Yesterday, the Court of the Appeals for the Federal Circuit decided not to review the Patent Trial and Appeal Board’s (PTAB) practice of construing patent claim terms under the broadest reasonable interpretation (BRI) standard in post-grant proceedings. In In Re Cuozzo Speed Technologies, LLC, 2014-1301, the Federal Circuit denied Cuozzo’s Speed Technology LLC’s petition for rehearing en banc, finding that the PTAB is correct to use the BRI standard in construing the meaning of claim terms in inter partes review (IPR) proceedings.
Concurring with the order to deny the petition, Judge Timothy Dyk found that the PTAB’s use of the BRI standard is proper because Congress implicitly intended the standard to be used in IPR proceedings. The Patent and Trademark Office has used the standard for over 100 years and the America Invents Act (AIA) gave no indication that the standard should be changed. In any case, according to Judge Dyk, the law (35 U.S.C. § 316) provides authority for the PTAB to adopt a standard of claim construction.
Judges Prost, Newman, Moore, O’Malley and Reyna strongly disagreed with the decision to not review the claim construction standard. The judges pointed out that “[t]he post-grant proceedings established by the America Invents Act were intended as a far-reaching surrogate for district court validity determinations,” and there is no reason for the PTAB to use a different standard than those used in the district court. The BRI standard is only a “useful tool, prior to patent issuance, for clarifying the metes and bounds of an invention during the back-and-forth between the applicant and examiner when claims are not yet in their final form.” This is not the case with IPR proceedings, which are analogous to district court adjudications. “During IPRs, there is no back-and-forth between the patentee and examiner seeking to resolve claim scope ambiguity; there is no robust right to amend.”
The dissent also disagreed that the PTAB has the right to adopt its own standard under the law, as the law only allows the PTAB to adopt rules that affect procedural aspects, i.e., of how the IPR proceedings are conducted. The dissent further noted that even if the claim construction standard were “procedural” in nature, the PTAB could not adopt the standard because it is “is contrary to the intent of Congress, as divined from the statute and its legislative history.” In passing the AIA, Congress intended IPR proceedings to be a viable alternative to district court adjudications of patent validity. Importing the BRI into IPR proceedings “defeats the purpose of substituting administrative adjudication for district court adjudication.” Furthermore, in determining validity of an issued patent, “it makes little sense to evaluate the claim against the prior art based on anything than the claim’s actual meaning.”
Judge Pauline Newman also filed a blistering dissent, stating that allowing the PTAB to use the BRI standard, “and thus need not achieve the objectively correct determination of validity, has no defender other than a majority of the Federal Circuit court.” Judge Newman cited to numerous briefs filed by industry groups advising the court that “the PTO’s decision to use the [BRI] Rule is inconsistent with the AIA and sound patent policy,” as it adversely affects patent licensing, design-around activities, and other critical business decisions while encourages gamesmanship.
Following the Court’s ruling, it will be business-as-usual at the PTAB, at least until Congress acts. Both the concurrence and dissents noted that several bills pending currently before Congress include provisions that would mandate the PTAB use the district court standard for claim construction.