In In re Cuozzo Speed Technologies, LLC., 2014- 1301 (Fed. Cir. Feb. 4, 2015), the Federal Circuit decided its first review of a Final Decision from an Inter Partes Review (IPR) proceeding. An IPR is the administrative proceeding created by the America Invents Act (AIA) of 2011, which was intended to be a cost-effective and efficient alternative to district court litigation for patent cases. The Court made definitive rulings on two important procedural aspects of IPRs: (1) holding that review of the decision to institute an IPR is only proper if the PTAB clearly exceeded its authority; and (2) affirming the use of the “broadest reasonable interpretation” standard for construing claims in IPRs. The Court also affirmed the particular rulings at issue in Cuozzo—finding the claims invalid as obvious and rejecting proposed amendments to the claims.
First, the majority concluded that 35 U.S.C. § 314(d) prohibited review of the PTAB’s decision to institute an IPR on an appeal of the Final Written Decision. Cuozzo contended that the institution decision was improper because the PTAB relied upon art that the Petitioner had not identified as grounds for the IPR. The Court rejected that position and held that § 314(d) explicitly provides that there is no appeal available of a decision to institute. The Court left open the possibility that after a PTAB Final Written Decision, “mandamus may be available” to challenge the decision to institute an IPR if the PTO “clearly and indisputably exceeded its authority.” With that potential opening, the majority held that, for the present case, even if the Court treated Cuozzo’s appeal as a mandamus petition, Cuozzo could not satisfy the clear and indisputable requirement.
Next, the majority affirmed the use of the broadest reasonable interpretation standard for claim construction in IPR proceedings. The majority found that the AIA, which authorized Inter Partes Review, was silent on the claim construction standard to be used. It also found that the AIA did not indicate any intention to change the claim construction standard that the Patent Office had applied in various proceedings for more than 100 years: “It can therefore be inferred that Congress impliedly adopted the existing rule of adopting the broadest reasonable construction.” In the alternative, the Court determined that, even if Congress had not impliedly adopted the broadest reasonable interpretation standard in the AIA, the Patent Office had rulemaking authority to do so.
After ruling on those procedural points, the majority affirmed the PTAB’s claim construction of Cuozzo’s claims. The Court reviewed the PTAB’s broadest reasonable interpretation de novo because no extrinsic evidence was relevant to the claim construction. The Court also affirmed the PTAB’s legal conclusion that the claims at issue were obvious over the prior art. Finally, the majority held that the PTAB properly denied Cuozzo’s motion to amend the claims, which were attempts to impermissibly broaden the scope of the claims.
This was the Federal Circuit’s first review of the Final Written Decision in an IPR. Many more appeals from IPRs are to be heard this year as well as appeals seeking review of Final Written Decisions from Covered Business Method proceedings. These subsequent rulings will continue to resolve many overarching issues regarding these still-new PTAB proceedings.