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IP Alert: Federal Circuit Upholds Broadest Reasonable Interpretation in IPRs

July 13, 2015

On appeal from the Patent Trial Appeal Board’s (PTAB) finding of obviousness on three claims in U.S. Patent No. 6,778,074 in No. IPR2012-00001, a panel of the U.S. Court of Appeals for the Federal Circuit upheld the PTAB’s practice of applying the broadest reasonable interpretation (BRI) standard used in claim construction for matters before the PTAB, as opposed to the ordinary meaning standard used in district court.

Trial was granted in the underlying inter partes review (IPR) on a petition by Garmin International, Inc. and Garmin USA, Inc. (collectively, “Garmin”) against the ’074 patent owned by Cuozzo Speed Technologies, LLC (“Cuozzo”). The PTAB issued a final decision finding claims 10, 14, and 17 obvious. The PTAB also denied Cuozzo’s motion to amend.

The Cuozzo decision touches on a very significant issue. The BRI standard is applied during ex parte prosecution, where the examiner and the applicant can negotiate the scope of the claims and where the applicant has wide latitude to amend the claims. In contrast, in district court litigation, the prosecution of the application has concluded, and the claims are evaluated in the context of the patent and its prosecution history. The claims ordinarily cannot be amended in district court litigation. An inter partes review proceeding is somewhat of a hybrid in that the patent has issued, but the applicant has at least a theoretical opportunity to amend the claims. As such, there are sound arguments for either standard of review at the PTAB.

On July 8, 2015, in In re: Cuozzo Speed Technologies, LLC, a Federal Circuit panel upheld the application of the BRI standard. On the same day, in a sharply divided 6-5 decision, the Federal Circuit voted not to hear the case en banc. The case generated several impassioned opinions from the various judges of the court. The panel opinion also concluded that the court lacked jurisdiction to review the PTAB’s decision to institute the IPR under the applicable statute.

The ’074 patent relates to an interface that displays the vehicle’s current speed as well as the speed limit. In accordance with one embodiment, a red filter is superimposed on a white speedometer so that “speeds above the legal speed limit are displayed in red . . . while the legal speeds are displayed in white.” A global positioning system unit tracks the vehicle’s location and identifies the speed limit at that location, and the red filter automatically rotates into place when the speed limit changes, so that the speeds above the speed limit at that location are displayed in red. The ’074 patent also states that the speed limit indicator may be a colored liquid crystal display. In accordance with a claim at issue, the colored display is “integrally attached” to the speedometer. Dependent claims recite “[t]he speed limit indicator as defined . . . wherein said colored display is a colored filter.” And “the speed limit indicator as defined . . . wherein said display controller rotates said colored filter independently of said speedometer to continuously update the delineation of which speed readings are in violation of the speed limit.”

In its final decision, the PTAB concluded that “[a]n appropriate construction of the term ‘integrally attached’ . . . is central to the patentability analysis.” The PTAB applied “a broadest reasonable interpretation standard and construed the term ‘integrally attached’ as meaning ‘discrete parts physically joined together as a unit without each part losing its own separate identity.’”

The PTAB denied Cuozzo’s motion to amend the patent to claim “a speedometer integrally attached to [a] colored display, wherein the speedometer comprises a liquid crystal display, and wherein the colored display is the liquid crystal display.” The PTAB rejected the amendment because a substitute claim 21 lacked written description to support the proposed amendment, and because the substitute claims would, in the opinion of the PTAB, “improperly enlarge the scope of the claims as construed by the Board.”

The Federal Circuit found the PTAB’s institution decision unreviewable based on section 314(d)’s broad statement that “[t]he determination by the Director whether to institute inter partes review under this section shall be final and nonappealable,” and further relying on its prior decision in St. Jude Medical, Cardiology Division, Inc. v. Volcano Corp. (See our earlier alert relating to the St. Jude decision here.) In the St. Jude case, the Federal Circuit had concluded that section 314(d) precludes an interlocutory appeal of PTAB institution decisions. On this basis, the Federal Circuit concluded that section 314(d) prohibits review of decisions to institute IPRs even after a final decision.

In addition, Cuozzo contended that the PTAB erred in finding the claims obvious, arguing that the PTAB should not have applied the broadest reasonable interpretation standard. At the outset, the Federal Circuit observed with respect to this issue that no section of the patent statutes specifically provides that the broadest reasonable interpretation standard shall or shall not be used in PTAB proceedings, instead deferring to the rule-making authority granted to the Director under 35 U.S.C. § 316(a)(2), (a)(4). In addition, the Federal Circuit observed that the broadest reasonable interpretation standard has been applied by the U.S. Patent and Trademark Office and its predecessor for more than 100 years, a fact of which, the Federal Circuit notes, Congress, in enacting the America Invents Act, was well aware.

Cuozzo argued that judicial or congressional approval of the broadest reasonable interpretation standard for other proceedings is irrelevant because the earlier judicial decisions relied on the availability of amendment, which is limited under the America Invents Act in IPR proceedings. The Federal Circuit, however, concluded that this case does not involve any restriction on amendment opportunities materially distinguishing IPR proceedings from their predecessors, in that section 316(d)(1) provides that a patent owner may file one motion to amend, though it prohibits any enlargement of the scope of the claims. Thus, the Federal Circuit concluded that although the opportunity to amend is limited, it is nonetheless available.

The Federal Circuit went on to conclude that it found no error in the PTAB’s interpretation of patent owner’s claims, and it affirmed the PTAB’s opinion that the claims were obvious.

For more information on this decision, please contact Thomas F. Lebens, the author of this alert.


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