Two recent events will drive big changes in ongoing and future post-grant trials (IPR, PGR and CBM). The PTAB has just announced that it intends to abandon the “broadest reasonable” claim interpretation standard in favor of the “plain and ordinary meaning” standard used in district court litigation. This change mutes what has historically been an important advantage for petitioners: the ability to challenge the validity of claims based on a claim construction that (a) made it easier to show invalidity than the claim construction standard used in court; (b) did not require the petitioner to commit to a claim construction applicable to an infringement trial; and (c) allowed the petitioner to use the patent owner’s assertion of broad claim scope against it, even if the petitioner contested that claim scope in court. The change could go into effect as early as July 8, and would apply to pending as well as future post-grant trials.
In DSS Technology Management v. Apple, the Federal Circuit reversed a holding of unpatentability of claims that the PTAB considered plainly obvious in an IPR. The Federal Circuit found that merely stating that the claims were obvious did not fill a gap in the case of obviousness, such that the PTAB had failed to provide a sufficient explanation for its conclusion. The Federal Circuit then reversed the finding of obviousness (rather than remanding for the PTAB to elaborate), reasoning that there was insufficient evidence in the record to enable the PTAB to offer an adequate explanation—leaving the claims intact.
In Coalition for Affordable Drugs v. Pozen, Inc. (IPR2015-01718), the Board instituted a trial despite a failure of the petition to show that a final “wherein” clause of a method claim was met by the prior art. Rather, the Board reasoned that the “wherein” clause was likely to actually be a “whereby” clause, just by another name. Because a “whereby” clause stating the intended result of performing a method is not a limitation on the claim, failure to show that the result was known or even occurred in the prior art was not a basis to deny institution.
To be or not to be is an important question in classic literature as well as in defending patents that may be challenged with a Covered Business Method (CBM) review. One patent owner faced this question—not for itself, but for a dependent claim—when its patent was challenged in Plaid Technologies Inc. v. Yodlee, Inc. (CBM2016-00070, paper 8).
The AIA ushered in significant changes in the patent system. At the time, there was much consternation about the change to a first-inventor-to-file system. The prospect of enhanced post-grant challenges was an afterthought, dismissed as a variation in inter partes reexamination. Inter partes reexamination filings even spiked in 2012, as practitioners were reluctant to let go of the familiar process in favor of the new post-grant trial system.
The Federal Circuit seemingly had put to rest the question of whether, in making an amendment in an IPR, the petitioner bears the burden of proving an amended claim unpatentable or the patent owner bears the burden of proving the amended claim patentable. Microsoft Corp. v. Proxyconn, Inc. upheld PTAB procedures placing the burden on the patent owner to prove patentability. Other CAFC panels—including Prolitec, Inc. v. ScentAir Techs., Inc. and Nike, Inc. v. Adidas AG—followed. Currently, claim amendments are evaluated in accordance with the PTAB’s guidance in Idle Free Systems, Inc. v. Bergstrom, Inc. and MasterImage 3D, Inc. v. RealD Inc. As set out in these cases, the patent owner must prove patentability over prior art of record, which includes the prior art cited in the original prosecution of the challenged patent, as well as prior art that the patent owner should put on the record in accordance with its duty of candor.
The U.S. Supreme Court today issued what had the potential for being the most significant case to impact one of the most significant additions to patent law in our lifetimes. At issue in Cuozzo Speed Technologies, LLC v. Lee was the way the Patent Office’s Patent Trial and Appeal Board (PTAB) and the courts have been dealing with a new type of challenge to patents, made available in the fall of 2012 under the America Invents Act (AIA). AIA trials have been sought over 5,000 times to challenge patents and are widely used to resolve patent disputes. Many patent owners complained that these proceedings were unfairly tilted in favor of those challenging patents. Cuozzo sought Supreme Court review of two such practices that it felt went too far and were inappropriate given the language and intent of the AIA. However, the Court sided with the PTAB on both issues, leaving the AIA trial process, as practitioners have come to know it over the last four years, intact.
New data shows a marked decrease in the number of new reissue applications, which have fallen by about half since peaking five years ago. This drop is theorized by some to be a retrenchment on the widely used technique of filing for reissue to insulate patents from challenge in third-party reexaminations. That hypothesis is reasonable, given that ex parte reexamination filings are also down by about half over the same period.
We recently commented on the uncertainty that will prevail until the Supreme Court issues its decision on the proper claim interpretation to apply in post-grant trials. If the Supreme Court finds that the PTAB, in applying the broadest reasonable claim interpretation, is impermissibly invalidating claims, that would call into question many IPR decisions—including many that will be issued between now and when the Supreme Court decides In re: Cuozzo Speed Technologies, which is likely to happen before the Court’s term ends in June.
The Supreme Court has agreed to hear its first case relating to AIA trials. When the Court renders its decision, it should definitively settle two issues that created consternation in the early days of AIA trials. Until then, accepting the case for review reopens two questions that were seemingly settled in the Federal Circuit’s decision in In re: Cuozzo Speed Technologies. The uncertainty is particularly acute, given the high rate at which the Supreme Court reverses the Federal Circuit.