In re Cuozzo Speed Techs., LLC, — F.3d – (Fed. Cir. Feb. 4, 2015) (Newman (dissent), Clevenger, DYK)
Federal Circuit affirms PTO decision to reject claims in inter partes review proceeding.
Jurisdiction: The court started by considering whether it could hear Cuozzo’s complaint that the Board improperly instituted the IPR on grounds different than those asserted by the Petitioner (which had since left the case after a settlement). The Court decided it had no jurisdiction because the institution decision was made under 35 USC 314, and that section says its decisions are ”final and unappealable.” Cuozzo had distinguished its appeal from that in St. Jude v. Volcano, where the appeal had been taken from the institution decision itself rather than from a final decision in the IPR, but the Federal Circuit noted that Section 314(d) “must be read to bar review of all institution decisions, even after the Board issues a final decision.” Analogizing to review of reexamination decisions, the court noted that any errors at institution are “washed clean” by subsequent proceedings, which the Federal Circuit can review. The Federal Circuit noted that prior mandamus decisions (In re Dominion and In re Proctor & Gamble) had not decided whether mandamus can be brought in this sort of situation and the court would not do so now – though the court did then comment on the applicability of mandamus to the current case.
Claim Construction Standard: The Federal Circuit concluded that the “broadest reasonable interpretation” (BRI) standard for claim construction should apply for inter partes review, because it has been applied in all other areas of PTO practice (unless the patent has expired), and Congress enacted the IPR provisions against that backdrop but never said anything special for IPRs. The rationale for the broader standard is that an applicant can always amend the claims to make then clearly narrower, and “[a]lthough the opportunity to amend is cabined in the IPR setting, it is nonetheless available.” Slip Op. at 16. In any event, under Chevron, the PTO can adopt such a standard under its rulemaking authority.
Claim Construction Merits: The claims related to a device that shows an automobile driver the current speed limit, e.g., right on a speedometer. The Federal Circuit first noted that the case had no extrinsic evidence, so Teva did not apply. On the merits, the term was “integrally attached,” and Cuozzo wanted a broader definition would could cover complete integration of the two relevant parts into a single structure. The term was not in the specification or original claims. The Federal Circuit agreed with the Board that Cuozzo’s construction was wrong because it would read out the word “attached,” since something cannot be attached to itself.
Obviousness: Applying its normal “substantial evidence” standard of review to the Board’s fact findings, the Federal Circuit noted that the claims were invalid if they read on obvious subject matter even if they also read on nononbvious subject matter. The Federal Circuit also dismissed the argument that there would be no motivation to combine references that showed electronic devices with those that showed mechanical devices. Slip Op. at 23-24.
Motion for Leave to Amend: The Federal Circuit agreed with the Board that Cuozzo’s proposed amendment was broadening (applying the same strict test it uses for reissues and reexaminations), and thus improper.
In dissent, Judge Newman opined that (a) the Board should apply the same legal and evidentiary standard as applied by district courts because it was meant to be a litigation substitute; (b) the court should not completely insulate institution decisions from appellate review via “heavy-handed foreclosure.” On BRI, she notes that the standard is premised on the availability of an “unfettered right to amend,” whereas availability of amendment in IPR is “almost entirely illusory.”
What should you take from this decision?
This decision is notable, not so much for its analysis on any particular topic, but because it resolves a number of previously-open issue related to IPRs that many parties were waiting to have resolved — especially the continuing use of the BRI claim construction standard. The court also expanded its prohibition on appeals that started in St. Jude v. Volcano, holding that even appeals taken from the end of a full IPR cannot raise issues from the institution of the IPR. There are some limited factual situations in this area that the court has not yet addressed, and the court did leave a little room for mandamus. Also, even the PTO has admitted (in the Cuozzo oral argument) that review can be had for any Board violation of a fundamental Constitutional right (though that is likely to be extremely narrow).
John Dragseth is a Senior Principal of Fish & Richardson, and has been named one of the top 50 IP attorneys in the country under the age of 45. He has also been named a Minnesota SuperLawyer multiple years. His practice centers on complex legal analysis and writing – in federal appeals, patent prosecution, reexamination,...