Patent Law Practice Center

Supreme Court will decide whether BRI or Phillips standard applies to IPR claims

During patent examination, pending patent claims are given the broadest reasonable interpretation (“BRI”) that is consistent with the specification, as would be understood by one of ordinary skill in the art. See Phillips v. AWH Corp., 415 F.3d 1303, 1316 (Fed. Cir. 2005).

The Patent Office applies the broadest reasonable interpretation in virtually all circumstances. It is, however, true that at least one situation where the Patent Office does not use broadest reasonable interpretation is when a reexamination of a patent is undertaken and reexamination will not be concluded until after the patent term has expired. The position of the USPTO is that, in this situation, a patent could not be changed because the term has expired; therefore, the only remaining “life” a patent has would be in litigation because the statute of limitations for a patent infringement action is six years. Thus, the USPTO applies the Phillips standard. (Further discussion of this advanced topic goes beyond the scope of this article, which is intended to be a primer on the broadest reasonable interpretation standard.)

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The patent legacy of Supreme Court Justice Antonin Scalia

On Saturday, February 13, 2016, Justice Antonin Scalia of the United States Supreme Court passed away in a hotel room in Texas. Justice Scalia is perhaps best known for his conservative philosophy and desire to strictly construe the Constitution, relying on the text of the document. Justice Scalia was also ardently opposed to the use of legislative history to interpret statutes, again preferring a strict textual construction.

With Justice Scalia’s passing, some have started to already wonder what his absence will mean for a variety of different cases and issues. With respect to intellectual property, not much will change (if anything) as the Supreme Court moves forward to consider a number of patent and other intellectual property cases this term and in future years. Intellectual property is not an area where the Court divides ideologically, so we do not generally see 5-4 splits as are seen in many other areas of law.

For example, the three recent patent eligibility cases that have thrown the industry into something of a tailspin were all unanimous decisions — Mayo Collaborative Services v. Prometheus Laboratories, Inc. (2012); Association for Molecular Pathology v. Myriad Genetics (2013); and Alice Corporation v. CLS Bank (2014). The Supreme Court also reached unanimous decisions in eBay, Inc. v. MercExchange, LLC (2006)(ruling that a victorious patent owner does not have an automatic right to a permanent injunction; rather, the court must consider the four-factor injunction test, despite the fact that a patent grants a supposedly absolute exclusionary right to the patentee); and KSR International v. Teleflex, Inc. (2007)(fundamentally changing the obviousness inquiry by ruling that teaching, suggestion and motivation is not the only rationale to combine references to support an obviousness rejection). (more…)

Supreme Court accepts Inter Partes Review Appeal

On Friday, January 15, 2016, the United States Supreme Court accepted the petitioner’s request to hear Cuozzo Speed Technologies v. Lee, a case that will now require the Court to address two questions about inter partes review (IPR) proceedings.

IPR proceedings were created by the America Invents Act (AIA), which was signed into law by President Barack Obama on September 16, 2011. IPR and the other two forms of post-grant challenge to issued patents — Post Grant Review (PGR) and Covered Business Method (CBM) Review — did not become available as a procedure to challenge patents until September 16, 2012. Thus, these proceedings are quite new and Cuozzo will be the first opportunity for the Supreme Court to weigh in on these controversial administrative proceedings.

According to the statute, “[a] person who is not the owner of a patent may file a petition to institute an inter partes review of the patent.” 35 U.S.C. 311(a). Significantly for this appeal, the statute also says: “The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” 35 U.S.C.314(d). Additionally, although the statute is silent as to the proper claim construction standard to use in post grant proceedings, the United States Patent and Trademark Office (USPTO) has decided to apply the familiar standard used elsewhere throughout the Office, which is the broadest reasonable interpretation (BRI) rather than the so-called “Phillips standard” that is used in district court litigation and narrowly construes claims in an already issued patent. (more…)

SCOTUS hears enhanced damages oral arguments February 23, 2016

On Tuesday, February 23, 2016, the United States Supreme Court will hear oral arguments in Halo Electronics, Inc. v. Pulse Electronics, Inc. (14-1513) and Stryker Corporation v. Zimmer, Inc. (14-1520), which have been consolidated for appeal. These two cases will force the Court to dive into one of the most thorny patent litigation issues – the issue of enhanced damages for willful patent infringement.

