On June 20, 2016, the Supreme Court issued its opinion in Cuozzo Speed Techs., LLC v. Lee, No. 15-446, affirming the Federal Circuit’s rulings that the U.S. Patent and Trademark Office’s (“PTO”) Patent Trial and Appeal Board’s (“PTAB”) decision whether to institute Inter Partes Review (“IPR”) proceedings is judicially unreviewable, and that the PTAB can apply the broadest reasonable interpretation (“BRI”) claim construction standard in IPR proceedings.

The PTAB had instituted an IPR proceeding against certain claims of a patent owned by Cuozzo on obviousness grounds not explicitly stated in the IPR petition. The PTAB also employed the BRI standard in its final written decision invalidating all claims at issue. On appeal from the PTAB, the Federal Circuit relied primarily on 35 U.S.C. § 314(d), the “No Appeal” provision. The Federal Circuit majority held that it did not have jurisdiction to review the PTAB’s decision to institute on grounds not explicitly stated, even when appealed after the PTAB issued its final written decision. Furthermore, the Federal Circuit held that it was appropriate for the PTAB to apply the BRI standard for claim construction, noting, inter alia, that the PTO has applied, and courts have upheld the use of, the BRI standard for more than a century.

The Supreme Court granted certiorari on these two issues, and in its decision specifically considered whether § 314(d) “bars a court from considering whether the Patent Office wrongly ‘determin[ed] . . . to institute an inter partes review’ when it did so on grounds not specifically mentioned in a third party’s review request,” and whether Congress “authorize[d] the Patent Office to issue a regulation stating that the agency, in inter partes review, ‘shall [construe a patent claim according to] its broadest reasonable construction in light of the specification of the patent in which it appears.’” Slip Op. at 1-2 (citations omitted, last alteration original). In affirming the Federal Circuit, Justice Breyer delivered the opinion of the Supreme Court, which was unanimous as to the BRI issue. Justice Thomas filed a concurring opinion, and Justice Alito—joined by Justice Sotomayor—dissented on the reviewability of institution decisions issue.

The Supreme Court held that the “final and nonappealable” language of § 314(d) renders judicial review unavailable. Id. at 7. The majority rejected Cuozzo’s argument regarding a related statutory section, § 312, which states that petitions must be pleaded “with particularity.” According to the Supreme Court, the “‘No Appeal’ provision’s language must, at the least, forbid an appeal that attacks a ‘determination . . . whether to institute review by raising this kind of legal question and little more.” Id. at 7-8. The majority also rejected the dissent’s contention that § 314(d) only precludes interlocutory appeals of institution decisions because “[t]he Administrative Procedure Act already limits review to final agency decisions,” and the provision would thus be superfluous. Id. at 9. The majority further explained, contrary to the dissent’s view, that the statutory provision overcomes by clear and convincing evidence the strong presumption of judicial reviewability, noting that “[t]he text of the ‘No Appeal’ provision, along with its place in the overall statutory scheme, its role alongside the Administrative Procedure Act, the prior interpretation of similar patent statutes, and Congress’ purpose in crafting inter partes review, all point in favor of precluding review of the Patent Office’s institution decisions.” Id. at 10-11. Finally, the majority opinion indicated that its holding applies “where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review,” leaving open questions of “the precise effect of § 314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond ‘this section.’” Id. at 11. Here, “Cuozzo’s claim that Garmin’s petition was not pleaded ‘with particularity’ under § 312 [was] little more than a challenge to the Patent Office’s conclusion, under § 314(a), that the ‘information presented in the petition’ warranted review.” Id. at 12

As to the BRI issue, the unanimous opinion held that § 316(a)(4), which “grants the Patent Office authority to issue ‘regulations . . . establishing and governing inter partes review under this chapter,” gives the PTO authority to issue regulations imposing usage of the BRI. Id. at 12-14. According to the Supreme Court, this notion is not defeated by the alleged “purpose of inter partes review” to be an alternative to district court litigation because “inter partes review is less like a judicial proceeding and more like a specialized agency proceeding.” Id. at 15. Furthermore, the BRI “regulation represents a reasonable exercise of the rulemaking authority that Congress delegated to the Patent Office,” which “encourages the applicant to draft [claims] narrowly,” has been used by the PTO “for more than 100 years,” and is “not unfair to the patent holder in any obvious way,” despite the statistically low success rates for motions to amend in IPR proceedings. Id. at 17-19. Finally, the Supreme Court rejected Cuozzo’s contention regarding potential inconsistent results between the PTAB and district courts, explaining that BRI is internally consistent with other PTO proceedings, and that the “different evidentiary burdens [between IPRs and district court proceedings] mean that the possibility of inconsistent results is inherent to Congress’ regulatory design.” Id. at 19-20.

The Supreme Court’s decision gives important practical guidance to both patent owners and patent challengers. The majority’s decision that § 314(d) generally bars judicial review of the PTAB’s institution decisions, at least on grounds closely tied to the application and interpretation of the statutes concerning institution, is likely to give greater certainty on judicial reviewability—but, as both the majority and dissent suggest, future cases are likely to raise issues about what challenges (such as constitutional issues, or questions whose scope and impact reach “well beyond” this section) may still be reviewable by the courts. Furthermore, while the choice of claim construction standards might not lead to a different result in many cases, the Supreme Court’s decision resolves the hotly contested BRI question that, had it come out differently, might have required further review of most issued PTAB Final Written Decisions.