Federal Circuit Holds that a Decision to Institute an IPR is not Appealable After a Final Decision and Upholds the Broadest Reasonable Construction Standard for IPRs
In in Re Cuozzo Speed Techs. LLC, No. 2014-1301 (Feb. 4, 2014 Fed. Cir.), the Federal Circuit rendered two important decisions for inter-parties review (IPR) proceedings. First, the Federal Circuit held that the PTO’s decision to institute an IPR on a basis not raised in the petition is not reviewable on appeal after a final IPR decision. Secondly, the Federal Circuit upheld the PTO’s use of the broadest reasonable interpretation standard for construing claims in an IPR.
Although the Federal Circuit had previously held that it has no jurisdiction to hear an interlocutory appeal of the PTO’s decision whether to institute an IPR, the Court had left open the issue of whether the decision to institute the IPR could be appealed after a final IPR decision. In in Re Cuozzo, the patentee appealed from a final IPR decision and argued that because the PTO had instituted the IPR regarding two claims based on two references that were asserted in the petition against only other claims and ultimately used these two references to invalidate the claims, the PTO had exceeded its authority in instituting the IPR. According to the patentee, the basis for instituting the IPR must be set forth in the petition under 35 U.S.C. § 312(1)(3) and 35 U.S.C. § 314(d). But the Federal Circuit held that it could not review the PTO’s decision even after a final decision. The Federal Circuit relied heavily on the language of 35 U.S.C. § 314(d), which states that the PTO’s director’s determination of “whether to institute an inter parties review . . . is final and nonappealable” and the language of 35 U.S.C. § 319 and § 141(c), which only provide for appeals from final decisions. The Federal Circuit, however, left open the issue of whether a party could file a writ of mandamus with the Federal Circuit after a final decision has been rendered raising the issue of whether the PTO has exceeded its authority in instituting the proceedings.
In upholding the PTO’s regulation that provides for claims to be provided their broadest reasonable interpretation in an IPR, the Federal Circuit reasoned that even though the patent statute does not provide a claim construction standard for IPR proceedings, “Congress implicitly adopted the broadest reasonable interpretation standard” for IPR proceedings because Congress was aware that the PTO had applied such a standard in examining patents and did not change it in amending the patent statute to provide for IPR proceedings. The Federal Circuit also held that even if Congress did not adopt the broadest reasonable interpretation standard, Congress granted the PTO the authority to adopt this standard under 35 U.S.C. § 316,which grants the PTO the power to establish regulations setting the “standards” for instituting and regulating IPR proceedings.
Judge Newman dissented. She reasoned that the AIA did not preclude appeal of the PTO’s decision to institute an IPR under any circumstances, but rather provided review of the PTO’s decision to institute an IPR after a final decision, so as to preclude interlocutory appeals. With respect to the claim construction standard, Judge Newman argued that the AIA’s provisions relating to “patentability” and “validity” meant that Congress intended that IPRs would have the same claim construction standards that are applied in a district court. In addition, Judge Newman reasoned that the broadest reasonable interpretation standard was not appropriate during IPRs because they are basically invalidity proceedings, as opposed to examination proceedings that provide a more meaningful process for amending claims.