Phillips Claim Construction Rule Imminent

Back in May, the USPTO issued a Notice of Proposed Rulemaking to switch from the Broadest Reasonable Interpretation (BRI) standard to a Phillips claim construction for AIA Trial Proceedings (here). Thereafter the agency collected comments from the public, most of which favored the change, and submitted the issue to the Office of Management & Budget (OMB) for final regulatory approval. On Wednesday October 3rd the regulatory approval was given by OMB’s Office of Information & Regulatory Affairs (OIRA). Thus, the USPTO may now publish a Final Rule Package to make the proposed switch to Phillips.

The Final Rule Package, which I expect will publish in the Federal Register next week does not take effect immediately. Rather, there will be an effective date 30-60 days after the date of publishing. Assuming publication next week, that would provide an effective date as early as the first full week of November, or as late as December. (There have been discussions that this change would be retroactive, but that is not my expectation. Too much re-work for existing proceedings, and on the heels of SAS, I just don’t see it.) I expect that any petition filed on or after the effective date will be subject to the Phillips standard.

As I have pointed out previously, while I don’t expect this change will impact trials in a significant regard, it will impact filing strategies. That is, there will be an avalanche of petitions coming into the PTAB before the effective date.

The reason for the filing surge is that currently a petitioner can assert a broader claim construction under BRI for invalidity purposes, and later argue (in court) a narrower construction under Phillips for non-infringement purposes. Petitioners will want to fall under the old system to maintain that benefit. I also expect there will be a drop off in filings in the months after the switch as petitioners grapple with the change. Petitioners will be reluctant to commit to constructions that could stick in court, especially if not fully apprised of infringement contentions prior to filing. This means petition drafting will be a slower exercise as compared to current practices.

As to other impacts, I also pointed out previously that this change may actually harm Patent Owners facing motions to stay. And, that the change will allow more appellate flexibility by introducing greater subjectivity in determining what is the “correct” claim construction as compared to a reasonable construction.

The times they are a-changin.