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U.S. Supreme Court to Review Patent Claim Construction Standards

Posted on Feb 24, 2016 in Articles

This article originally appeared in The Legal Intelligencer on February 24, 2016.

The U.S. Supreme Court is soon set to decide the standard that should be used when the U.S. Patent and Trademark Office reassesses the validity of an issued patent. The case, Cuozzo Speed Technologies LLC v. Lee, No. 15-446, may play a significant role in determining whether an accused patent infringer can defend itself by arguing that the asserted patent should have never been granted in the first place.

Patents issue after the U.S. Patent and Trademark Office (PTO) subjects patent applications to an examination process to determine whether an invention is original (in PTO parlance, novel and non-obvious). As such, an extensive database search is conducted to determine whether prior patents (or other publications) disclose or make obvious the invention for which patent protection is sought. This investigation is not infallible and accused patent infringers often fight back by arguing that the PTO’s examination of the patent being asserted against them was flawed. In many cases, the accused infringer will provide additional patents or publications considered to be better than the ones relied upon by the PTO in the original examination process.

On Sept. 16, 2011, President Obama signed into law the America Invents Act. This landmark legislation created post-grant proceedings that enable a party to dispute the validity of an issued patent. Post-grant proceedings, which are handled by the PTO, are substantially cheaper than arguing patent invalidity in federal court.

A common way of alleging invalidity is to show that a prior art reference (a prior patent or printed publication) was not considered (or not properly considered) by the PTO in determining patentability. The party requesting the post-grant proceeding submits the prior art reference(s), and, if approved, the PTO considers the reference(s) and then reassess whether the patent is valid.

The key to determining whether a patent is valid usually lies in the claims at the end of the patent that define the scope of the patented invention. The prior art must be compared to the patent claims to determine whether the claims are invalid. Before performing this comparison, however, it is necessary to understand the meaning of the claims through a process called claim construction. How claim construction is performed in post-grant proceedings lies at the crux of what will be decided by the U.S. Supreme Court.

Claim construction—how claims are interpreted and what is their scope—has (almost) always been done in two distinct ways, depending upon whether the decision-maker is the PTO or the federal courts. Historically, there have been important reasons for this distinction.

When the PTO receives a new patent application, and the PTO examiner is determining whether a patent should be granted, the patent claims are subjected to a standard called “broadest reasonable interpretation,” or BRI. “No better method of construing claims is ­perceived than to give them in each case the broadest interpretation which they will support without straining the language in which they are couched,” as in Podlesak v. McInnerney, 1906 Dec. Comm’r Pat. 265. “Giving claims their broadest reasonable construction serves the public interest by reducing the possibility that claims finally allowed will be given broader scope than is justified,” according to In re American Academy of Science Tech Center, 367 F.3d 1359 (Fed. Cir. 2004). Federal courts, by contrast, subject claims to interpretation based on the Phillips standard. Phillips requires that claims be interpreted based on “the meaning that [a] term would have to a person of ordinary skill in the art in question at the time of the invention,” as in Phillips v. AWH, 415 F.3d 1303 (Fed. Cir. 2005).

The America Invents Act that was signed into law in 2011 does not specify whether the PTO should be using the BRI ­standard or the Phillips standard for post-grant review. Currently, the PTO is using BRI for post-grant proceedings. In Cuozzo, the petitioner is arguing before the U.S. Supreme Court that the PTO should be using the Phillips standard for post-grant review, and not BRI. Certiorari has been granted and briefs are now due.

Cuozzo Speed Technologies (for that matter, any patent owner) has a strong interest in wanting the PTO to use the Phillips standard. The BRI standard gives claims a broader (wider) interpretation. The broader the interpretation of a claim, the easier it is to reject a claim as being unpatentable over prior art. In other words, it is certainly possible that a prior art reference can render a patent invalid under the BRI standard, but not under the Phillips standard. Any patent owner seeking to preserve validity will want a narrow ­interpretation of the claims.

At the U.S. Court of Appeals for the Federal Circuit, the majority in Cuozzo concluded that BRI was the correct standard for the PTO to use in a post-grant proceeding. The reasons given by the court are as follows:

  • The PTO has applied the BRI ­standard to every PTO proceeding relating to unexpired patents and it has done so for more than 100 years.
  • Nothing in the America Invents Act ­indicates that a standard other than BRI is to be used by the PTO.
  • Congress was well aware that the PTO was using the BRI standard when the AIA was enacted. “It can therefore be inferred that Congress impliedly approved the existing rule of adopting the broadest reasonable construction,” the court ruled.

The dissent, however, argued that Phillips was the correct standard to be applied by the PTO in post-grant proceedings. The reasons given by the dissent are as follows:

  • Patent claims are “construed the same way for validity as for infringement” and there is neither statute nor precedent that “authorizes or even tolerates broader construction for validity than for infringement.” The PTO is assessing validity and therefore the Phillips standard should be used.
  • The BRI standard is important to the process of obtaining a patent (i.e., before a patent issues) because it “serves the public interest by reducing the possibility that claims, finally allowed, will be given broader scope than is justified” (citing In re Yamamoto, 740 F. 2d 1596 (Fed. Cir. 1984)). The BRI standard helps the applicant and the PTO to define claim scope during patent prosecution. Once a patent issues, however, neither validity nor infringement is based on the BRI standard.
  • “An applicant’s ability to amend his claims to avoid cited prior art distinguishes proceedings before the PTO from ­proceedings in federal district courts on issued patents. When an application is pending in the PTO, the applicant has the ability to correct errors in claim language and adjust the scope of claim protection as needed. This opportunity is not available in an infringement action in district court,” citing Yamamoto. In post-grant proceedings, patent owners’ ability to amend claims is severely limited, and hence the BRI standard should not apply. To clarify, patent owners in post-grant proceedings do not have a right to amend their claims—the PTO must decide if any amendments will be permitted.
  • During re-examination of expired patents, examiners are instructed by the Manual of Patent Examining Procedure (MPEP) to not use the BRI standard “since the expired claims are not subject to amendment.” It is argued that the same rationale should apply to post-grant proceedings since owners of issued patents also do not have a right to amend their patent claims.

If the PTO starts using the Phillips standard in post-grant proceedings instead of BRI, patent claims will be subject to Phillips‘ more limiting interpretation, which in turn will make it harder to find invalidating prior art. The U.S. Supreme Court decision in this case may thus be one of the more important patent-related ­decisions of 2016.

– by Lawrence Ashery


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