Posts Tagged: "Cuozzo Speed Technologies"

Last week, the U.S. Court of Appeals for the Federal Circuit (CAFC) reviewed an appeal of the PTAB’s final decision that Game and Technology Co. Ltd.’s (GAT) Patent No. 7,682,243 (the ‘243 patent) was obvious over the prior art, and that inter partes review (IPR) was not barred under 35 U.S.C. § 315(b). The CAFC held that the PTAB properly asserted that claims 1-7 of patent ‘243 were obvious in light of the prior art and that an IPR was not barred because the petitioner, Wargaming Group Limited (Wargaming), was not properly served with a complaint alleging infringement of the [‘243] patent over a year before it filed its petition for an IPR.

In response to a request for supplemental briefing from the Federal Circuit in Facebook v. Windy City Innovations, the U.S. Patent and Trademark Office (USPTO) recently argued that its precedential panel opinions interpreting the America Invents Act (AIA) are entitled to Chevron deference, under which (essentially) courts must defer to an agency interpretation of a statute so long as the interpretation is reasonable. To the extent that this bid for Chevron deference is limited to procedural administrative Patent Trial and Appeal Board (PTAB) matters such as the one at issue in that case, (an interpretation of 35 U.S.C. § 315(c) which relates to the USPTO Director’s ability to join a party in inter partes review [IPR]), it is arguably defensible. But to the extent that the agency claims (or plans to claim) that its precedential PTAB opinions are owed deference on issues of substantive patent law, it is likely incorrect.

On Monday, the U.S. Supreme Court granted a petition for writ of certiorari to take up Dex Media Inc. v. Click-to-Call Technologies, LP on appeal from the Court of Appeals for the Federal Circuit. The case will ask the nation’s highest court to determine whether 35 U.S.C. § 314(d), which states that decisions to institute inter partes review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB) are final and non-appealable, permits appeal of IPR institution decisions upon a finding that the one-year time bar under 35 U.S.C. § 315(b) doesn’t apply.

In its petition for writ, SSL Services argued that the PTAB’s decision to institute the IPR incorrectly denied the application of 35 U.S.C. § 325(d), the statute governing multiple proceedings at the USPTO; giving the USPTO Director authority to reject a proceeding based on substantially similar prior art or arguments already presented to the agency in a validity review. While the PTAB laid out a multi-factor test for applying the multiple proceedings rule in a 2017 precedential decision in General Plastic v. Canon, SSL Services argued that this test is legally incorrect because the factors in that test do not find support in the statute. Further, the PTAB has applied Section 325(d) to bar the institution of IPRs in far less meritorious cases, including multiple cases where the asserted prior art had only been cited in the original prosecution of the patent and not a validity challenge after the patent had issued. This has resulted in a standard for applying Section 325(d) which is unworkable, SSL Services argued.

To come up with the list below I’ve reviewed all of our patent articles, and have come up with these top 10 patent stories for 2016. They appear in chronological order as they happened throughout the year. Just missing the top 10 cut were the Supreme Court denying cert. in Sequenom and the USPTO being sued for Director Lee declaring a federal holiday. As interesting as those stories may have been, there was far more consequential patent news in 2016. Also missing the cut, but particularly interesting were the rather egregious and insulting response filed in an Office Action in September, and the embarrassing concurring decision by Judge Mayer in Intellectual Ventures. While the latter two were truly train wreck moments, they were fleeting. Judge Mayer has completely marginalized himself on the Federal Circuit with no one embracing his extreme and inaccurate reading of Alice, and that type of albeit cringe-worthy and unprofessional response to an Office Action happens very rarely.

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.

The battle of Cuozzo, and patent reform in general, is not between the tech industry and the pharmaceutical industry. The battle was started by wealthy multinational tech companies led by Google who, by using their huge market and deep pockets, massively commercialize technology they did not invent to take control of emerging multi-billion dollar markets. Once a tech market is taken, it is nearly impossible to unseat the incumbent, unless, of course, you have a patent and that patent can be defended. So these huge companies bought Congress to create law that destroyed hundreds of years of patent law repositioning it against the very people who invent most of the new technologies we all use, small tech startups and inventors. Congress and the Supreme Court have now ensured that the big stay big and the small do not disrupt their highly profitable cabal with the nuisance of patent rights.

The Supreme Court’s ruling will disappoint those who had hoped to change the standard by which the PTAB conducts inter partes reviews through the courts, rather than through Congress or the PTO itself. The manner in which the majority framed the case also offers hints about the Court’s views of today’s patent landscape and the deference that may be granted to the PTAB in future decisions, should the Court decide to grant more petitions for certiorari in this area.

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.

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.