In In re Cuozzo, the Federal Circuit held, in a 2-1 opinion, that decisions of the PTAB to institute an IPR are not appealable and confirmed the use of the broadest reasonable interpretation standard for claim construction proceedings in IPR. In re Cuozzo Speed Techs., LLC, No. 2014-1301 (Fed. Cir. Feb. 4, 2015).
The Court noted its previous holding (discussed here) that 35 U.S.C. § 314(d) precludes interlocutory review of decisions whether to institute IPR. The Court then found that § 314(d) excludes all review of these decisions, including after the Board issues a final decision, as § 314(d) provides that decisions whether to institute IPR are both “nonappealable” and “final.” The Court did not decide the question of whether decisions to institute IPR are reviewable by mandamus after the Board issues a final decision or whether such review is also precluded by § 314(d).
Regarding the appropriate standard for claim construction in IPR proceedings, the Court found Congress impliedly adopted the broadest reasonable interpretation (BRI) standard, for when it enacted the AIA, Congress was well aware that the BRI standard was the prevailing standard for PTO proceedings.
The patent owner argued that the stricter standard for claim construction applied in district court litigation should apply to IPR proceedings because other PTO proceedings allow claim amendments, whereas the AIA limits amendments in IPR proceedings. The Court rejected this argument, noting that “[a]lthough the opportunity to amend is cabined in the IPR setting, it is thus nonetheless available.” The Court also found that even if Congress did not adopt the BRI standard, the standard was properly adopted by PTO regulation as § 316 provides authority to the PTO to establish regulations for IPR proceedings.
Judge Newman dissented, arguing that IPRs are intended to be a surrogate for district court litigation, and thus the prevailing and stricter district court standard set forth in Phillips should apply. Judge Newman also noted that the purpose of the “nonappealable” provision is to “bar interlocutory proceedings and harassing filings…,” and that the majority’s holding regarding § 314(d) was “heavy-handed foreclosure of all review of anything related to the petition.”
As this decision confirms, the determination of the Board as to whether to institute an IPR is not appealable, but may be reviewable under mandamus. Also, since the BRI standard applies in IPR, a patent challenger should carefully evaluate the differences in invalidating claims via IPR versus federal district court.
However, this may not be the end of the claim construction standard debate. On the day after the Federal Circuit’s decision in Cuozzo, the Innovation Act patent reform bill was introduced in Congress, and one provision would require the Board to cease using the BRI standard for claim construction and instead use the same standard as district courts. Patent practitioners should monitor the status of this bill, as it could impact IPR proceedings.