USPTO Announces Notice of Proposed Rulemaking for Claim Construction Standard used in PTAB Proceedings

USPTO Press Release: Alexandria, VA – Today, the United States Patent and Trademark Office announced its proposed rulemaking to change the prior policy of using the Broadest Reasonable Interpretation standard for construing unexpired and proposed amended patent claims in Patent Trial and Appeal Board (PTAB) proceedings under the America Invents Act. The proposed new standard is the same as the standard applied in Article III courts and International Trade Commission (ITC) proceedings.

The USPTO also proposed to amend the rules for PTAB trials to add that the USPTO will consider any prior claim construction determination concerning a term of the claim in a civil action, or an ITC proceeding, that is timely made of record in an Inter Partes Review (IPR), Post Grant Review (PGR), or Covered Business Method (CBM) proceeding.

The purposes of the proposed rule include, among other things, to ensure consistency in claim construction between the PTAB and proceedings in district court or at the ITC, and to increase judicial efficiency.

A Notice of Proposed Rulemaking (NPRM) will publish on May 9, 2018. Please submit comments to ptabnpr2018@uspto.gov within 60 days from the notice of publication.

CURRENT: 37 C.F.R. § 42.100

(b) A claim in an unexpired patent that will not expire before a final written decision is issued shall be given its broadest reasonable construction in light of the specification of the patent in which it appears. A party may request a district court-type claim construction approach to be applied if a party certifies that the involved patent will expire within 18 months from the entry of the Notice of Filing Date Accorded to Petition. The request, accompanied by a party’s certification, must be made in the form of a motion under § 42.20, within 30 days from the filing of the petition.

PROPOSED: 37 C.F.R. § 42.100

(b) In an inter partes review proceeding, a claim of a patent, or a claim proposed in a motion to amend under § 42.121, shall be construed using the same claim construction standard that would be used to construe such claim in a civil action to invalidate a patent under 35 U.S.C. 282(b), including construing the claim in accordance with the ordinary and customary meaning of such claim as understood by one of ordinary skill in the art and the prosecution history pertaining to the patent. Any prior claim construction determination concerning a term of the claim in a civil action, or a proceeding before the International Trade Commission, that is timely made of record in the inter partes review proceeding will be considered.

30 thoughts on “USPTO Announces Notice of Proposed Rulemaking for Claim Construction Standard used in PTAB Proceedings

  1. 5

    This eliminates one frequent complaint about IPRs. Another is being eliminated by the PTAB itself, in decisions [including one in July designated “informative”] rejecting IPR petitions which raise prior art no better than that previously considered.

  2. 4

    Note this will also apply to interferences and derivation proceedings.

    1. 4.1

      I said that only because 37 C.F.R. § 42 was written for both interferences and AIA contested cases trial proceedings, but the comments accompanying the two proposed rule changes make it clear that it is only intended to cover AIA contested cases.

  3. 3

    A symbolic amendment to the rules, but not a particularly meaningful one. The PTAB has not really been applying “broadest reasonable interpretation” for at least three years, and most practitioners and PTAB judges cannot articulate how the BRI and Phillips standards are meaningfully different in how they’re applied.

    1. 3.1

      Even Judge Newman seems to confuse BRI and the Phillips standard. In Arendi v Google link to patentlyo.com she quoted a portion of Sorensen explicitly related to claim interpretation by the courts under the Phillips standard (page 7). Arendi v Google was an appeal from an IPR decision in which the claims were interpreted under BRI. I was surprised that Judge Newman did that. So yes, the CAFC has made it very difficult to distinguish BRI from the Phillips standard. But I don’t see a reason why it would be a bad thing to have both interpretations converge to the same result.

  4. 2

    The PTAB should continue on and accept all Art III orders/findings/judgments as conclusive on an issue.

    That is not to say validity cannot be challenged on a separate ground than was litigated, but if a jury considers a 102 argument and finds the patent not invalid, the PTAB should be done with that reference. The parties are able to appeal the issue to the Fed. Cir.

    If efficiency is the name of the game, the work the Art III courts perform should be part of the equation.

    1. 2.1

      Definitely.

    2. 2.2

      Does anyone but me feel that this change is just going to shift the venue for invalidation away from IPRs and back to ex parte reexams so that accused infringers can STILL get the benefit of using the BRI standard? Seems like just addressing the IPR, PGPs, and CBM claim construction standard….the PTO is leaving a loophole for the PTAB to continue to invalidate claims using non-Philips standard (AND they doesn’t have to consider prior court claim constructions in the re-exam case either.)

      1. 2.2.1

        Nope. As I said in a different comment, BRI isn’t really that different than Phillips in actual application.

        No patent challenger would give up the benefit of actually participating in an inter partes proceeding to gain the illusory benefits of BRI through ex parte reexamination.

        1. 2.2.1.1

          Here’s what will actually happen. The accused infringer will file an IPR. Then after that IPR is decided, if it didn’t go in their favor, they will file an ex parte reexam (likely on different art). I’ve seen it before and expect to see this practice continue.

