In Cuozzo Speed Technologies, LLC v. Lee, the Supreme Court unanimously affirmed the United States Patent and Trademark Office’s (“USPTO’s”) standard for construing patent claims in an inter partes review (“IPR”), a post-grant proceeding used to challenged patent validity. In a 6-2 decision, the Court also affirmed that the USPTO’s decision whether to institute an IPR is not appealable.
In an IPR, the USPTO uses the “broadest reasonable construction” standard, which results in broader claims than the “ordinary meaning” standard used in federal district court litigation. Broader claims result in a greater likelihood that the claims will be held invalid.
The Court acknowledged that inconsistent outcomes might result from different claim construction standards in IPR and district court proceedings. But the Court deferred to the USPTO, reasoning that IPR proceedings are less “trial-like” and more like specialized agency proceedings. IPRs are intended to “protect the public’s ‘paramount interest in seeing that patent monopolies . . . are kept within their legitimate scope,’” which justifies a standard that makes it easier to invalidate a patent.
Regarding whether the decision to institute is appealable, the Court relied on the express language of 35 U.S.C. § 314(d): “determination by the [USPTO] whether to institute an [IPR] under this section shall be final and nonappealable.” Justice Alito dissented, arguing that the Patent Office might exceed its authority by improperly instituting IPRs, for example by instituting a late-filed IPR, and Congress could not have intended such “shenanigans” to be unreviewable. But the Court did not preclude the possibility of all judicial challenges, declining to “decide the precise effect of § 314(d) on appeals that implicate constitutional questions.”
As we discussed here, the Court’s opinion keeps IPRs attractive to patent challengers. The broadest reasonable construction standard is likely to result in more invalidated patents, and patent owners have limited, if any, ability to challenge the USPTO’s decision to institute an IPR.