IP News

Federal Circuit: Application by PTAB of Broadest Reasonable Interpretation Standard in Claim Construction Upheld Under the AIA

On Feb. 4, 2015, a Federal Circuit panel of Judges Newman, Clevenger, and Dyk issued a 2-1 opinion, authored by Judge Dyk, in In re Cuozzo Speed Tech., LLC, Case No. 2014-1301. The panel held, inter alia, that: 1) the Federal Circuit lacks jurisdiction to review final decisions made by the Patent Trial and Appeal Board (PTAB) regarding whether to institute an inter partes review (IPR); and 2) the PTAB must apply the broadest reasonable interpretation standard of review to claim construction determinations during an IPR. See, Slip op. at 2. This case marks the Federal Circuit's first decision in an appeal of an IPR petition under the America Invents Act (AIA). Justice Newman dissented.

The appeal resulted from a dispute between Cuozzo Speed Technologies (Cuozzo), owner of U.S. Patent No. 6,778,074 (the '074 patent), and Garmin International, Inc. and Garmin USA, Inc. (collectively Garmin) over the validity of the '074 patent. The '074 patent discloses a mechanism for displaying a vehicle's speed as well as the speed limit. Garmin petitioned for an IPR of three claims of the '074 patent, which the United States Patent and Trademark Office (USPTO) instituted. The PTAB issued a final decision finding all three claims obvious over the prior art and denying Cuozzo's motion to amend the claims at issue. Cuozzo appealed.

On appeal, the Federal Circuit affirmed the PTAB's decision. As an initial matter, the majority rejected Cuozzo's argument that it should be permitted to appeal the PTAB's decision in the first place. In doing so, the court cited explicit language from the AIA providing that “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” Id. at 6. As such, the opinion firmly stated that the AIA “prohibits review of the decision to institute IPR even after a final decision,” noting that “the provision is not directed to precluding review only before a final decision,” but rather “is written to exclude all review of the decision whether to institute review.” Id. The opinion mentioned, however, that mandamus may be available to challenge the USPTO's decision to institute an IPR petition after a final decision is issued by the PTAB only “in situations where the PTO has clearly and indisputably exceeded its authority.” Id. at 8.

Turning to the standard of review for claim construction, Justice Dyk first recognized that although the IPR was created by the AIA, the statute does not expressly state whether the broadest reasonable interpretation standard is “appropriate” in such a proceeding. See, id. at 11. The opinion noted, however, that both “rulemaking authority” and “establishing and governing inter partes review” were vested rights in the USPTO under 35 U.S.C. ”316(a)(2) and (a)(4) of the AIA. The opinion continued by discussing the history of the broadest reasonable interpretation standard and how it has been applied to claim construction determinations made by the USPTO in various types of proceedings for over 100 years. See, id. at 11'12. The opinion also noted that the Federal Circuit has consistently “approved the broadest reasonable interpretation standard in a variety of proceedings.” Id. at 13. Moreover, the majority raised the point that Congress was “well aware that the broadest reasonable interpretation standard was the prevailing rule” when enacting the AIA and, yet, chose not to mention it in the statute. Id. at 14. The decision therefore “inferred that Congress impliedly adopted the existing rule of adopting the broadest reasonable construction.” Id. Finally, the court briefly addressed Cuozzo's additional grounds for appeal ' namely, the PTAB's finding of obviousness with respect to the '074 patent claims at issue and the PTAB's denial of Cuozzo's motion to amend ' and affirmed the PTAB's rulings as proper. See generally, id. at 21'26.

In a strongly worded dissent, Judge Newman disagreed with the majority's decision on almost all fronts, stating that several aspects of the AIA are “incorrectly or confusingly treated.” Dissent at 3. She argued against the PTAB's application of the broadest reasonable interpretation standard because it “precludes achieving review of patent validity in inter partes review comparable to that of the district courts, where validity is determined based on the correct claim construction, not an artificially 'broadest' construction.” Id. at 2. Judge Newman also questioned the majority's holding that PTAB decisions are nonappealable, arguing that such a “ruling appears to impede full judicial review of the PTAB's final decision, further negating the purpose of the [AIA] to achieve correct adjudication of patent validity '.” Id.

Jeff Ginsberg is a Partner in the New York office of Kenyon & Kenyon LLP. Brooke Hazan is an associate at the firm.

