US Supreme Court will review PTAB claim construction standard

The US Supreme Court has agreed to hear a challenge centring on the claim construction standard that the Patent Trial and Appeal Board (PTAB) applies during the inter partes review (IPR) process, following complaints too many patents are invalidated.

On Friday, January 15, the court granted Cuozzo Speed Technologies’s writ of certiorari challenging the PTAB’s decision to invalidate its patent covering technology used in a speedometer.

Cuozzo argued that the PTAB invalidated its patent because it applied the broadest reasonable interpretation (BRI) construction standard instead of the Philips 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 (USPTO) 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 sharply divided federal circuit rejected an en banc hearing of the case.

Cuozzo filed its Supreme Court writ in October, citing the BRI standard as the reason for the high number of patents that are invalidated by the PTAB. It argued that its patent would have been declared valid at a district court proceeding.

In June, the USPTO published data which showed that 84% of challenges to existing patents that reach the final written stage are invalidated by the PTAB.

“A primary reason for the high cancellation rate is that, although IPR was expressly designed to be a surrogate for litigation, the PTAB does not use the same claim construction standard as federal courts,” Cuozzo argued in its writ.

“Of course, the broader the interpretation, the more extensive the array of relevant prior art—and in turn the more likely that the claim will be held invalid in light of that prior art,” it added.

The case has been closely followed within the intellectual property industry. The American Intellectual Property Law Association sided with Cuozzo, arguing that the “application of BRI negates the presumption of validity otherwise afforded [to] issued patents”.

The Biotechnology Industry Organization said that use of the BRI standard meant that invalidation had reached an “alarming rate”.

The Supreme Court’s decision to accept the case suggests that it is intending to alter the claim construction standard applied by the PTAB, said Steve Maebius, partner at law firm Foley & Lardner.

“The grant of certiorari may have a profound effect impact on post-grant proceedings. BRI is fundamental to the balance of power between patent owners and petitioners, and acceptance of cert by the Supreme Court may signal intent to modify, which could benefit patent owners.”

The USPTO declined to comment.