CAFC’s majority says that a PTO’ decision to institute IPR is not appealable even after a final decision and a broadest reasonable interpretation rule applies in IPR

Yoshiya Nakamura | July 22, 2015

In Re Cuozzo Speed Technologies, LLC

July 8, 2015

Before: Newman, Clevenger, and DYK. Opinion by DYK. Dissenting opinion by Newman.

Summary

Garmin filed in the PTO a petition to institute an inter partes review (IPR) on patented claims owned by Cuozzo. The PTO granted the petition to institute the IPR and concluded that the claims at issue were obvious over prior art. Cuozzo appealed to CAFC, arguing: (1) the petition was defective as failing to identify prior art references for each claim; and (2) a broadest reasonable interpretation (BRI) standard should not be applied in the obviousness determination. CAFC held: (1) the statute prohibits a review on the PTO’s decision to institute the IPR even the final decision was on appeal; and (2) the BRI standard applies in IPR.

Japanese Summary

本判決は、(1)第三者の請求に基づく特許付与後レビュー(inter partes review; IPR)においてその請求書の内容に問題があった場合にそれをCAFCが審査できるか否か、および(2)クレーム解釈の基準として、最大限に広い合理的な解釈(a broadest reasonable interpretation: BRI)をIPRの審査に使用してよいか否かという争点に関するものである。

IPRは2段階の手続きであり、まず特許庁は第三者が提示した請求内容がIPRでの審査を開始するための要件を満足しているかを決定し、レビューを開始すると決定した場合、特許クレームが無効であるか否かを決定する。本件では、文献の引用が一部欠落しているクレームに対して特許庁がレビューを開始し、無効の結論を出した。特許権者はレビュー開始の決定が違法であるとして控訴したが、CAFCは、特許庁がレビューを開始するという決定は控訴可能な対象ではなく、特許庁が正しい引用例で結論を出したので問題ではないと判断した。

またIPRではクレーム補正の機会は制限され、従前の再審査よりも司法手続きに近い制度である。特許権者は、補正制限等のあるIPRでは、クレーム解釈の基準として、最大限に広く合理的な解釈(BRI)を使用すべきではないと主張した。CAFCは、IPRを含めて特許庁における付与後見直しにBRIの基準を使用することは長年の運用で認められており、法律上も問題ないと判断した。

Details

I. Background

(1) Institution of IPR

Cupzzo owned U.S. patent No. 6,778,074 (’074 patent) related to a speed limit indicator. Garmin filed the petition to institute IPR against ’074 patent. The IPR petition listed the following reference:.

Claim 10: Aumayer, Tegethoff, Awada,
Claim 14: Aumayer, Evans, Tegethoff, Awada, and
Claim 17: Aumayer, Evans, Wendt, Tegethoff, Awada.

Representative claim 10 recited:

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.

The PTO instituted the IPR, finding that there was a reasonable likelihood that claims 10, 14 and 17 were invalid over Aumayer, Fvans, Wendt, Tegethoff and Awada, although the petition did not cite Evans or Wendt for claim 10, did not cite Wendt for claim 14. The PTO noted that “claims 10 and 14 based on the grounds for claim 17 was proper because claim 17 depends from claim 14, which depends from claim 10.”

(2) Motion to amend claims

Cupzzo proposed the following substitute claim:

a speed limit indicator comprising:
a global positioning system receiver determining a vehicle’s present location, a vehicle’s present speed and a speed limit at the vehicle’s present location;
a display controller connected to said global positioning system receiver, wherein said display controller adjusts a colored display in response to signals indicative of the speed limit at the vehicle’s present location from said global positioning system receiver to continuously update the delineation of which speed readings determined by the global positioning system receiver are in violation of the speed limit at the vehicle’s present location; and
a speedometer integrally attached to said colored display,
wherein the speedometer comprises a liquid crystal display, and
wherein the colored display is the liquid crystal display.

