USPTO Proposes Harmonizing Claim Construction Standard In PTAB Proceedings

By Andrew Williams --

The U.S. Patent and Trademark Office published a notice of proposed Rulemaking in the Federal Register (83 Fed. Reg. 21221) today which would provide a change to the claim construction standard used in Inter Partes Reviews (IPRs), Post-Grant Proceedings (PGRs), and Covered Business Method Reviews (CBMs).  Instead of the broadest reasonable interpretation ("BRI") standard originally adopted, and blessed by the Supreme Court in Cuozzo Speed Technologies LLC v. Lee, the proposed rulemaking would adopt the same standard used by district courts and the ITC.  The use of a harmonized standard has been long advocated by patent holders, specifically because they are faced with an unfair dichotomy -- a more stringent construction when alleging infringement, but a broader construction when faced with an allegation of unpatentability at the PTAB.  Or, as the Office acknowledged in the notice, it is possible that "even if a competitor's product would not be found to infringe a patent claim if it was sold after the patent's effective filing date, the same product nevertheless could constitute invaliding prior art if publically sold before the patent's effective filing date."  Nevertheless, over time, the BRI standard for post-issuance proceedings has been refined by the Federal Circuit to the extent that it was almost approaching the Phillips standard anyway.  In fact, cases in which the claim construction standard has been outcome determinative are few and far between.  Still, this effort to harmonize the construction of issued claims regardless of which tribunal is considering the issue is welcome and long overdue.

Specifically, the Patent Office is proposing amending 37 C.F.R. §§ 42.100(b), 42.200(b), and 42.300(b) to replace the first sentence with the following:  "a claim of a patent, or a claim proposed in a motion to amend, 'shall be construed using the same claim construction standard that would be used to construe such claim in a civil action to invalidate a patent under 35 U.S.C. 282(b), including construing the claim 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.'"  The Office, in other words, would begin applying the principles that were articulated by the Federal Circuit in Phillips and its progeny.  This would include taking into account the claim language, the specification, and the prosecution history (including any other post-issuance proceeding), as well as relevant extrinsic evidence.  Moreover, the Office is proposing amending each of these sections to add the following sentence:  "Any prior claim construction determination concerning a term of the claim in a civil action, or a proceeding before the International Trade Commission, that is timely made of record in the . . . proceeding will be considered."  Finally, the Office proposes removing the language for a different standard for claims in an expired (or expiring) patent because there would no longer be a need for a distinction.  Importantly, these proposed rule changes "would be applied to all pending IPR, PGR, and CBM proceedings before the PTAB."  As a result, practitioners with pending proceedings will likely need to account for the two different standards during the transition.

One of the stated reasons for this change was the goal of implementing "a fair and balanced approach, providing greater predictability and certainty in the patent system."  In making this claim, the Board pointed to PPC Broadband, Inc. v. Corning Optical Comm'ns RF, LLC, 815 F.3d 734 (Fed. Cir. 2016).  In that case, the Court noted that it "hinge[d] on the claim construction standard applied—a scenario likely to arise with frequency.  And in this case, the claim construction standard is outcome determinative."  Id. at 740-42.  Nevertheless, it is unclear how frequent such cases have been, as there were very few (if any) subsequent cases decided by the Federal Circuit that had such an outcome.  In fact, over time, the two standards seemed to be converging.  It began with the admonition in Microsoft Corp. v. Proxyconn, Inc., in which the Federal Circuit pointed out that a BRI construction still had to be that -- reasonable.  In fact, the Court warned in Trivascular, Inc. v. Samuels in February of 2016 that the PTAB does not have an "unfettered license" to construe claims inconsistent with the specification and prosecution history.  Instead, the Court concluded that any construction must reflect the "ordinary" and "customary" meaning of the terms as understood by those skilled in the art.  Clearly, by this point, the two different standards were already appearing to be not as far apart as originally feared.

For those wishing to submit comments, the deadline is July 9, 2018.  Comments can be sent via e-mail to [email protected], or they can be sent via the Federal eRulemaking Portal at http://www.regulations.gov.  All such submitted comments should include the docket number (PTO-P-2018-0036).  Comments can also be submitted by postal mail, but the Office would prefer electronic submissions to more easily share the comments.  The Notice also provides that if further information is required, please contact Michael Tierney and Jacqueline Wright Bonilla, Vice Chief Administrative Patent Judges, by telephone at (571) 272-9797.  And, of course, we will monitor comments and provide updates as warranted.

Comments

[MaxDrei]

Tell me I have no reason to worry, please, about the following point of difference between the PTO and the courts, when it comes to claim construction.

The high presumption of validity (C+C) obliges the USPTO to be circumspect about claim construction. Hence: BRI.

Whereas, in the DC, the high hurdle to finding the claim invalid can lead the court to put a narrow construction on the claim, in the interests of justice.

Now, if the PTO is obliged to follow the court on claim construction, it will be letting through, and "duly" issuing, claims that would have, until now, it would have rejected.

Will the PTO wrapper memorialize the narrow construction, I wonder, on the basis of which the claim was issued?

Because otherwise, as here in Germany, where validity is tried in one court and infringement in another, one can imagine the claim being read narrowly (in the USPTO) and so issued, and then broadly, in District Court, to ensnare those who thought they could not be held to be infringing a not invalid claim.

