Cuozzo at SCOTUS: day one arguments and ‘tectonic shift’ calls
The US Supreme Court will hear oral arguments today in Cuozzo Speed Technologies v Lee, a case that centres on the claim construction standard that the Patent Trial and Appeal Board (PTAB) applies during the inter partes review (IPR) process.
In January this year, the court granted a writ of certiorari filed by Cuozzo that challenged an earlier PTAB decision to invalidate a patent it owns covering a speedometer.
The dispute started in 2012 after rival Garmin challenged the validity of Cuozzo’s patent, US number 6,778,074, by requesting an IPR at the PTAB.
After construing the claims asserted in the patent under its broadest reasonable interpretation (BRI) standard, the PTAB invalidated it in 2013 on the grounds that it was obvious.
Cuozzo argued that its patent would have been held valid under the Phillips standard, which is used by US district courts.
BRI, argued Cuozzo, encompasses a wider prior art search, which increases the chance of the patent being invalidated on grounds of obviousness. Examiners at the US Patent and Trademark Office apply the BRI standard when reviewing a patent application.
In February, the US Court of Appeals for the Federal Circuit rejected Cuozzo’s challenge against the PTAB’s ruling and, five months later, a divided federal circuit rejected an en banc hearing of the case.
In its Supreme Court writ, filed in October last year, Cuozzo said the BRI standard is the reason for the high number of patents that are invalidated by the PTAB.
Naveen Modi, partner at law firm Paul Hastings, said the Cuozzo case is asking the court to set the fundamental ground rules for IPR proceedings by determining what patent construction standard applies.
“While the choice will not be outcome-determinative in every case, if the court were to require the same patent construction standard as that used by the district courts, some believe that it will tilt the general playing field in favour of patent owners.”
Steve Maebius, partner at law firm Foley & Lardner, told WIPR there are two issues at stake that could give a lift to patent owners, depending on the how the court rules.
“First, whether a narrower claim construction standard should be applied during America Invents Act proceedings, which would benefit patent owners by making it less likely that their claims are interpreted so as to encompass invalidating prior art.
“Secondly, whether a patent owner has a right to challenge the PTAB’s institution decision on appeal, which would benefit patent owners by providing a new way to attack IPRs on procedural grounds where the PTAB goes beyond the scope of a petition.”
Tom Duston, partner at law firm Marshall Gerstein & Borun, said practitioners would likely be “girding for a tectonic shift in IPR proceedings”.
“Those beleaguered by litigation from non-practising entities ... may be justified in fearing that coveted IPR proceedings will become less useful as a bulwark against such cases,” he said.
Duston added: “Not only would elimination of the BRI standard likely result in the cancellation of fewer claims, but permitting appellate review of the PTAB’s institution decisions will likely increase costs and impose delays for a mechanism originally intended to achieve the opposite.”
The case has been closely followed within the intellectual property industry, including the American Intellectual Property Law Association, which has supported Cuozzo, and the Biotechnology Industry Organization, which said that use of the BRI standard meant invalidation had reached an “alarming rate”.
