This article appeared in Law360 on September 22, 2014.
The US Patent and Trademark Office has published a “Request for Comments on Trial Proceedings Under the America Invents Act Before the Patent Trial and Appeal Board,” requesting written comments on or before September 16, 2014.1 One of the questions relates to the claim construction standard to be applied in inter partes review and/or covered business method proceedings.2 Thus far, the PTAB has applied the “broadest reasonable interpretation” (“BRI”) standard to IPR and CBM proceedings, except when a patent has expired.3 A question raised in both proposed legislation and in PTAB proceedings is whether, or under what circumstances, the PTAB should employ the same standard for claim construction as district courts.
Prior to the enactment of the America Invents Act, the PTO had applied BRI in re-examination proceedings. In re Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984) (claims are “given their broadest reasonable interpretation, consistent with the specification”); In re Trans Texas Holdings, 498 F.3d 1290, 1298-99 (Fed. Cir. 2008). The Federal Circuit has distinguished IPR proceedings from re-examination proceedings, stating that the former is an adjudicative proceeding, while the latter was an examination proceeding.4 For this reason, some have argued that past Federal Circuit decisions approving BRI for re-examination proceedings do not necessarily dictate that BRI should be the standard for the new AIA adjudicative IPR proceedings.
In a decision that traced the history of BRI in the PTO, the PTAB justified the application of BRI to CBM proceedings in SAP America Inc. v. Versata Dev. Group Inc.5 There, the board reasoned that “[b]y encouraging patent owners to eliminate ambiguity through amendment, the use of the broadest reasonable interpretation standard encourages clarity in claim language, which serves the important public notice function.” 6 It also raised concern that “inconsistent results [in the PTO] would become a major issue if the Office adopted a standard of claim construction other than the broadest reasonable construction,” noting that re-examinations on the same patent might be proceeding in parallel with postgrant review proceedings.7
The concern about inconsistent results in the PTO is not illusory. Ex parte re-examination proceedings continue to be available under the America Invents Act. 8 The PTAB has stayed ex parte re-examinations and reissue proceedings pending the outcome of IPR and CBM proceedings. 9 Consistent claim construction standards in IPR, CBM and ex parte re-examination proceedings means that PTAB IPR and CBM decisions will guide examiners in subsequent ex parte reexamination and reissues.
If the claim construction standards were different, however, PTAB IPR and CBM decisions might not provide guidance to examiners in subsequent re-examination and reissue proceedings, or even in co-pending continuation applications Thus, different standards would potentially decrease the overall efficiency of the PTO. On the other hand, if the PTAB were to apply the same claim construction standard as district courts, PTAB claim construction decisions might help guide district court claim construction decisions in parallel litigation. But would it also cause parties to contest the meaning of more claim terms?
Recent proposed patent reform legislation would have required that “each claim of a patent shall be construed as such claim would be in a civil action to invalidate a patent under section 282(b), including construing each claim of the patent in accordance with the ordinary and customary meaning of such claim as understood by one of ordinary skill in the art and the prosecution history pertaining to the patent.”10 Amicus briefs filed by 3M 11 and Dell 12 in the appeal of the PTAB’s decision in the SAP case demonstrate that there is a split among industry leaders on this issue. The Federal Circuit is scheduled to hear oral argument in that case on October 8, 2014. One of the issues to be decided by the Federal Circuit is whether the PTAB should have applied BRI in that proceeding.
The positions taken by proponents and opponents of BRI have largely failed to address a very important issue: whether there would be a significant difference in outcomes of IPR or CBM proceedings if the district court standard were applied to those proceedings instead of BRI. The BRI standard as applied by the PTAB does not appear to be appreciably different from the standard used by district courts.
As is the case with district court claim construction, under BRI, “[c]laim terms are ... given their ordinary and customary meaning as would be understood by one of ordinary skill in the art in the context of the entire disclosure.” 13 Both BRI and district courts construe a claim term different from its ordinary meaning when “an inventor acts as his or her own lexicographer ... with reasonable clarity, deliberateness, and precision.” 14 Both standards caution against importing features from the specification into the claims. 15
The Federal Circuit has recognized that “the prosecution history ... serves as intrinsic evidence for purposes of claim construction ... in construing claims before the PTO, 16 but that “the PTO should only limit the claim based on the specification or prosecution history when those sources expressly disclaim the broader definition.” 17 Whether this is a different standard than that applied by the Federal Circuit in appeals from district court decisions is open to debate.
