By Andrew Williams --
One of the more controversial rules concerning PTAB trials promulgated by the USPTO in the wake of the America Invents Act was the adoption of the "broadest reasonable interpretation" ("BRI") claim construction standard for proceedings before the Board. It was no surprise, therefore, that when the Patent Office requested feedback on the rules concerning PTAB trial proceedings, one of the highlighted issues was: "Under what circumstances, if any, should the Board decline to construe a claim in an unexpired patent in accordance with its broadest reasonable construction in light of the specification of the patent in which it appears?" In response to the request, this author, along with his colleagues Alison Baldwin, Grantland Drutchas, and Lisa Schoedel, submitted a comment advocating that the Board adopt the same standard for construing claim terms as used by federal courts as articulated in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc). The comment explained that the justifications used by the Office for implementing the BRI standard have either been rendered moot or proven to be incorrect.
First, the USPTO justified the use of the broadest reasonable interpretation standard as being allegedly consistent with the legislative history of the AIA. See 77 FR 48680, 48697-99 (Aug. 14, 2012) ("The adoption of the 'broadest reasonable interpretation' standard is further consistent with the legislative history of the Leahy-Smith America Invents Act, which indicates that Congress was aware of the 'broadest reasonable interpretation' standard and expected the Office to apply the standard to the new Leahy-Smith America Invents Act review proceedings."). The Patent Office concluded that neither "Congress [nor] the drafters of the legislation considered a different standard for [these proceedings]." Id. at 48697. The Office had to so justify because the AIA was silent as to what claim construction standard should apply to inter partes review ("IPR"), post-grant review ("PGR"), and covered business method patent review proceedings.
Nevertheless, even if the Patent Office was correct regarding the events leading to the passage of the AIA, subsequent actions have made explicit that that particular premise is no longer valid. As we have been reporting for over the past year, Congress is once again tackling the issue of patent reform. The House of Representative passed H.R. 3309 (the Innovation Act) by an overwhelming majority on December 5, 2013. The comparable bill, S. 1720 (the Patent Transparency and Improvements Act of 2013), stalled in the Senate. Sen. Leahy explained at the time that there were "repeated concerns" that the House's Innovation Act "went beyond the scope of addressing patent trolls, and would have severe unintended consequences on legitimate patent holders who employ thousands of Americans."
This legislation also contained improvements and technical corrections to the AIA that were not so contentious. One of these improvements, found in both the House and Senate bills, clarified the intent of Congress for at least IPRs and PGRs: "each claim of a patent shall be construed as such claim would be in a civil action to invalidate a patent under section 282(b), including constructing each claim of the patent in accordance with the ordinary and customary meaning of such claim as understood by one of ordinary skill in the art and the prosecution history pertaining to the patent . . . ." Moreover, with regard to concurrent actions at the Patent Office and federal court, the Act provided that "if a court has previously construed the claim or a claim term in a civil action in which the patent owner was a party, the Office shall consider such claim construction." In other words, even though these bills were not enacted because of opposition to unrelated provisions, Congress made its view explicit on this point – the Board should be using the same claim construction standard as used in federal court.
Interestingly, with regard to its impact on the BRI standard, the Electronic Frontier Foundation ("EFF") interpretation of the inability of Congress to pass to patent litigation reform was diametrically opposed to this. The EFF has been a strong critic of the patent system, and the views expressed in its submitted comment are no exception. It was not unexpected, therefore, that the EFF was in favor of maintaining the BRI claim construction standard for PTAB litigation proceedings. What was surprising was the EFF's reliance on the stalled attempt to pass patent reform as its justification for the use of this standard. According to the EFF, because "[s]ome proposed bills have included language to change" the use of the BRI standard, "moving away from [the standard] is more properly a decision for Congress." However, because the bill did not pass the Senate, the EFF concluded that there was no clear direction from Congress on the use of this standard. The EFF did not have such a dim view of the voice of Congress in its May 21, 2014 article entitled "Senator Leahy Kills Patent Reform (For Now)," authored in part by two of the signatories to EFF's submitted comment. This article placed the blame squarely with Sen. Leahy, not with Congress as a whole. The authors suggested at the time that the issues presented in the bills "cross[ed] both sides of the aisle," evidenced by the strong 325-91 vote for the Innovation Act, which included a majority of Republicans and Democrats. Of course, the EFF did not explain how Congress could be so clear when it comes to addressing the so-called patent troll problem, yet provide no clear direction when it comes to AIA improvements, especially when no one in Congress has been on record opposing this provision.
