Introducing IPRs as the De Facto Administrative Claim Construction (ACC) Procedure

by Dennis Crouch

Several years ago, I proposed an Administrative Claim Construction Procedure (ACC)— allowing a patentee or third party to request a claim-construction by the USPTO.  The process would be much like an Inter Partes Review (IPR) proceeding – although my proposal would end the proceedings before actually analyzing whether the prior art reads upon the claims.

The combination of (1) the USPTO’s new proposed court-like claim-construction for IPRs and (2) the Supreme Court’s SAS decision collectively provides some opportunity for a de facto administrative claim construction procedure.  It is likely that a substantial portion of IPR participants will now be focused as much on claim construction as on the underlying validity arguments themselves.  Although this is already going on to some extent, once the courts and PTO apply the same standard of law, PTAB claim construction determinations could then be taken as decided issues of law (or at least highly persuasive authority) handed back for the stayed (or upcoming) district court litigation.

In his first major action as USPTO Director, Andrei Iancu has proposed modifying the approach to claim construction that the Patent Trial and Appeal Board (PTAB) applies in IPR proceedings (as well as PRG and CBM proceedings).  Rather than using the usual examination standard of “broadest reasonable interpretation,” the proposal would shift to the “ordinary meaning” of claim terms as applied by the courts and exemplified by Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) and adjusted by Teva Pharms. USA, Inc. v. Sandoz, Inc., 135 S.Ct. 831 (2015).

Although the BRI and Ordinary Meaning standards are actually quite close, the courts and PTO have regularly held them to be different enough to avoid preclusion or even consideration when considering a claim construction performed by another judicial body.  Thus, the PTO Notice explains: “Minimizing differences between claim construction standards used in the various fora could lead to greater uniformity and predictability of the patent grant [and] could help increase judicial efficiency overall.”  (Note – the notice does not mention issue preclusion or collateral estoppel).

The point here is that claim construction performed by the PTAB will now suddenly have an important legal impact once the case returns to the district court.

In SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348 (2018), the Supreme Court held that the PTO cannot partially-institute its AIA trials, but rather, it must address the patentability – and issue a final written decision – for each and every patent claim challenged in an IPR petition (if the petition is granted).  Under SAS, weaker patent challenges will now be heard — for those claims, the fight will likely be primarily about claim construction. Although the petitioner has power over the petition, the patentee also has expanded amendment rights.  Thus, both sides will have the power to seek and obtain a final decision that likely includes a claim construction of disputed claim terms.

At this point, it is difficult to know generally if the PTAB ordinary-meaning claim constructions will tend to favor the patentee or the accused infringer.  The big benefit, however, will be greater certainty prior to getting deep-into district court litigation.

In Light of the Prior Art: One important twist is that the PTAB claim construction is be done in view of the prior art – but ordinarily not with much if any consideration of the accused infringing actions.  This makes it less likely that the claim construction will fully resolve the infringement dispute – that’s OK and how it should be since infringement is a question for the jury.

 

 

 

 

 

79 thoughts on “Introducing IPRs as the De Facto Administrative Claim Construction (ACC) Procedure

  1. 11

    Buried down below (but eminently worth repeating up top):

    6.2.3.2.1.3
    anon May 11, 2018 at 7:03 am

    Ben,

    Your own boss has used these very words:

    “Are we helping these inventors?” Whether it’s an individual tinkering in her garage, or a team at a large corporation, or a laboratory on a university campus, we must ask ourselves “Are we helping them? Are we incentivizing innovation?”

    See link to patentdocs.org

    I would add here that this view exemplifies the difference that Anon2 was attempting to demonstrate to Greg vis a vis a modern Stateist viewpoint (the patent system exists for the benefit of the State) versus the foundational US Sovereign view (the State exists for – and only for – serving the individual).

  2. 10

    That’s better than being needled.

  3. 9

    The BRI standard is used by the PTO to examine patent applications for allowance of recited claims. If allowed under that standard, claims are issued as a patent and then construed by the courts under the “ordinary meaning” standard.

