Cuozzo and Inter Partes Review
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The Supreme Court affirmed the USPTO Board's decision to invalidate claims in Cuozzo's speedometer patent. The Court held that the Board's decision to institute IPR of dependent claims not explicitly challenged in the petition was not appealable. The Court also upheld the Board's use of the "broadest reasonable interpretation" standard for construing claim terms during IPR, rather than the narrower standard used in district court. The decision increases the USPTO's power to reconsider and invalidate issued patents through the IPR process.
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Cuozzo and Inter Partes Review
- 1. Cuozzo and Inter Partes Review: are Patents Getting Easier to Invalidate? Thomas Lingard Law Clerk
- 2. US Patent No. 6,778,074 10. A speed limit indicator comprising: a global positioning system receiver; a display controller connected to said global positioning system receiver, wherein said display controller adjusts a colored display in response to signals from said global positioning system receiver to continuously update the delineation of which speed readings are in violation of the speed limit at a vehicle’s present location; and a speedometer integrally attached to said colored display. 14. The speed limit indicator as defined in claim 10, wherein said colored display is a colored filter.
- 3. US Patent No. 6,778,074 17. The speed limit indicator as defined in claim 14, 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 at a vehicle’s present location
- 4. US Patent No. 6,778,074 Filed: March 18, 2002 Issued: August 17, 2004 IPR Petition: Late 2012 Challenging, among other things, claim 17 as obvious over three patents IPR Initiated: January 9, 2013 Trial before PTAB limited to claims 10, 14, and 17 IPR Decision: November 13, 2013 Cuozzo’s motion to amend denied, claims 10, 14 and 17 cancelled Appeal to CAFC: July 28, 2015 Affirmed USPTO Board’s decision SCOTUS: June 20, 2016 Affirmed CAFC
- 5. Cuozzo’s arguments 1. The Board improperly instituted IPR of claims 10 and 14 because Garmin only explicitly challenged claim 17 – is this decision appealable? 2. The Board improperly applied the “broadest reasonable interpretation” standard rather than the “ordinary meaning” standard
- 6. Appeal of Decision to Institute IPR • 35 USC §314(a) states that IPR may be instituted if “there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition” • §314(d) states that “the determination. . . whether to institute an inter partes review. . . shall be final and nonappealable”
- 7. Appeal of Decision to Institute IPR • The Board initiated IPR of claims 10 and 14 because claim 17 depends from claim 14, and claim 14 depends from claim 10 • Cuozzo contends, under 35 USC §312(a)(3), that the petition must identify “with particularity, each claim challenged, the grounds on which the challenge to each claim is based, and the evidence that supports the grounds for the challenge”
- 8. Appeal of Decision to Institute IPR • The CAFC held the dependent claims “rise and fall together” 793 F.3d 1268, 1281 (CA Fed. 2015) • SCOTUS agreed (6-2), stating IPR reinforces the USPTO’s power ensure patent quality • A Board decision should not be undone by “some minor statutory technicality related to its preliminary decision”
- 9. Appeal of Decision to Institute IPR • The Administrative Procedure Act limits review to final agency decisions • Factors contributing overcoming the presumption of judicial review : – the text of the statute – the location of the statute in 35 USC – prior interpretation of similar statutes – congressional intent • This decision does not cover constitutional questions (due process)
- 10. Appeal of Decision to Institute IPR • Dissent – Strong presumption favoring judicial review – “when Congress intends to bar judicial review altogether, it typically employs . . . unambiguous and comprehensive” language. Lindahl v. Office of Personnel Management, 470 US 768, 779 (1985) – §314(d) implies that while the decision to initiate IPR may not be directly appealable, it may be reviewed on appeal of a final Board decision – Strikes a balance, proceedings may move forward, but must be accountable to the courts
- 11. Appeal of Decision to Institute IPR • Dissent – “Judicial review enforces the limits Congress has imposed on the [USPTO’s] power” – “A party may be dissatisfied with a final written decision in an inter partes review because the Patent Office lacked authority to institute the proceeding in the first place” – Allowing the Board to review claims not included in the petitioner’s appeal may cause prejudice to the patent owner – Acknowledges that Cuozzo probably could not have won because of the dependency of claim 17 – May have implications for post-grant review and CBM review
- 12. Standard of Review • 37 CFR §42.100(b) requires IPR to give a patent claim “its broadest reasonable construction in light of the specification” • The courts apply an “ordinary meaning . . . As understood by a person of skill in the art” Phillips v. AWH Corp., 415 F.3d 1303, 1315 (CA Fed. 2005) • There is no statutory provision declaring which to use