The statute in question says very little that is relevant, merely saying that the district court judge “may increase the damages up to three times the amount found or assessed.” 35 U.S.C. § 284. Simple and straightforward enough, but over the years the United States Court of Appeals for the Federal Circuit has issued rulings that make it virtually impossible for a victorious patent owner to ever receive enhanced damages. The rigid structure of the enhanced damages test has effectively removed the permissive and discretionary language of the statute, which just says that the district court judge “may increase the damages.”

In the Supreme Court’s recent decisions in Highmark Inc. v. Allcare Health Management Systems, Inc., 134 S. Ct. 1744 (2014) and Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014) the Court, interpreting 35 U.S.C. § 285, found that there was no textual support in the statute to impose an onerous, rigid test for the awarding of attorneys’ fees to a prevailing party in a patent infringement lawsuit. Most notably, the Supreme Court explained to the Federal Circuit that they misinterpreted a key ruling of the Supreme Court when they created the test that would result in attorneys’ fees never being award. That same exact misinterpretation is at the heart of Federal Circuit case law relating to the awarding of enhanced damages to a victorious patent owner.

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Supreme Court Decides Commil USA v. Cisco Systems

On May 26, 2015, the United States Supreme Court decided Commil USA, LLC v. Cisco Systems, Inc., a case that dealt with inducement to infringe. More specifically, the issue considered by the Supreme Court was whether a good faith belief of patent invalidity is a defense to a claim of induced infringement. In a 6-2 decision written by Justice Kennedy, the Supreme Court ruled that belief of invalidity is not a defense to a claim of induced infringement.

Justice Kennedy started his substantive analysis with a discussion of direct infringement, which was joined by Justices Ginsburg, Alito, Sotomayor and Kagan. Justice Thomas, who joined in the majority with respect to Parts II-B and III, did not join the majority relative to the background discussion. Justice Thomas did not write a separate opinion so we can’t know for sure, but it seems  that Thomas chose not to join parts of the decision that were historical in nature (Part I) and the part of the decision where the majority discussed substantive legal issues not specifically germane to the issue presented.

Moving beyond direct infringement being a strict liability offense, and inducement requiring direct infringement, Justice Kennedy ultimately reached the question presented, namely whether a good faith belief of patent invalidity is a defense to a claim of induced infringement. Kennedy explained: “[B]ecause infringement and validity are separate issues under the Act, belief regarding validity cannot negate the scienter required under §271(b).” Kennedy concluded: “Were this Court to interpret §271(b) as permitting a defense of belief in invalidity, it would conflate the issues of infringement and validity.”

Kennedy seemed sympathetic to those who argue that an invalid patent cannot be infringed, which seems to make common sense. But he went on to explain that logic and semantics sometimes must give way to interpretation of an otherwise clear statutory framework:

[T]he questions courts must address when interpreting and implementing the statutory framework require a determination of the procedures and sequences that the parties must follow to prove the act of wrongful inducement and any related issues of patent validity. “Validity and infringement are distinct issues, bearing different burdens, different presumptions, and different evidence.” 720 F. 3d, at 1374 (opinion of Newman, J.). To be sure, if at the end of the day, an act that would have been an infringement or an inducement to infringe pertains to a patent that is shown to be invalid, there is no patent to be infringed. But the allocation of the burden to persuade on these questions, and the timing for the presentations of the relevant arguments, are concerns of central relevance to the orderly administration of the patent system.

In addition to the statutory language that Kennedy found clearly on point, he explained that there were also several practical reasons why a good faith defense should not be allowed. For example, if someone believes that a patent is invalid, they should file a declaratory judgment action (assuming they have standing) or could file a petition for inter partes review with the Patent Trial and Appeal Board (PTAB).

Kennedy also specifically explained that the Court is mindful of abusive litigation tactics employed by so-called patent trolls. Raising the issue seemed wholly out of place and a bit odd given that Kennedy also quickly explained that in this case the parties raised no issue of frivolity. The issue of patent trolls must be weighing on the Court very heavily for it to be inserted by Kennedy in a decision where no one was alleged to have been a patent troll.