Whatever happened to the raison d'etre of BRI at the USPTO, to provide protection against the possibility of issue of over-wide covetous claims. No longer a worry?

[Paul F. Morgan]

As previously noted, the above-cited Fed. Cir panel editorial in PPC Broadband, Inc. v. Corning about allegedly significant differences in results between the two claim constructions [BRI vs. Phillips] was pure dicta, since the actual panel decision was on the "R" requirement in the IPR BRI claim interpretation, holding it UNreasonable, i.e., same result. As the author here correctly notes: "In fact, cases in which the claim construction standard has been outcome determinative are few and far between."

[Skeptical]

MaxDrei,

Did you understand that this change only affects the POST GRANT actions in the Office?

[Greg DeLassus]

"[C]ases in which the claim construction standard has been outcome determinative are few and far between."

True. We could add to this that cases in which the difference between preponderance-of-evidence and clear-&-convincing standards has been outcome determinative are also few and far between. I can count on one hand the number of CAFC opinions where the distinction was discussed on the way to a holding.

[Skeptical]

Both of Paul F. Morgan's and Greg DeLassus's comments make me wonder why the wait then to remove anyone's concern about disparate treatment and why NOT make the Office treatment reflect a more traditional Post Grant state....

[MaxDrei]

I'm grateful for the replies to my questions about i) BRI vs Phillips and ii) preponderance of evidence of invalidity vs C+C. Those replying assure me that the number of cases where the decision turned on one or other of these differences is minimal.

That's not how I have been seeing it, through recent decades. I still think that the enhanced presumption of validity is the root cause of the problems in the area of claim construction. It's the proverbial elephant in the room. Nobody mentions it, least of all judges in their written decisions, but everybody knows it's there.

Only in the USA is the presumption of validity skewed. Only in the USA is the claim construed one way in the PTO and a different way in District Court. The former is the cause of the latter, it still seems to me. See the thread just a few days ago, about prior commercial use of the claimed subject matter. Striking the patent down for IC finesses out of any need to reach a decision with regard to the validity attacks.

Skeptical suggests that there is nothing wrong if the USPTO continues with BRI up to issue but then, if there is an IPR, applies a Phillips construction to the attacked claim. That reminds me of the situation in Europe, with claim construction before and after issue. Up to issue, the Patent Office can (and often does) object that the claim is unclear (ie indefinite). But the EPC forbids post-issue attacks on the clarity of the claim. Instead, judges have to do the best they can, even when the claim is manifestly low on clarity. But does that help the owner of the patent against prior art attacks. Most certainly not! The more indefinite the claim, the easier it is, to read the prior art onto the claim, if you are so minded. So, at least in Europe, writing a vague claim is not at all a bright idea. I like patent law provisions that encourage good behaviour. I dislike the ones that tempt lawyers (and their clients) to cheat. In the USA, to rewards for getting to issue tempt applicants at the USPTO into all sorts of dodgy behaviour.

[Kevin E Noonan]

Of course, Max, if the district court construes the claim narrowly for validity then the scope of what is infringing is also diminished. Seems fair.

[Skeptical]

MaxDrei,

Your penchant (and distaste) of the Clear and Convincing standard has long sullied your views that our Sovereign has made in relation to patent law.

What you want - and how your logic comes across - is that WEAK patents are better because such bring less desire to have them, and less desire to have them means that those wanting them will behave better.

You bring NO awareness to how innovation actually works and why the US Sovereign choices for a STRONG patent system was what (once upon a time) provided that the US had THE gold standard for protecting innovation.

[MaxDrei]

Kevin, yes indeed. If one and the same court has to decide both together the questions i) Invalid Y/N and ii) Infringed Y/N, then one and the same claim construction will (or ought to) govern both questions.

My point on the Presumption of Validity is that it skews the 2x2 (Infringement/Validity) decision matrix in favour of the patent holder.

As the accused infringer, entry into the "obvious" side of the 2x2 matrix is forbidden, whenever your evidence falls short of "clear and convincing". It's hard for a lay judge and jury to assess what, ten years (or more) ago was or was not obvious to the relevant PHOSITA. So getting them to the point of being clearly convinced that the ambit of the claim reaches to something that was obvious, back then, is near impossible, in all but outrageous cases.

Trial ought to be for 50:50 cases. Those where the obviousness issue is clear for any disinterested and well-informed technical expert ought not to get as far as trial.

Now, if you want a "strong" patent jurisdiction, that dispenses justice fairly and robustly, between those who hold patents and those who are accused by those holders of patent infringement, and so you happen to be looking for a disinterested and well-informed technical expert to help you in that task, there ought to be more than enough to meet the need, at your PTO.

[skeptical]

MaxDrei,

Your view of skew is itself skewed - for the reasons already provided.

With "friends like you," innovation needs no enemies.

[Kevin E Noonan]

Max: I think you are confusing the quantum of proof with the standard of claim scope. The district court applies its construction (the same construction) to invalidity and infringement, which was my point. The presumption makes it more difficult to prove invalidity, but the same reduction in claim scope (wherein it differs from the BRI standard in the PTO) makes it harder to find infringement as well as making it harder to invalidate. But in that case the infringer doesn't need to bear the burden of invalidation, does she?

Thanks for the comment.