Existing BRI Litigation Cover Will Be Blown

While the Patent Trial & Appeal Board’s (PTAB) plan to switch from the broadest reasonable interpretation (BRI) to a Phillips claim construction may not be the magic bullet that Patent Owner’s expect, the switch will pose strategic problems for petitioners. Even though the PTAB rarely discerns a difference between a BRI and Phillips constructions, the courts think very differently than the expert agency. For this reason, Petitioners often cited to the different claim construction standards to explain away the application of a broader read at the PTAB as compared to that urged in the court. This enabled petitioners to take positions on claim breadth in PTAB petitions that would otherwise undermine a non-infringement position if advanced under Phillips.

Going forward at the PTAB under Phillips, petitioners will be forced to commit to a one-size-fits-all claim construction.

Committing to a district court claim construction within one year of a complaint for infringement (to meet the IPR time bar) might be a concern for some litigants — especially in slower district where detailed infringement contentions remain unavailable at the time of IPR filing. But, I would not expect this loss in strategic benefit to detract from the overall value of the PTAB to petitioners. It just means that petitioners need to put a bit more thought into their initial positions than before, and account for those patent claims that have been previously construed by the courts.

What does the PTAB do with district court Markman Orders? Is the PTAB bound by them?

Absent a claim construction affirmed by the Federal Circuit, I would expect that the PTAB is free to stray from the constructions laid out in a Markman Order. The draft rules state that a prior determination of the ITC or district court “will be considered,” but not necessarily adopted. Going the other way, the courts may be bound by the Board’s construction under the reasoning of B&B Hardware in cases where parties emerge from the PTAB to continue the infringement litigation. This is because the PTAB’s Phillips construction is a “materially same” analysis as done in the courts. This eventuality places increasing importance on the PTAB’s determination in this regard as a potential settlement point. Moreover, claim construction may need to be sorted out early on in the PTAB trial, perhaps by dedicated claim construction briefing as post-SAS Institution decisions may not provide the requisite detail.

As to petitions being drafted now, it would be wise for petitioners to present claim constructions under Phillips in anticipation of the rule change, and for existing PTAB litigants to reserve Phillips arguments should the final rule apply to all pending PTAB proceedings. My expectation is that the rule will go final in late summer/fall.

On balance I still maintain that the change to Phillips is a negative for Patent Owners.