In re Cuozzo Speed Tech., LLC, No. 2014-1301, 2015 U.S. App. LEXIS 1699 (Fed. Cir. Feb. 4, 2014) (Dyk, J.) (Newman, J., dissenting). Click Here for a copy of the opinion.
Cuozzo appealed an Inter Partes Review (IPR) decision by the Patent Trial & Appeal Board (PTAB), finding that claims 10, 14 and 17 in U.S. Pat. No. 6,778,074 were obvious. Independent claim 10 was directed to a speed limit indicator comprising a receiver attaching to a display controller that adjusts a colored display and a speedometer integrally attached to the colored display. In its final IPR decision, the PTAB applied a "broadest reasonable interpretation" and construed "integrally attached" as meaning "discrete parts physically joined together as a unit without each part losing its own separate identity." Based on this construction, the disputed claims were held unpatentable as obvious over different combinations of the prior art than were cited in the original IPR petition. Cuozzo's motion to amend the claims was denied.
On appeal, Cuozzo argued that the PTO improperly relied on prior art asserted in the inter partes petition against claim 17 as grounds for review of claims 10 and 14. The Federal Circuit held that it lacks jurisdiction to review the scope of the IPR because 35 U.S.C. § 314(d) provides that the decision to institute an IPR is "nonappealable" and "final." In addition, a mandamus against the PTO (if sought) would still face the court's finding that "there is no clear and indisputable right that precludes institution of the IPR proceeding."
The second issue was whether the PTO properly reviewed the claim language under a "broadest reasonable interpretation," as it does for patent applications, or whether a higher presumption of validity should apply, as in litigation, because the challenged claims are in a granted patent. The Federal Circuit sided with the PTO and cited 37 C.F.R. 42.100(b), which states "a claim in an unexpired patent shall be given its broadest reasonable construction in light of the specification of the patent in which it appears." This rule is within the PTO's rulemaking authority, because 35 U.S.C. § 316 gives the PTO "authority to establish regulations setting the 'standards' for instituting review and regulating IPR proceedings." The court pointed to a long history of this claim construction standard in other proceedings (e.g. initial examination, reexaminations, and reissues) and the lack of indication by Congress to change this standard for IPR proceedings. Thus, "Congress implicitly adopted the broadest reasonable interpretation standard in enacting the AIA." Under this standard, the court found no error in the PTO's interpretation of "integrally attached" and the obvious determination was affirmed.
The court also affirmed the PTO's denial of Cuozzo's motion to amend. Based on the construction of "integrally attached," the court held that the amendment impermissibly broadened the claim by encompassing an embodiment not covered by the original claim.
Judge Newman dissented, arguing that the majority contradicted the legislative purpose of the AIA, which was to "convert" inter partes reexamination "from an examinational proceeding to an adjudicative proceeding." Thus, IPR was "intended as a far-reaching and powerful surrogate for district court validity determinations." In presiding over IPR proceedings, the PTO should apply the same procedural and substantive law as the district courts in litigation. Judge Newman would apply the standard for patent validity in Phillips, "where claims are given their correct construction as understood by a person of ordinary skill in the field of the invention."
The dissent also distinguished IPR from examination and reissue proceedings. The IPR statute refers to "validity," which "is the province of adjudication, while 'patentability' applies to examination." In addition, unlike examination and reexamination, a patentee's ability to amend claims is in an IPR requires a motion to the Board, which is rarely granted. With respect to the PTO's "nonappealable" decision to grant IPR, the dissent argued that precedents "have established that judicial review of a final agency action by an aggrieved person will not be cut off unless there is persuasive reason to believe that such was the purpose of Congress."
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