Federal Circuit: Application by PTAB of Broadest Reasonable Interpretation Standard in Claim Construction Upheld Under the AIA

On Feb. 4, 2015, a Federal Circuit panel of Judges Newman, Clevenger, and Dyk issued a 2-1 opinion, authored by Judge Dyk, in In re Cuozzo Speed Tech., LLC, Case No. 2014-1301. The panel held, inter alia, that: 1) the Federal Circuit lacks jurisdiction to review final decisions made by the Patent Trial and Appeal Board (PTAB) regarding whether to institute an inter partes review (IPR); and 2) the PTAB must apply the broadest reasonable interpretation standard of review to claim construction determinations during an IPR. See, Slip op. at 2. This case marks the Federal Circuit's first decision in an appeal of an IPR petition under the America Invents Act (AIA). Justice Newman dissented.

The appeal resulted from a dispute between Cuozzo Speed Technologies (Cuozzo), owner of U.S. Patent No. 6,778,074 (the '074 patent), and Garmin International, Inc. and Garmin USA, Inc. (collectively Garmin) over the validity of the '074 patent. The '074 patent discloses a mechanism for displaying a vehicle's speed as well as the speed limit. Garmin petitioned for an IPR of three claims of the '074 patent, which the United States Patent and Trademark Office (USPTO) instituted. The PTAB issued a final decision finding all three claims obvious over the prior art and denying Cuozzo's motion to amend the claims at issue. Cuozzo appealed.

On appeal, the Federal Circuit affirmed the PTAB's decision. As an initial matter, the majority rejected Cuozzo's argument that it should be permitted to appeal the PTAB's decision in the first place. In doing so, the court cited explicit language from the AIA providing that “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” Id. at 6. As such, the opinion firmly stated that the AIA “prohibits review of the decision to institute IPR even after a final decision,” noting that “the provision is not directed to precluding review only before a final decision,” but rather “is written to exclude all review of the decision whether to institute review.” Id. The opinion mentioned, however, that mandamus may be available to challenge the USPTO's decision to institute an IPR petition after a final decision is issued by the PTAB only “in situations where the PTO has clearly and indisputably exceeded its authority.” Id. at 8.

Turning to the standard of review for claim construction, Justice Dyk first recognized that although the IPR was created by the AIA, the statute does not expressly state whether the broadest reasonable interpretation standard is “appropriate” in such a proceeding. See, id. at 11. The opinion noted, however, that both “rulemaking authority” and “establishing and governing inter partes review” were vested rights in the USPTO under 35 U.S.C. ”316(a)(2) and (a)(4) of the AIA. The opinion continued by discussing the history of the broadest reasonable interpretation standard and how it has been applied to claim construction determinations made by the USPTO in various types of proceedings for over 100 years. See, id. at 11'12. The opinion also noted that the Federal Circuit has consistently “approved the broadest reasonable interpretation standard in a variety of proceedings.” Id. at 13. Moreover, the majority raised the point that Congress was “well aware that the broadest reasonable interpretation standard was the prevailing rule” when enacting the AIA and, yet, chose not to mention it in the statute. Id. at 14. The decision therefore “inferred that Congress impliedly adopted the existing rule of adopting the broadest reasonable construction.” Id. Finally, the court briefly addressed Cuozzo's additional grounds for appeal ' namely, the PTAB's finding of obviousness with respect to the '074 patent claims at issue and the PTAB's denial of Cuozzo's motion to amend ' and affirmed the PTAB's rulings as proper. See generally, id. at 21'26.

In a strongly worded dissent, Judge Newman disagreed with the majority's decision on almost all fronts, stating that several aspects of the AIA are “incorrectly or confusingly treated.” Dissent at 3. She argued against the PTAB's application of the broadest reasonable interpretation standard because it “precludes achieving review of patent validity in inter partes review comparable to that of the district courts, where validity is determined based on the correct claim construction, not an artificially 'broadest' construction.” Id. at 2. Judge Newman also questioned the majority's holding that PTAB decisions are nonappealable, arguing that such a “ruling appears to impede full judicial review of the PTAB's final decision, further negating the purpose of the [AIA] to achieve correct adjudication of patent validity '.” Id.

Jeff Ginsberg is a Partner in the New York office of Kenyon & Kenyon LLP. Brooke Hazan is an associate at the firm.