    Because patents are presumed valid under 35 USC 282, the courts require “clear and convincing evidence” to prove invalidity. Microsoft v i4i, 564 U.S. 91 (2010). However, Congress has mandated the “preponderance of the evidence” standard for IPR proceedings. 35 USC 316(e). Consequently, an accused infringer may prove invalidity with a lesser evidentiary showing in the PTAB.

    If the PTO adopts the ordinary meaning standard for claim construction in IPR proceedings, patentees may consider narrower claim terms in order to preserve the validity of their patents. This may make infringement more difficult to prove in court, but there can be no infringement if there is no valid patent claim.

  4. 8

    Wake me up when Iancu comes up with an eligibility test that isn’t a total j0 ke along the lines of one proposed by the IPO and AIPLA, or even takes a baby step and acknowledges the proposals by the IPO and AIPLA to be ridiculous and d.o.a.

    1. 8.1

      Translation:

      Wake me up when someone else gets done with the heavy lifting and I will do my “sniff test,” and if the item does not make me feel better (that is, align with my desired ends), then I will go to my short script and pick a random rant to v0m1t forth.

  5. 7

    “Administrative Subject Matter and Claim Construction”

    ASMCC ?

    The invention should be construed at this step (and at the Markman step in D.C.) so far as to where the novelty is, and what the invention may be “directed to” and all the other paraphernalia of Alice Step 1.

    It’s the natural place, time, and form of proceeding for the essential purpose.

    1. 7.1

      ? IPRs cannot decide Alice 101 issues. Some CBMs can, for the few more years before they sunset, although CBM applicability has been significantly narrowed.

      1. 7.1.1

        ? IPRs cannot decide Alice 101 issues.

        This is correct but a detailed claim construction could and should define the structures of any machines or machine components recited in the claim. What’s not defined in sufficient structural detail will be rendered generic. And that’s the end of the ballgame for pretty much every junk logic claim.

        Oh, but wait! Let’s clap really loud and the “fake” structure will become “real”.

        1. 7.1.1.1

          “define the structure”…

          Still attempting to peddle your optional claim format as something more than just an option, Malcolm?

        2. 7.1.1.2

          “will be rendered generic”

          That’s most definitely NOT what the term “generic” means.

  6. 6

    Scott’s Post-Grant blog continues to challenge assumptions that changing IPRs and CBMs from BRI to Phillips is pro-patent-owner. E.g, today he notes that:
    “..a change to Phillips gives district courts yet another reason to await a PTAB outcome. That is, the PTAB will be construing claims under Phillips within 6 months of a petition filing. How will a district court look at a timely filed PTAB proceeding instituted on all litigated claims, now applying Phillips, and decide to continue with its own proceeding?. Especially given the lengthy dockets in some districts where Markman is some 12-18 months down the line?”

    To add to this, note that if indeed this PTO Rule change leads to earlier D.C. Markman claim interpretations based on [often earlier] PTAB claim interpretations, that would logically lead to far more early, low cost, [pre-settlement] summary judgments for non-infringement, depriving many patent owners of the settlements they now obtain from defendants anxious to avoid full blown patent litigation defense costs.
    As widely noted in comments here and elsewhere, the change from BRI to Phillips is not expected to benefit patent owners in many IPR, because it will not not narrow most subject claim interpretations at all, or not enough to avoid the cited prior art. But in any IPRs where it does narrow claims, that is more likely to be disadvantageous to patent owner in the parallel D.C. infringement suit, for the above and other reasons.

    1. 6.1

      Let me see if I follow your logic,

      Case 1:

      IPR is filed, PO submits a claim construction narrower than the petitioner, PTAB adopts the narrow version and finds the patent not invalid. PO now gets to litigate using the adopted narrower construction, which it proposed knowing its infringement case.

      Case 2:

      IPR is filed, PO submits a claim construction narrower than the petitioner, PTAB adopts the broader version and finds the patent invalid. PO is done.

      Case 3:

      IPR is filed, PO submits claim constructions from the DC, petitioner submits broader constructions, PTAB ignores DC because it says BRI is the rule. PTAB finds patent invalid. PO is done.

      ____

      Case 3 is how many IPRs have progressed.

      How is PO worse off in Case 1 and 2 with the new proposed rule again??

