Private: Broadest Reasonable Interpretation and Claim Amendments in Post-Grant Patent Challenges

by Monica Grewal, Partner, and Michael H. Smith, Senior Associate, WilmerHale

The United States Patent and Trademark Office has used a “broadest reasonable interpretation” (BRI) standard for claim interpretation when examining pending patent applications. Under the BRI standard, a claim term is generally given its broadest reasonable interpretation consistent with the ordinary and customary meaning of the term, its use in the specification, and how it would have been understood by those skilled in the art. Federal district courts, by contrast, have utilized the approach provided in Phillips v. AWH Corp. Under the Phillips approach, courts construe claim terms based on the meaning they would have had to a person of ordinary skill in the art at the time of the invention, based on review of the patent specification, file history, and extrinsic evidence such as dictionaries.

The America Invents Act of 2011 (AIA) established procedures for challenging issued patents at the Patent Office through inter partes review (IPR), covered business methods review (CBM), and post-grant review (PGR) proceedings. The Patent Office generally applies the BRI standard to these proceedings rather than the Phillips standard. Whether the Patent Office should apply BRI or a Phillips construction has been a matter of debate given the nature of these proceedings.

BRI and claim amendments in In re: Cuozzo

In In re: Cuozzo Speed Technologies, LLC, now on appeal to the Supreme Court, the Federal Circuit upheld the use of the BRI standard in IPR proceedings in a 2-1 decision. The majority and dissent agreed that the Patent Office’s BRI standard is premised at least in part on the ability to amend claims. The judges disagreed, however, on the implications for IPR proceedings.

Writing for the majority, Judge Dyk identified the ability to amend the claims as one of the rationales for BRI and concluded IPRs provided the ability to amend claims despite some restrictions. In the opinion, Judge Dyke described the “repeatedly stated rationale for using the broadest reasonable interpretation standard” as “that claim language can be modified when problems are identified in the PTO.” He further noted, “Although the opportunity to amend is cabined in the IPR setting, it is thus nonetheless available.” In the majority’s view, if the requirements for claim amendment are too restrictive, they should be revised, but BRI should stand. The court explained, “If there are challenges to be brought against other restrictions on amendment opportunities as incompatible with using the broadest reasonable interpretation standard, they must await another case.” Thus, the majority concluded that the PTO properly applies BRI in IPR proceedings.

Judge Newman, writing in dissent, similarly characterized BRI as premised on the ability to amend, but described the availability of amendments in IPR proceedings as “almost illusory.” Judge Newman concluded that IPRs were more like district court adjudication than Patent Office examination and that a Phillips construction should therefore be applied. The dissent argued, “The restricted role of amendment in the America Invents Act proceedings comports with the intended and expected ‘correct’ claim construction, not the broadest claim construction. It comports with district court practices in adjudication, not PTO practices in examination.”

Developments at the PTO and Federal Circuit since the Federal Circuit’s In re: Cuozzo decision

Prior to In re: Cuozzo, a panel of judges on the PTO’s Patent Trial and Appeals Board (PTAB) articulated the requirements for claim amendments during IPR proceedings in Idle Free Systems, Inc. v. Bergstrom, Inc. The panel in Idle Free explained that the “burden is not on the petitioner to show unpatentability, but on the patent owner to show patentable distinction over the prior art of record and also prior art known to the patent owner.” Shortly after the In re: Cuozzo decision, in MasterImage 3D, Inc. and MasterImage 3D Asia, LLC v. Reald Inc., the PTAB provided a “clarification” on this requirement. The panel explained that “Prior art of record” means material art from the prosecution history, the current proceeding, and any other proceeding before the Patent Office involving the patent, and that “Prior art known to the patent owner” means “no more than the material prior art that Patent Owner makes of record in the current proceeding pursuant to its duty of candor and good faith.”

More recently, the Federal Circuit in Synopsys, Inc. v. Mentor Graphics Corp. affirmed the PTAB’s denial of a motion to amend based on a finding that the Patent Owner had failed to demonstrate patentability over the prior art of record. Judge Newman argued in dissent that the PTAB’s requirements for claim amendments were too restrictive and again noted the relationship between BRI and claim amendments. She explained, “The opportunity to amend is an important part of the balance struck in the AIA. The easier standards and lighter burdens for invalidation in AIA proceedings, including the PTAB’s use of the broadest claim interpretation instead of the correct claim interpretation, up-end the delicate balance crafted by Congress.”

Synopsys suggests that even with the PTAB’s “clarification” in MasterImage, prevailing on a motion to amend in a post-grant proceeding remains challenging for patent owners. Many practitioners therefore still view the requirements for amending the claims as meriting additional guidance from the PTO and the courts.

BRI and claim amendments in the PTAB’s newly adopted rule changes

As part of the comment period for the PTO’s recent rule changes, the PTO noted it would “continue to make improvements and clarifications via the rule-making process, by updating the Office Patent Trial Practice Guide, and by designating opinions as precedential or informative, as warranted.” However, the newly issued rules, effective May 2, 2016, largely keep intact the PTO’s existing approach to claim interpretation and claim amendments.

The new rules continue to apply BRI to unexpired patents and Phillips to expired patents. The amended rules merely added provisions that Phillips applies to patents that are not expired at the time the petition is filed, but that will expire during the proceeding. Thus, the new rules provide for application of BRI where claim amendments are available and Phillips where claim amendments are unavailable.

The rule changes did not make any changes to the practice for amending claims either. Instead, the new rules merely note the PTO would “further consider ways to promote uniformity in the requirements for a motion to amend, such as by designating opinions precedential, issuing a standing order setting forth what requirements govern a proceeding for motions to amend, or other means.”

Open questions after In re: Cuozzo

The Supreme Court will hear arguments in In re: Cuozzo (now Cuozzo v. Lee) on April 25, 2016. If the Supreme Court allows the PTO to apply a different standard than district courts, several open questions will remain. To what extent will the Supreme Court defer to the PTO to interpret and apply BRI versus weighing in on how it should be applied by the PTO? Were the PTAB’s “clarifications” in MasterImage sufficient under a BRI standard? Should the requirements for claim amendments be revised to make it easier for Patent Owners to amend under a BRI standard? Likewise, if the Supreme Court requires the PTO to apply the same standard as district courts, open questions will remain. How, if at all, should the procedures for claim amendments be revised under a Phillips approach? Should claim amendments be available at all without BRI? Regardless of the outcome, it is likely that additional litigation, and possibly further legislation, will be needed to answer these questions.