Claim construction is just about the most important part of a patent lawsuit. And when it comes to a prior art invalidity challenge, the standard used to decide just how broad patent claims are can be the deciding factor on whether a patent is valid or invalid. So it should come as no surprise that there is a healthy debate going on regarding the Patent Trial and Appeal Board’s use of the broadest reasonable interpretation standard for claim construction; a standard that on its face purports to be broader than the Phillips standard for claim construction used in federal district courts. This criticism is now at a focal point, with the Federal Circuit split 6-5 on the issue and a number of pieces of legislation attempting to make their way through Congress. Below we take a look at how we got here, the Federal Circuit’s division, the progress of efforts in Congress to change the standard going forward, and the U.S. Patent and Trademark Office's response to criticism.
How We Got Here
The America Invents Act gave the patent office explicit and broad authority to determine the standards for inter partes review proceedings, including the authority to determine the proper claim construction standard for the new AIA post-grant proceedings at the Patent Trial and Appeal Board.
In its proposed rule on July 26, 2012, the patent office noted that adopting a broadest reasonable interpretation standard would be consistent with older patent office procedures (i.e., re-examinations). Using the same logic that justified the use of the broadest reasonable interpretation standard in those earlier proceedings, the patent office argued that unlike a federal district court litigation, a patentee can amend the claim during an inter partes review and that justifies the more “difficult standard for claim interpretation.” In other words, where a patentee has the ability to amend the patent’s claims to ensure accuracy and precision, the patentee should be held to a high standard if he or she chooses not to amend those claims.
In its final rule, the patent office officially adopted the broadest reasonable interpretation standard, stating that a “claim in an unexpired patent shall be given its broadest reasonable construction in light of the specification of the patent in which it appears.”
Federal Circuit Challenges
Now that two and a half years have passed since the first petitions for inter partes review were filed and over 400 final written decisions have issued, we are starting to see challenges to the patent office’s use of the broadest reasonable interpretation standard for inter partes review proceedings at the Federal Circuit. The first such challenge was made in In re Cuozzo Speed Techs. LLC. In a 2-1 majority, the Cuozzo panel affirmed the patent office’s use of the standard based both on the theory that Congress itself impliedly adopted the standard and on the theory that Congress gave the patent office the power to decide whether or not to use the standard. The dissent disagreed, arguing that the AIA intended inter partes reviews to be a substitute for district court litigation and, as such, the same claim construction standard should apply.
On July 8, 2015, the Cuozzo split magnified; a narrow 6-5 majority of regularly active members of the Federal Circuit denied Cuozzo rehearing en banc and agreed with the patent office’s use of the broadest reasonable interpretation standard in inter partes review proceedings. On the same day, the original Cuozzo panel also issued revised majority and dissenting opinions.
The Cuozzo panel majority reasoned that “the broadest reasonable interpretation standard has been applied by the PTO and its predecessor for more than 100 years” in proceedings where the patentee is able to amend the claims and because “Congress is presumed to legislate against the background of the kind of longstanding, consistent existing law that is present here,” “[i]t can therefore be inferred that Congress impliedly approved the existing rule of adopting the broadest reasonable construction.” The en banc concurrence added that “[i]n the absence of evidence of congressional intent to abrogate the broadest reasonable interpretation standard, we should not act to adopt a different standard based on our own notions of appropriate public policy. If the standard is to be changed, that is a matter for Congress. There are pending bills which would do just that.”
The Cuozzo panel majority also held that, in the alternative, the AIA explicitly “provide[d] authority to the PTO” to establish the “regulations” and “standards” for inter partes review and, as such, the patent office’s adoption of the broadest reasonable interpretation standard is entitled to Chevron deference.
The dissents disagreed, arguing that the AIA’s silence on a claim construction standard does not lead to the conclusion that the broadest reasonable interpretation standard is applicable. The en banc dissent asserted that the Patent Office only has a history of applying the Broadest Reasonable Interpretation standard when there is a “back-and-forth between the applicant and examiner” and a “robust right to amend,” and such a history is not a backdrop to the AIA since inter partes reviews lack those “examinational hallmarks.” The Cuozzo panel dissent went so far as to call the ability to amend a claim in an inter partes review “illusory.” To the contrary, the en banc dissent argued, it “could not have been clearer” that Congress was “creating a completely new type of PTO proceeding” with “the efficiency and finality of district court adjudications of patent validity.” Thus, reasoning that any silence should be construed as a signal that the district court standard for claim construction should apply.