      1. 6.1.1

        I don’t really care, since, like others here, I don’t think this rule change will make any difference EXCEPT POSSIBLY to the D.C. judge.
        But note that in all three cases, either party can appeal an incorrect claim interpretation de novo to the Fed. Cir. since it is a matter of law, if it actually would make a difference. What the PTAB says is not a final decision.
        But how can “Case 3 is how many IPRs have progressed” be true? That would require a D.C. Markman claim interpretation completed before the [normally earlier] IPR claim interpretation since the IPR has to be filed within one year of the complaint date.

        1. 6.1.1.1

          Several district courts issue a claim construction order within 13 months of filing.

          Many defendants don’t rush to file IPRs right away. Many wait until the PO submits its proposed constructions and then submit those constructions to the PTAB as the minimum for what BRI should mean.

    2. 6.2

      Scott’s Post-Grant blog continues to challenge assumptions that changing IPRs and CBMs from BRI to Phillips is pro-patent-owner.

      And Mr. McG is correct. The change is not “pro-patent-owner,” because we do not and should not run the patent system for the benefit of either the patentee or the defendant. The proposed change is desirable because it enhances fairness and efficiency of the overall process, not because it works to the good of one side or the other in any given dispute.

      1. 6.2.1

        Yes!

        Having two different standards leads to gamesmanship with the rules. No longer can one side argue contradictory positions before the PTAB and the DCT.

        1. 6.2.1.1

          No longer can one side argue contradictory positions before the PTAB and the DCT.

          But you can still argue that structureless abstractions have structure.

          And litigants will still argue contradictory positions if those are the only positions they have left.

          And that’s all that really matters. This BRI versus non-BRI business is a silly sideshow.

      2. 6.2.2

        A noble thought Greg, but not what most IPR-haters had in mind.

      3. 6.2.3

        “we do not and should not run the patent system for the benefit of either the patentee or the defendant.”

        I don’t see how to reconcile this this with the sentiment that the people running the patent system should be constantly asking themselves “Are we helping these inventors?”

        1. 6.2.3.1

          It squares because a patentee/defendant context is quite different than an examiner/patentee context.

          Context matters.

        2. 6.2.3.2

          I am afraid I am not clear what you mean, Ben. I gather that your 6.2.3 is meant as a response to my 6.2, but I am rather lost as to what it is to which you are responding.

          1. 6.2.3.2.1

            I was referencing your post from a few weeks back about how “Are we helping inventors?” should be asked by everyone administering the patent system at every opportunity. That sounds like a system being run for the benefit of patentees.

            1. 6.2.3.2.1.1

              I am afraid that I do not remember the post you describe. If you say that I wrote such a thing, I am sure that you are correct, but I cannot remember it well enough to comment on the point that you are trying to make.

            2. 6.2.3.2.1.2

              As I said, I cannot remember the context of the remark that you are citing, so I will not try to comment on that remark. About the distinction between “patentee” and “inventor,” however, I will say that I am much less troubled about the idea of running the patent system for the benefit of inventors than I am at the idea of running it for the benefit of patentees. If that seems like rather a thin distinction to you, I would note that the whole reason we have IPRs is because there exists a class of patentees who are neither inventors nor the successors in interest of inventors. Rather, they are folks whose “invention” was already part of the prior art, but who were granted patents nevertheless because of imperfections (not necessarily culpable imperfections, but imperfections nevertheless) in the examination process. It is good for the system as a whole—and a help to true inventors—if those misbegotten claims be culled from the rolls. This is an instance of running the system for the benefit of inventors, but not necessarily for patentees.

              1. 6.2.3.2.1.2.1

                I “get” the distinction that you want to make Greg, but the reality is that your “system” employing as it does a politicized process for property AFTER the horse has left the barn with NO meaningful tie back into the actual examination process is problematic across the board and in fact does MORE damage to the patent system (and thus, your distinction of “inventors” – as applied – are HURT by the “fix”).

                If this were an actual non-government entity putting out a product and having a quality system with such a “post-sales” program, the entity would not be in business for long at all.

                Here, because this is a government program, and can be run without regard to any actual effects, AND have payment streams from BOTH ends (the examination end and the horse-long-gone-from-the-barn end), we are building in a fai1ure mode that is offensive and counter-productive for what the patent system was intended for.

