U.S. Supreme Court (SCOTUS (Justice Breyer))
June 20, 2016
Brief Summary: PTO decision whether or not to institute IPR is non-appealable under §314(d) and PTO’s use of broadest reasonable claim construction standard in IPR is proper.
Summary: This case relates to an appeal of the PTO’s use of the “broadest reasonable construction” standard to interpet Cuozzo’s claims in deciding to institute inter partes review (IPR). SCOTUS held: 1) “§314(d) expressly states that the Patent Office’s determinations whether to institute [IPR] ‘shall be final and nonappealable’” and “[t]he ‘strong presumption’ favoring judicial review…is overcome here by…‘clear and convincing’ indications that Congress intended to bar review”; Cuozzo’s challenge to the PTO’s decision to institute IPR is therefore barred; and 2) the PTO’s “regulation requiring the Board to apply the broadest reasonable construction standard to interpret patent claims is a reasonable exercise of the rulemaking authority granted to [it] by statute” (“Neither the statute’s language, nor its purpose [not only to resolve patent-related disputes among parties, but also to protect the public’s ‘paramount interest in seeing that patent monopolies…are kept within their legitimate scope [Precision Inst., US 1945]. . .Applying the broadest reasonable construction standard in [IPR] is not…unfair to a patent holder, who may amend at least once during the review process, and who has had several opportunites to amend in the original application process…use of that standard encourages the applicant to draft narrowly.”) The Court also noted that “though the application of one standard in [IPR] and another in district court proceedings may produce inconsistent outcomes, that structure is inherent in Congress’ regulatory design, and it is also consistent with past practice, as the patent system has not provided different tracks for the review and adjudication of patent claims” and that “this Court does not decide whether a better alternative exists as a matter of policy.” Justice Alito / Justice Sotomayor’s dissent argued that the “no appeal” rule should only apply “to interlocutory appeals, leaving a court free to review the initial decision to institute review in the context of the agency’s final decision.” The Court explained that this decision “does not categorically preclude review of a final decision where a petition fails to give ‘sufficient notice’ such that there is a due process problem with the entire proceeding, nor does out interpretation enable the agency to act outside its statutory limits by, for example, canceling a patent claim for ‘indefiniteness under §112’ in” IPR (“[s]uch ‘shenanigans’ may be properly reviewable in the context of §319 and under the [APA]”).