Earlier today, the U.S. Court of Appeals for the Federal Circuit decided the first appeal of a final decision from an inter partes review (“IPR”) proceeding before the Patent Trial and Appeal Board. In re Cuozzo Speed Technologies, LLC., Case No. 2014-1301, slip op. (Fed. Cir. Feb. 4, 2015). In Cuozzo, the Federal Circuit panel: (i) held that it does not have jurisdiction to review the Board’s IPR institution decisions; (ii) approved the Board’s use and application of the “broadest reasonable interpretation” standard for claim construction; and (iii) upheld the Board’s final determination that the subject patent claims are obvious, as well as the Board’s denial of patent owner Cuozzo’s motion to amend those claims.

The IPR proceeding on appeal in Cuozzo began when Garmin petitioned the Board requesting inter partes review of a patent owned by Cuozzo Speed Technologies. The Board granted Garmin’s petition and instituted the IPR proceeding, relying, in part, on combinations of prior art that Garmin did not explicitly raise in its petition. In its subsequent final decision, the Board construed claim terms under the “broadest reasonable interpretation” standard and determined that the three challenged claims were unpatentable as obvious under 35 U.S.C. § 103. The Board also denied Cuozzo’s motion to amend the challenged claims, finding that the proposed new claims lacked written description support and improperly enlarged the claims’ scope (in view of the Board’s claim constructions).

In its appellate ruling, the Federal Circuit first considered Cuozzo’s threshold argument that the Board’s decision to institute the IPR proceeding was improper because it relied on new grounds introduced by the Board and not included in Garmin’s petition. Although the Court previously held that the America Invents Act (“AIA”) precludes interlocutory review of decisions to institute IPR proceedings, that earlier ruling left open the question of whether such institution decisions could be appealed after the Board rendered its final decision. The Federal Circuit answered that question in Cuozzo, holding that no appeal of the institution decision is available even after a final decision. In reaching that conclusion, the Court opined that the AIA was written to prohibit any and all review of the Board’s IPR institution decisions. However, this may not be a firm and bright-line rule, as the Court also noted that a patent owner may be able to seek mandamus relief related to an institution decision after the Board issues a final decision and provided, as an example, that such relief may be available in exceptional cases where the Board has clearly and indisputably exceeded its authority.

In Cuozzo, the Federal Circuit also upheld the Board’s use and application of the “broadest reasonable interpretation” standard for claim construction in IPR proceedings. The Court noted that, although the statute is silent on this particular issue, Congress expressly granted rulemaking authority to the U.S. Patent and Trademark Office for these new proceedings. And, the Court reasoned that the U.S. Patent and Trademark Office has authority to promulgate rule 37 C.F.R. § 42.100(b), which provides that claims are to be given their broadest reasonable interpretation in the IPR context. The Court also explained that its holding is consistent with the U.S. Patent and Trademark Office’s practice - spanning over 100 years, and in various other types of proceedings – and is further supported by the ability of patent owners to seek to amend patent claims in IPR proceedings.

The Court, applying the “broadest reasonable interpretation” standard, agreed with the Board’s construction of the claim term disputed by patent owner Cuozzo and affirmed the Board’s final determination that the Cuozzo’s patent claims are invalid as obvious. Again citing to the Board’s claim construction, the Court affirmed the Board’s denial of patent owner Cuozzo’s motion to amend its claims, finding that the proposed amendments would have impermissibly broadened the claim scope and lacked support in the patent’s written description.

Today’s first-impression ruling by the U.S. Court of Appeals for the Federal Circuit addresses many issues important to all parties and practitioners involved in trial proceeding before the Patent Trial and Appeal Board. Notably, beyond the majority ruling addressed here, Judge Newman authored a lengthy dissenting opinion. And, future application of Cuozzo may be impacted by U.S. Patent and Trademark Office rulemaking, the possibility that the Court may revisit Cuozzo en banc, evolving Patent Trial and Appeal Board trial practice, and other factors.