The Supreme Court Weighs in on PTAB’s Claim Construction Standard for IPR Proceedings

In a recent decision, the Supreme Court affirmed the Federal Circuit’s ruling that the Patent Trial and Appeal Board (PTAB) was within its authority to give a patent claim “its broadest reasonable construction” during an inter partes review (IPR) proceeding. The Court found that the PTAB was authorized to apply this standard because 35 U. S. C. §316(a)(4) granted the Patent Office authority to issue “regulations . . . establishing and governing inter partes review under this chapter.”

As previously discussed, this time last year the Federal Circuit in a contentious 6-5 vote denied en banc review on this issue. The dissenting judges argued that the “broadest reasonable construction” standard during IPR proceedings should be reconsidered because IPR proceedings were designed to be akin to district court adjudications of patent validity and IPR proceedings, unlike prosecution, do not allow for a “back-and-forth between the patentee and examiner.”

The Supreme Court did not find these arguments persuasive. The Court considered an IPR as “less like a judicial proceeding and more like a specialized agency proceeding.” The Court noted that in “inter partes review, the challenger (or the Patent Office) must establish unpatentability ‘by a preponderance of the evidence’; in district court, a challenger must prove invalidity by ‘clear and convincing evidence.’” The Court also concluded that since an IPR is the heir to the inter partes reexamination process, it is for a different purpose, namely “a second look at an earlier administrative grant of a patent.”

The Court also concluded that prudential considerations warrant applying this standard to IPR proceedings. First, the Court found that this standard “helps to protect the public” by ensuring “precision while avoiding overly broad claims, and thereby helps prevent a patent from tying up too much knowledge.” Second, the “Patent Office has used this standard for more than 100 years.”

The Court further rejected the argument that the “broadest reasonable construction” should not be applied because the patent owner has limited or no ability to amend the claims. The Court noted that 35 U. S. C. §316(d) provided patent owners with the opportunity to amend their claims and was not moved by the fact that the Patent Office only allows such amendments in rare circumstances: “To the extent Cuozzo’s statistical argument takes aim at the manner in which the Patent Office has exercised its authority, that question is not before us.”

Gibbons P.C. will continue to monitor developments in the review of IPR proceedings.

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