Posts Tagged: "broadest reasonable interpretation"

In a December 22, 2016 decision, the Federal Circuit vacated a decision by the Patent Trial and Appeal Board (“The Board”) in two inter partes review (IPR) proceedings. The Court reversed the Board’s decision that the claims at issue were unpatentable for anticipation and obviousness… The broadest reasonable interpretation of a patent claim does not extend to a legally incorrect interpretation. When the claim as a whole expressly excludes a particular result, a claim term cannot be interpreted so broadly as to encompass that result.

The high water mark for the PTAB came in June 2016 when the United States Supreme Court issued its ruling in Cuozzo Speed Technologies v. Lee, which ruled that the broadest reasonable interpretations (BRI) standard was acceptable, and that IPR institution decisions were not appealable. After that, however, the tide turned decidedly with the Federal Circuit finding the PTAB acted arbitrarily and capriciously, and that they were blatantly using the wrong definition of a covered business method (CBM) patent to institute challenges on patents that were not financial business methods. The year ends with the Federal Circuit considering whether the PTAB’s refusal to allow motions to amend, despite the statute saying they are allowed, is within their discretion. The writing seems to be on the wall and 2016 seems to be ending with the PTAB in a very different place than it was at the start of the year.

It is one again time to take a moment to look back on the year that was, reflecting on the biggest, most impactful moments of 2016. For us that means looking backward at the most impactful events in the world of intellectual property. As you might expect, the two recurring themes in this 2016 patent year end review relate to patent eligibility and the Patent Trial and Appeal Board.

The Court held that the Board improperly continued to apply the BRI standard following the expiration. While the examiner properly applied the BRI prior to expiration, the BRI standard no longer applies the moment the patent expires – even if it means the Board applies a different standard than the examiner.

While the Supreme Court spoke clearly and unanimously on the issue in Cuozzo, this hardly means the standard to be applied to claim construction in IPRs has been settled. Rather, it means only that the solution to the problem lies outside the courts. Because the Patent Office has adopted, by regulation, an unsatisfactory standard, Congress should step in. In the context of IPR proceedings, the Patent Trial and Appeal Board (PTAB) should be instructed to give claim terms their plain and ordinary meaning to one of skill in the art, just as the courts are instructed to do.

AIA trials have been sought over 5,000 times to challenge patents and are widely used to resolve patent disputes. Many patent owners complained that these proceedings were unfairly tilted in favor of those challenging patents. Cuozzo sought Supreme Court review of two such practices that it felt went too far and were inappropriate given the language and intent of the AIA. However, the Court sided with the PTAB on both issues, leaving the AIA trial process, as practitioners have come to know it over the last four years, intact.

“This is obviously a victory for some who challenge a patent’s validity in IPR proceedings since broadly construed claims are more vulnerable to attack than narrowly construed claims” remarked Scott Daniels, partner at Westerman Hattori Daniels & Adrian, LLP. “Still, the great majority of IPR decisions do not turn on claim construction and for those cases Cuozzo simply makes no difference.”… Levy, who was similarly dead on accurate with his predictions, raises an important point that so many in the patent community who were rooting for Cuozzo failed to keep in mind. Those challenging the action of an agency face a substantial uphill battle when they seek a judicial determination overriding agency rulemaking and statutory implementation.

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.

Congress can, and should, take at least four steps in restoring the health and vitality of our patent system: First, Congress should ensure that the patent grant is meaningful and valuable in the first instance. Second, Congress should reaffirm the exclusive nature of the patent grant. Third, Congress should clarify, and perhaps legislatively overrule, the cases addressing patent eligible subject matter, Alice, Mayo, and Myriad. Fourth, and finally, Congress should tread extremely carefully in the realm of so-called patent litigation reform.

A good argument can be made that a given panel of PTAB judges will construe claims in the manner that makes most sense to them, regardless of the legal rubric they are assigned. Indeed, we can draw a direct analogy from the experience following the Supreme Court’s decision in Teva v. Sandoz on the degree of appellate deference to be accorded to a district court’s claim construction. Notwithstanding decades of anticipation surrounding that issue, there has been little practical effect on the outcomes of litigations or appeals as a result of Teva. District court judges and Federal Circuit panels still approach claim construction issues in essentially the same way they did before. It seems likely that the use of BRI versus plain and ordinary meaning in inter partes review proceedings will also turn out to be much ado about nothing.

It seems difficult to reconcile the Respondent’s principal argument that two standards should still apply: that is, that the PTAB should be permitted to continue applying its policy-derived broad BRI standard for construing patent claim scope in Congressionally mandated “adjudicative” IPR proceedings while still using the lower preponderance of the evidence standard provided under 35 U.S.C. § 316(e). The notion that the USPTO may “infer” such intent to also apply the BRI in the absence of any express guidance from Congress was weak, at best. Especially because having two such claim construction standards applied by Article III courts and the ITC on the one hand, and the USPTO’s unilateral application of an “examination” claim construction standard in an intended “adjudication” setting on the other hand, has already led to inequitable and presumably non-appealable results.

On Monday, April 25, 2016, the United States Supreme Court heard oral arguments in Cuozzo Speed Technologies v. Lee, the first case in which the Supreme Court will decide issues relating to inter partes review (IPR) proceedings conducted by the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO). With the oral arguments now behind us, I once again reached out to a panel of experts who are closely watching the case to ask for their reactions. Once again, I posed the question: What do you expect the Supreme Court to do in Cuozzo? This time, with the benefit of having listened to the oral arguments, the reactions and predictions of our panel of experts follows.

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.”

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.

On one hand, logic dictates that the broader the interpretation of the claim, the more extensive the array of relevant prior art—and in turn the more likely that the claim will be held invalid in light of that prior art. On the other hand, evaluating whether the Board’s use of the BRI protocol in an IPR claim construction will lead to “different results” than the plain and ordinary meaning construction used by federal courts in claim construction is complicated by the relatively scant evidence on the subject, and the inevitable fact that this evidence is naturally dependent on particular prior art and invalidity and obviousness arguments specific to a particular patent. Even putting aside the question of what impact a different claim construction standard may have in an IPR, In re Cuozzo Speed Technologies will not address several powerful differences between an IPR and district court litigation that impact whether a particular patent claim survives.