On February 4, 2015, in In re Cuozzo Speed Technologies, LLC the Federal Circuit decided the first appeal from the Patent Trial and Appeal Board (PTAB) regarding an Inter Partes Review (IPR). Inter Partes Review is a United States Patent and Trademark Office (USPTO) proceeding created by the America Invents Act (AIA) meant to offer a more expeditious and less expensive alternative to district court litigations on validity.
In re Cuozzo Speed Technologies, LLC was an appeal from the first IPR ever filed. The IPR was filed in late 2012 by Garmin International, Inc. to challenge Cuozzo’s patent relating to GPS units that can indicate speed limits at a user’s location. The PTAB issued its first ever IPR decision in 2013 invalidating the patent claims as obvious. Cuozzo challenged the PTAB’s decision and the Federal Circuit affirmed in a 2-1 decision.
The CAFC’s analysis focused on two issues: First, the Court considered whether it could review the PTAB’s decision to institute an IPR proceeding. The Court decided that it could not review such a decision because the statute barred review. In particular, the Court pointed to AIA language stating the PTAB’s decision to institute an IPR shall be “final and nonappealable.”
Second, and more significantly, the Court decided that the PTAB’s use of the broadest reasonable interpretation standard for claim construction during the proceeding is proper. The Court cited legislative history for adopting this standard, stating that because the USPTO has used this standard in other proceedings for decades, Congress implied intent to use it in AIA reviews as well. Cuozzo attempted to distinguish AIA reviews from other USPTO proceedings and argued that the broadest reasonable interpretation standard for construing claims in AIA reviews was not proper because there is limited ability to amend claims during these reviews. Specifically, during an IPR the patent owner is limited to a single amendment that does not broaden the claims and addresses the ground of unpatentability. The Court, however, was not convinced and stated that the limited amendment opportunities in IPR proceedings is not a material difference. The Court therefore affirmed that the broadest reasonable interpretation standard is the proper standard for claim construction in IPR proceedings.
The decision in In re Cuozzo Speed Technologies, LLC indicates that it may be difficult to overturn decisions from the PTAB due to the CAFC’s deference to the PTAB on both substantive and procedural issues. Further, the PTAB’s broadest reasonable claim interpretation standard—that generally favors challengers because it exposes granted patents to more prior art—has now been affirmed by the Federal Circuit. For these reasons, the PTAB is likely to continue to be a favorable choice of forum for challenging patents.
John (Jack) J. Penny, V is the chair of Nutter's Intellectual Property Department. He counsels clients in the development of strategic patent portfolios; prepares opinions concerning infringement, validity ...
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