The Supreme Court will decide what standard the Patent Trial and Appeals Board (“PTAB”) should use to construe claims during Inter Partes Review (“IPR”). Cuozzo Speed Techs., LLC v. Lee. The PTAB currently construes claims using the “broadest reasonable interpretation” standard, rather than the “ordinary meaning” standard used in District Court litigation.
In July 2015, a divided panel of the Federal Circuit upheld the broadest reasonable interpretation standard. In re Cuozzo Speed Techs., LLC, 793 F.3d 1268 (Fed. Cir. 2015). The panel majority first found that Congress “implicitly approved” the broadest reasonable interpretation standard because the PTO has applied the standard for more than 100 years, and Congress was “well aware” of this history when it enacted the America Invents Act (“AIA”). Id. at 1277-78.
The majority further held that even if Congress had not approved of the standard, the AIA gave the PTO the authority to prescribe regulations, and its adoption of the broadest reasonable interpretation standard was consistent with the statute. Following the Chevron two-step analysis, the Federal Circuit concluded that the broadest reasonable interpretation standard survived step one because congress was silent regarding how the PTO should construe the claim. Id. at 1279. Next, the court found that the standard survives Chevron’s second step by presenting a reasonable application of the statute. Id. The court explained that the “adopted standard is reasonable not just because of its pedigree but for context-specific reasons” including policy rationales and the fact that using the standard allows an IPR to be consolidated with other proceedings before the PTO. Id.
Judge Newman dissented, arguing that the broadest reasonable interpretation standard impedes the statutory purpose of the AIA. She wrote that the standard could not be correct because IPRs were intended as a “far-reaching surrogate for district court validity determinations” designed to reduce the cost and delay of obtaining a validity determination, and this “legislative purpose fails when the PTO tribunal uses a different standard of claim construction, a standard that does not require the correct claim construction.” Id. at 1286.
Now the Supreme Court, having granted certiorari, will resolve the dispute. The high rate at which the PTAB has found patent claims invalid during IPR proceedings has been frequently publicized and discussed. If the Supreme Court requires the PTAB to use the “ordinary meaning” standard advocated by Judge Newman, more patents may survive IPR. This could make IPR proceedings slightly less attractive to patent challengers – although the comparatively inexpensive cost and more favorable standard for proving a patent is invalid will likely cause IPRs to maintain much of their popularity. Regardless, the Supreme Court’s decision in this case will be important for patent challengers to consider when deciding whether to file an IPR or save their invalidity fight for the District Court.