PTAB Will Use Nautilus Approach to Indefiniteness for Post-Grant Proceedings

Last week, the United States Patent and Trademark Office (USPTO) issued binding indefiniteness guidance in a memorandum from Director Andrei Iancu that addresses confusion about which indefiniteness standard applies in post-grant proceedings: the standard set forth in In re Packard, 751 F.3d 1307 (Fed. Cir. 2014) or in Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. 898 (2014). Specifically, the memorandum confirms that the standard in Nautilus is the correct approach for analyzing indefiniteness in America Invents Act (AIA) post-grant proceedings.

Two Standards

Under Nautilus, a claim of a patent challenged for indefiniteness is unpatentable for indefiniteness if the claim, read in light of the specification delineating the patent, and the prosecution history, fails to inform, with reasonable certainty, those skilled in the art about the scope of the invention. Id. at 901 (emphasis added). It is important to note that the memorandum’s guidance only applies to AIA post-grant proceedings and does not discuss claim construction or indefiniteness outside of that context.

Previously, the courts battled with reconciling the standard set forth in Packard, wherein “[a] claim is indefinite when it contains words or phrases whose meaning is unclear” Id. at 1310, 1314. The memorandum notes that, at the same time, all proceedings also used the broadest reasonable interpretation approach to claim construction. After Nautilus, the Office reaffirmed that the Packard standard would be used for examination, reexamination, and reissue applications. See Ex parte McAward, Appeal 2015-006416, 2017 WL 3947829, at *5 (PTAB Aug. 25, 2017). The Patent Trial and Appeal Board (PTAB) noted that such a standard does not apply in post-grant proceedings because “[t]he Office’s application of the broadest reasonable interpretation for pending claims and its employment of an interactive process for resolving ambiguities during prosecution naturally results in an approach to resolving questions of compliance with Section 112 that fundamentally differs from a court’s approach to indefiniteness.” Id. At *4 (emphasis in original). In contrast, for example, in inter partes reviews—by far the most frequent AIA proceeding—parties challenging patents are not allowed to argue that a patent is indefinite, but proposed amended claims can be rejected by the Board as indefinite.

The memorandum cites the Board’s confusion as to whether Nautilus or Packard applies in several cases. Particularly, the Office cites BASF Corp., v. Ingevity South Carolina, LLC, PGR2020-00037, Paper 19 at 12 (PTAB Sept. 10, 2020) which cites both approaches and notes that the Federal Circuit declined previously to decide which one applies to the post-grant review process, and Dong Guan Leafy Windoware Co. Ltd., v. Anli Spring Co., PGR2020-00001, Paper 7 at 22—23 (PTAB Apr. 20, 2020) wherein the Board noted that the issue of whether which standard applies remains “open.”

Toward Consistency, Efficiency

The Office found its answer to the Packard or Nautilus question in 2018 rules changes. As a result of these rule changes that align the Board’s approach to claim construction to that used by district courts—i.e., from the broadest reasonable interpretation to the standard articulated in Phillips v. AWH Corp., which said claims should be construed according to the “ordinary and customary meaning of such claim as understood by one of ordinary skill in the art” as well as the prosecution history of the patent—and because indefiniteness questions are generally part of the claim construction process, the Board’s approach to analyzing indefiniteness in AIA post-grant proceedings should likewise align with the approach used by district courts, as set forth in Nautilus.

The USPTO reasoned that this approach will “promote consistency and efficient decision making among coordinate branches of government that decide similar issues in co-pending proceedings.”

The change in standards is a part of a broader effort by the USPTO to ensure that results at the PTAB are more in line with the district courts.

The memorandum concludes by asserting that the change “will lead to greater uniformity and predictability, improve the integrity of the patent system and help increase judicial efficiency.”