The Patent Office also partially justified its use of the broadest reasonable interpretation standard on the provision of the AIA that allows a patent owner to amend the claims at issue. See 77 FR at 48697. Of course, a patent owner's ability to amend claims is severely limited, as the AIA provided for only one opportunity to file a motion to amend. There remains the possibility of a subsequent request, but only if it is submitted jointly by both parties and only for the purpose of materially advancing settlement. In practice, however, the ability to substantively amend claims in these post-issuance proceedings turned out to be largely illusory. Only one motion to amend has been granted for an IPR proceedings, and that motion was unopposed by the petitioner. See International Flavors & Fragrances Inc. v. The United States of America, IPR2013-00124, Paper No. 12 (PTAB May 20, 2014). It also probably did not hurt that the patent owner was the United States. This vanishingly small possibility of amending the claims can no longer support the justification for this broad claim construction standard.
As a further justification, the Patent Office pointed to the use of the same standard in other patent office proceedings, such as reexaminations and reissue applications. See 77 FR at 48699. However, the Patent Office has been clear that the new post-issuance proceedings are more adjudicative in nature. It has been repeatedly explained that one of the reasons behind the low grant rate for claim amendments was that the Board does not conduct prior art searches. The burden, therefore, falls to the patent owner to demonstrate that the amended claims are patentable in view of the prior art – the opposite burden that exists during prosecution. And, as we have previously reported regarding federal litigation prosecution bars, a panel of the Board has concluded that "[a]n inter partes review is neither a patent examination nor a patent reexamination." See Google Inc. v. Jongerious Panoramic Techs., LLC, IPR2013-00191, Paper No. 50, at 4 (PTAB Feb. 13, 2014). Because an IPR is "a trial, adjudicatory in nature and constitutes litigation," this panel ruled that the prosecution bar would not prevent the attorney in question from participating in the proceeding. See id. With the Board's clear differentiation between these "litigation" proceedings and other patent office prosecution, the continued reliance on the claim construction standard used during prosecution appears misplaced.
This concern over the claim construction standard at the PTAB is more than an academic exercise – indeed it has real-world implications. Many of the IPRs currently pending before the Board have concurrent parallel patent infringement litigation in federal court. Requiring patentees to defend, from a prior art perspective, a patent scope before the Patent Office that they will not be able to use in parallel infringement litigation in federal court is manifestly unfair to the patent holder. It would be advantageous for federal courts to gain insight from the Patent Office's interpretation of claims, but this would only be possible if the Board applied the same interpretation standard. In many ways, patent holders are already in an uphill battle at the PTAB because of the lower invalidity burden in IPRs and other such Board adjudicative procedures. Applying this broad standard while at the same time curtailing the ability of the patentee to amend the claims effectively "stacks the deck" in favor of patent challengers and seriously impacts the value of issued U.S. patents.
Can there be any doubt as to the "politicalness" of ALL of this "patent reform" propaganda?
Will there be any objective voices that are actually paid attention to?
Sadly, I remain...
Posted by: Skeptical | October 28, 2014 at 09:21 AM
For a somewhat more balanced perspective on this issue, see "Should PTAB Apply Broadest Reasonable Construction In IPR?"
Law360, New York (September 22, 2014,
Posted by: Paul F. Morgan | October 28, 2014 at 09:43 AM
Yes, IPRs make claim amendments difficult, and frequently find original claims invalid. But what evidence is there from IPR decisions to date that merely changing IPR claim interpretation from BRC to PTAB interpretations of the notoriously widely varying claim breadth interpretations between different Fed. Cir. panels would make a real difference to IPR decisions? The PTAB already does pay attention to noted actual prosecution history estoppel. The main difference in IPR outcomes vs D.C. jury decisions is the vastly better prior art searchs done by the IPR petitioners being sued and PTAB APJ patent attorneys being able properly read claims against cited prior art unlike many untrained jury members. Not even to mention that merely changing from BRC would still leave IPRs with no presumption of validity or requirement for clear and convincing evidence, and In re Zurko for appeals.
Posted by: Paul F. Morgan | October 28, 2014 at 10:09 AM