The Patent Trial and Appeal Board’s (PTAB) used its first final judgment under the Patent Office’s new inter partes review procedure to declare multiple claims of Cuozzo Speed Technologies’ U.S. Patent No. 6,778,074 (“the ‘074 patent”) invalid.  In Garmin International Inc. et al. v. Cuozzo Speed Tech., Case IPR2012-00001 (PTAB November 13, 2013), the PTAB found in Garmin’s favor that each of the claims under review is obvious in light of a combination of prior art references. 

Inter Partes Review

Inter partes review became available September 16, 2012 as part of the America Invents Act (AIA), replacing the pre-AIA inter partes reexamination procedures. 

Inter partes review provides an alternate forum to district court litigation in which a petitioner can request to have claims of a patent canceled as unpatentable on anticipation or obviousness grounds under 35 U.S.C. §§ 102 and 103.  As with the pre-AIA inter partes reexamination procedures, inter partes review provides third party petitioners the benefit of participating in the proceedings. 

But unlike the pre-AIA inter partes reexamination procedures, inter partes review provides for the use of limited discovery and application of the Federal Rules of Evidence.  Further, inter partes review is conducted by a panel of three administrative patent judges of the PTAB.  These panels have the highest authority within the United States Patent and Trademark Office (USPTO), thus final decisions are directly appealable to the Federal Circuit.  As compared to the average 36 month length of pre-AIA inter partes reexamination proceeding (through an appeal to the PTAB), inter partes review will typically reach conclusion within 18 months.

Garmin v. Cuozzo

Garmin v. Cuozzo addressed the ‘074 patent directed toward a speed-limit indicator tied to a GPS system which would provide a signal to the driver of a vehicle when the vehicle was exceeding the speed limit.  Although Garmin sought review of all 20 claims of the ‘074 patent, the PTAB only reviewed claims 10, 14, and 17.  A parallel infringement lawsuit between the parties is also pending in the U.S. District Court for the District of New Jersey.

In making its decision on the reviewed claims, the PTAB first construed the claims.  One limitation found in each of the claims was that a speedometer be “integrally attached” to a speeding-indicator.  Although the PTAB is required to give claims their broadest reasonable construction, the PTAB took an approach similar to how a district court would construe claims by considering the specification and prosecution history, expert testimony, and doctrines of claim construction.   According to these principles, the PTAB found that the claim term “integrally attached” required two separate components as compared to an integrated display.

The PTAB also considered the patent holder’s attempts to antedate two pieces of 35 U.S.C. § 102(e)(2) prior art.  Under 35 U.S.C. § 102(e)(2), priority of invention goes to the first party to reduce an invention to practice unless the other party can show that it was the first to conceive of the invention and that it exercised reasonable diligence in later reducing that invention to practice.  In particular, the PTAB found that the inventor lacked corroboration as to its alleged conception date and that there was a lack of diligence between the earliest collaborated date of conception and when the inventor initiated the patenting process. 

The PTAB found the reviewed claims unpatentable as obvious by two combinations of prior art patents.  The first combination used three prior art references, while the second combination used four references.  What was most revealing was that the PTAB relied solely on the ordinary creativity of one skilled in the art as providing reasoning for combining references to arrive at the claimed invention.

Finally, the PTAB denied the patent holder’s motion to amend its claims as attempting to enlarge the scope of the claims.

Weapons of Choice: Litigation, Inter Partes Review, and Ex Parte Reexamination

Garmin v. Cuozzo confirms the general consensus that inter partes review may yield better results when relying on complex invalidity arguments hinging on a combination of prior art references.  The conventional wisdom is that complex factual arguments are a difficult sell to juries in district court litigation.  In Garmin v. Cuozzo, the PTAB issued a four reference obviousness rejection.  Accordingly, inter partes review may be preferable when relying on complex invalidity arguments that might not work at the district court level.

Still, inter partes review does have its drawbacks compared to district court litigation.  First, the time frame in which a party can seek an inter partes review is restricted to within one year of having been served with a complaint for patent infringement and prior to filing a declaratory judgment for patent infringement, thus potentially leaving inadequate time to prepare a inter partes review petition.  Additionally, inter partes review is not available for the first nine months after a patent issues, although post-grant review is available during this time frame.  While a district court may choose to stay litigation at its discretion, inter partes review does not automatically freeze or prevent litigation.  Generally, only patents and printed publications may be used as prior art, and only anticipation or obviousness under 35 U.S.C. §§ 102 and 103 will be considered.  Routine discovery is limited to exhibits not otherwise publicly available or served, cross examination of declarants, and non-cumulative information that is inconsistent with a position taken by the party before the PTAB.  Finally, the patent owner in an inter partes review is permitted to narrow its claims by amendment, thus leaving open the possibility of a patent owner still retaining enforceable claims against the petitioner.

While inter partes review replaced inter partes reexamination, ex parte reexamination is still available through the USPTO.  Ex parte reexamination, while not providing an opportunity to participate in the proceeding beyond the initial petition, does provide some benefits over inter partes review.  Ex parte reexamination is less expensive than the motion practice of district court litigation or an inter partes review.  The petitioner in an ex parte reexamination may retain its anonymity.  Further, ex parte reexamination can be pursued at any time, including after the petitioner has already filed a declaratory judgment.  Additionally, no judicial estoppel is created by an ex parte reexamination.

Inter partes review has its advantages and disadvantages which must be considered on a case-by-case basis.  However, as seen in Garmin v. Cuozzo, inter partes review may be the best option when relying on complex invalidity arguments.