The recently issued Federal Circuit opinion in In re Cuozzo Speed Technologies, LLC, No. 2014-1301, was the first Federal Circuit opinion from an appeal of an Inter Partes Review (IPR) final judgment. Among other issues of first impression, the Federal Circuit addressed whether the broadest reasonable interpretation ("BRI") was the appropriate standard to apply in construing claims in IPRs. The majority held that BRI was indeed the appropriate standard, while Judge Newman dissented in favor of harmonizing the standard with that applied by the courts as set forth in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005).
In looking at the decision in In re Cuozzo, it is interesting to note that both the majority and the dissent began their analysis by considering whether IPRs are more similar to proceedings before the U.S. Patent and Trademark Office (USPTO) or district court litigation. While the legislative history of the America Invents Act (AIA) was duly considered, the ability for the patent owner to amend during the course of an IPR was critical to the disparate opinions in answering the threshold question. Judge Dyk, writing for the majority, found IPRs to be more like USPTO proceedings, at least in part, because "[a]lthough the opportunity to amend is cabined in the IPR setting, it is nonetheless available. The fact that the patent owner may be limited to a single amendment, may not broaden the claims, and must address the ground of unpatentability is not a material difference." In Re Cuozzo at 16. In stark contrast, Judge Newman citing these very same limitations found IPRs to be dissimilar to USPTO proceedings, contrasting the limited opportunity to amend during IPRs with the "fluid, back-and-forth process between an examiner and the applicant [during routine examination and reexamination], who may present proposed amendments and new claims." Id. at 9.
One would like to think that the Court's finding that an IPR is more like other USPTO proceedings would lead the Patent Trial and Appeals Board (PTAB) to more freely grant motions to amend. However, such action is unlikely as the PTAB, in the spirit of keeping IPR as "a focused proceeding, unlike ex parte patent prosecution or patent reexamination," has strictly interpreted the requirements of 35 U.S.C. § 316, noting that "[i]f a patent owner desires a complete remodeling of its claim structure according to a different strategy, it may do so in another type of proceeding before the Office. For instance, a patent owner may file a request for ex parte reexamination . . .[or, I]n appropriate circumstance, it may also seek to file a reissue application." Idle Free Systems, Inc. v. Bergstrom, Inc., IPR2012-00027 at 4, 6. As of this writing, only two motions to amend during IPRs have been granted. See Flavors & Fragrances Inc. v. The United States of America, IPR2013-00124; see also Riverbed Tech., Inc. v. Silver Peak Systems, Inc., IPR2013-00402 and IPR2013-00403. This despite the seemingly reasonable statutory requirements of 35 U.S.C. § 316 (d)(1) and (3), which provides that a patent owner may file a motion to amend in order to "[c]ancel any challenged patent claim" or "[f]or each challenged claim, propose a reasonable number of substitute claims" and prohibits amendments that "enlarge the scope of the claims of the patent or introduce new matter."
The District Court's affirmation of the BRI standard and the reluctance of the PTAB to grant motions to amend presumably favors challengers looking to institute an IPR as it affords a greater opportunity to invalidate patent claims and limits a patent owner's opportunity to overcome new validity attacks. However, these are not necessarily unqualified wins for challengers. Under the broader BRI standard, a patent owner surviving the IPR challenge can now proceed with increased confidence of their position, at least on validity issues. Indeed, this same argument is what prevented challengers from using the reexamination process in greater numbers pre-AIA. Admittedly to date, the PTAB has ruled largely against patentability in IPRs, but as the IPR process refines itself, one can expect practitioners to adapt and produce higher quality patents that will survive such challenges, resulting is seemingly bullet proof patents ready for assertion and licensing. The result may lead to instances where challengers regret, at least in part, the broader BRI standard applied at the PTAB during IPRs.
Finally, both the District Court's decision on the BRI standard and the PTAB's unwillingness to allow for amendment only emphasize the PTAB's advice to patent owners to consider maintaining a pending continuation application for important technologies. It would seem that good practices remain good practices, regardless of changes in the law.