PTAB to Apply Phillips Standard of Claim Construction in Post-Grant Proceedings

by Dan Smith

On October 11, the USPTO published the final text of a new rule that changes the claim construction standard applied in Inter Partes Review (IPR), Covered Business Method (CBM) Review, and Post Grant Review (PGR) proceedings. The announcement was published in the Federal Register and is available online through the Federal Register website.

Under the new rule, the Patent Trial and Appeal Board (PTAB) will apply the Phillips standard of claim construction applied in district court proceedings to all patents, diverging from its historic practice of applying the Phillips standard only to expired patents and using the more-permissive Broadest Reasonable Interpretation (BRI) standard for unexpired patents. The BRI standard will continue to be applied during original prosecution and reexamination before the USPTO. This rule change will apply to all IPR, CBM, and PGR petitions filed on or after November 13, 2018. Because the change was not made retroactive, petitions filed before November 13 will continue to be governed by the BRI standard.

Notably, the new rule does not introduce procedural changes to post-grant proceedings, such as district court-style Markman hearings. In addition, the USPTO's commentary on the new rule describes the Phillips and BRI as similar, noting that "there have been very few decisions in which courts have attributed a variance in claim interpretation to the differences between the two standards."

Despite alignment with the standard used in district court, the new rule does not require the PTAB to adopt the same constructions as a district court. Instead, the new rule requires only consideration of a prior claim construction determination that is "timely made of record" in a post-grant proceeding. The new rule is silent regarding when prior claim constructions must be submitted to be considered "timely." Clarification by the USPTO or interpretation by PTAB panels may be needed to address this ambiguity.

We will continue to monitor the PTAB’s implementation of the Phillips standard and keep our clients up-to-date on the implications of the change.