed dramatically.  In fact, roughly 70% of IPR Petitions are brought by petitioners who are also defendants in patent lawsuits filed in U.S. district courts.  Given the widespread use of IPRs as well as the significant linkage between PTAB and district court patent validity proceedings, it is imperative that IPRs are consistent, fair and reliable to ensure that these proceedings fulfill Congress’ objective of providing a surrogate for district court litigation in a court-like proceeding.

In light of the Federal Circuit’s 6-5 decision denying en banc review, it is no surprise that the Supreme Court took this case, particularly given the Court’s ongoing interest in reviewing Federal Circuit decisions that apply special rules in patent cases that stray from general jurisprudence.  And if the Supreme Court’s recent track record in patent cases is a guide to the potential outcome in this case, it seems quite likely that the Court will not simply affirm the Federal Circuit’s decision.  While the Government has set out some reasonably compelling points in support of its position, I believe the Court will agree in large part with Cuozzo and the overwhelming support of the many amici in the case that have set out significant problems and negative long term consequences to the patent system if the PTO’s current approach of using BRI in IPRs is not altered.  I also believe the Court will reign in the PTO with regard to its position on reviewability of the PTAB’s institution decisions.  A prohibition on judicial review in this context arguably would allow a U.S. government agency to exceed its explicit statutory authority granted by Congress.  With many thousands of patents at stake protecting the value of significant research and development efforts across industries, the Court should take great care to arrive at an outcome that provides the greatest level of certainty, predictability and effectiveness for the newly created IPR proceedings.


jim-pooley-160-200James Pooley
Litigator, Strategist and Author
Former Deputy Director General of WIPO

While I’ve not read all the briefs, I thought the petition was excellent. And while I would never go into business handicapping the outcome of SCOTUS deliberations, I do have an opinion about what they should do in this case, at least on the claim construction issue. Judge Newman had it exactly right in her panel dissent and her concise dissent from the denial of rehearing en banc. The “broadest reasonable interpretation” standard is useful during the examination phase, ensuring that no conceivably relevant art is overlooked and that the applicant’s opportunity to amend is well informed. But it’s silly, and ultimately damaging to the system, to apply the same standard in a post-issuance process that is directed at determining exactly what issued claims mean and where amendments are seriously restricted. Just as in district court, IPRs benefit from contested advocacy about the meaning of claim terms. In that adjudicative phase there is no place for the artificial construct of “broadest reasonable interpretation” in place of “most reasonable interpretation.”


robert-greenspoonRobert Greenspoon
Flachbart & Greenspoon, LLC

It’s not impossible that there might be questions from the bench on the foundational constitutional authority of Congress to create the PTAB. The Cooper v. Lee and MCM Portfolio v. HP proceedings are in the pipeline, and the cert pool clerks are savvy enough to have known that. Did the Supreme Court take up the very first IPR outcome to come its way (indeed, IPR number one) because of uneasiness with Congress sidelining Article III trial courts and giving patent validity adjudication duties to an Article I agency? Recall that two Justices sua sponte took up questions of Article III Separation of Powers in B&B Hardware v. Hargis, even after the petitioner disavowed arguing that TTAB adjudications are unconstitutional.

And keep watch for questions about standing. Credit must go to Public Knowledge as the only party or amicus advancing a developed lack-of-standing argument. If the Court punts on question one (or dismisses cert entirely as improvidently granted), it might be on the strength of Public Knowledge’s argument that petitioner has never identified how it would benefit if BRI gets tossed out in favor of Phillips.

Overall, Petitioner won the amicus war (counting briefs, not parties). Petitioner racked up twelve supporting briefs, respondent only ten. The nine “neither party” briefs are even more telling – they vastly favor petitioner. The amicus briefing seemed oddly acrimonious to me. Petitioner amici raise the threat of accused-infringers using BRI for “gamesmanship,” and Respondent amici raise the threat of patentees using Phillips for — wait for it — “gamesmanship.” The truest patentee “friends” are the Law Professors (led by Gregory Dolin) who advocate for Petitioner. They note with scholarly rigor what most patentees have felt in their gut – that IPRs constitute an unconstitutional taking, at least when BRI is used.


Matt-Levy-160-200Matthew Levy
Computer and Communications Industry Association (CCIA)
Author, Patent Progress

The more I read the briefs in Cuozzo, the more I think this case isn’t really a patent case; it’s an administrative law case. And I think the justices will treat it that way, because administrative law is something they’re much more comfortable with than patent law.

The America Invents Act is silent with respect to the claim construction standard for IPRs, and the USPTO is granted authority to make rules governing the IPR procedures. That’s a clear delegation; the PTO had to choose some standard, because inter partes review was a new procedure. If it had chosen the district court standard, that would be under the exact same authority. If I had to guess, I think the Court will focus on whether the PTO’s choice was reasonable.

And with respect to whether the PTAB’s decision to institute can be reviewed, I expect that the Court will focus on the language of the statute, which clearly says that decisions to institute are final and not appealable. Cuozzo could have filed a petition for a writ of mandamus way back when the PTAB instituted. I wouldn’t be surprised if the Court asks why that isn’t sufficient.


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Join the Discussion

4 comments so far.

  • [Avatar for Anon]
    April 26, 2016 08:35 pm

    Edward at 3.

    I do not think that you are grasping (yet) the question to which the answer is going to be forthcoming from.

    You want to lay this at the feet of the PTO (or rather, you think that the Supreme Court is going to lay this at the feet of the PTO).

    That is decidedly NOT the answer to the question being asked (or perhaps, the question that NEEDS to be asked).

    If your answer includes the PTO, then that answer MUST be that the PTO acted in accord with the directions as provided BY Congress (the written law that controls) .

    Whether or not Gannon was caught flat footed is entirely a red herring because the PTO simply acted in accord with what Congress did. In re Portola is a red herring. I do not know what the list of 16 “different decision that have to be made to institute” mean – there is ONLY ONE decision to institute. There are different other things going on leading up to (and following) that ONE decision, but the law as written by Congress is exceptionally clear and only has but a single section on the actual institution decision. There is no other place for controls of that institution decision EXCEPT that one section.

    It is Congress – and not the PTO – that you have to frame as the object of the question.

    There is NO basis to try to separate what the PTO did from what they are allowed to do under the law as written by Congress. You can try as you might to talk about the chapter and the different sections, but there is only one section that controls the initiation point, and that one section is fundamentally clear, direct and without reservation of any kind.

    It is Congress – and not the PTO – that must be held accountable for how this law is written. It is Congress that has set the limits to the “Off-limits.” All the PTO has done is follow the law. All that the Federal Circuit has done is answer the questions put to them as to the PTO following the law. The Federal Circuit also has not been asked the right question – the question that deals with the right actor and whom judgement must be delivered against.

  • [Avatar for Edward]
    April 26, 2016 03:45 pm

    Anon, sure. Question 2. Unanimous in favor of Cuozzo. Gannon was caught flatfooted and unprepared. The court noted that Cuozzo was inconsistent with In re Portola that decided the same question differently. Gannon had no answer the list of 16 different decisions that have to be made to institute — are they ALL off limits from review? He had no answers.

    The court is going to hand it to the PTO.

  • [Avatar for Anon]
    April 26, 2016 05:57 am

    I do not understand what “Authority 9-0 in favor of Cuozzo” means. On what basis and what does that mean for the law as written by Congress?

    Can you flesh out your statement a little?

  • [Avatar for Edward]
    April 25, 2016 05:20 pm

    Based on oral argument: BRI 5-4 PTO wins; Authority 9-0 in favor of Cuozzo.