The United States Supreme Court has granted review in a case (Cuozzo Speed Technologies LLC v. Lee, Appeal No. 15-446) to consider two issues relating to patentability trials conducted by the Patent Trials and Appeals Board (PTAB) of the US Patent Office: 1) the correct claim construction standard to apply in those trials, and 2) the extent to which a PTAB decision to institute a trial can be reviewed after the PTAB’s final written decision.
These issues are important because they can have a significant effect on the ability to successfully challenge claims of an issued patent in PTAB trials (inter partes reviews, covered business method reviews, and post grant reviews).
In a federal district court trial, patent claims are interpreted under the so-called Phillips standard. In contrast, patent claims in an unexpired patent are interpreted under a different standard at the PTAB: the broadest reasonable interpretation, or BRI. The BRI can result in a broader claim construction than would be the case under the Phillips standard, and the BRI is often cited as one of the reasons for the high rate at which the PTAB declares claims unpatentable. As of September 2015, the PTAB’s statistics indicate that at least some claims are found unpatentable in 87 percent of trials that reach a final written decision, and all claims are found unpatentable in 72 percent of final written decisions. InCuozzo, a divided Federal Circuit panel found that the PTAB’s use of the BRI standard in inter partes review proceedings was correct.
The Supreme Court will also decide whether the PTAB’s decision to institute an AIA trial can be reviewed on appeal after a final written decision. The statute states that the “determination . . . whether to institute an inter partes review . . . shall be final and nonappealable.” The Federal Circuit held that this statute means that the PTAB’s initial decision to institute a trial cannot be reviewed either before or after the PTAB has issued a final written decision finding some or all claims unpatentable.
If the Supreme Court holds that the Phillips claim construction standard should be applied in all PTAB trials, it will likely make it more difficult to successfully challenge patent claims at the PTAB. Similarly, if the Supreme Court finds that PTAB institution decisions can be challenged on appeal, the total expense associated with PTAB trials will likely increase. Both of these possibilities will be beneficial to patent owners and detrimental to those accused of infringement.