On January 15, 2016, the Supreme Court granted certiorari in Cuozzo Speed Technologies v. Lee to address two important questions relating to inter partes review proceedings:

Whether the court of appeals erred in holding that, in IPR proceedings, the Board may construe claims in an issued patent according to their broadest reasonable interpretation (“BRI”) rather than their plain and ordinary meaning.

Whether the court of appeals erred in holding that, even if the Board exceeds its statutory authority in instituting an IPR proceeding, the Board’s decision whether to institute an IPR proceeding is judicially unreviewable.1

The dispute arose out of a petition for inter partes review (“IPR”) filed by Garmin International, Inc. (“Garmin”), of claims 10, 14, and 17 of U.S. Patent No. 6,778,074 owned by Cuozzo Speed Technologies, LLC (“Cuozzo”). 2 The Board denied all grounds on which the challenge to claims 10 and 14 were based, but nevertheless applied to those claims combinations of prior art that Garmin had only cited with respect to claim 17. The Board then instituted IPR for all three claims. The Board subsequently held all three claims to be unpatentable on the same grounds for which it had instituted IPR, and in doing so, applied the BRI, rather than the ordinary meaning, of a key claim term.3 Garmin and Cuozzo settled, but the PTO intervened to defend the Board’s decision on appeal.

A split Federal Circuit panel held that the Board’s decision to institute IPR was judicially unreviewable, even while acknowledging that the Board may have acted ultra vires. 4 On the merits, the Board held that the Board had permissibly adopted the BRI standard for claim construction in IPR.5 Judge Newman dissented with respect to both issues. Cuozzo filed a petition for rehearing, but it was denied by a vote of 6-5.

Before the Supreme Court, Cuozzo asserts that, while the PTO has long used the BRI standard, it was always in proceedings, such as initial examination, where applicants could amend their claims as part of an iterative exchange with the examiner.6 According to Cuozzo, the “Board’s use of the BRI protocol in IPR defeats Congress’s aim of substituting administrative adjudication for district court adjudication, because it leads to ‘different results’ than the ordinary-meaning construction used by courts.”7 With respect to the reviewability of the Board’s institution decision, Cuozzo argues that 35 U.S.C. 314(d)—which states that the Board’s decision to institute IPR is “final and nonappealable”—only bars an appeal of the Board’s institution decision when issued.8

The PTO responds that IPRs permit claim amendments, and that Congress has always blessed the use of BRI in such situations, including post-grant proceedings like inter partes reexamination. The PTO further argues that the AIA vests the PTO with broad rule making authority, and that its adoption of BRI is entitled to judicial deference as a reasonable exercise of that authority.9 On the jurisdictional issue, the PTO’s brief relies principally on the plain language of Section 314(d), which does not on its face differentiate between interlocutory appeals and those following a final written decision.

Cuozzo’s reply brief attacks the PTO’s comparison of IPRs to other examination-like proceedings, where amendments can be made on multiple occasions in an iterative process, and where applicants have an opportunity to disclaim broad claim constructions adopted by an examiner. With respect to the jurisdiction question, Cuozzo asserts that the Federal Circuit’s current interpretation allows the Board to violate the AIA’s limits without any judicial oversight.

Numerous amici have lined up on both sides of this dispute. Of note, retired Federal Circuit Judge Paul Michel submitted a brief arguing that BRI is inappropriate in IPRs. The Federal Circuit Bar Association and Licensing Executive Society both took the same position, while the Intellectual Property Owners Association and American Intellectual Property Law Association each argued that the Supreme Court should reverse on both the BRI and jurisdictional issues. On the other side, a large group of “technology companies, manufacturers, trade associations of Internet, automotive, computer and communications companies, and retailers that use and sell high-tech products,” submitted a brief supporting both of the Federal Circuit’s rulings.

The effects of a reversal by the Supreme Court remain somewhat unclear. In practice, it is rare that the PTAB’s rulings, or Federal Circuit decisions on appeal therefrom, turn on application of the “BRI” standard as opposed to the ordinary “Phillips” claim construction standard. Moreover, multiple bills proposed last year in Congress would eliminate the BRI standard in inter partes reviews. The jurisdictional issue—whether the Federal Circuit has jurisdiction to rule on at least ultra vires acts by the PTAB at the institution stage—may have larger consequences, with pros and cons to both patentees and petitioners. Currently, the Federal Circuit will not review institution decision issues such as the determination of the real party-in-interest  and privity. If the jurisdictional question is reversed, that could benefit patentees, who could appeal following a final written decision that the PTAB lacked the authority to institute the proceeding in the first place. On the other hand, a reversal on the jurisdictional question could theoretically open the door for petitioners to appeal following a final written decision with the respect to the denial of some, but not all, grounds as redundant.

Either way, this case will mark an important step in the development of IPR jurisprudence.