On February 4, 2014 the Federal Circuit Court of Appeals decided a threshold issue central to Inter Partes Review ("IPR") determinations under the American Invents Act ("AIA").1 In re Cuozzo Speed Techs., LLC, No. 2014-1301, 2015 U.S. App. LEXIS 1699 (Fed. Cir. Feb. 4, 2015). A panel of the Federal Circuit considered whether the IPR claim construction standard should be (a) the broadest reasonable interpretation of the claims (applied during United States Patent and Trademark Office ("PTO") examinations) or (b) the ordinary and customary meaning of the claim as understood by one of ordinary skill in the art (applied by U.S. District Courts). A split panel agreed with the Patent Trial and Appeal Board ("PTAB") that the proper claim construction standard to be applied in an IPR is the broadest reasonable interpretation of the claims.
The IPR procedure was established by the AIA and became operative in 2012. IPR proceedings were intended to "provid[e] quick and cost effective litigation alternatives." Id. at *41 (quoting H.R. Rep. No. 112-98, pt. 1, at 48 (2011). Unfortunately, the AIA did not specifically set forth the claim construction standard to be applied during an IPR proceeding. Id. at *13-14. As a result, the PTO promulgated 37 C.F.R. 42.100(b), which states that "a claim in an unexpired patent shall be given its broadest reasonable interpretation in light of the patent in which it appears" as the claim construction standard for IPR proceedings. Id. at *14. That standard is currently applied by the PTAB.
In a 2-1 decision, a Federal Circuit panel agreed with the PTAB's application of the "broadest reasonable interpretation" standard. The majority explained that: (a) the PTO and its predecessor had more than a 100 year history of patent examination in which the broadest reasonable interpretation standard was applied (Id. at *15-17); (b) the Federal Circuit had repeatedly approved of that standard for PTO proceedings (Id. at *16-17); (c) there was "no indication" that Congress intended to change that standard for IPR proceedings (Id. at *17); and (d) that the PTO was entitled to deference (Id. at *22-23). Judge Newman disagreed.
Judge Newman's dissent argued that IPR proceedings should apply the same claim construction standard as a district court. Judge Newman explained that the legislative history of the AIA made clear that the purpose of establishing the IPR "is to 'convert' inter partes reexamination 'from an examination proceeding to an adjudication proceeding.'" and the IPR was designed to "serve[] as a surrogate for district court litigation of patent validity." Id. at *34-35, 39-40. She noted that even the PTAB agreed that the IPR proceedings are fundamentally "a trial, adjudicatory in nature" and neither a patent examination nor a patent reexamination." Id. at *40. Further, Judge Newman stated that IPR proceedings are materially different from other PTO proceedings and do not permit iterative amendment of claims sufficient to support using the broadest reasonable interpretation standard. Id. at *46-47. Thus, she concluded "the procedure whereby claims are given their broadest reasonable interpretation, instead of their correct construction [like a District Court case], defeats the purpose of Inter Partes Review as a surrogate for district court litigation." Id. at *47-48.
Despite the panel decision, this issue may not have been resolved. It is possible that, given Judge Newman's dissent, the court may decide to hear this case en banc. Moreover, on February 5, 2015, only one day after the issuance of In re Cuozzo, U.S. Representative Goodlatte introduced the Innovation Act, which mandates that IPR proceedings apply the same claim construction standard as the District Court, namely that claim construction should be "in accordance with the ordinary and customary meaning of such claim as understood by one of ordinary skill in the art and the prosecution history pertaining to the patent." If enacted, In re Cuozzo, would be abrogated.
Footnote
1 In an unrelated issue, the Federal Circuit majority also held that the plain meaning of 35 U.S.C. § 314(d) does not permit an appeal of the decision to institute an IPR at any time. Id. at *6-8.
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