Supreme Court decides Cuozzo Speed Technologies: BRI proper, IPR institution not appealable

Justice Breyer delivered the opinion of the Court in Cuozzo.

In a unanimous decision delivered by Justice Breyer in Cuozzo Speed Technologies, LLC v. Lee, the United States Supreme Court upheld the United States Patent Office’s regulation requiring the Patent Trial and Appeal Board to apply the broadest reasonable interpretation (BRI) standard in Inter Partes Review (IPR) proceedings. The Supreme Court also held that the Patent Office’s decision to institute an IPR proceeding is not appealable to the Federal courts.

Inter Partes Review (IPR) appeared in 2011 with the passing of the AIA, intended to replace a similar procedure, known as “inter partes reexamination.” Inter partes reexamination proceedings were established in 1999, which stemmed from the ex parte reexamination proceedings. In the ex parte reexamination proceedings, any person at any time had the right to file a request for reexamination on the basis of prior art bearing on patentability of an already-issued patent. Currently instituted IPR proceedings replaced the Inter Partes Reexamination proceedings, however, adding the provision that changed the standard that governs the Patent Office’s institution of the agency’s process, requiring that a petition show a “reasonable likelihood that” the challenger “would prevail” rather than a “substantial new question of patentability.”

Federal Circuit decision in Cuozzo Speed Technologies

The Federal Circuit in Cuozzo Speed Technologies upheld the Patent Trial and Appeal Board’s use of the BRI standard in IPR proceedings. The Federal Circuit held that, because the BRI standard has been approved in other types of Patent Office proceedings, including initial examinations, interferences, and post-grant proceedings, such as reissues and reexaminations, the use of the BRI standard in IPR proceedings was proper. The Federal Circuit further held that there was no indication that the AIA was designed to change the claim construction standard that has long been applied in such other types of PTO proceedings. The divided panel of the Federal Circuit also held that the Patent Office is immune from judicial scrutiny, even on appeal from a final decision rendered by the PTO pursuant to an improperly instituted IPR proceeding.

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The Statutes

The two statutes in issue here were 35 U.S.C. §314(d) and §316(a)(4). The texts of these statutes reads as follows:

35 U.S.C. §314(d):

“The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”

35 U.S.C. §316(a)(4):

“The Director shall prescribe regulations…establishing and governing inter partes review under this chapter and the relationship of such review to other proceedings under this title.”

The Holding in Cuozzo Speed Technologies

In evaluating the BRI standard, the Court relied on 35 USC §316(a)(4), granting the Patent Office authority to issue “regulations…establishing and governing inter partes review.” The Court interpreted this grant of authority in light of the decision in Chevron U.S.A., Inc., which held that “where a statute is clear, the agency must follow the statute.” The Court ultimately found that that §316(a)(4) is ambiguous, therefore allowing for the Patent Office to issue rules “governing inter partes review.” Finally, the Supreme Court held that the BRI regulation represents a reasonable exercise of rulemaking authority that Congress delegated to the Patent Office.

The Court, in finding that the Patent Office’s decision to institute an IPR proceeding is not appealable to the Federal courts, found that the text of §314(d) expressly states that the Patent Office’s determinations whether to institute inter partes review “shall be final and nonappealable.” The Court further held that a “strong presumption” favoring judicial review is overcome by “clear and convincing” indications that Congress intended to bar review.

EDITOR’S NOTE: Much more commentary and analysis of the Supreme Court Cuozzo decision will be forthcoming over the next several days, weeks and months. Already in the works is an article with industry reaction to the decision, which we hope to publish this evening. Stay tuned!