Posts Tagged: "Cuozzo Speed Technologies"

Perhaps the best question of the entire oral argument was asked by Chief Justice Roberts: “So why ­­should we be so wedded to the way they do business in the PTO with respect to the broadest possible construction when the ­­point is not to replicate PTO procedures? It’s supposed to take the place of district court procedures.” Gannon’s response pointed to the difference in the burden of proof between the district court (i.e., clear and convincing) and the PTAB (i.e., preponderance). Chief Justice Roberts responded, “it’s a very extraordinary animal in legal culture to have two different proceedings addressing the same question that lead to different results.” Gannon replied that there are “multiple reasons” why different results could be achieved, to which Roberts said: “there’s a problem here, and so we should accept another problem that’s presented where we don’t have to do it.”

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.

Unified Patents Inc. explained in its amicus brief in Cuozzo Speed v. Lee that “[t]he phrase ‘broadest reasonable interpretation’ describes the same procedure applied in both the PTO and by the courts.” An inconvenient truth for Cuozzo — but a truth nonetheless. Gene attacked Unified Patent’s position here last Sunday as “false on its face” and “unequivocally incorrect.” Those pejoratives miss the point of Unified’s brief. Unified did not argue that the courts and PTO both apply BRI in name; indeed, Cuozzo would lose his semantic gripe if that were the case. Rather, Unified argued that peeling away the Phillips and BRI labels reveals that both standards employ the same procedure. On this point, Unified’s position is hardly controversial, and Unified is hardly alone.

In the Introduction to the Unified Patents’ brief the following statement is made: “The phrase ‘broadest reasonable interpretation’ describes the same procedure applied in both the PTO and by the courts.” That statement is unequivocally incorrect. Federal district courts do not apply the broadest reasonable interpretation of an issued claim when performing a claim construction in patent litigation. Quite the opposite, district courts narrowly interpret claims in an attempt to find a true and correct construction of the claims. The law is unequivocally clear: district courts do not apply the broadest reasonable interpretation standard. It is so axiomatic that district courts use a different standard than does the USPTO when interpreting claims it is almost difficult to figure out where to begin to unravel this falsehood.

The Supreme Court will hear oral arguments in the Cuozzo Speed Technologies, LLC v. Lee on April 25, 2016, with a decision expected sometime before the end of June… [S]ome of the Federal Circuit judges have shown signs that their position on these questions are not as rigid as previously thought. This is not unprecedented – for example, when the Supreme Court was on the verge of considering the patent fee-shifting statute of 35 U.S.C. § 285 in the Octane Fitness case, Judge Rader was seen criticizing the Federal Circuit’s established test in a concurrence to the Kilopass Tech. Inc. v. Sidense Corp. case. The current Federal Circuit may also be recognizing that the present understanding of PTAB jurisprudence may be soon changing.

Recently the United States Supreme Court added an important IPR case to its docket. Normally the Supreme Court does not take a Federal Circuit appeal to compliment the Court on how well they have resolved a particular matter, so it seems safe to bet that the Federal Circuit will be reversed on one or both of the issues take. At the very least the Supreme Court can be expected to make broad statements of law and principle and remand the case for further consideration. In either event the outcome would be welcomed by patent owners. In the meantime as we wait for a decision it will also be interesting to watch and see if the PTAB begins to moderate and whether the Federal Circuit shifts their jurisprudence, as they have been known to do from time to time while awaiting a decision from the Supreme Court.

On Tuesday, February 2, 2016, at 12 PM ET, patent expert, Gene Quinn will host a free webinar discussion on the current state of inter partes review and what the Supreme Court stepping into the mix will mean for the future of these proceedings.

There were no topics ruled out of bounds for this 30 minute interview, not even the Supreme Court’s recent decision to accept cert. in Cuozzo, although as an attorney myself I know better than to ask questions that would have certainly provoked a polite “no comment” response in the face of ongoing litigation. Nevertheless, our conversation was wide ranging. We discussed the release of the Copyright White paper, which among other things recommends expanding eligibility for statutory damages in copyright infringement actions. We also discussed Lee’s recent visit to the Consumer Electronics Show (CES), the power outage that brought down USPTO electronic filing systems, the Office’s patent quality initiative, the new patent classification system, the Patent Trial and Appeal Board (PTAB) and more.

The Patent Act itself clearly and unambiguously states that patents are property. See 35 U.S.C. 261. Unfortunately, this property right of Constitutional significance has increasingly come under attack over the last decade. Without either substantial legislative fixes, or a new Administration that orders a new Director of the USPTO to rewrite post grant regulations, no single case could undue the significant damage that has been done to the U.S. patent system by the creation of the PTAB and post grant proceedings. That being said, Cuozzo does offer an excellent opportunity to say enough is enough and fight to protect a Constitutionally critical property right our most respected Founding Fathers thought to be absolutely critical.

On Friday the United States Supreme Court added several cases to its docket for this term. One of those cases is Cuozzo Speed Technologies v. Lee, a case that will require the Supreme Court to address two critically important questions associated with inter partes review (IPR) proceedings. First, is it appropriate for the United States Patent and Trademark Office to use a different claim constructions standard than is used in federal district court. Second, are institution decisions insulated from judicial review.