On June 20th, the U.S. Supreme Court handed down a decision in Cuozzo Speed Technologies, LLC v. Lee, which may not have wide-reaching implications on the U.S. patent landscape but will nonetheless be troubling to patent owners. In a unanimous 8-0 decision, the court upheld the ability of the Patent Trial and Appeal Board (PTAB) to apply the broadest reasonable interpretation (BRI) of patent claims during an inter partes review (IPR) proceeding. It also declared that PTAB’s use of the IPR system was not judicially reviewable.
“This is obviously a victory for some who challenge a patent’s validity in IPR proceedings since broadly construed claims are more vulnerable to attack than narrowly construed claims,” remarked Scott Daniels, partner at Westerman Hattori Daniels & Adrian, LLP. “Still, the great majority of IPR decisions do not turn on claim construction and for those cases Cuozzo simply makes no difference.”
“The Justices today showed awareness that constitutional challenges to IPRs are in play,” said Robert Greenspoon, founding member of Flachsbart & Greenspoon, LLC. This could have implications for appeals on a couple of court cases recently decided at the C.A.F.C., including Cooper v. Lee and MCM Portfolio LLC v. Hewlett-Packard Company, both of which question the constitutionality of review proceedings initiated after a patent has issued. The acknowledgment of a patent as “a valuable property right” in a dissent written by Justice Samuel Alito is at least some indication that the highest court in America wants to uphold patents as a property right. “The next thing to look for is whether Cooper v. Lee… now gets redistributed for conference before June 30th.”
Brad Olson of Barnes & Thornburg in Washington, DC believes that the Cuozzo opinion will place a higher burden on all patentees who intend to attempt to enforce their patent rights and find themselves defending that same patent in an inter partes review (IPR) procedure. Olson also noted that, while SCOTUS upheld the finality of PTAB’s decisions on instituting IPRs, “the majority had to take a light touch in finding that Mead/Chevron applies by its affirmance of the substantive rulemaking authority of the Patent Office in its use of the BRI standard to claims under review in an IPR,” Olson said. Of more importance to Olson was the majority’s belief that the ability of a patent owner to file a single motion to amend was sufficient to permit an otherwise examination-based claim standard to be used in a procedure intended as a substitute to U.S. district courts. “Going forward, it will be much more difficult for patentees to maintain meaningful patent claim scope in view of the application of the BRI standard in IPRs, CBMs, and likely in PGR proceedings,” he said. “Perhaps a legislative solution seems warranted to address the building tension between applying the BRI standard to patent claims in an IPR setting in direct contrast with the ‘plain and ordinary meaning’ of the Phillips standard applied to patent claims in the Article III courts and before the ITC.”
Meanwhile, Robert Stoll, former Commissioner for Patents at the USPTO and current partner with Drinker Biddle, was not surprised by the decision, but did say that he thinks at least one amendment should be ordinarily granted as a matter of right. “The Office should more liberally allow for amendments in IPRs as intended by the AIA,” Stoll explained. “The first amendment should usually be entered if it further limits the claims and doesn’t introduce 112 issues.”
“My take from the time of cert. was that, much like the Microsoft v. i4i case, the BRI aspect of the case was just about the Court weighing in on an issue that was long debated,” said Scott McKeown, partner at Oblon, McClelland, Maier & Neustadt, LLP. To McKeown, the major backdrop to the case was whether 40 years of patent reexamination or one hundred years in patent interference was too significant to sweep under the rug, a point which he said was brought up in an amicus brief filed by Unified Patents in this case. “I was pleased to see Justice Breyer walk down all of these issues in a like manner,” he said, noting that BRI is not a new subject in adversarial PTO proceedings. “Despite the best efforts of Cuozzo and his amici to advance their ‘alternative to litigation’ mantra, the Court shrugged that off as baseless,” McKeown said. “With this favorite attack platform gone, any significant modification to PTAB practice will have to come from Congress.” It is worth noting that McKeown has all along accurately predicted the outcome of the Cuozzo decision.
At the end of the day, the Court’s decision in Cuozzo v. Lee may have less to do with patent law than it does with administrative law. “I think that the Court’s opinion shows how dangerous it is to be blinded by patent law,” said Matt Levy, patent counsel at the Computer & Communication Industry Association (CCIA). He noted that more general areas of law, like administrative law, still apply to these cases. “In the end, as I predicted, the Court treated this as a fairly straightforward law case,” Levy added. “Even if one thinks the PTO should have used a different standard of claim construction, it’s very difficult to argue that they chose an unreasonable one.”
Tags: Cuozzo, Inter Partes Review, IPR, patent, patents, post grant proceedings, SCOTUS, Supreme Court
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