Federal Circuit Issues Its First AIA Appeal Ruling

On Tuesday, the Federal Circuit issued its first ruling on an appealed Patent Trial and Appeal Board (“PTAB”) decision of an inter partes review (“IPR”).

Cuozzo Speed Technologies (“Cuozzo”) owns U.S. Patent No. 6,778,074 (the “’074 patent”) entitled “Speed Limit Indicator and Method for Displaying Speed and the Relevant Speed Limit.” Garmin International, Inc. and Garmin USA, Inc. (collectively, “Garmin”) petitioned the United States Patent and Trademark Office (“USPTO”) for IPR of claims 10, 14, and 17 of the ’074 patent. The PTAB found the claims to be invalid as obvious.

Cuozzo appealed the PTAB’s decision to the Federal Circuit on multiple grounds. First, it argued that the USPTO improperly instituted IPR on claims 10 and 14 because the USPTO relied on prior art not specifically raised against those claims in Garmin’s petition. The Federal Circuit held that it lacks jurisdiction to review the USPTO’s decision to institute IPR. The Court cited 35 U.S.C. § 314(d) that states “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”

Second, Cuozzo argued that the PTAB applied the wrong claim construction standard – the broadest reasonable interpretation. The Federal Circuit acknowledged that the AIA is silent in regard to what standard should be applied in any PTO proceedings. However, it recognized that for more than a century, the USPTO has been using the “broadest interpretation which [the claim terms] will support without straining the language in which they are couched.” (citing Podlesak v. McInnerney, 1906 Dec. Comm’r Pat. 265, 258. It concluded “that Congress implicitly adopted the broadest reasonable interpretation standard in enacting the AIA.” The Court also found justification for that standard under 35 U.S.C. § 316(a)(2) and (4) which gives the Director the ability to establish the standards for the showing of sufficient grounds to institute a review under section 314 (a) and establishing and governing inter partes review under this chapter and the relationship of such review to other proceedings.

Third, Cuozzo argued that the PTAB improperly construed the claims under the broadest reasonable interpretation. The Federal Circuit, in compliance with the recent Supreme Court decision in Teva Pharmaceuticals, U.S.A., Inc. v. Sandoz, Inc., 135 S. Ct. 831, 841 (2015), first determined whether there were any underlying factual determinations concerning extrinsic evidence. Finding no reliance on extrinsic evidence, the Federal Circuit reviewed the PTAB’s claim construction de novo but found no error in the PTAB’s interpretation. The Federal Circuit also upheld the PTAB’s decision that claims 10, 14, and 17 of the ’074 patent were obvious.

Lastly, Cuozzo challenged the PTAB’s decision to deny Cuozzo’s motion for leave to amend the claims. The PTAB held that the amended claims would enlarge the scope of the patent. The Federal Circuit held that 35 U.S.C. § 316(d)(3) and USPTO regulation 37 C.F.R. § 42.221(a)(2)(ii) bar amendments which would broaden the scope of the claims. In determining whether Cuozzo’s amendment was broader in scope, the Court held that the same test applied in reissues and reexaminations – claim is broader in scope that the original claims if it contains within its scope any conceivable apparatus or process which would not have infringed the original patent (quotations and citations omitted) – applies in IPRs. Applying that test, the Federal Circuit held that Cuozzo’s proposed amendment was broadening.

The Court’s first decision on an appeal from the PTAB clearly supported and did not challenge the findings and standards applied by the PTAB. Gibbons will continue to monitor Federal Circuit case law stemming from appeals of PTAB decisions in IPR proceedings.

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