On Monday, June 20, 2016, the US Supreme Court issued its first decision interpreting the provisions of the 2012 America Invents Act (AIA). The court sided with the US Patent and Trademark Office (USPTO), as well as the majority of a divided Federal Circuit, upholding the agency's positions that decisions on institution are not appealable, and that the broadest reasonable interpretation standard should govern inter partes reviews (IPRs). Given that the proceedings created by the AIA have been widely utilized and, as most would argue, effectively managed by the USPTO, the court may have been reluctant to alter the rules of the game in a manner that would change the status quo.

The Supreme Court found that both the language of the statute and the intent of Congress were clear: Appeals that attack the initial determination of whether to institute reviews are expressly forbidden by the AIA. 35 U.S.C. § 314(d). The court rejected the argument that the statute should be construed in a manner that would only prohibit interlocutory appeals, yet permit review of institution decisions in the context of an appeal of the final written decision issued by the USPTO. Justice Stephen Breyer, writing for the majority, refused to accept this interpretation because "[i]t read into the provision a limitation (to interlocutory decisions) that the language nowhere mentions and that is unnecessary." Cuozzo Speed Technologies. LLC v. Lee, 579 U.S. ____, slip op., at 9 (2016).

The court left the door slightly ajar when it said that its decision did not mean that it was deciding whether the AIA precluded appeals that implicate a constitutional question or the USPTO's statutory jurisdiction. The only example given by the court of such a situation clearly exceeding statutory limits was "canceling" a patent claim for indefiniteness under 35 U.S.C. §112 during an IPR—a prohibited rationale for canceling a claim in an IPR. Id., slip op., at 11.

Turning to the issue of claim construction, the court observed that the AIA clearly fails to dictate the use of any particular claim construction standard. Then, citing its decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., as well as the explicit grant of rulemaking authority contained in the AIA, the court found that the USPTO was well within its authority when it promulgated a rule dictating that the broadest reasonable interpretation standard would be used to interpret claims during AIA reviews. 37 C.F.R. § 42.100(b).

Cuozzo and a number of amici had argued that Congress intended for AIA reviews to be a type of surrogate for court proceedings, and that the "ordinary meaning" standard used by the district courts to interpret patent claims should therefore be applied in AIA reviews. The court squarely rejected this argument, disagreeing with the characterization of IPRsas more akin to district court litigation. Instead, the court found that an IPRis more like "a specialized agency proceeding," more closely related to reexamination proceedings, also conducted by the USPTO. 579 U.S. _____, slip op., at 15-16 (2016).

The Cuozzo decision may not be the final word on either question. First, as mentioned, the court left open possible constitutional and statutory challenges to decisions on institution. Second, based on recently proposed legislation, including the Innovation Act of 2015 (H.R. 9) and the Support Technology and Research for Our Nation’s Growth (STRONG) Patents Act (S. 632), we expect that Congress will consider codifying the district court standard of claim construction. Therefore, the Cuozzo decision may simply be a major battle in an ongoing war over the functioning of our patent system, and the next battle may commence later this year, after the election cycle.

"The USPTO appreciates the Supreme Court’s decision which will allow the Patent Trial and Appeal Board (PTAB) to maintain its vital mission of effectively and efficiently resolving patentability disputes while providing faster, less expensive alternatives to district court litigation."

The opinion for a unanimous court was written by Justice Breyer, with Justice Clarence Thomas filing a concurring opinion; Justice Samuel Alito filed an opinion concurring in part and dissenting in part, in which Justice Sonia Sotomayor joined.