            3. 6.2.3.2.1.3

              Ben,

              Your own boss has used these very words:

              “Are we helping these inventors?” Whether it’s an individual tinkering in her garage, or a team at a large corporation, or a laboratory on a university campus, we must ask ourselves “Are we helping them? Are we incentivizing innovation?”

              See link to patentdocs.org

  7. 5

    [T]he PTO Notice explains: “Minimizing differences between claim construction standards used in the various fora could lead to greater uniformity and predictability of the patent grant [and] could help increase judicial efficiency overall.” (Note – the notice does not mention issue preclusion or collateral estoppel).

    Perhaps this is ungracious grousing, because I expect that “increase judicial efficiency” is a reference to collateral estoppel, but it would have been better if the PTO had mentioned collateral estoppel explicitly. If the PTO really wants to achieve more consistency between court and PTAB constructions, then the best and easiest way to reach that goal is to treat Art. III claim constructions (where they exist) as binding on the PTAB in IPR/PGR proceedings. You cannot get more “consistent” than identical.

    1. 5.1

      Perhaps this is ungracious grousing,

      Hmm, I suppose there is some of that (given the reminder at post 4), but in truth, your idea is not a bad idea – its just not what the Office did here.

    2. 5.2

      I agree – if this is the desired result then it should be explicitly stated.

      1. 5.2.1

        But it’s not the PTO’s prerogative to decide if a D.C. judge can, or must, decide if there is collateral estoppel from an IPR claim interpretation, even under these new rules?

        1. 5.2.1.1

          Sure. What I meant is that the PTO can (and should) announce that it will apply issue preclusive effect to any claim construction already done in parallel litigation. One might hope that courts will do the same, but you are, of course, correct that the PTO cannot direct them to do so.

          1. 5.2.1.1.1

            Why not? For Franchise Rights, the Executive Branch can do what it wants to do, eh?

    3. 5.3

      I don’t see how the Notice could have mentioned issue preclusion. In most cases, the petitioner has not litigated the claim construction and should be free to argue a “better” construction under Phillips.

      1. 5.3.1

        I am not following you, here. If the PTAB is to construe the claims according to the Philips standard, then why should either party be free to argue a “better” Philips standard in court (or vice versa)? The issue of what the claims mean under Philips will have been fully and fairly litigated in one forum, why should there be another opportunity to re-litigate the whole question in another forum?

        1. 5.3.1.1

          Where do you get that a PTAB order containing a claim construction finalizes the claim construction issue for the DC? Until a [the PTAB] proceeding is “final” and the claim construction is necessary for the final decision, the claim construction is not final and there is no issue preclusion. See TecSec v. IBM…

          1. 5.3.1.1.1

            And, if I recall correctly, the Fed. Cir. has already held that a Markman claim interpretation in a pending D.C. suit [much less the PTAB?] is not binding on another D.C.

            1. 5.3.1.1.1.1

              Is not part of the issue here is that “claim construction” is being viewed as some type of singular event, where in actuality, a contest in an Article III court may reflect only particularly debated claim terms between explicit parties?

              Throw in a different suit with different parties, and different claim terms may then be under focus, eh?

          2. 5.3.1.1.2

            Sorry for not making myself clear. You are, of course, correct. I meant merely that where issue preclusion should apply in court, I would hope that the courts would apply it. Naturally, where the conditions for issue preclusion are not actually met, then there is no reason for issue preclusion to apply.

        2. 5.3.1.2

          I thought that what was meant by issue preclusion was that the PTAB could be bound by a previous DC construction. I did not consider the case of a PTAB construction binding a DC construction.

          1. 5.3.1.2.1

            Ah, I see. Well, certainly, where the court has not tackled claim construction, then there is nothing to bind the PTAB. The position that I am advancing (evidently with rather less clarity of thought or expression than one might wish) is that: (1) where the courts have construed claim terms as between a set of parties, then the PTAB ought to adopt those same constructions (absent some reason why it would be manifestly unfair to do so); and (2) where the PTAB has given a final decision as between two parties, but the parallel court proceeding has not resolved Markman, then the court should adopt the PTAB constructions (once again, except where there is some reason why it would be manifestly unfair to do so). In other words, ordinary principles of issue preclusion should apply between court and PTAB (except that the PTAB should bow to Markman orders, which are not “final judgments” as such, but close enough for these purposes).

