Earlier this week, in Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. __ (2016), the Supreme Court issued its first decision reviewing post-grant proceedings created by the America Invents Act (AIA) and affirmed the Federal Circuit in the two questions on appeal. Both issues challenged provisions of the AIA. First, the Court considered whether 35 U.S.C. § 314(d) bars judicial review of decisions to institute post-grant proceedings by the United States Patent and Trademark Office (USPTO). Second, the Court reviewed whether the rulemaking authority in 35 U.S.C. § 316(a)(4) permits the USPTO to regulate application of the broadest reasonable interpretation standard (BRI) during claim construction before the Patent Trial and Appeal Board (PTAB).

Reviewability of Post-Grant Proceedings

The Court held that “Section 314(d) bars . . . challenge[s] to the Patent Office’s decision to institute inter partes review.” Writing for the Court, Justice Breyer noted that the text of § 314(d) expressly states that institution decisions “shall be final and nonappealable.” The Court stated that interpreting this language to allow judicial review would “undercut one important congressional objective, namely, giving the Patent Office significant power to revisit and revise earlier patent grants.”

Justice Alito dissented and was joined by Justice Sotomayor. Citing the “strong presumption” favoring judicial review, Justice Alito argued that the AIA’s language merely limits interlocutory appeals and that judicial review of institution decisions “ensur[es] that the Office’s action . . . stay within the bounds of the law.” Addressing the dissent’s strong presumption argument, the Court found there was clear and convincing evidence to overcome that presumption because “[t]he text of the ‘No Appeal’ provision, along with its place in the overall statutory scheme, its roles alongside the Administrate Procedure Act, the prior interpretation of similar patent statues, and Congress’ purpose in crafting inter partes review, all point in favor of precluding review of the Patent Office’s institution decisions.” Moreover, the Court clarified that its holding did not preclude judicial review of constitutional questions, including failure to provide due process during institution.

Broadest Reasonable Interpretation

The Court unanimously held that the USPTO’s regulation providing for BRI construction is within its statutory rulemaking authority and is reasonable. Analyzing the USPTO’s authority within theChevron framework, the Court observed that § 316(a)(4) allows the USPTO to issue rules “governing inter partes review” and concluded that the BRI regulation is such a rule. The Court answered the argument that the USPTO construction standard should be the same as the district court standard by stating that although there was evidence that Congress intended to create a litigation-like proceeding, “in other significant respects, inter partes review is less like a judicial proceeding and more like a specialized agency proceeding.” And “neither the statutory language, its purpose, [n]or its history suggest that Congress considered what standard the agency should apply when reviewing a patent claim in inter partes review.” Finally, the Court concluded that the BRI standard is reasonable because it “protects the public” by more strictly analyzing patent claims and because the USPTO “has used this standard for more than 100 years.”

Justice Thomas briefly concurred, agreeing that the USPTO’s regulation was reasonable, but challenging the Court’s analysis to the extent it relies on “Chevron’s fiction.”