On February 5, the Federal Circuit issued its first decision on an appeal of a final written decision of an Inter Partes Review (“IPR”). The decision addressed two outstanding questions of interest to IPR proceedings. First, the Federal Circuit held that the “broadest reasonable interpretation” standard for claim construction is appropriate in IPRs. Second, the Federal Circuit held that decisions to institute IPRs are not reviewable on appeal.
Garmin filed a petition requesting the PTAB to institute an IPR to review the validity of claims from Cuozzo’s patent. The PTAB granted the petition and instituted an IPR, which included institution of the IPR based on grounds not specifically stated in the petition. At the conclusion of the IPR, the PTAB issued a final decision finding all challenged claims obvious, and denied Cuozzo’s motion to amend the claims.
Cuozzo appealed two issues: (a) the PTAB erred in granting the petition to institute the IPR, and (b) the PTAB erred by using the “broadest reasonable interpretation” standard for claim construction. Although Garmin settled with Cuozzo and dropped out of the appeal, the USPTO continued as the appellee.
As summarized above, the Federal Circuit affirmed the PTAB. The Federal Circuit affirmed the PTAB’s use of the broadest reasonable interpretation standard, and the PTAB’s resulting claim construction findings in this case. The Court reasoned that while the AIA does not provide a claim construction standard, Congress intended the use of the broadest reasonable interpretation standard employed in all other Patent Office proceedings, including other adjudicatory proceedings such as interferences. The Court also held that (short of a mandamus petition) it lacked jurisdiction to review a decision to institute an IPR even after the PTAB had issued a final decision, because 35 U.S.C. 314(d) states that the decision to institute reviews “shall be final and nonappealable.”
Judge Newman dissented, arguing both that patent owners should be able to appeal decisions to institute IPRs after a final decision and that the PTAB should use the same claim construction standard as district courts.
Interestingly, the issue of “broadest reasonable interpretation” is one that is currently directly addressed in the Innovation Act, which was reintroduced in the House on February 5, 2015. The proposed legislation would require the PTAB to employ the same standard for claim construction as used by the district courts.