On July 8, 2015, the U.S. Court of Appeals for the Federal Circuit, split 6-5, denied rehearing of its earlier decision, In re Cuozzo Speed Technologies, LLC, 778 F.3d 1271 (Fed. Cir. 2015), in which the court upheld the use of the broadest reasonable interpretation standard in inter partes reviews. The original panel decision in Cuozzo was the Federal Circuit's first opinion in an appeal from a final written decision of the Patent Trial and Appeal Board (PTAB) in a proceeding under the America Invents Act (AIA). In affirming the PTAB's decision that three challenged patent claims were unpatentable, the court addressed challenges to the PTAB's claim construction standard and its claim amendment practice. The court's reasoning was broadly applicable to the other PTAB post-grant trials: post-grant review (PGR) and transitional covered business method review (CBM).
The AIA granted the United States Patent and Trademark Office (USPTO) power to promulgate rules and standards for inter partes review.1 The USPTO promulgated a rule adopting the "broadest reasonable interpretation" claim construction standard, consistent with long-standing precedent for patent examination and for pre-AIA post-grant proceedings.2 The USPTO also promulgated rules for amending claims in inter partes reviews that place procedural and substantive burdens on the patent owner.3
On appeal, Cuozzo argued that the broadest reasonable interpretation claim construction standard is improper and that AIA proceedings should instead be decided under the same claim construction standard applicable in district court proceedings. Cuozzo also challenged the PTAB's restrictive amendment practice. The Federal Circuit held that the broadest reasonable interpretation standard is an appropriate claim construction standard for AIA proceedings, noting that the USPTO has given claims their broadest reasonable construction in a variety of proceedings for over 100 years.4 The court rejected Cuozzo's argument that the PTAB's restrictive amendment practice made the broadest reasonable interpretation inappropriate, holding that "IPR proceedings are not materially different" than other USPTO proceedings when it comes to amending claims.5
Cuozzo requested rehearing en banc. Four amicus curiae briefs supported Cuozzo's request: two from intellectual property law groups, one from a pharmaceutical trade group, and one from a group of manufacturing companies. The request failed on a 6-5 vote. Judge Dyk—joined by Judges Lourie, Chen, and Hughes—wrote a concurrence that rebutted the dissenters' policy arguments and, against the backdrop of the USPTO's long use of the broadest reasonable interpretation standard, confirmed the agency's ability to adopt that standard. The concurrence made note of bills pending in Congress that could change the standard.6
The decision also provoked two dissents. The first, by Chief Judge Prost—joined by Judges Newman, Moore, O'Malley, and Reyna—argued that Congress intended a process more like litigation, which would require a claim construction standard like the one used in district court,7 which is generally thought to be more flexible for patent owners. The dissent rejected the idea that inter partes reviews are "examinational" in nature like reexaminations, instead contending that Congress created an "adjudicative" process with nothing like the give-and-take between an applicant and examiner. The dissent also questioned whether the USPTO had authority to adopt a claim construction standard without express legislative authority.8 A second dissent from Judge Newman alone focused on the amicus arguments, particularly stressing an understanding that PTAB post-grant trials should work the same as district court invalidity trials.
This 6-5 split at the court reflects competing and essentially incompatible views of the function of PTAB post-grant trials in the patent system. Given the importance of the question (as noted by the dissents and the amicus curiae briefs) and the sharp divide at the Federal Circuit, it is likely that the issue will have to be resolved in Congress or at the Supreme Court. Any outcome will affect not only inter partes reviews, but also PGRs and CBMs.
1 35 U.S.C. 316.
