Jessica Karmasek Jun. 21, 2016, 3:02pm


WASHINGTON (Legal Newsline) - On Monday, the U.S. Supreme Court agreed with the U.S. Patent and Trademark Office’s handling of a case involving a patent on an invention that alerts drivers when they exceed the posted speed limit.

The nation’s highest court, after hearing arguments in Cuozzo Speed Technologies LLC v. Michelle K. Lee, Under Secretary of Commerce for Intellectual Property and Director, Patent and Trademark Office in April, decided to support a U.S. Court of Appeals for the Federal Circuit ruling that upheld the PTO’s invalidation of Cuozzo’s speedometer patent.

Basically, the invention, using a GPS device with a display inside the vehicle, eliminates the need for drivers to take their eyes off the road to look for speed limit signs.

The Supreme Court, in its review, was tasked with deciding whether 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.

In its unanimous, 8-0 decision, the court backed the federal agency’s current process, calling it a “reasonable exercise of the rulemaking authority” that Congress delegated to the PTO. Justice Stephen Breyer wrote the 20-page opinion.

“For one thing, construing a patent claim according to its broadest reasonable construction helps to protect the public,” Breyer explained. “A reasonable, yet unlawfully broad claim might discourage the use of the invention by a member of the public.

“Because an examiner’s (or reexaminer’s) use of the broadest reasonable construction standard increases the possibility that the examiner will find the claim too broad (and deny it), use of that standard encourages the applicant to draft narrowly.

“This helps ensure precision while avoiding overly broad claims, and thereby helps prevent a patent from tying up too much knowledge, while helping members of the public draw useful information from the disclosed invention and better understand the lawful limits of the claim.”

Cuozzo argued there is a difference between the PTO’s initial examination of an application to determine if a patent should issue, than, in this case, when the agency reviews an already-issued patent.

The America Invents Act’s inter partes review, or 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 the procedure, which replaced a previous review procedure called inter partes reexamination, has been abused in recent years.

The Supreme Court, in its ruling, said the broadest reasonable construction standard, in IPR, may actually help protect certain public interests.

But the court noted there is no absolute right, in IPR, to amend any challenged patent claims.

Cuozzo argued this is unfair to the patent holder.

The Supreme Court said the process is not “as unfair” as the company suggests.

“The patent holder may, at least once in the process, make a motion to do just what he would do in the examination process, namely, amend or narrow the claim,” Breyer noted.

“This opportunity to amend, together with the fact that the original application process may have presented several additional opportunities to amend the patent, means that use of the broadest reasonable construction standard is, as a general matter, not unfair to the patent holder in any obvious way.”

New Jersey-based Cuozzo also argued the use of the broadest reasonable construction standard in IPR, together with use of an ordinary meaning standard in district court, may produce “inconsistent results” and cause added confusion.

“A district court may find a patent claim to be valid, and the agency may later cancel that claim in its own review,” Breyer wrote for the high court. “We recognize that that is so.

“This possibility, however, has long been present in our patent system, which provides different tracks -- one in the Patent Office and one in the courts -- for the review and adjudication of patent claims.”

Breyer continued, “As we have explained above, inter partes review imposes a different burden of proof on the challenger. These different evidentiary burdens mean that the possibility of inconsistent results is inherent to Congress’ regulatory design.”

To try to create uniformity of standards would consequently prove difficult, the Supreme Court said.

“And we cannot find unreasonable the Patent Office’s decision to prefer a degree of inconsistency in the standards used between the courts and the agency, rather than among agency proceedings,” Breyer wrote.

He added, “The Patent Office is legally free to accept or reject such policy arguments on the basis of its own reasoned analysis.”

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

The PTAB determined 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 filed amicus briefs in the case, including the American Intellectual Property Law Association, Intellectual Property Owners Association and Pharmaceutical Research and Manufacturers of America.

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

Organizations in this Story

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

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

American Intellectual Property Law Association
241 18th Street South
Arlington, VA 22202

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