To BRI or Not to BRI, That Is the Question

By Paul Berghoff
May 9, 2016

On April 25, 2016, the Supreme Court of the United States heard oral argument in the case of Cuozzo Speed Technologies, LLC v. Lee, No. 15-446. The Cuozzo case presented two questions on certiorari:

  1. Whether the court of appeals erred in holding that, in IPR proceedings, the Board may construe claims in an issued patent according to their broadest reasonable interpretation rather than their plain and ordinary meaning.
  1. Whether the court of appeals erred in holding that, even if the Board exceeds its statutory authority in instituting an IPR proceeding, the Board’s decision whether to institute an IPR proceeding is judicially unreviewable.

Even though there were two independent issues, most of the questions from the justices focused on the first issue of whether IPRs should be based on the use of the broadest reasonable claim interpretation (BRI) or the plain and ordinary meaning standard set forth in Phillips v. AWH Corp., 415 F. 3d 1303 (Fed. Cir. 2005) (en banc).

What did we learn from the oral argument? As a threshold matter, the questions from the justices betrayed a general unfamiliarity with the procedures and substance of patent law. To those who have followed previous Supreme Court arguments in patent cases, this difficulty in formulating relevant questions comes as no surprise. After all, none of the justices arrived at the Supreme Court with any significant background or experience in patents.

[Supreme-Court]

That said, the questions posed by the justices did shed some light on what we can expect from the Supreme Court’s eventual decision in Cuozzo, at least with this respect to the question of BRI versus plain and ordinary meaning. Although it is always risky to predict outcomes based on the questions posed at oral argument, it looks like the Supreme Court will maintain the USPTO’s reliance on the broadest reasonable interpretation in IPRs.

supreme-court-scotus-front

United States Supreme Court, Washington, DC.

Much of the focus of the justices during questioning was on whether inter partes reviews are more like district court litigation or more like the examination of patent applications in the USPTO. For example, Justice Ginsburg queried whether IPRs are best described as “[k]ind of a hybrid” between litigation and Patent Office examination. Transcript at 23. Justice Sotomayor suggested that the ability to amend claims during an IPR, though limited, is inconsistent with district court litigation where substantive amendment of claims is not allowed. Id. at 4. In Justice Alito’s one contribution to the oral argument, he suggested that though amendments are limited during IPR proceedings, having one opportunity to amend the claims might be adequate. Id. at 8-9.

Justice Breyer led a more extended discussion comparing IPRs to district court litigation. He indicated that if IPRs were intended to be “a little court proceeding,” then the use of the Phillips standard might be appropriate. Id. at 14. But if IPRs were intended to address the issue of patent trolls, Justice Breyer continued, then the use of BRI might make more sense. In the context of patent trolls, Justice Breyer observed that: “the Patent Office has been issuing billions of patents that shouldn’t have been issued – I overstate – but only some.” Id. Justice Breyer concluded by pointing out that even if the purpose of IPRs were ambiguous between a little court proceeding or a mechanism for canceling the “billions of patents that shouldn’t have been issued,” the Patent Office should be accorded Chevron deference to choose the appropriate standard. Id. at 15.

Justice Kennedy’s questions were less pointed than those posed by Justice Breyer. Justice Kennedy proposed that if a patent claim is unpatentable under the broadest reasonable interpretation, then the USPTO “should never have issued the patent in the first place.” Id. at 11. (Justice Breyer made a similar point. Id. at 13.) This reasoning would seem consistent with the use of BRI in IPRs. Justice Kennedy also pointed out that district court judges construe claims to preserve their validity and apply the statutory presumption of validity, neither of which is true in IPRs. Id. at 20-21.

Justice Kagan took a different tack with her questions. She first established that Congress was silent in the America Invents Act as to which standard applies in post-grant proceedings. Id. at 21. Since Congress was presumably well aware that the USPTO used BRI in examining the patentability of claims, Congress would have been expected to explicitly call out any change in the standard. “I mean, I guess if I’m trying to put myself in Congress’s position, I’m – I’m looking at the PTO, and it does pretty much everything by this broadest-construction standard. And if I had the clear intent that you’re suggesting [to use Phillips], given the backdrop of how the PTO generally operates, wouldn’t I say so?” Id. at 22.

