En Banc Rehearing of Cuozzo Appeal Denied

In a close decision, the Court of Appeals for the Federal Circuit (CAFC) denied rehearing in In re Cuozzo Speed Technologies (here). At issue in the request for en banc rehearing was whether or not the Patent Trial & Appeal Board (PTAB) should apply a broadest reasonable view of challenged claims, or apply a district court style construction (Philips). The majority dismissed the argument as one of legislative policy that is beyond the power of the Court to modify. Meanwhile, the dissent argued that the “new” proceedings of the PTAB were adjudicative in nature, provided limited amendment possibility, and therefore required a claim construction consistent with that applied in the courts. 

While the majority decision is short and to the point, the dissent is quite spirited.

The majority states:

Congress conveyed rulemaking authority to the PTO to prescribe regulations, inter alia, “establishing and governing inter partes review,” 35 U.S.C. § 316(a)(4), and the PTO has adopted the broadest reasonable interpretation standard for IPR proceedings, 37 C.F.R. § 42.100(b). In the absence of evidence of congressional intent to abrogate the broadest reasonable interpretation standard, we should not act to adopt a different standard based on our own notions of appropriate public policy. If the standard is to be changed, that is a matter for Congress. There are pending bills which would do just that.

The dissent, on the other hand, focused on the adjudicative nature of the PTAB trial proceedings, perceived congressional intent, and limited ability to amend..

Congress’s intent in creating a completely new type of PTO proceeding—one bearing the efficiency and finality of district court adjudications of patent validity—could not have been clearer. The panel majority fails to explain why Congress (or anyone else) would have thought it desirable or necessary for the Board to construe the claims during IPRs under a different legal framework than the one used by district courts.                                                                                                            .         .          .         .

With respect to amendments, the panel majority observes that “[a]lthough the opportunity to amend is cabined in the IPR setting, it is nonetheless available.” Id. at 15. But the court fails to explain how a “cabined” amendment process fits within our prior case law emphasizing the “readily” available nature of amendments in other proceedings in which the broadest reasonable interpretation is appropriate.

While the ability to amend in a PTAB proceeding is far from unfettered, the ability to amend in patent reexamination is also limited. For example, typically, amendment is only possible, once, after the first action. Substantive amendments attempted after final rejection are almost always denied. The dissent also makes much of 35 U.S.C. §316(d) allowing PTAB amendment by “permission” only.  I’m not sure that is a fair characterization of a motion opportunity that exists as a matter of right. Certainly the failure to meet the required showing will result in a denial of the motion, but, nonetheless, the opportunity to amend exists as a matter of right. While the PTAB denies motions in AIA trials, the PTO routinely rejects amendment in patent reissue and reexamination for the very same threshold reasons. The fact that reexam/reissue amendments remain in the record (as rejected claims) is more form than substance. And, of course, on the district court side there is never a possibility of amendment.

Also, while the AIA was designed to improve upon patent reexamination, changing the standard in AIA trials would leave reexamination, supplemental examination, and patent reissue untouched —all of which consider previously issued patent claims by applying a BRI analysis. The dissent does not address the potential for inconsistent interpretation by the PTAB if they are to operate using two different claim construction rubrics. (if you accept that there would be a meaningful difference). Judge Newman, in her separate dissent, addresses patent reissue.

And reissues are directed to correction of the patentee’s error; the purpose is to achieve correctness, not breadth. Contrary to the concurrence, the question before this court is not whether to “eliminate” BRI, but whether to impose it on issued patents, where it has not previously reposed.

While patent reissues are indeed filed to address “errors,” in my experience, such errors are almost always of claim scope. In fact there are entire lines of CAFC precedent directed to proper broadening, and recapture. BRI for issued patents is not new at all.

The debate on this issue will almost certainly rage on in Congress in the months ahead.