            1. 5.3.1.2.1.1

              (1) is unfair to the petitioner because the petitioner had no chance to present additional extrinsic evidence, appeal the previous construction, or make a more competent argument for a different construction.
              (2) may work, I have not thought about it. Note however that it would appear very presumptuous that the USPTO expresses an opinion about how the DC should handle the PTAB construction. It is not surprising that the Notice is silent on this topic.

              1. 5.3.1.2.1.1.1

                I am still not following you on #1. Why has the petitioner not had an opportunity to present all of its relevant evidence in the Markman process that (ex hypothesi) must have occurred for this even to be an issue? Why is the lack of an appeal even an “unfairness”? If the PTAB adopts a construction from the district court, and that construction is later overturned on appeal, then that construction can still be challenged on appeal. In fact, because the PTAB is likely to finish before the court, the appeal from the PTAB decision might actually arrive in time to be of some use to the infringement trial. Finally, why is it “unfair” that the petitioner be denied a chance in front of the PTAB to “make a more competent argument for a different construction.” The whole point of issue preclusion is that you should make your competent arguments right from the start. If you make an incompetent effort in front of one tribunal, it is not “unfair” that you be stuck with the results in another tribunal.

                1. You do remember that the two different tribunals operate under two different sets of ground rules, right?

                  There are a host of differences that may very well dictate different strategies, so your implicit “one best way” may not in fact even exist.

                2. I misunderstood “a set of parties” as meaning the patentee and a third party, and not the patentee and the petitioner. If there is a final judgement on claim construction on a proceeding involving the petitioner before the IPR is instituted, then I agree with you. But how often will this happen?

  8. 4

    (Note – the notice does not mention issue preclusion or collateral estoppel).

    …as I pointed this out to Greg….

  9. 3

    The experience of patent litigation in i) England (where one court decides infringement and validity in one single trial) and ii) Germany (where a court at one end of the country does validity while a court at the other end of the country does infringement) suggests that bifurcation of these issues can be problematic.

    English litigators would suggest that the infringement issues sensitize the judge to the key issues of claim construction, and keep the construer on the straight and narrow path, to deliver a construction that is unexceptionable.

  10. 2

    What’s not to like:

    1. Upon the emergence of a definitive construction of the claim, most of the reasons to litigate fall away.

    2. who better to dispense claim construction than a neutral, unemotional and apolitical lifetime expert that is accustomed to listening to both sides of the argument before delivering its findings?

    1. 2.1

      What party is it that you think your (2.) is represented by?

    2. 2.2

      Upon the emergence of a definitive construction of the claim, most of the reasons to litigate fall away.

      How is this a something not to like? We ordinarily consider it a good thing if parties lose enthusiasm for litigation.

      1. 2.2.1

        Ah yes – beware the kool aid that all litigation “must” be bad.

        Even though litigation is part and parcel of the system we have chosen to put in place in order to enforce Rights (be they merely “Franchise Rights” or be they personal property rights).

  11. 1

    I’ll support it and I do believe that ned would’ve supported this as well.

    1. 1.1

      Interesting 6, as I recall, you rejected a version that I put forth that is practically the same (having to do with examiners during examination effectively providing this output).

      1. 1.1.1

        Even after a claim construction order from an Art III Court, the parties and sometimes the Court doesn’t agree what the boundaries of the constructions are.

        To believe rewriting a term or phrase with another term or phrase ends the ability of litigators to dispute the construed terms in phrases is myopic in my experience.

        While you think it would be rare, I have seen experts (and parties) explicitly disagree with the Court’s very construction of a term at trial. Disagreeing with a PTAB order would be much easier…

        1. 1.1.1.1

          Its “turtles all the way down,” as any phrase (comprised of words) can ONLY be rewritten with – you guessed it – other words.

          Much like the ill-thought our “let’s include a definition section” paradigm, your post reminds all that the item being advanced is merely the item to which that advancement itself comprises.