Chief Justice Roberts showed significant concern in his questioning for the possibility of inconsistent results for a given patent claim in district court litigation versus inter partes review. Based on this concern, the Chief Justice’s questions displayed a strong belief that the same claim construction standard should be used in litigation and IPRs. For example, he stated that “it seems to be perfectly clear that Congress meant for this entity [the PTAB] to substitute for the judicial action. So why – why should we be so wedded to the way they do business in the PTO with respect to the broadest possible construction when the — the point is not to replicate PTO procedures. It’s supposed to take the place of district court procedures.” Id. at 31. Chief Justice Roberts went on to state that “it’s a very extraordinary animal in legal culture to have two different proceedings addressing the same question that lead to different results.” Id. at 32.   Later during the argument he stated that “[i]t just seems to me that that’s a bizarre way to conduct legal – to decide a legal question.” Id. at 41. Finally, after establishing that it is entirely possible to have inconsistent decisions on the identical patent claim in an IPR versus litigation, he expressed incredulity that this could be the result “under a statute designed to make the patent system more reasonable and more expeditious in reaching judgments.” Id. at 44.

Based on the colloquy from the Supreme Court justices, how will the vote on the first question in Cuozzo turn out? It appears clear that Justice Breyer will vote in favor of BRI and equally clear that Chief Justice Roberts will vote for plain and ordinary meaning. Though less certain, it does seem that Justices Kennedy, Kagan, Sotomayor and Ginsburg are leaning towards BRI. (The data is too scant or completely absent, respectively, to speculate about Justices Alito and Thomas.) Therefore, a 5-3 or 6-2 affirmance of Cuozzo on the first question seems likely.

But perhaps the most perceptive questioning during oral argument came from Justices Sotomayor and Ginsburg concerning what practical effect, if any, the adoption of Phillips versus BRI would have on the outcomes of inter partes reviews. Justice Sotomayor pointed out that both construction standards use the same tools, i.e., the intrinsic record, and therefore should yield the same results. Id. at 17. “So how different at the end of that process is the ordinary meaning from a continuing broad meaning?…. [D]oesn’t it end up in the same place?” Id. at 27-28. In a similar vein, Justice Ginsburg indicated that choosing one or the other claim construction standard “doesn’t determine who’s going to win or lose this case, does it?” Id. at 10.

Justices Sotomayor and Ginsburg may be onto something here. 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.

On the second question under consideration by the Supreme Court, very little insight was gained during oral argument. The second question focused on Section 314(d) of patent statute, which states “The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” 35 U.S.C. § 314(d). At one point Justice Ginsburg indicated that this statutory language must do more than just prevent interlocutory appeals, because the lack of a final judgment would bar such appeals in any case. Id. at 25. Justices Ginsburg and Sotomayor also asked whether there shouldn’t be some level of review available for institution decisions, especially in cases where the USPTO’s decision is clearly wrong. Id. at 50-52. Other than that, the ability to challenge institution decisions was ignored by the justices.

Though it can be daunting to interpret the significance of silence during oral argument, the clarity of the statute (What part of “nonappealable” don’t you understand?) may provide the answer. Faced with such unambiguous statutory language, was there really a need for questions? If true, that would point towards an affirmance on the second Cuozzo question as well.

The Author

Paul Berghoff

Paul Berghoff is a founder of McDonnell Boehnen Hulbert & Berghoff LLP. Mr. Berghoff has three decades of experience as lead trial counsel in complex patent litigation - both jury and bench trials - concentrating in litigation involving pharmaceuticals, medical devices, biotechnology, electronics, and software. He has coordinated complex, worldwide patent litigations for many of his Fortune 500 clients and has argued numerous times before the U.S. Court of Appeals for the Federal Circuit. For more information, or to contact Mr. Berghoff, 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 6 Comments comments.

