The Supreme Court has agreed to hear its first case relating to AIA trials. When the Court renders its decision, it should definitively settle two issues that created consternation in the early days of AIA trials. Until then, accepting the case for review reopens two questions that were seemingly settled in the Federal Circuit’s decision in In re: Cuozzo Speed Technologies. The uncertainty is particularly acute, given the high rate at which the Supreme Court reverses the Federal Circuit.
In Cuozzo the Court will decide both the proper standard for interpreting claims in an AIA trial and whether the PTAB’s decision to institute an IPR trial is insulated from judicial review, even if the decision exceeds the PTAB’s statutory authority. As we previously commented, this case bears watching, and other commentators seem to agree.
In deciding the claim interpretation standard, the Court will consider whether the PTAB should apply the “broadest reasonable interpretation,” as the Patent Office routinely applies in prosecution, or the claim interpretation that a court would apply. Often there is not a significant difference between these two standards.
Yet, if the Supreme Court determines that the PTAB has been applying the wrong standard, there is the potential for upending pending trials instituted under that standard, unless the petitioner can show that the claim interpretation makes no difference. Cases on appeal and petitions not yet acted on would similarly be at risk, unless the Supreme Court applies its decision only prospectively.
A reversal of the current prohibition on appealing a decision to institute, even when the PTAB exceeds its authority, could also impact many pending cases. Cases, like Cuozzo, where the PTAB instituted an AIA trial for reasons not expressly enumerated in the petition could be challenged. Likewise, appeal might be possible of decisions to institute based on prior art outside the scope of AIA review or that are otherwise alleged to be improper for some reason not addressed by a review of the merits of the final written decision.
Takeaways: Until we have the certainty of a decision from the highest court that can review the underlying legislation setting up AIA trials, those looking to file new petitions will need to weigh the benefits of arguing the broadest reasonable interpretation of the claims—which makes it easier to show that the claims are invalid in light of prior art—versus the risk that an initial win could be wiped out if the Supreme Court changes the claim interpretation standard. Some petitioners may wish to hedge their bets, arguing under both standards. Yet, even this approach is not risk-free, as presenting a case in the alternative, particularly when subject to page limits, can risk creating confusion that prevents the PTAB from recognizing that the petition has made the appropriate showing.
Patent owners responding to petitions should consider challenging the claim interpretation standard, so as to keep the issue alive for appeal. For pending cases, both patent owners and petitioners should build a record for why they should prevail, regardless of which claim interpretation standard is used.
Patent owners who lose at the institution stage similarly will want to keep their options open, building a record that could support an appeal of a decision to institute that arguably exceeds the authority of the PTAB, if the Supreme Court green-lights such appeals.