The dissents also argued that the AIA does not give the patent office the authority to establish a claim construction standard for use in inter partes reviews. The en banc dissent argued that the AIA only granted the patent office the “authority to prescribe procedural regulations,” not claim construction standards. The Cuozzo panel dissent added that by prescribing a different claim construction standard than that used in district courts, “the PTO departed from the purpose of the America Invents Act to create a surrogate for district court litigation.”
While the 6-5 split in the Federal Circuit makes it more than likely that Cuozzo will file a petition for a writ of certiorari with the U.S. Supreme Court, as it stands the Federal Circuit has affirmed the patent office’s use of the broadest reasonable interpretation claim construction standard in inter partes reviews. In fact, Chief Judge Prost has indicated that even though she disagrees with the Patent Office’s use of the Broadest Reasonable Interpretation standard in the inter partes review context, the Cuozzo panel decision settles the issue for subsequent panels. Less than a month before Chief Judge Sharon Prost wrote the Cuozzo en banc dissent discussed above, Chief Judge prost authored the unanimous opinion in Microsoft Corp. v. Proxyconn Inc., where she rejected a challenge to the Patent office’s use of the broadest reasonable interpretation standard in inter partes reviews because “[i]n Cuozzo, this court held that the broadest reasonable interpretation standard in [inter partes reviews] ‘was properly adopted by PTO regulation’” and “we are bound by the decision in Cuozzo.”
As the en banc concurrence in Cuozzo referenced, there are currently two bills pending that, if passed, would override the patent office and explicitly mandate that the Phillips standard be used in inter partes review. In the House, the Innovation Act of 2015 (H.R.9) was introduced by House Judiciary Chairman Bob Goodlatte, R-Va., on Feb. 5, 2015, and was amended and approved by the Subcommittee on Courts, Intellectual Property, and the Internet on June 11, 2015. However, Rep. Goodlatte has since indicated that he would consider amendments to the bill’s inter partes review provisions. The bill is expected to be taken up in July by the full House floor and voted on before the August recess. In the Senate, the STRONG Patent Act (S.632) was introduced by Rep. Christopher Coons, D-Del., on Mar. 3, 2015, and remains in committee.
The patent office itself has not turned a deaf ear to this criticism. In fact, it has organized “roundtables” across the country, so the public can participate in discussions and give feedback about inter partes review procedures. And it appears as though the patent office may itself act on such criticism. In a May 27, 2015, blog post, USPTO Director Michelle Lee announced that “as a direct result of [the] feedback” the patent office would address the underlying criticism that it is too hard for patentees to amend claims during inter partes review, stating that the patent office is:
contemplating proposed changes to emphasize that a motion for a substitutionary amendment will always be allowed to come before the Board for consideration (i.e., be ‘entered’), and for the amendment to result in the issuance (‘patenting’) of amended claims, a patent owner will not be required to make a prior art representation as to the patentability of the narrowed amended claims beyond the art of record before the Office. Of course, the duty of candor and good faith requires the patent owner to make of record any additional prior art material to patentability known by the patent owner. These contemplated changes would be intended to more noticeably limit the burden on the patent owner, even though the patent owner is the party moving for the change in the patent.
A proposed version of such a rule is expected “later this summer” and, if implemented, would strengthen the Patent Office’s justification for its use of the Broadest Reasonable Interpretation standard.
But more immediately, Chief Patent Trial and Appeal Board Judge James Donald Smith has stated that he thinks motions to amend are “perhaps not nearly as difficult as has been described” and advocated getting the message out that “you will get it if you do it correctly.” Just a few weeks later, the Patent Trial and Appeal Board granted Neste Oil Oyj’s motion to amend.
It appears that the use of the broadest reasonable interpretation standard for claim construction during inter partes review proceedings is currently the law of the land, with a slight majority of the Federal Circuit blessing the patent office’s use of the standard and Chief Judge Prost indicating that, even though she disagrees with the Cuozzo majority, Cuozzo should settle the issue for future panels. But that may soon change. The sharp split in the Federal Circuit increases the probability that the Supreme Court may weigh in on the issue and there are bills in Congress that may mandate the Phillips standard for future inter partes reviews.