New claim construction in IPR and PGR

While the rate of filings for a post-grant review (PGR) trial has been slow, the rate of petitions filed to request an inter partes review (IPR) or a PGR specifically for a covered business method (CBM) patent trial have exceeded expectations. The rate of granting PGRs is around 70% for the fiscal year 2015, although it was higher in previous fiscal years. Once instituted, the petitioner has succeeded in cancelling patent claims in more than 70% of cases.

Many patent owners are now lobbying the US Congress to change certain procedures in IPR, PGR and CBM. One of the changes concerns the claim construction applied by the US Patent and Trademark Office’s (USPTO) Patent Trial and Appeal Board (PTAB)—the broadest reasonable interpretation (BRI) standard. A narrower claim construction may be in the works because the post-grant methodology used by district courts and the PTAB differs.

The BRI standard has been used for almost a decade for patent applications and is also used after a patent is issued, such as in ex parte re-examinations. The justifications behind BRI include: the applicant or patent owner has a chance to amend the claims and is in the best position to define the invention; it eliminates ambiguity through claim amendments; and, unlike litigation, there is no presumption of validity before the USPTO.

One tricky aspect of using BRI is that a claim term can be construed broadly in view of the specification, but the applicant or patent owner cannot import a limitation from the specification into the claims (Van Geuns, 26 USPQ2d 1057, 1059, Fed. Cir. 1993).

This differs from a district court setting, where the specification is not simply referred to as guidance but has more force, and especially where expert witnesses can argue the meaning of a claim and the judge may use other extrinsic evidence such as technical definitions to construe the patent claims narrowly (and preserve validity).

Another tricky part of using BRI is that the claim construction can be broawd but unreasonable as understood by the skilled artisan—see, for example, Kevin Imes, 113 USPQ2d 1522, Fed. Cir. 2015.

Criticism of BRI has been heavy since the America Invents Act was passed (even the American Intellectual Property Law Association sent similar comments on October 16, 2014 to the USPTO’s deputy director Michelle Lee). In particular, with so few motions to amend patents actually being granted (three at the time of writing), the first reason for using BRI falls short.

Further, the USPTO has warned that if the claims are substantially changed (where the proposed substitute claim has to be traceable to the challenged claim), the patent owner can pursue such claims in another USPTO proceeding such as an ex parte re-examination, thereby limiting the options during an IPR or CBM even more so.

Reform agenda

Congress has been floating some bills for patent reform. The latest, the Support Technology and Research for Our Nations Growth Patents Act (STRONG Act), proposes to use a district court claim construction, with the presumption of validity making it tougher for the petitioner to prove that the claims should be cancelled. It is not clear if such a bill will pass soon, given the controversial fee diversion provision aimed at abusive filings by ‘trolls’.

However, if a PTAB trial did implement a Phillips/Markman-like hearing, assuming it was right after the institution decision this may actually create problems for the patent owner. Because an IPR or PGR is relatively quick, this means that any claim construction would necessarily have to be early and therefore be determined before any claim construction in a concurrent litigation.

This can give a district court judge incentive to (1) more likely stay the litigation (typically an infringement suit) pending the outcome of the IPR; and (2) give more deference to the claim construction in the IPR/PGR due to the similarities of the claim construction. In other words, while the legislation is aimed at preserving patents, this may lead to more stays at the district court setting, where infringement is being contested.

Unless Congress changes the one-year timeline (institution to the final written decision is one year or less), the STRONG Act’s passing will lead to this fast claim construction determination in the PTAB trial. To avoid a district court from absolutely adopting the PTAB claim construction, a new PTAB standard has be less than BRI but more than a district court standard. Otherwise, filing an IPR or PGR becomes more the rule for the petitioner (accused infringer) if there is concurrent litigation (this may already be already the case).

"While the legislation is aimed at preserving patents, this may lead to more stays at the district court setting, where infringement is being contested."

So what can be done? Maybe more emphasis could be added to the patent specification. Besides the mentioned case of Van Geuns, the federal circuit has actually had inconsistent positions regarding importing a limitation from the specification, as in Retractable Techs v Becton Dickinson & Co, 653 F.3d 1296 (Fed. Cir. 2011) and Arlington Industries v Bridgeport Fittings, 632 F.3d 1246 (Fed. Cir. 2011).

Inventors’ intentions

These cases have emphasised the importance of complying with the written description requirement, but in the context of claim construction. In a concurring/dissenting opinion in Arlington, Judge Lourie stated: “The bottom line of claim construction should be that the claims should not mean more than what the specification indicates, in one way or another, the inventors invented.” So, the emphasis on the specification is what the inventors contemplated.

Here, a PTAB Phillips/Markman-like claim construction can involve more emphasis on written description. Procedurally, there can be initial filings by both parties (with certain page limitations, as in all other filings), with no more than one supporting affidavit or declaration. Because disputes often come down to one or two claim limitations, the declaration can be made by someone who possesses ordinary skill in the particular art commenting on the particular claim interpretation.

Let us take as an example the claimed term “fastener”, where a “screw” and “nail” are discussed in the patent specification. The specification also describes that the “fastener” is detachable, and never mentions “glue” as an embodiment. The alleged infringer may be using Velcro, but a BRI of “fastener” can read on the prior art disclosure of “glue”.  If the specification was not just consulted, but used to import meaning, then a “fastener” cannot include “glue”, especially if it is not detachable or “glue” is never contemplated by the inventors as evident from reading the entire specification.

It is worth noting that the intrinsic evidence for claim construction is: (1) the claims, (2) the specification, and (3) the prosecution history record. But isn’t a prosecution history record being created during the trial? Another possible compromise is the prosecution history record as made by the trial record itself giving the narrower claim construction.

After such a determination, patentability can still be determined using a prima facie case with the preponderance of evidence standard (versus presumption of validity requiring clear and convincing evidence to prove invalidity), where there is still more protection for the patent owner with the possible narrower claim construction.

If the STRONG Act does not pass any time soon, patent owners can still pressure the USPTO to change its claim construction practice to be narrower than BRI but aligned with case law. Otherwise, the patent owner should have other back-up plans, such as a pending continuation application in the (statistically likely) event that some or all of the patent claims are cancelled with a final written decision. 

Eugene Perez is a patent attorney at  Birch, Stewart, Kolasch & Birch. He specialises in chemical, pharmaceutical and biotechnology patents. He has argued before the US Court of Appeals for the Federal Circuit and the USPTO. He can be contacted at: etp@bskb.com