February 9, 2017

USPTO Claim Construction Standards for Inter Partes Review Proceedings

Confirming long-standing U.S. Patent & Trademark Office (USPTO) practice, the Supreme Court in the Cuozzo Speed Techs. v. Lee decision (Cuozzo), affirmed the USPTO’s broadest reasonable interpretation standard as the appropriate review under Patent Trial & Appeal Board (PTAB) Inter Partes Review (IPR) proceedings (except where the patent will expire during the proceedings).  By affirming this standard, it remains easier to challenge validity of issued patents before the USPTO than in the courts.

The Supreme Court also affirmed that the USPTO’s initial decision to institute an IPR post-grant decision is non-appealable — eliminating a patent owner’s ability to challenge certain aspects of post-grant proceedings.  Subsequent Federal Circuit decisions also offer guidance about whether an institution decision can be challenged.

Cuozzo and subsequent Court of Appeals of the Federal Circuit (CAFC) decisions also offer guidance about whether to appeal a PTAB institution decision.

In Cuozzo, the patentee argued that the PTAB erred in instituting review of claims 10 and 14 of U.S. Patent No. 6,778,074 where the petitioner sought review only of claim 17, which depends from claims 10 and 14.

Under 35 U.S.C. § 314(a), “[t]he Director may not authorize an Inter Partes Review to be instituted unless the Director determines that the information presented in the petition filed under section 311 … shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” Under § 314(d), “[t]he determination by the Director whether to institute an Inter Partes Review under this section shall be final and nonappealable.”

The Supreme Court held that § 314(d) prohibited Cuozzo from challenging the PTAB’s decision instituting IPR proceedings against claims 10 and 14. The Court held that the reach of § 314(d) extended to questions that are closely tied to the application and interpretation of statutes related to the PTAB’s decision to initiate IPR proceedings. The Court, however, indicated its holding did not extend to appeals: (1) implicating constitutional questions; (2) depending on other less closely related statutes; or (3) presenting other questions of interpretation that reach, in terms of scope and impact, well beyond § 314(d).

Takeaway: Cuozzo could influence other presently controlling CAFC law. For example, § 315(b) says that a party being sued for patent infringement has only one year in which to file an IPR request against the patent in suit. In Achates Publishing v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015) the CAFC held that § 314(d) prohibits it from reviewing a PTAB’s decision to initiate IPR proceedings based on its assessment of the time-bar of § 315(b), even if such assessment is reconsidered during the merits phase of proceedings and restated as part of the PTAB’s final written decision. However, on January 4, 2017, in Wi-Fi One, LLC v. Broadcom Corp. the Federal Circuit agreed to consider en banc the interpretation of, and interplay between, 35 U.S.C. § 314(d) (the No Appeal provision) and § 315(b).

Citation: Cuozzo Speed Techs. v. Lee, 136 S. Ct. 2131 (2016)