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17 May 2016PatentsEthan Horwitz and Shaun Hargadine

BRI v Phillips: a changing landscape?

The Patent Trial and Appeal Board (PTAB) is not quite a court and not quite an examiner and the question now before the US Supreme Court is whether the PTAB should use the courts’ or the examiners’ standard for claim construction.

In a court, the standard for claim construction is how a person of ordinary skill in the art would understand the term (the Phillips standard). By contrast, an examiner uses the broadest reasonable interpretation (BRI) standard. The reasons for each standard and why they are used, as well as the history of the PTAB’s standard, will be reviewed as will the issues now before the Supreme Court.

The claim construction standard used by courts in determining validity and infringement is how the claim term will be understood by the person of ordinary skill in the art. The US Court of Appeals for the Federal Circuit in the 2005 case Phillips v AWH noted that proper claim construction is informed by statute, namely the first and second paragraphs of 35 USC §112.

The Phillips court held that according to this statute, the ordinary and customary meaning of a claim term is defined by how a person of ordinary skill in the art at the time of the invention would understand the term. This understanding by a person of ordinary skill in the art is deemed to incorporate the entire patent, including the specification. If there is still doubt about the meaning of a claim term, the Phillips court provided guidelines for consulting intrinsic and extrinsic evidence to further interpret the claim term.

By contrast, during examination, an examiner uses the BRI standard. While application of the BRI standard in US Patent and Trademark Office (USPTO) proceedings has long been justified by the ability to amend claims during examination, some of the earliest language in support of the BRI standard does not mention amendment at all. Instead, a 1906 decision from the commissioner of patents discussed the BRI standard in different terms:

“That a claim which does not carry its true meaning on its face misleads those affected by the patent instead of guiding them to its true scope is alone sufficient reason why the Patent Office should refuse to recognise proposed limitations of claims which have not been clearly expressed therein.”

The commissioner focused on the public notice aspect of a patent, not on an applicant’s or patentee’s right to amend claims. The BRI standard, according to the commissioner, puts the public on notice of the meaning of the claims on their very face, as opposed to requiring the public to read the specification in order to discern the true meaning of the claims. In 1906, the ability to amend, if a justification at all, was secondary to a public notice as a justification for the BRI standard.

Proper claim construction

In a 2015 case decided by the Federal Circuit, In re Cuozzo Speed Techs, the Federal Circuit addressed which claim construction standard should be applied in the relatively new inter partes review (IPR) proceedings in the PTAB. The majority held that the BRI standard is appropriate in an IPR.

The majority reasoned that the BRI standard has long been applied to “examination” proceedings, including ex parte and inter partes re-examination. The majority pointed out that the BRI standard has been reaffirmed countless times as being the proper claim construction standard during examination when patent owners have the ability to amend, an option available in the USPTO proceedings but not in a federal court proceeding.

“The BRI standard has been reaffirmed countless times as being the proper claim construction standard during examination when patent owners have the ability to amend.”

Following this history, the majority noted the statutory language in the America Invents Act (AIA)—as regulated in 35 USC §316(d)—allows one motion to amend during an IPR. The majority’s reasoning thus followed the long history of case law applying the BRI standard to USPTO proceedings where amending the claims is an option.

The majority’s opinion was challenged in a strong dissent by Judge Pauline Newman. The dissent emphasised the legislative intent of an IPR to act as a substitute proceeding for a district court invalidation action. Newman argued that allowing a different claim construction standard in an IPR from the claim construction standard applied in a district court defeats the very purpose for which the IPR was created.

In support of her view, Newman cited legislative history that makes clear that the intent of the IPR creation was to provide a surrogate for district court invalidity proceedings, and argued that one proceeding cannot substitute for another where different claim construction standards are applied.

Newman also made a distinction between the “ability” to amend and the “right” to amend. In an examination of a patent, or a re-examination, an applicant has a broad right to amend the claims. Conversely, under the statutory language of the AIA, a patentee in an IPR is allowed one motion to amend, and only one. Newman argued that this motion or request for a single amendment is fundamentally different from the negotiated amendment process during examination. Further, Newman described the option of a motion to amend as illusory, because to date only one or two amendments have been allowed.

In re Cuozzo is not the only case where the BRI standard has been applied in one of the new AIA post-grant proceedings. In SAP America v Versata Development Group, Versata argued to the PTAB that the Phillips standard should be applied in a covered business methods (CBM) review. The PTAB disagreed, and held that the BRI is the correct standard under similar reasons given by the majority in Cuozzo.

On appeal, the Federal Circuit did not reach the issue of whether the PTAB was correct in holding that the BRI standard is appropriate in a CBM review.

In addition, on April 1, 2016, the USPTO published revisions to the rules of procedures for the PTAB. The revised rules, which went into effect on May 2, provide that where a patent will expire 18 months from the date the petition was filed, a party may request that the IPR be conducted using the Phillips standard.

The Supreme Court granted certiorari in the In re Cuozzo case and will determine what claim construction standard should be used in post-grant proceedings at the PTAB. The effect of this decision can be significant. For example, if a fresh piece of prior art is the basis of the IPR, it is very possible that a claim term, as understood in view of the limitations in the specification, will enable the claim to be valid over that fresh piece of prior art.

However, if the BRI standard is used, that limitation in view of the specification will be ignored and the patent claim invalidated. Further, if the patent owner attempts to amend the claim to specifically rewrite that claim limitation found in the specification, the odds are high that the amendment will not be allowed.

Ethan Horwitz is a shareholder at  Carlton Fields. He can be contacted at: ehorwitz@carltonfields.com

Shaun Hargadine is an attorney at Carlton Fields. He can be contacted at: shargadine@carltonfields.com

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