Cuozzo argued that their substitute claim did not enlarge the scope of the patented claims because the construction of the limitations “integrally attached” would cover “a display that both functionally and structurally integrates the speedometer and the colored display, such that there only is a single display.”

(3) PTO’s final decision

The PTO issued a final decision that claims 10, 14 and 17 were all invalid for the grounds noted in the institution of IPR, and denied the patentee’s motion to amend.

According to the PTO, “[a]n appropriate construction of the term ‘integrally attached’ in independent claim 10 is central to the patentability analysis of claims 10, 14, and 17.” The PTO construed the terms “integrally attached” as meaning “discrete parts physically joined together as a unit without each part losing its own separate identity.”

Based on the construction, the PTO noted that the terms “integrally attached” excluded “an embodiment in which the speedometer are integrated with a colored display into a single display.”
The PTO held that the substitute claim captured the single display embodiment which lacked support in the specification and would enlarge the scope of the patented claims.

II. CAFC’s decision

On appeal, Cuozzo argued:
1) the petition was defective as failing to identify prior art references for each claim; and
2) argued initially that the BRI standard should not be applied in the obviousness determination.

35 USC 312(a)(3) states: “a petition for IPR must identify with particularity… the grounds on which the challenge to each claim,” while 35 U.S.C. § 314(d) states: “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”

(1) CAFC decided not to review the PTO’s decision to institute IPR even the final decision was on appeal, because:

a) the AIA statutory appears to prohibit such appeal “[b]ecause § 314(d) is unnecessary to limit interlocutory appeals, it must be read to bar review of all institution decisions, even after the Board issues a final decision;”

b) as CAFC “held that a flawed decision to institute reexamination under 35 U.S.C. § 303 was not a basis for setting aside a final decision,” the defect in the petition “is irrelevant because a proper petition could have been drafted;” and

c) while “mandamus” might be available if the PTO has clearly and indisputably exceeded its authority (for example, if the PTO relies on “prior public use” to institute IPR), the present case is not the case.
(2) CAFC held that the BRI is a proper standard to apply in both IPR institution and proceeding, because:

a) although the statute is silent about this issue, PTO is a rule making authority under 35
U.S.C. § 316(a) which states: “[t]he Director shall prescribe regulations,… setting forth the standards for the showing of sufficient grounds to institute. . . review,” and “establishing and governing inter partes review. . . and the relationship of such review to other proceedings. . . .”

b) the BRI standard is a long, well settled standard as it “has been applied by the PTO and its predecessor for more than 100 years in various types of PTO proceedings,” and CAFC “has approved this standard “in a variety of proceedings, including initial examinations, interferences, and post-grant proceedings such as reissues and reexaminations,” except for unexpired patents.

c) in view of the legislative history, “Congress in enacting the AIA was well aware that the broadest reasonable interpretation standard was the prevailing rule, and the inference of the congressional approval “is not undermined by the fact that IPR may be said to be adjudicatory rather than an examination.”

d) even though opportunities to amend claims are somewhat restricted in IPR as compared with examination proceedings, but available. Given the only amendment opportunity restriction at issue in this case, the conclusion does not change, while CAFC added that “if there are challenges to be brought against other restrictions on amendment opportunities as incompatible with using the broadest reasonable interpretation standard, they must await another case.”

(3) CAFC agreed with the PTO’s interpretation of the terms “integrally attached” because the word must be given some meaning and the specification supports the interpretation stating: “the present invention essentially comprises a speed limit indicator comprising a speed limit display and an attached speedometer.”
III. Dissenting opinion

Newman dissented because the majority opinion confusingly treated the legislative purpose of AIA.

1) the purpose of the “final and nonappealable” stated in the statute is to control interlocutory delay and harassing and the “review is not barred of material aspects that were decided in connection with the petition to institute;” and

2) IPR is part of “adjudicative systems comparable to district court validity determinations” as intended by AIA, which requires a “correct claim construction” as a question of law, instead of BRI acceptable where “proposed claims are readily amended in the give-and-take of patent prosecution.”

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