Federal Circuit Upholds First AIA Inter Partes Review | Practical Law

Federal Circuit Upholds First AIA Inter Partes Review | Practical Law

In In re Cuozzo Speed Technologies, LLC, the US Court of Appeals for the Federal Circuit upheld the first inter partes review (IPR) under the Leahy-Smith America Invents Act (AIA).  Notably, the court held that it lacked jurisdiction to review the US Patent Trial and Appeal Board's (PTAB) decision to institute IPR even after a final written decision, and that the PTAB properly used and applied the broadest reasonable interpretation claim construction standard in ruling that the challenged claims were unpatentable.

Federal Circuit Upholds First AIA Inter Partes Review

Practical Law Legal Update 9-599-3090 (Approx. 4 pages)

Federal Circuit Upholds First AIA Inter Partes Review

by Practical Law Intellectual Property & Technology
Law stated as of 06 Feb 2015 • USA (National/Federal)
In In re Cuozzo Speed Technologies, LLC, the US Court of Appeals for the Federal Circuit upheld the first inter partes review (IPR) under the Leahy-Smith America Invents Act (AIA). Notably, the court held that it lacked jurisdiction to review the US Patent Trial and Appeal Board's (PTAB) decision to institute IPR even after a final written decision, and that the PTAB properly used and applied the broadest reasonable interpretation claim construction standard in ruling that the challenged claims were unpatentable.
On February 4, 2015, the US Court of Appeals for the Federal Circuit issued an opinion in In re Cuozzo Speed Technologies, LLC affirming the US Patent Trial and Appeal Board's (PTAB) final written decision in the first inter partes review (IPR) under the America Invents Act (AIA) (No. 2014-1301, (Fed. Cir. Feb. 4, 2015)). Notably, in this case of first impression, a split panel of the court held that:
  • The Federal Circuit lacks jurisdiction to review the USPTO's decision to institute IPR. The court reasoned that 35 U.S.C. § 314(d) prohibits judicial review of a PTAB decision to institute IPR even after a final written decision has issued.
  • During the IPR the PTAB properly applied the broadest reasonable interpretation (BRI) claim construction standard, which differs from the standard used by district courts under Phillips v. AWH Corp (.415 F.3d 1303 (Fed. Cir. 2005)).
  • The challenged claims were unpatentable as obvious under 35 U.S.C. §103 based on the court's de novo affirmance of the PTAB's claim construction.
The IPR proceeding began when Garmin International, Inc. and Garmin USA, Inc., (Garmin) petitioned the PTAB for review of Cuozzo's patent, which is directed to a speed limit indicator and method for displaying speed and the relevant speed limit for use in vehicles. Specifically, the patent calls for a colored display to indicate to the driver whether the current speed is within the legal limit.
During IPR, the PTAB applied the BRI standard to construe the disputed term "integrally attached." Ultimately, the PTAB issued a final written decision finding that the claims at issue were invalid as obvious in view of the prior art and denied Cuozzo's motion to amend the claims. For more information on the PTAB's final written decision, see Legal Update , PTAB's First Inter Partes Review Holds Cuozzo's Patent Claims Unpatentable as Obvious over Prior Art.
On appeal, the Federal Circuit first addressed the threshold question of whether it had the authority to review a determination to institute IPR under Section 314(d) of the Patent Act. In reaching the conclusion that the court lacked the jurisdiction to review the PTAB's institution decision, the Federal Circuit expanded upon its holding in St. Jude Medical, Cardiology Division, Inc. v. Volcano Corp., which reasoned that Section 314(d) precludes interlocutory review of decisions to institute IPR (749 F.3d 1373 (Fed. Cir. 2014)). Here, the Federal Circuit further reasoned that Section 314(d) prohibits review of IPR institution decisions even after a final decision, based on the following factors:
  • On its face, Section 314(d) is written to exclude all review of the decision whether to institute review.
  • The precedent of In re Hiniker Company, where the Federal Circuit held that even a flawed decision to institute reexamination under 35 U.S.C. § 303 was not a basis to set aside a final decision (150 F.3d 1362 (Fed. Cir. 1998)).
  • Although mandamus may be available to challenge the PTAB's decision to grant a petition to institute IPR after a final written decision, it is limited to situations where the PTAB has clearly exceeded his authority, which was not the case here.
The Federal Circuit then rejected Cuozzo's claim that the PTAB improperly applied the BRI claim construction standard, reasoning that:
  • While the AIA does not explicitly address whether the BRI standard is appropriate in IPR proceedings, it gives the USPTO rulemaking authority to prescribe regulations governing IPR. The USPTO therefore had authority to promulgate 37 C.F.R. § 42.100(b), which sets the BRI standard for IPR proceedings.
  • Congress's silence in adopting a different standard while knowing that the BRI standard is the prevailing standard for any proceeding or examination before the USPTO is tantamount to an implicit adoption of the standard.
  • The BRI standard is appropriate because a patent owner may amend the challenged claims in an IPR, unlike during district court litigation, even if amendment is limited to particular circumstances.
Turning to the merits, the court reviewed the PTAB's claim construction de novo under the Supreme Court's Teva Pharmaceuticals U.S.A. v. Sandoz Inc. decision because there was no issue as to extrinsic evidence. The court affirmed the PTAB's:
  • Construction of "integrally attached" based on the patent's specification and file history.
  • Final determination that the patent claims were invalid as obvious.
  • Denial of Cuozzo's motion to amend the claims because the proposed amendments would have impermissibly expanded the claim scope and lacked support in the patent's written description.
Judge Newman dissented, contending primarily that the majority opinion was contrary to the AIA's legislative purpose, and noting in particular that:
  • Congress intended PTAB proceedings to be a surrogate for district court litigation, and therefore the same legal standards, including the claim construction standard, should apply across the two forums.
  • The purpose of the BRI standard is to encourage patent applicants to draft and amend their claims in a way that avoids the prior art. Because claim amendment is highly limited in IPR, unlike in other proceedings like reexamination where a patent applicant may freely amend its claims, the BRI standard is not appropriate in IPR.
  • The majority's ruling the 35 U.S.C. § 314(d) bars review of all institution decisions, even after the PTAB issues a final written decision, impedes full judicial review of the PTAB's decision and negates the AIA's purpose of achieving consistent determination of patent validity through IPR.