Ahead of Cuozzo Decision, Two Decisions Discuss Broadest Reasonable Interpretation Standard in IPRs: Fed. Cir. | Practical Law

Ahead of Cuozzo Decision, Two Decisions Discuss Broadest Reasonable Interpretation Standard in IPRs: Fed. Cir. | Practical Law

In a pair of related cases, both captioned PPC Broadband, Inc. v. Corning Optical Communications RF, LLC, the US Court of Appeals for the Federal Circuit discussed the application of the broadest reasonable interpretation claim construction standard in inter partes review proceedings, ahead of the US Supreme Court's upcoming decision in In re Cuozzo Speed Technologies, LLC reviewing the use of that standard in IPRs.

Ahead of Cuozzo Decision, Two Decisions Discuss Broadest Reasonable Interpretation Standard in IPRs: Fed. Cir.

by Practical Law Intellectual Property & Technology
Published on 23 Feb 2016 • USA (National/Federal)
In a pair of related cases, both captioned PPC Broadband, Inc. v. Corning Optical Communications RF, LLC, the US Court of Appeals for the Federal Circuit discussed the application of the broadest reasonable interpretation claim construction standard in inter partes review proceedings, ahead of the US Supreme Court's upcoming decision in In re Cuozzo Speed Technologies, LLC reviewing the use of that standard in IPRs.
On February 22, 2016, in a pair of related appeals both captioned PPC Broadband, Inc. v. Corning Optical Communications RF, LLC, the US Court of Appeals for the Federal Circuit issued two opinions discussing the use of the broadest reasonable interpretation claim construction standard in inter partes review (IPR) proceedings.
In the first proceeding (PPC Broadband I) ( (Fed. Cir. Feb. 22, 2016)), the Federal Circuit confirmed the application of the broadest reasonable interpretation (BRI) standard in IPRs, but discussed at length important differences between IPRs and other patent examination proceedings where the BRI standard applies. The Federal Circuit also emphasized the similarities between IPR proceedings and traditional district court cases, in which courts apply the more restrictive standard articulated in Phillips v. AWH Corp.(415 F.3d 1303 (Fed. Cir. 2005)) .
Specifically, the Federal Circuit noted that:
  • The USPTO has historically used the BRI standard to help clarify the scope of claims during prosecution—where the claims can be freely amended to subsequently modify the scope—and not to determine the exact claim scope in reference to the specification.
  • In contrast, in district court cases where the exact scope of the claims is central to the dispute, courts have sought out the "correct" construction under Phillips. The court also discussed that IPR proceedings are notably similar to district court proceedings because they are:
    • adversarial in nature;
    • permit discovery;
    • ultimately result in a trial; and
    • move quickly, absent good cause.
  • The USPTO does not apply the BRI standard in reexaminations of expired claims, which cannot be amended, similar to the limitation on amendments present in IPR proceedings, where the BRI standard does apply.
The PPC Broadband I court commented that these were "important" differences, but noted that the USPTO still applies the older BRI standard in IPRs regardless.
The court then reviewed the Patent Trial and Appeal Board's (PTAB) claim construction decision under both the Phillips and BRI standards, holding that the PTAB's construction would not be correct under Phillips. The court noted further that the choice of claim construction standards was case dispositive. In particular, the court discussed that:
  • Under Phillips, the specification gave clear guidance that a restrictive definition of the terms at issue should have been adopted.
  • Under the BRI standard, the broader ordinary meaning of the terms at issue resulted in a reasonable construction that was far broader than that allowed by the totality of the specification, even if that construction found some support in the specification.
The Federal Circuit affirmed the PTAB's construction despite the fact it was broader than the one supported by the specification, since it was consistent with the required BRI standard. The Federal Circuit specifically noted, however, that this was not the "correct" construction under Phillips.
The Federal Circuit also addressed the PTAB's invalidity decision relating to a second set of other, unconstrued claims that explicitly included the same restrictions that the PTAB rejected in construing the first set of claims. The Federal Circuit:
  • Held that the PTAB failed to make any fact findings relating to those limitations when it invalidated the patents.
