US Supreme Court upholds BRI claim construction

The US Supreme Court has upheld the claim construction that the Patent Trial and Appeal Board (PTAB) uses, affirming a ruling from the US Court of Appeals for the Federal Circuit.

In a decision handed down today, June 20, the court said it was reasonable for the PTAB to use the broadest reasonable interpretation (BRI) standard when assessing patent claims.

The case, Cuozzo Speed Technologies v Lee, centres on the claim construction standard that the 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 Cuozzo’s rival Garmin International 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 using its 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.

Cuozzo said the BRI 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 (USPTO) apply the BRI standard when reviewing a patent application.

In February, 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.

Today’s ruling upholds the Federal Circuit’s view. The court also held that decisions to institute IPRs cannot be appealed.

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.

But, writing the majority opinion, Justice Stephen Breyer wrote: “The Patent Office uses the broadest reasonable construction standard in other proceedings, including interference proceedings, which may implicate patents that are later reviewed in district court.”

He added that the statute gives the USPTO the power to consolidate these other proceedings with IPRs.

“To try to create uniformity of standards would consequently prove difficult. And we cannot find unreasonable the … decision to prefer a degree of inconsistency in the standards used between the courts and the agency, rather than among agency proceedings,” he added.

Dissenting in part Justice Alito said: “I would vacate the Federal Circuit’s judgment and remand for that court to consider whether the Patent Office exceeded its authority to institute inter partes review with respect to claims 10 and 14 of Cuozzo’s patent. With respect to claim 17, I agree with the court that the judgment below must be affirmed.”

Steve Maebius, partner at law firm Foley & Lardner, said petitioners will “breathe a sigh of relief” and that patent owners hoping for a pro-patent turn of events will be disappointed in the outcome.

“The court has maintained the status quo,” he added.

Michelle Lee, director of the USPTO, said: "The USPTO appreciates the Supreme Court’s decision which will allow the PTAB to maintain its vital mission of effectively and efficiently resolving patentability disputes while providing faster, less expensive alternatives to district court litigation."

More analysis to follow.