- 13. Standard of Review • IPR is similar to a court proceeding – discovery, including depositions and affidavits – presentation of factual evidence and expert opinions – oral argument – published opinion by PTAB • Cuozzo argues it must be a “surrogate for court proceedings” and therefore use the same interpretation standard
- 14. Standard of Review • SCOTUS says IPR is dissimilar from court – no standing required – challenger need not remain in proceeding – USPTO may intervene in subsequent judicial proceedings – burden of proof for IPR is “preponderance of the evidence”, rather than “clear and convincing” in district court • IPR is not the same, it is closer to a reexamination (despite the name change to ‘review’)
- 15. Standard of Review • Broadest reasonable interpretation standard protects the public by requiring precise claim language • 100 year old USPTO standard • Patent owner has a chance to amend the claim (multiple times in prosecution, at least once in IPR) • Inconsistent results are inherent in the system, so deal with it
- 16. Are Patents Getting Easier to Invalidate • It depends – Related claims are potentially subject to review – Broadest reasonable interpretation standard
Editor's Notes
- Introduce yourself
- Go through the patent – Pokémon joke? Note I only put up the claims that I was interested in
- This was the only claim that was brought before the PTAB with Garmin’s argument Garmin’s argument was a 103 obviousness argument based on three prior art patents
- Go quickly through the prosecution history
- Emphasize the 17-14-10 dependency, focusing again on the PTAB initiating review of 10 and 14 Go through standards briefly, saying we’ll focus on that later
- Go through the law Summarize that the board may institute 314(a) with a reasonable likelihood to prevail” Note the “at least 1” language – SCOTUS does not discuss 314(d) can be summarized as nonappealable – the language is clear. The sticky issue is whether nonappealable is valid, or, according to the dissent, does nonappealable only apply to interlocutory appeals
- Emphasize Cuozzo’s contention that 312(a)(3) means that the Board cannot discuss a claim not challenged “with particularity” I think this is a solid argument. The counter argument is that 17s dependency makes claims 14 and 10 challenged “with particularity.”
- Claims and their dependency “rise and fall together” is a pretty solid statement. A cancelled claim cancels all claims dependent on that claim. So, when analyzing a dependent claim, the question is: what part of the claim is invalid? The new matter, or the information that the dependent claim depends from? Ensuring patent quality means that the USPTO reserves the right to revisit and revise patents
- The APA already limits judicial review to final agency decisions The strong presumption of judicial review given by SCOTUS may be overcome by The text is clear, nonappealable (Ghosts of Scalia) 314 is located at the end of 35 USC, prior to appeal Similar statutes with nonappealability have been supported Congress could not have intended to hamstring the USPTO with this “minor technicality” The due process concerns may revolve largely around whether notice was given to the patent owners – the owner had a chance to review, so too bad
- The appeal of a final board decision may be a final decision on the merits Dissent agrees that the appeal cannot be a stay to the IPR proceedings, but that should not prevent issues surrounding instituting the IPR from being heard in court
- In a way, the final decision argument is similar to a jurisdictional argument; a court should not hear a case if it does not have jurisdiction The patent owner may be prejudiced against because he/she may not have a chance to respond to the aspects of the appeal It is interesting to note that the Dissent, more than the majority, discusses that Cuozzo wouldn’t have had its patent validated anyway, because of the dependencies There is a “three-tiered” frame of review. Post-grant – soon after. IPR – anytime. CBM – covered business methods. Refusing appeal of decisions to institute IPR may result in problems from a post-grant turning into an IPR.
- The main issue presented here is whether the USPTO had the authority to instruct the PTAB to use “broadest reasonable interpretation”
- The argument hinges on how the IPR acts: like a court, or like an administrative function
- For the patent owner, IPR may be scary if her patent is only thinly protected from prior art For the patent challenger, IPR may be an opportunity to knock a player out of the game However, I think this decision may be fairly narrow, and may not have many teeth, at least form the review standpoint This decision could probably be limited to the review of claims with a close relation to each other, such as a dependency. Would there be a due process issue if the PTAB independently decided to extend an IPR to a claim outside of a chain of dependency? Both the majority and the dissent make clear that a constitutional challenge to instituting IPR is not precluded by this decision. The broadest reasonable interpretation standard doesn’t really impact anything, because that is the standard against which patents are judged initially, so no big deal.