Practitioner Strategies for Living in a Post-Cuozzo World

By Bradley Olson
May 4, 2016

SCOTUS-Supreme-Court-front-leftOral arguments in the Cuozzo Speed Technologies v. Lee appeal were heard by the U.S. Supreme Court on April 25, 2016. As now widely appreciated and commented on, this is a case that has mainly focused on the claim construction standard of review that the U.S. Patent and Trademark Office’s (USPTO) Patent Trial and Appeal Board (PTAB) has been applying during the inter partes review (IPR) process.

The chief issue on appeal before the Supreme Court important to patent practitioners is whether the USPTO, a federal agency, has the substantive authority to construe patent claims in an IPR proceeding under the broadest reasonable interpretation (BRI) standard rather than the doctrinal “plain and ordinary meaning” standard set forth in Phillips v. AWH Corp., 415 F.3d 1303, 1312-1313 (Fed. Cir. 2005) (en banc) as applied by Article III courts, and interestingly enough, also by the International Trade Commission (ITC). The ITC, like the USPTO, is a federal agency having jurisdiction over patents in certain circumstances. Specifically, the ITC has statutory authority to investigate the importation of goods that infringe a U.S. patent claim. See 19 U.S.C. § 1337. In fulfilling that mandate, the ITC uses the same “plain and ordinary meaning” claim construction standard as Article III courts by under Phillips for determining patent validity and infringement. See Kyocera Wireless Corp. v. ITC, 545 F.3d 1340, 1346 (Fed. Cir. 2008); 35 U.S.C. § 282.

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.

The extirpative effect of the broadest reasonable interpretation in IPR proceedings can be discerned from the USPTO’s own data: from September 2012 to January 2016, more than 4,000 petitions for institution of IPR proceedings were filed. From reviewing the USPTO’s own data, a total of 792 IPRs reached a final decision and in 685 of those IPRs (or a whopping 86%), the PTAB invalidated some or all of the challenged claims. See PTAB Statistics, January 31, 2016, at pp. 2, 7, 9, U.S. Patent and Trademark Office (last accessed May 2, 2016).

Fortunately, a glimpse of how the Supreme Court may rule in Cuozzo gives some hope that the Court will correct the inequities being wrought by the PTAB’s application of the BRI. This theme was revealed during questioning of the government’s attorney by Chief Justice Roberts, who stated at one point that “it’s a very extraordinary animal in legal culture to have two different proceedings addressing the same question that lead to different results.” Cuozzo; Tr. at 32. If that statement sheds some light on Chief Justice Roberts’ mindset as to how he would draft the majority opinion, the decision may depend on how many associate justices can be convinced to join that same line of thinking.

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While we do not know the eventual outcome of Cuozzo, let’s take a look at how to adapt in a post-Cuozzo world.

Practitioner Strategies Post-Cuozzo [1]

  • Higher Rate of Continuation Practice: There will likely continue to be a significant number of prior art references construed in any IPR. When taken in view of the perfect storm of limited or non-existent opportunities to amend claims, the application of the BRI (or Phillips standard if the Supreme Court so opines) combined with the loss of appellate jurisdiction of the Federal Circuit (also an issue on appeal in Cuozzo), the PTAB likely will continue to be the apocryphal “patent death squad” and invalidate a significant number of challenged patent claims in an IPR. One strategy to countervail this situation may be to maintain several continuation patent applications having claim scope similar to those claims in the IPR. If the patent claims in the IPR are invalidated, amending one or more of the pending claims in a related continuation application to get issuance of new patent with claims having a narrower scope than the now-invalidated related patent may help neutralize the prior art that was broadly construed in the IPR.
  • Take Your IPR Lumps: The PTAB will likely not grant IPR for all claims challenged by a petitioner. For such claims not selected by PTAB to be involved in an IPR, a patent holder may find itself considering filing a patent infringement suit on such patent claims against an accused infringer. No matter whether the Supreme Court in Cuozzo reaffirms the BRI in IPRs or mandates the Phillips standard, suing on those claims not selected for IPR suggests that those patent claims may have been construed as not reading on the submitted prior art before the PTAB, and may well escape similar prior art when and if challenged in a district court or before the ITC.
  • Amending Challenged Claims: For the patentee, the ability to amend challenged claims is greatly limited or non-existent in practice in an IPR. However, if an amendment is filed, one must show point-by-point written description support for the proposed claims. One way of doing so is to directly copy the proposed claim language straight from the specification to avoid enlarging the scope of the original claims by adding new matter or when construed under the doctrine of claim differentiation.
  • Challenge All Claims: Under 35 U.S.C. § 315(b), an IPR must be filed within one (1) year from the service date of a complaint for patent infringement. To eliminate the risk of a facing a potential patent infringement action after the one-year window for filing an IPR has run, a petitioner may want to consider challenging all of the claims of the patent in the first IPR, as the patentee could elect to assert different claims of the same patent in a second court action if the petitioner waits more than one year after the first infringement action was filed. In such an instance, the petitioner would otherwise be time barred and prevented from challenging in subsequent IPRs.
  • Embrace the “Broadest Reasonable Interpretation” Standard: If the Supreme Court reaffirms the PTAB’s use of the “broadest reasonable interpretation” in IPRs, a potential petitioner may want to begin compiling dictionary definitions, prior art references, industry standards, and experts in the filed as to establishing the ordinary state of the art in support of the petition for institution of an IPR. Convincing the PTAB that there is a “reasonable likelihood” of prevailing based on the submitted evidence increases the odds that PTAB will also agree that the challenged claims under BRI read on the newly submitted prior art and that a petitioner is likely to prevail on at least one challenged claim.
  • Conduct and Maintain an Extensive Prior Art Library: Compiling an extensive prior art library as a matter of course is an important step to take, preferably as soon as a competitor’s patent application is first published 18 months after filing. The petition for an IPR must convince the PTAB that there is “a reasonable likelihood that the petitioner [will] prevail with respect to at least one 1 of the claims challenged in the petition,” so it is important to have prior art already collected long before it is needed. See 35 U.S.C. § 314(a).

