On Monday, June 20, 2016 the United States Supreme Court upheld the prevailing "broadest reasonable construction" claim construction standard that has been used by the Patent Trial and Appeal Board ("PTAB") in trials conducted under the America Invents Act ("AIA"), namely inter partes reviews, post-grant reviews and covered business method patent reviews. The "broadest reasonable construction" standard requires consideration of only the patent specification and permits limited consideration of the prosecution history (excluding estoppels) in construing claims. The June 20, 2016, Decision in Cuozzo Speed Technologies v Lee, Case No. 15-446, resolved a years-long controversy over whether the PTAB should be required to employ the more restrictive "ordinary meaning" standard articulated in Phillips v. AWH Corp., 415 F. 3d 1303 (Fed. Cir. 2005). The Phillips standard is used in U.S. District Court litigation and requires consideration of other intrinsic and extrinsic evidence, namely the prosecution history (including estoppels), expert and inventor testimony, dictionaries and treatises. The Phillips standard also requires that patent claims be construed to uphold their validity where possible. Because the PTAB considers only patent validity and not infringement, adoption of this standard would have dealt a tremendous advantage to patent owners, who would then tailor their claims constructions toward a later finding of infringement.
The "broadest reasonable construction" standard has been used by the U.S. Patent and Trademark Office for decades for patent examinations, reexaminations, reissues and appeals. Use of this standard in AIA trials has nevertheless been controversial because of the high numbers of patents being invalidated by the PTAB. In recent years, the PTAB has granted about 67 percent of petitions seeking institution of AIA trials. Once a trial was instituted, about 82% of the patent claims that proceeded through the final stages of trial (without amendment or settlement) have been declared invalid. The June 20, 2016, Decision implies that this trend will continue. The Court also held that the PTAB's decision to institute an AIA trial is not appealable.
The Court's Decision will necessarily continue the current emphasis on challenging patent validity before the PTAB. Petitioners will continue to find the reception more conducive to invalidation before the PTAB than in the District Courts. Other advantages of AIA trials compared to District Courts include a) substantially less expense, b) faster track to final decision, c) trial before trained patent judges, and d) no presumption of patent validity. We have extensive experience in prosecuting and defending AIA trials before the PTAB and invite you to contact us for further information.
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