In In re Cuozzo Speed Technologies, LLC., 2014- 1301 (Fed. Cir. Feb. 4, 2015), the Federal Circuit decided its first review of a Final  Decision from an Inter Partes Review (IPR) proceeding. An IPR is the administrative proceeding created by the America Invents Act (AIA) of 2011, which was intended to be a cost-effective and efficient alternative to district court  litigation  for  patent  cases. The  Court made definitive rulings on two important procedural aspects of IPRs: (1) holding that review of the decision to institute an IPR is only proper if the PTAB clearly exceeded its authority; and (2)  affirming  the  use of the “broadest  reasonable interpretation” standard for construing claims in  IPRs.  The  Court also affirmed the particular rulings at issue in Cuozzo—finding the claims invalid as obvious and rejecting proposed amendments to the claims.

First, the majority concluded that 35 U.S.C. § 314(d) prohibited  review  of the  PTAB’s  decision to institute an  IPR on  an  appeal  of the  Final  Written Decision. Cuozzo  contended  that  the  institution decision was improper  because  the  PTAB relied upon art that the Petitioner had not identified as grounds for the IPR. The  Court  rejected  that  position  and  held  that § 314(d)  explicitly   provides   that  there  is  no  appeal available  of  a  decision  to  institute.         The  Court  left open the  possibility  that after  a  PTAB Final  Written Decision, “mandamus may be available” to challenge the  decision  to  institute  an  IPR  if  the  PTO “clearly and  indisputably  exceeded  its  authority.”     With that potential   opening,   the   majority   held   that,   for the present  case,   even   if  the   Court  treated Cuozzo’s appeal  as  a  mandamus  petition,  Cuozzo  could not satisfy the clear and indisputable requirement.

Next, the majority affirmed the use of the broadest reasonable interpretation standard for claim construction in IPR proceedings. The majority found that the AIA, which authorized Inter Partes Review, was silent on the claim construction standard to be used. It also found that the AIA did not indicate any intention to change the claim construction standard that the Patent Office had applied in various proceedings for more than 100 years: “It can therefore be inferred that Congress impliedly adopted the existing rule of adopting the broadest reasonable construction.” In the  alternative,  the  Court determined that, even if Congress  had not impliedly adopted the broadest reasonable interpretation standard in the AIA, the Patent Office had rulemaking authority to do so.

After ruling on those procedural points, the majority affirmed the PTAB’s claim construction of Cuozzo’s claims. The Court reviewed the PTAB’s broadest reasonable interpretation de novo  because  no extrinsic evidence was relevant to the claim construction. The Court also  affirmed  the PTAB’s legal conclusion that the claims  at  issue  were obvious over the prior art. Finally, the majority held that the PTAB properly denied Cuozzo’s motion to amend the claims, which were attempts to impermissibly broaden the scope of the claims.

This was the Federal Circuit’s first review of the Final Written Decision in an IPR. Many more appeals from IPRs are to be heard this year as well as appeals seeking review of Final Written Decisions from Covered Business Method proceedings. These subsequent rulings will continue to resolve many overarching issues regarding these still-new PTAB proceedings.