This article should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.

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[1] Adopted in part from Olson, B.J., “Federal Circuit affirms broad PTAB claim construction standard,” Westlaw Journal of Intellectual Property, Vol. 21, No. 25; April 1, 2015 at 7.

The Author

Bradley Olson

Bradley Olson is a partner with Barnes & Thornburg in the firm's Washington, D.C. office, and is a member of the firm’s Intellectual Property Department. For more than 20 years, Mr. Olson has been involved in virtually all aspects of patent litigation, including the handling of discovery, motion, and trial practice, retaining experts and consultants for trial, coordinating jury focus groups, and preparing witnesses for deposition and trial testimony. He has prepared and negotiated complex intellectual property rights transfer agreements, including patent litigation settlements, patent licenses, and computer software and hardware agreements. Brad also has experience in virtually all aspects of patent and trademark litigation in U.S. District Courts, ITC Section 337 hearings, and patent litigations in the U.S. and in several European countries. For more information or to contact Mr. Olson please visit his firm profile page.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 10 Comments comments.

  1. Edward Heller May 4, 2016 4:03 pm

    Why in the world should we accept a patent revocation regime that uses BRI? The whole idea is nonsense.

    If the Supreme Court affirms the use of BRI, and we will know by the end of June, then we need to repeal or amend IPRs — and every post grant system that revokes claims in issued patents. I would limit the use of BRI to new or amended claims only.

    People should also know that Cooper and MCM Portfolio LLC are both challenging IPRs on constitutional grounds. Amicus briefs supporting the MCM petition must be filed by May 31.

  2. Anon May 4, 2016 7:16 pm

    Mr. Heller,

    Perhaps here you will answer a simple question put to you:

    What is the difference in your bundle of sticks that is your property right between a granted patent immediately prior to an initiation decision point and one immediately after an initiation decision point?

    You want to cry out against “BRI,” and yet you seem reluctant to note at what point (and at what loss) that “BRI” becomes “fair game.”

    I am certain that the answer to this question – if you dare – will point you in the right direction (and have you asking the right question of the Court).

  3. Ternary May 4, 2016 10:31 pm

    The sad truth is that patent cases before SCOTUS sometimes reflect sloppy prosecution work in certain aspects. As an inventor I find Cuozzo a good solid invention. There is no technical reason for Justice Breyer to imply that Cuozzo is a troll. Bur, as a patent professional I find that the Cuozzo claim stinks and inserts ambiguity by using the term “integrally attached.” One cannot see from the prosecution history why and how the Cuozzo spec was drafted as filed. No provisional was filed, and no continuation or continuation-in-part. It has some significant missing parts in the structure of certain aspects of the invention as related to a processor implemented device. It reads as a predominantly mechanical invention.

    I am not sure if Cuozzo could have been salvaged with an amendment. The spec is light on the electronics. On the other hand controllers (processors) were of course well known in 2002 at the time of filing and probably do not need further description. Cuozzo would have benefitted from approaching the specification much more as an engineering document and from an attorney (or engineer) assisting with the engineering of the invention. Attorney arguments nowadays get us through the Examiner, but not through the PTAB and courts. This is in hindsight but also reaches back to a more old-school approach in patent drafting.