  • Vacated and remanded for further proceedings on those claims.
Accordingly, had the PTAB applied the Phillips standard to the first set of claims and incorporated the same restriction as was explicit in the second set, all of the claims at issue would have been sent back on remand.
Finally, the Federal Circuit briefly discussed the PTAB's reliance on certain objective considerations of non-obviousness. While the court affirmed the PTAB's consideration of evidence relating to long-felt need and failed attempts, it found that the PTAB erred when it discounted the success of PPC's commercial embodiment. Specifically, the court found that:
  • The PTAB erroneously ignored undisputed evidence that PPC sold a commercial embodiment that practiced all of the elements of the claims at issue.
  • The PTAB erroneously ignored undisputed evidence that the embodiment was commercially successful.
  • The PTAB failed to apply the required presumption that the commercial embodiment was successful due to the claimed invention—a presumption which applies in contested proceedings such as IPRs.
The court thus left the PTAB to reconsider the commercial success findings in light of its remand on the remaining claims.
In the second proceeding (PPC Broadband II) ( (Fed. Cir. Feb. 22, 2016)), the Federal Circuit again discussed the use of the BRI standard in IPRs. The court:
  • Stated that the appeal was a close and difficult case only because the PTAB was required to apply the BRI standard.
  • Compared the difficulty of deciding the case under the BRI standard to the straightforward outcome that would result from applying the Phillips standard.
  • Again pointed out the similarities between IPRs and district court proceedings.
  • Additionally noted that the use of different standards in IPRs and district court proceedings raised the strong possibility that the two forums would issue inconsistent judgments in co-pending cases involving identical parties and patents.
On the merits, the Federal Circuit found that the construction adopted by the PTAB was not reasonable under the BRI standard. The court held that:
  • The PTAB erred when it arrived at its construction by simply selecting the broadest dictionary definition of the term at issue from those offered by the parties, rather than the broadest definition consistent with the specification.
  • PPC offered a reasonable construction, even though the construction excluded multiple embodiments. The court specifically held that:
    • a construction that excluded multiple embodiments could still be the broadest reasonable interpretation, depending on what guidance the specification gave; and
    • the broadest reasonable construction is not always the one that covers the most embodiments.
Put together, PPC Broadband I & II repeat and expand on the criticism made by the dissenting judges in In re Cuozzo Speed Technologies, LLC ( (Fed. Cir. Jul. 8, 2015)) (Cuozzo) regarding the use of the BRI standard in IPRs, this time in a majority decision of the Federal Circuit.
Given that the Supreme Court has granted Cuozzo Speed Technologies' petition in the Cuozzo case in order to consider what claim construction standard should apply in IPRs, PPC Broadband I & II represent a signal from the deciding panel (Judges Moore, O'Malley, and Wallach) to the Supreme Court that:
  • The current use of the BRI standard in IPRs results in constructions that are broader than the "correct" constructions produced by Philips, despite the fact that IPR proceedings share much in common with proceedings that reject the use of the BRI standard.
  • The use of BRI constructions will often determine the outcome of an IPR, and potentially produce inconsistent results across forums.
  • The use of BRI constructions is likely to lead to more uncertainty and closer cases in IPRs.
Additionally, in PPC Broadband II, the Federal Circuit demonstrated a willingness to adopt more limited constructions under the BRI standard by referencing the specification as a touchstone to determine reasonableness. This suggests that counsel practicing in front of the PTAB should strongly consider claim construction arguments that remain grounded in the specification, even if counsel is seeking a broad construction under the BRI standard. Doing so will strengthen counsel's position for any appeal in light of PPC Broadband II.
For more information on the Supreme Court's review of the Cuozzo decision and use of the BRI standard in IPRs, see Legal Update, The Supreme Court Will Address Key Issues Concerning the PTAB. Let Practical Law Help You Get Up to Speed on This Important IP Topic.