        2. 1.1.1.2

          “While you think it would be rare, I have seen experts (and parties) explicitly disagree with the Court’s very construction of a term at trial. Disagreeing with a PTAB order would be much easier”

          Not unlikely at all, the court is not an expert and certainly isn’t an imaginary man with access to all published knowledge. I’m sure litigants quite often have a better understanding of the claims than judges do.

          1. 1.1.1.2.1

            Um, except claim construction is an issue of law and is final before the jury. See Markman and O2 Micro.

            The point was substituting words for words doesn’t end the debate of what those words mean.

            1. 1.1.1.2.1.1

              “Um, except claim construction is an issue of law and is final before the jury. See Markman and O2 Micro.”

              The jury/judge getting the final (or it being an issue of lawl) say doesn’t have squat to do with whether the litigants continue to disagree after that final say is had.

              1. 1.1.1.2.1.1.1

                You missed this, 6:

                The point was substituting words for words doesn’t end the debate of what those words mean.

                1. I actually purposely disregarded it because of its re tar dation. I disagree with the childish notion that is being discussed in that section.

                2. Your comment is awaiting moderation.
                  May 10, 2018 at 8:20 pm

                  Your feelings won’t make that point go away, 6.

                3. “Your feelings won’t make that point go away, 6.”

                  Childish “points” can be dismissed quite easily, by either of my own personal feelins or thinkins. I do so regularly.

                4. No 6, closing your eyes (as is what you are doing with such “feelins or thinkins”), does NOT make the point go away.

                  That point is still there.

                  And yet it turns.

        3. 1.1.1.3

          Yes, and the scope of a particular claim element that did not initially even look like it needed any “claim interpretation” might turn out later to need it for determining infringement of a different product of the initial accused infringer, or products later accused infringers.
          Even D.C. judges may change part of their prior Markman claim interpretations by the time of the trial.

      2. 1.1.2

        Perhaps, I don’t recall, but I will support it now. I don’t recall my ever having any concerns with the PTO doing the markman hearing ala D’s suggestion or the PTO making their construction explicit and using the district court standard ala the director’s proposal.

        1. 1.1.2.1

          Perhaps, I don’t recall, but I will support it now.

          Another item on the “convert 6” list…..

          1. 1.1.2.1.1

            Well I mean when IPRs first came out I was under the impression that if they used BRI in IPRs then people would be able to amend on a fairly regular basis. If they’re not going to allow amendments then these other matters need to change. I don’t think I was so much converted as they deliberately decided to not allow people to amend, which in my view, even back in the day, should have precluded BRI being used.

            1. 1.1.2.1.1.1

              Very reasonable of you there, 6.

            2. 1.1.2.1.1.2

              That is a popular complaint, but the facts are that very few patent owners have ever even ASKED to amend claims in IPRs, and now both the Fed. Cir. and the PTAB have made it easier to get such requests granted.

              1. 1.1.2.1.1.2.1

                [T]he facts are that very few patent owners have ever even ASKED to amend claims…

                I am not sure what to make of this observation. After the first few months of IPRs, when literally 100% of claim amendment motions were denied, patentees justifiably inferred that such motions were a waste of their valuable page limits. Let us see what the rate of amendment petitions adjusts two once the new reality of AquaProds. sets in.

                1. Fair enough Greg. but I will bet you that attempted IPR claim amendments will not significantly increase even under the new ground rules. Not with 85% of IPRs resulting from patent lawsuits, in which most patent owners are unwilling to take the hit for “intervening rights” until they finally realize, too late in the proceeding, that they need to.
                  The IPR rule change to In re Phillips claim construction will further delude some patent owners into overestimating the small difference between true BRI and In re Phillips – thinking they can now get a narrowing interpretation of a claim from APJs by attorney argumentation and POSITA declarations without amendments. But this rule change will now make those attorney claim narrowing arguments more effective as admissions against interest in the parallel D.C. litigation.

                2. Let us see what the rate of amendment petitions adjusts two…

                  Argh. The blue alien who typed these words cannot be me. I would never have written that. The real Greg DeLassus would have written “Let us see to what the rate of amendment petitions adjusts… .”

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