First published in LES Insights

Abstract

The Leahy–Smith America Invents Act established a new type of patent-review by the U.S. Patent and Trademark Office (PTO) known as Inter Partes Review (IPR), which was meant to provide a more efficient and less expensive alternative to district-court litigation. In a recent decision, the U.S. Court of Appeals for the Federal Circuit determined that the PTO's decision whether to institute an IPR is not appealable. The court also determined that the PTO correctly adopted the broadest-reasonable-interpretation standard for interpreting patent claims in IPR proceedings, as opposed to the narrower standard used by district courts.

The Leahy-Smith America Invents Act (AIA) established new patent-review provisions, such as the Inter Partes Review (IPR), which aims to provide a faster, more cost-efficient alternative to district-court litigation. There are two phases to an IPR proceeding: first, the United States Patent and Trademark Office's (USPTO) Patent Trial and Appeals Board (PTAB) determines whether to institute an IPR, and, second, if instituted, the PTAB reviews the patentability of the instituted claims. A recent decision from the U.S. Court of Appeals for the Federal Circuit determined that the USPTO's decision on institution is not appealable.1 The court also found that the PTAB properly applied the broadest-reasonable-interpretation standard to interpret the unexpired patent claims, rather than the more exacting standard used by district courts.

Background

Cuozzo Speed Technologies is the assignee of a patent directed to an interface that displays a vehicle's current speed and the speed limit of the road on which the vehicle is located. Garmin International, Inc. and Garmin USA, Inc. petitioned the PTO for an IPR, arguing the patent claims were unpatentable as anticipated by or obvious over prior patents. The USPTO instituted the IPR on three patent claims. For two of the patent claims, the USPTO's decision relied on prior patents that Garmin did not identify in its petition for those two claims, although Garmin did identify those same prior patents as rendering unpatentable the third claim. After an IPR proceeding, applying the broadest-reasonable-interpretation standard to the claim term “integrally attached,” the PTAB concluded that the three claims were invalid as obvious. Cuozzo appealed, arguing that the statute precluded the USPTO from instituting an IPR on bases that Garmin did not identify in its petition and that the PTAB should apply the same claim-construction standard used by district courts.

The Federal Circuit's Decision

On appeal, the court affirmed the PTAB's decision. First, the court pointed to one of its earlier decisions finding that the statutory language precluded interlocutory review of the decision of whether to institute an IPR. The court went on to determine that the statute also precludes review of the USPTO's decision of whether to institute, even after it has issued its final written decision. The court seemingly left open the possibility, however, that challenging the decision using a petition for writ of mandamus may be possible, stating that “mandamus may be available to challenge the USPTO's decision to grant a petition to institute IPR after the Board's final decision in situations where the USPTO has clearly and indisputable exceeded its authority.”

Regarding the PTAB's use of the broadest-reasonable-interpretation standard for construing the claims of an unexpired patent, the court first noted that the PTAB (and its predecessor) applied the broadest-reasonable-interpretation standard of patent claims in various USPTO proceedings for more than 100 years, without any objection by the courts. Furthermore, the court explained that “Congress is presumed to legislate against the background of existing law where Congress in enacting legislation is aware of the prevailing rule.” Here, the legislative history indicates Congress knew the broadest-reasonable-interpretation standard is the prevailing rule at the USPTO. Because the AIA gives no indication that Congress intended to change the standard, the court found that “[i]t can therefore be inferred that Congress impliedly adopted the existing rule of adopting the broadest reasonable construction.”

Cuozzo attempted to distinguish IPRs from prior USPTO proceedings, pointing to the statutory limitations on the ability to amend patent claims during an IPR, limits that do not apply in other USPTO proceedings. This difference, Cuozzo reasoned, rendered the courts' and Congress's prior approval of the broadest-reasonable-interpretation standard irrelevant for IPRs. The court rejected Cuozzo's argument because it found that although the statute limits the opportunity to amend patent claims in IPRs it is nonetheless available.

Finally, the court also concluded that even if Congress had not impliedly adopted the broadest-reasonable-interpretation standard it had granted the USPTO rulemaking authority, and, under this authority, the USPTO properly adopted the broadest-reasonable-interpretation standard.

Strategy and Conclusion

This decision illustrates the procedural hurdles facing a party who seeks to challenge the USPTO's decision whether to institute an IPR. Parties should consider that the PTAB generally has final authority on whether and on what grounds to institute an IPR. Also, different patentability/invalidity determinations may result from district-court and IPR proceedings, because they employ different standards to interpret the claims of an unexpired patent.