Jessica Karmasek Mar. 14, 2016, 10:01am


WASHINGTON (Legal Newsline) - Next month, the U.S. Supreme Court will hear arguments in a case that questions the U.S. Patent and Trademark Office’s procedures for evaluating challenges to the validity of patents.

The nation’s highest court has set oral arguments for the patent case of Cuozzo Speed Technologies, LLC, v. Michelle K. Lee, Under Secretary of Commerce for Intellectual Property and Director, Patent and Trademark Office for April 25.

The court, after hearing the arguments in Cuozzo v. Lee, must decide whether the U.S. Court of Appeals for the Federal Circuit should handle claims in patent cases arising from the Patent Trial and Appeal Board, or PTAB, the same as claims in cases arising from district courts.

Some argue that regardless of where the cases originated, the Federal Circuit should handle the claims the same.

David Applegate, chair of the intellectual property practice group at Chicago-based firm Williams Montgomery & John Ltd., says that under the America Invents Act’s new inter partes review, or IPR, process, this has not stood true.

IPR is a procedure for challenging the validity of a patent before the PTO. The procedure, which allows third parties to challenge bad patents, is conducted by the PTAB.

The review was enacted in September 2012 as part of the AIA to create a streamlined alternative to district court litigation. Some argue that the new procedure, which replaced a previous review procedure called inter partes reexamination, has been abused.

Applegate, in a recent blog post, points to Cuozzo’s opening petition to the Supreme Court, which notes that IPRs filed since the AIA’s effective date have yielded an “unexpectedly high” rate of patent claim cancellation.

Of the more than 3,400 IPR petitions filed since the AIA’s inception, as of Oct. 6, 2015, nearly 85 percent have resulted in cancellation of some or all the claims under review.

“One reason, petitioners believe, is that the PTAB applies a broader standard of claim construction than the federal courts,” Applegate wrote. “By construing claims more broadly than the courts, the PTAB necessarily considers a larger universe of prior art and heightens the potential impact of a given piece of art. Concomitantly, this increases the likelihood of finding a patent either anticipated under Section 102 or obvious under Section 103.”

Like Cuozzo’s attorneys, he argues the Supreme Court should clarify that the proper standard for claim construction in assessing validity of an issued patent does not depend on its initial forum.

In Cuozzo, the petitioner owns a patent on an invention that alerts drivers -- using a GPS device with a display inside the vehicle -- when they exceed the posted speed limit.

Basically, the invention eliminates the need for drivers to take their eyes off the road to look for speed limit signs.

Garmin, one of the largest makers of in-vehicle GPS systems, filed an IPR, challenging various claims of Cuozzo’s patent.

The PTAB determined that three claims were obvious given the prior art -- that is, information made available to the public in any form before a given date that might be relevant to a patent’s claims of originality.

Cuozzo then appealed the board’s decision to the Federal Circuit. Garmin, at that point, settled with Cuozzo. However, the PTO intervened to defend the PTAB’s decision.

A panel of the Federal Circuit affirmed the board’s decision in its entirety.

After being denied a rehearing en banc, Cuozzo appealed to the Supreme Court.

In January, the high court granted certiorari, or review, in the case to address two specific questions:

1. Whether the Federal Circuit erred in holding that, in IPR proceedings, the PTAB may construe claims in an issued patent according to their broadest reasonable interpretation rather than their plain and ordinary meaning.

2. Whether the Federal Circuit erred in holding that, even if the PTAB exceeds its statutory authority in instituting an IPR proceeding, the board’s decision whether to institute an IPR proceeding is judicially unreviewable.

A number of groups have filed amicus briefs in the case, including the American Intellectual Property Law Association, Intellectual Property Owners Association and Pharmaceutical Research and Manufacturers of America.

A decision is expected in July.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

Organizations in this Story

U.S. Supreme Court
1 First St NE
Washington, DC 20543

U.S. Patent and Trademark Office
600 Dulany St
Alexandria, VA 22314

Williams Montgomery & John Ltd.
1622 East Lombard St.
Chicago, IL 60606-3094

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