    The whole patent assertion system is severely asymmetrical: a patent owner is required to have everything right while an infringer only has to find a single flaw. Fairness should demand from the system to allow patent owners to reasonably repair repairable flaws. On the other hand, the public in general and its political representatives (enthusiastically prepped by interest groups) are upset about perceived “low quality” patents, without being able to articulate what a “low quality patent” exactly is, but right now they want to give patent owners as little slack as possible. The Cuozzo case appears to fall, as far as written description aspects and claims are concerned, in the lower quality category. This does not mean that BRI approach in IPR is appropriate. But the quality issue gives an opportunity to anti-patent parties to loudly denounce patents in general without making any distinction in technical interpretations and revel in any trouble they can cause. It is like checking spaghetti: throw it against the wall and if it sticks it is fine for serving. Almost anything goes.

    We can fight this perception, we should and we do, with limited success so far. At the same time it is probably wise and practical to follow Mr. Olson’s suggestions and also to draft patent applications and especially claims more as an engineering document. I believe Gene has suggested in the past to make the specification so super technical that the courts will have trouble understanding it (because if they believe they understand it they draw the wrong conclusions anyway.) Perhaps that time has come.

  4. nat scientist May 4, 2016 10:41 pm

    When we try to pick out anything by itself, we find it hitched to everything else in the universe. ~John Muir, My First Summer in the Sierra, 1911

    In a John Muir universe,
    where the connections are more clear,
    the Broadest Reasonable Interpretation
    leads right back to the status-quo
    where all the right parties are paid extremely well,
    to protect against the terrorists
    interrupting the daily cash-flow.

  5. Edward Heller May 5, 2016 9:29 am

    Ternary, I have see a quote from the AIA legislative history that states the understanding of the congress that “low quality” patents were “business method” patents.

  6. Noobieagenttechguy May 5, 2016 9:29 am

    I am a noobie patent agent and have a question regarding the BRI and POM standards. In concept, it is my understanding that, when writing a patent, you are allowed to be your own lexicon. It is one reason why I am trying to put a lot of time into clearly defining terms that are used in the claims. Failing a definition, I thought that the term is then interpreted in view of what a POSITA would know (from journals, etc). If I understand BRI and POM correctly though, none of that makes any difference. Am I missing something? Reading references welcome! I have a lot to learn!

  7. Edward Heller May 5, 2016 2:29 pm

    Noobie, you may want to look at the facts in In re Morris to see just how the problem of BRI arises.

    However, if a term has a well-understood art meaning, it should ordinarily control absent a clear definition to the contrary in the specification.

    If the term is somewhat coined, no one really knows what it means unless one looks at the specification to put flesh on the bones. This is what happens with means plus function, by the way; and it was the way functional terms have always been addressed in the courts.

    BRI typically occurs, however, with terms that have ordinary meaning with multiple definitions. The PTAB uses the one that reads on the prior art, not necessarily the one most consistent with the specification. The latter is the so-called Philips interpretation.

  8. Anon May 5, 2016 7:12 pm

    Mr. Heller,

    Please do not mislead new agents with your versions of “functional claiming.” At the very least please recognize what Mr. Federico noted: Congress has strengthened the use of using terms sounding in function outside of the option of what is now 112(f).

  9. Anon May 5, 2016 7:16 pm

    New Agent,

    I recommend reading up on the Act of 1952, as much writing by BOTH of the main contributors to that Act: Federico and Rich, and other items like the Cornell web site which includes comments to the Act.

    I also recommend taking with a very large grain of salt any advice you hear on blogs from people who post with philosophical agendas on how they would have the law rather be (then rather what it is). There is (sadly) no shortage of people who actively advocate on blogs things that are just not so.

  10. Ternary May 6, 2016 11:45 am

    Noobie @6

    There is clearly a lesson in Cuozzo for you. Cuozzo does not use the term “integrally attached” in the specification. The specification reads as a somewhat mechanical invention applied to a speedometer in a dashboard attached to GPS and changes color depending on location. Garmin is a stand-alone GPS unit with a navigation map and shows info on vehicle speed and speed limit, but the Garmin is not the speedometer in dashboard.

    The attorney in this case brilliantly saved the application from rejection by inserting “integrally attached” by clever patent lawyering.

    But does the invention cover the Garmin GPS unit? While the term “integrally attached” makes perfect sense in the dashboard interpretation, it is pretty much meaningless in the sense of a user interface.

    A spec drafter increasingly has to act as an engineer to the inventor to help with possible and alternative embodiments. This is not always a popular approach. But the inventor generally has no idea of the traps she/he is walking into. In Cuozzo better definitions of terms actually would have killed the case right from the start. Ambiguity gave it another shot. Unfortunately the broad engineering is missing in the Cuozzo specification and proposed amendments were deemed to be not supported.

    Under the current barrage of tightening of rules (and it is going to be worse, I have never seen a period were patents were so unpopular) there is a need for old-school intensive use of engineering skills during drafting: better engineered specifications to enable clever patent lawyering. Cuozzo demonstrates this need.