Cuozzo Speed Technologies, LLC v. Lee
119 U.S.P.Q. 2d (BNA) 1065
| SCOTUS | 2016Background
- The America Invents Act (AIA) created inter partes review (IPR), an administrative process at the USPTO (PTAB) allowing third parties to petition to cancel issued patent claims based on §§102/103 prior art challenges.
- 35 U.S.C. §314(d) states: "The determination by the Director whether to institute an inter partes review under this section shall be final and non-appealable." 35 U.S.C. §316(a)(4) authorizes the PTO to issue "regulations ... establishing and governing inter partes review." 37 C.F.R. §42.100(b) commands use of the "broadest reasonable construction" (BRC) for claim construction in IPRs.
- Cuozzo Speed Technologies owned a patent; Garmin petitioned for IPR, challenging claim 17 and implying claims 10 and 14 were also unpatentable. The PTAB instituted review of claims 10, 14, and 17 and later cancelled them.
- Cuozzo appealed to the Federal Circuit arguing (1) the PTAB improperly instituted IPR on claims 10 and 14 where the petition lacked the requisite particularity under §312(a)(3), and (2) the PTAB erred in applying the BRC standard instead of the district-court Phillips ordinary-meaning standard.
- The Federal Circuit affirmed; the Supreme Court granted certiorari to decide (A) whether §314(d) bars judicial review of institution decisions like Cuozzo's and (B) whether §316(a)(4) authorizes the PTO regulation adopting BRC for IPRs.
Issues
| Issue | Plaintiff's Argument (Cuozzo) | Defendant's Argument (USPTO/Government/Garmin) | Held |
|---|---|---|---|
| Whether §314(d)'s "No Appeal" provision precludes judicial review of the PTO's decision to institute IPR when institution is challenged as statutorily improper (e.g., petition lacking particularity) | §314(d) should not bar review of institution-related legal errors; "nonappealable" means no immediate interlocutory appeal but permits review on appeal from final decision | §314(d) makes institution decisions final and nonappealable; challenges to institution that are "closely tied" to application of IPR statutes are barred to preserve agency prerogative and Congressional design | Held: §314(d) bars judicial review of ordinary statutory challenges to institution decisions closely tied to §314(a)/§312 — patent owner cannot appeal the PTAB's decision to institute IPR on those grounds (constitutional questions or claims going beyond "this section" may remain reviewable) |
| Whether §316(a)(4) authorizes the PTO to promulgate a regulation requiring the BRC standard in IPRs (37 C.F.R. §42.100(b)) | BRC is inappropriate because IPRs are adjudicative, court-like proceedings and should use the district-court Phillips ordinary-meaning standard | §316(a)(4) is an express delegation to issue regulations "establishing and governing inter partes review;" statute is ambiguous on claim-construction standard so Chevron/Mead permit reasonable agency rulemaking; BRC is reasonable given the public-protection and historical PTO practice | Held: §316(a)(4) authorizes the PTO to adopt BRC for claim construction in IPRs; the regulation is a reasonable exercise of rulemaking authority |
Key Cases Cited
- United States v. Mead Corp., 533 U.S. 218 (2001) (administrative rulemaking can merit deference when Congress intended to delegate authority)
- Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (Court defers to reasonable agency interpretations of ambiguous statutes)
- Lindahl v. Office of Personnel Management, 470 U.S. 768 (1985) (statutory "final" and "conclusive" language interpreted to permit review of legal questions despite a general finality clause)
- Block v. Community Nutrition Institute, 467 U.S. 340 (1984) (presumption of judicial review can be overcome by clear statutory intent)
- Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806 (1945) (public interest in keeping patents within legitimate scope)
- Microsoft Corp. v. i4i Ltd. Partnership, 564 U.S. 91 (2011) (district-court burden to invalidate a patent is "clear and convincing" standard)
- In re Yamamoto, 740 F.2d 1569 (Fed. Cir. 1984) (PTO historically applied broadest reasonable construction in reexamination)
- In re Hiniker Co., 150 F.3d 1362 (Fed. Cir. 1998) (similar patent-reexamination provisions precluded direct review of institution decisions)