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.
The CAFC has recently focused attention on the use of functional claim language—that is, claim language that describes what an element does, rather than describing what the element is. A recent IPR showed how functional claiming can play out at the PTAB, where it is often the case that neither the petitioner nor the patent owner wants the claims to be construed as employing “means-plus-function” language. For the petitioner, such an interpretation would make it more difficult to show invalidity. For the patent owner, such an interpretation could substantially narrow the scope of the claim and have a significant downstream impact on the patent owner’s ability to show infringement. But the PTAB may have its own ideas about how to interpret the claims.
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.
Last week, the U.S. Supreme Court heard oral arguments in Cuozzo Speed Technologies v. Lee. At issue in this appeal is the fundamental nature of IPR—is it an efficient means to cull bad patents that shouldn’t have been issued in the first place, or is it a cost-effective substitute for district court litigation? While we’ll have to wait until June for the final decision to learn the answer, the Justices’ questions highlight some of their concerns.
It can be tempting to propose a broad interpretation of the claims in an IPR in order to read on the prior art included in the petition. But a recent decision highlights that there are limits to how far even the PTAB will go in applying the BRI standard. Should the Supreme Court find in Cuozzo Speed Technologies, LLC v. Lee that the PTAB should apply the plain and ordinary meaning standard instead of the BRI standard, finding good prior art that clearly discloses the claimed technology, without broadly interpreting the claims, will become even more important.
“Private property began the instant somebody had a mind of his own.” — E.E. Cummings
Among other rights, the Fifth Amendment guarantees that private property shall not “be taken for public use, without just compensation.” Both the Patent Act and the Supreme Court have classified patents as personal property. And in 2015, the Supreme Court made clear that the Takings Clause of the Fifth Amendment applies not only to real property but to “personal property” as well. Is the PTAB, then, by finding unpatentable more than 80% of claims instituted in an IPR proceeding, taking private property “without just compensation”? For four IP law professors, the answer is a resounding “yes.”
Last week, the United States Patent & Trademark Office filed its merits brief with the Supreme Court in Cuozzo Speed Technologies, LLC v. Lee. Cuozzo previously filed its merits brief on February 22, setting up a clash in viewpoints over basic elements of the post-grant review process established by the AIA. A close look at the wording of the briefs, however, suggests that the resolution of the case may turn on a much more nuanced consideration of whether post-grant trials determine “invalidity” of claims versus “unpatentability.”
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.
The losing party in the first IPR decision on the merits is seeking Supreme Court review of the claim construction standard used in all subsequent decisions.
Cuozzo’s petition for certiorari challenges the practice of giving claims the “broadest reasonable interpretation” in IPRs instead of the standard applied in federal court under Phillips. Cuozzo narrowly missed obtaining a rehearing en banc on the same grounds in a 6-5 decision dividing the Federal Circuit, which could signal to the Supreme Court that this is an important issue to take up.
There is risk in filing petitions that rely on the PTAB adopting a broad interpretation of the claims in order to read on the prior art included in the petition—even though the PTAB has just confirmed that it will apply the broadest reasonable interpretation (BRI) standard when interpreting claims in a challenged unexpired patent. This risk is highlighted in the recent decision in Stryker Corporation v. Karl Storz Endoscopy-America, Inc. (IPR2015-00673), where the PTAB denied Stryker's petition because it relied on a claim interpretation that broadened the claims beyond what is disclosed in the patent.