Director Memo Decides Against Standard of In Re Packard

Back in 2018 I noted the current PTO administration had backed away from a dispute on the appropriate 112 standard to apply in AIA trials (after intervention by the previous PTO administration). That is, the initial intervention sought to support the application of the standard enunciated by In re Packard to AIA trial proceedings.  After Director Iancu came on board, that Intervenor Brief was withdrawn.

Today, the PTO formally announced (via memorandum) that the Nautilus standard applies to AIA trials – settling an open question….at least for the time being.

As I have explained previously, the standard enunciated by In re Packard is stricter (i.e., more favorable to patent challengers/examiners) relative to the “reasonable certainty” standard of Nautilus.  And that given the Federal Circuit’s justification for the use of the stricter Packard standard in patent prosecution proceedings— iterative process, public notice function of claims, and ability to amend— there was an argument that the district court standard of Nautilus may apply to AIA trials.  That said, the Federal Circuit has yet to decide this issue. And there are equally compelling reasons not to apply Nautilus in AIA trial proceedings.

As the SCOTUS and Federal Circuit have repeatedly made clear, AIA trials are a hybrid proceeding. They share aspects of patent prosecution, such as the ability to amend, as well as aspects of patent litigation. For example, given that PGR is the only mechanism where questions of 112 are squarely presented (aside from amended IPR claims), it would make little sense to apply one standard during prosecution to pending claims, and then to apply a different one to amended claims some 9 months later in the same Office  It seems unlikely that the memorandum (here) will be the last word on this issue. Indeed, such memos may not even be lawful given executive orders of the Trump Administration warning against such practices by administrative agencies.

Nevertheless, for the time being, the agency has explained the change as follows:

This memorandum, issued under the Director’s authority to set forth binding agency guidance, ensures that the agency’s approach to analyzing indefiniteness in AIA post-grant proceedings will adhere to the approach used in district courts, as set forth in the Supreme Court’s Nautilus decision. Under Nautilus, a claim of a patent challenged for indefiniteness is unpatentable for indefiniteness if the claim, read in light of the patent specification and the prosecution history, fails to inform, with reasonable certainty, those skilled in the art about the scope of the invention. Aligning the indefiniteness approach used in AIA proceedings before the PTAB with the approach used in the district courts will lead to greater uniformity and predictability, improve the integrity of the patent system, and help increase judicial efficiency.

While PTAB critics may find yet another pro-patent change heartening, indefiniteness is very rarely a key issue in AIA trials.  At least in the handful of cases I have encountered it, the difference in applicable standard was largely irrelevant.

The debate is most likely to reach the Federal Circuit via a dispute over an IPR amendment as presumably, any PGR presenting arguments under In re Packard would be denied (aside from those now in trial or on appeal).  Once before the Court, I would not expect the memorandum to hold much sway….until then, Nautilus it is.