  1. ValuationGuy May 9, 2016 11:53 am

    While I agree with your scorecard regarding the obvious votes (Breyer for BRI – Roberts against)…..I came up with the 180 degree interpretation regarding the questions of Ginsburg/Sotormeyer/Alito….which appear to be that those Justices are looking for a single valid excuse why the separate BRI standard is necessary in a re-exam setting. Against the strong arguments regarding the practical inability to amend claims (in a reexam setting) under current rules, there really is no justification for looking at the claims at their broadest possible meaning.

    I think former Chief (CAFC) Justice Michel’s amici brief (in support of neither party) provided a lot of the underlying questions the Justices were seeking clarity on why the two don’t reach the same construction even though ‘theoretically’ they should. Given his former position at the CAFC, he was at ground zero for years dealing with this issue.

    It is really only through the recent railroading patents get in recent years at the PTO/PTAB to try and meet unrealistic timelines engendered by the AIA that the constructions have dramatically departed from each other.

    VG

  2. Inventor0875 May 9, 2016 1:35 pm

    >>>> “So how different at the end of that process is the ordinary meaning from a continuing broad meaning?…. [D]oesn’t it end up in the same place?”

    >>>> “choosing one or the other claim construction standard “doesn’t determine who’s going to win or lose this case, does it?”

    The idea that there is only one Broadest Reasonable Interpretation (BRI) seems very flawed. Many BRI are possible.

    As one example consider:
    BRI for Beauregard (1995) media claims (and transitory signals):

    Prior to Nuijten (2007), Beauregard claims were valid without excluding “transitory signals” (BRI-pre-Nuijen).

    About 12 years later, a new BRI is “invented” (BRI-post-Nuijten), where media claims can be interpreted to either include or exclude “transitory signals”.

    Given this new BRI-post-Nuijen, how are previously issued claims to be interpreted?

    Do we assume (in hindsight) that the Patent Office, industry practitioners and applicants were idiots for not previously taking BRI-post-Nuijen into account?
    Do we allow infringers to get a free ride, because a new BRI has been created?

    Or do we respect the Applicant’s investment in property rights, by interpreting previously issued media claims as obviously excluding “transitory signals” and hence valid?

  3. Edward Heller May 9, 2016 3:11 pm

    BRI matters primarily when a claim term has two ordinary meanings, one broader, and both meanings are supported by the specification so that they are both reasonable.

    A court would not take the broader construction, or should not take the broader construction, as a general principle. The scope of the claim affects infringement. Ambiguities must be resolved against the drafter.

    In the PTO, ambiguities are resolved against the drafter as well — so that the broader construction is chosen that the applicant might amend if that construction leads to unpatentability.

    But, when amendments narrow the scope of a claim, they introduce intervening rights. This is harmful to the patentee, which is why using BRI in connection with issued patents is so harmful.

    Because IPRs have or will soon all but completely supplant district court validity litigation, engaging in abstract arguments about Congress’s intent gets un no where fast. IPRs are, in point of fact, patent validity trials. That is what they are.

    So, unless changed, we will have BRI, which is really harmful to patent holders. We will also have the lower standard of proof where reasonable doubts are not resolved in the favor of patent owners. The combined effect of both in IPRs have already had a devasting effect on the patent system. Repeal of IPRs is in order, we cannot get the Supreme Court to hold IPRs unconstitutional.

  4. David May 9, 2016 8:41 pm

    It’s going to be BRI.

    The salient question is whether the BRI determination will become advisory subject to de novo trial court review.

  5. Night Writer May 10, 2016 12:05 am

    Yeah, but, you know, why isn’t the SCOTUS just doing to say, well, this is a statute that the PTO is implementing so Chevron probably applies and yes it is a bit weird but the PTO only really knows how to apply BRI so let them. Their whole organization is set up for BRI and a patentee can amend (I know not really).

    My guess is they are going to leave this alone. It just seems like they are really fiddling with the way the PTO works and that is probably a bad idea.

    @4 David—what?

  6. Anon May 10, 2016 8:21 pm

    David at 4,

    How in the world is the law going to change like that?

    “Salient?” That is not a word that I would use to describe your wishful thinking.