In some IPR proceedings, the board has taken the original prosecution history into account when construing claim terms. For example, in Kyocera Corp. v. SoftView LLC, 18 the board took into account the patent owner’s explanation in the remarks section of an amendment of a limitation added by amendment, and construed the claim accordingly. 19 In Intellectual Ventures Mgmt. LLC v. Xilinx Inc., 20 the PTAB considered the prosecution history, but concluded that statements relied on by the patent owner did not constitute an explicit definition or a clear disclaimer of a broader definition, where the statement at issue had been made to describe how the claim structure related to the specification, but not to define the claim language. 21 Moreover, the portion of the prosecution history relied on by the patent owner was contradicted by another statement in the prosecution history. 22 It is doubtful that a district court would have reached a different result in either Kyocera or Intellectual Ventures, if faced with the same arguments.
In Foursquare Labs Inc. v. Silver State Intellectual Tech. Inc., 23 the PTAB, relying in part on a district court’s claim construction of the term at issue, broadened its interpretation on a motion for reconsideration of its decision not to institute the proceeding as to certain claims. 24 In Cisco Systems Inc. v. AIP Acquisition LLC, 25 the expiration date of the patent at issue was prior to the date that the PTAB would issue its final written decision, but after the date of institution of the proceeding. Under those circumstances, the PTAB determined that BRI would not apply with respect to the final written decision, but that its previous construction of claim terms under BRI would be the same under the district court standard. 26
The Dell Amicus Brief 27 argues that although BRI considers the same type of evidence as district courts under Phillips v. AHW. Corp., 28 “the PTO strictly enforces the principle that characteristics of preferred embodiments should not be treated as claim limitations where the claims do not recite such limitations.” 29 It also argues that in “many cases, district courts ultimately conclude, based on a close reading of the specification, that facially ambiguous claim language should be construed narrowly based on the inventor’s disclosures. But there is often a range of reasonable interpretations, and under the BRI standard the PTO will assume the broadest of those interpretations unless the applicant or patent owner has disavowed that reading.” 30 Although this seems logical, Dell does not provide any citations to support its argument.
The 3M Amicus Brief does not address the issue of how, if at all, BRI is different from district court claim construction, and whether the imposition of a different standard than district courts would have made any difference in any of the final written decisions of the PTAB. It argues that decisions of the PTAB should apply the same standard as the district courts to achieve “uniform” results. Given the Federal Circuit’s reversal rate of district court claim construction decisions, one can hardly characterize district court claim construction decisions as having achieved any degree of “uniformity.”
Those who favor the application of district court claim construction standards to IPR proceedings have not factored in a very significant difference between IPR and district court claim construction determinations. In IPR proceedings, the PTAB cannot issue a final written decision finding a claim invalid for indefiniteness. 31 In sharp contrast, indefiniteness has often treated by district courts as a claim construction issue. 32 Query whether it would be inconsistent to require the PTAB to adopt the district court claim construction standard without also providing the PTAB with the authority to issue final written decisions finding claim terms indefinite.
We submit that the PTAB’s IPR and CBM decisions that have applied BRI should be analyzed before Congress passes legislation to require a different claim construction standard. A study is necessary to determine whether and how a different claim construction standard would have made any difference in the outcome of PTAB decisions, and if so, to assess the PTAB’s concerns about inconsistent results between concurrent re-examination proceedings versus IPR or CBM proceedings.
A study might also compare district court constructions of common terms in those cases where the PTAB and the courts have construed the same terms in parallel proceedings to determine whether there has, in fact, been any difference in the construction and whether the any such difference would have changed the outcome. Another factor to consider is whether adoption of a district court claim construction standard would cause parties in IPR proceedings to dispute an increased number of claim terms, resulting in an increased burden on the PTAB, and giving rise to the potential for collateral estoppel arguments in both the PTAB and district courts. Changes to the PTAB’s current application of BRI to IPR and CBM proceedings should not be based on rhetoric, but instead, on an informed decision-making process.