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IP Alert: U.S. Supreme Court Affirms Cuozzo

June 21, 2016

Yesterday, in Cuozzo Speed Technologies, LLC v. Lee, the U.S. Supreme Court, on writ of certiorari to the U.S. Court of Appeals for the Federal Circuit, affirmed the Federal Circuit’s decision that it lacked jurisdiction to review the Patent Trial and Appeal Board’s (PTAB’s) decision to institute the inter partes review (IPR) IPR2012-000001 and affirmed its filing of “no error” with the PTAB’s claim construction under the broadest reasonable interpretation (BRI) standard.

Justice Breyer wrote for a unanimous Court on the question of whether the PTAB’s use of the BRI claim construction standard was proper and for a 6–2 majority on the jurisdictional question.

With regard to the latter, the Court agreed with the Federal Circuit that Cuozzo’s contention that the U. S. Patent and Trademark Office (USPTO) unlawfully instituted the IPR is not appealable, relying heavily on the plain language of § 314(d). Cuozzo argued that the petitioner's failure to plead “with particularity” required the petitioner to have specifically said that claims 10 and 14 are also obvious, however, the Court found that § 314(d)’s “no appeal” provision’s language forbids an appeal that attacks the PTAB’s determination whether to institute.

And with regard to the former, the Court relied on Chevron U.S.A., Inc. in upholding the Federal Circuit's affirmation of the PTAB's use of the BRI standard, basing their deference on the statute's "gap" in not providing unambiguous direction to the agency to use one standard or another. The Court further relied on the statute's express authorization for the USPTO to issue rules.

In addition, and arguably unnecessarily, the Court went on to explain what it perceived to be several benefits to the BRI standard, stating that "construing a patent claim according to its broadest reasonable construction helps to protect the public," and concluding that "[a] reasonable, yet unlawfully broad claim might discourage the use of the invention by a member of the public." In addition, the Court found that the BRI standard "helps ensure precision while avoiding overly broad claims, and thereby helps prevent a patent from tying up too much knowledge, while helping members of the public draw useful information from the disclosed invention and better understand the lawful limits of the claim."

The Court justified the BRI standard as fair, given that the “patent owner may, at least once in the process, make a motion to do just what he would do in the examination process, namely, amend or narrow the claim. . . . This opportunity to amend, together with the fact that the original application process may have presented several additional opportunities to amend the patent, means that use of the broadest reasonable construction standard is, as a general matter, not unfair to the patent owner in any obvious way."

Of potential note is the fact that these perceived benefits to the BRI standard, at least to some degree, may apply to claim construction in proceedings before the courts, which presently apply the "ordinary meaning" standard set forth in Phillips v. AWH Corp. instead of the BRI. 

In dissent, Justices Alito and Sotomayor disagreed with the majority on the issue of nonappealability, but agreed with the majority with respect to the BRI standard. Specifically, the dissent would have found that institution decisions are subject to review in an appeal from the PTAB's final written decision.

For more information on this ruling, please contact Fitch Even partner Thomas F. Lebens, author of this alert.

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