          1. 2.2.1.1.1

            Re: “Here’s what will actually happen. The accused infringer will file an IPR. Then after that IPR is decided, if it didn’t go in their favor, they will file an ex parte reexam (likely on different art).”

            ? Please explain why that is not precluded by the statutory estoppel provisions of the IPR? [Which are NOT limited to the patent and publication prior art presented in the IPR.]

            1. 2.2.1.1.1.1

              Here’s the applicable statute:
              “The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised OR REASONABLY COULD HAVE RAISED during that inter partes review. [emphasis supplied]

            2. 2.2.1.1.1.2

              While such a course of action is definitely precluded by the AIA estoppel provisions (37 C.F.R. §1.510(b)(6)), to be fair to Lemming, I have no idea how the PTO can police that requirement. If a third-party requester simply files it in his/her own name (instead of the name of the corporate entity that prosecuted the IPR), the PTO has little ability to go behind the face of the request to enforce the estoppel provisions. If the requester is not a lawyer, then OED has no power over this sort of bad-behavior, and the requester wants to destroy a patent, not obtain one, so the threat of inequitable conduct consequences is rather weak.

              1. 2.2.1.1.1.2.1

                OED can sanction any patent attorney or agent who knows about fraud and/or IC being perpetuated on the PTO and does not report it, as the rules require. The IPR and reeexam are public information anyone seriously interested in the patent would become aware of. Also, such an illegal reexam could be legally attacked.

                1. OED can sanction any patent attorney or agent who knows about fraud and/or IC being perpetuated…

                  Sure. We do not disagree that in theory the PTO can address such bad behavior. Pause and consider, however, how the OED would go about proving that a given lawyer had perpetrated such a fraud. As I said above, if one simply imagines the situation in which an individual employee of the IPR-petitioner corporation files the ex parte request in the employee’s own name, then there is no lawyer involved. No lawyer files the request, and (absent really appalling sloppiness), no law-firm indicia are present on the papers submitted. In such circumstances, the PTO would be hard pressed to mount a disciplinary action against any individual lawyer.

                  Also, such an illegal reexam could be legally attacked.

                  Could it? That was just what I was trying to establish to my own satisfaction. I would be obliged if you could explain to me how a patentee might challenge such an ex parte re-exam outcome.

                  Who would the patentee have to sue, and on what grounds?

                  Could the PTO simply invoke its right to institute re-exams sua sponte, such that the response to the improper petition would be no more than harmless error?

                  Would it make a difference if the patentee initially acquiesced to the proceeding by filing amendments? If the patentee were to file amendments, and then later challenge the PTO’s authority to institute the re-exam, would the outcome be to take the patent back to the state of pre-initiation, or would the amendments stand on the record?

                2. Greg, your comment below deleted the fraud REPORTING obligation, which is not limited to those engaged in it.
                  In any case, unless the patent owner has incompetent counsel, they will promptly move to stop such a reexam with the estoppel statute before it even starts.

        2. 2.2.1.2

          No patent challenger would give up the benefit of actually participating in an inter partes proceeding to gain the illusory benefits of BRI through ex parte reexamination.

          I do not disagree with this, but I think that the practical objection to ex parte re-exam is much more fundamentally about the duration than the lack of participation. Remember, inter partes re-exams were never especially more popular than ex parte re-exams.

          Both procedures usually took about three years to complete, sometimes less but often more. If the court gets all the way to final judgment before the re-exam wraps up, then the defendant can still end up owing damages, regardless of how the re-exam eventually concludes.

          Comparatively few district courts were willing to stay parallel litigation on the hope that a process of unspecified duration might simplify the issues to be tackled in litigation. By contrast, a court can know with IPRs that the whole thing will be wrapped up in a year or less, and that certainty as to timing makes it much more consistent with docket management concerns.

          In other words, most defendants do not really want an ex parte re-exam, because it does not help them to escape liability. If it does not help a defendant to escape liability, then why bother asking for one. If no one asks for ex parte re-exams, then one will not see a big uptick in ex parte re-exams.

        3. 2.2.1.3

          Plus, much less likely getting a reexamination fast enough – no one year deadline, and a two stage proceeding – examiner then Board.

  5. 1

    An excellent idea. Using the same claim construction standard in both IPRs and Art. III litigation will, indeed, enhance judicial efficiency, not least because it will mean that PTAB findings will be entitled to issue preclusive effect in courts, and vice versa.

    1. 1.1

      I would not over-read that as stating that the Office will employ issue preclusive effects just because of the change in claim construction standard.

      While related, the two items are yet distinct one from the other.

    2. 1.2

      I agree – a single standard in court proceedings and IPR/PGR/CBM would be welcome.

      1. 1.2.1

        Actually, for whatever little my opinion on this point is worth, I think that the best way to resolve the discrepancy would be for the CAFC to convene en banc and replace Philips with BRI as the standard to be used in litigation. That is to say, at any given point of dispute between the patentee and the alleged infringer as to the size of the claim scope, ambiguities should be resolved in favor of a larger scope of claimed exclusivity (constrained, of course, by considerations of what is “reasonable” in view of the spec and file wrapper). That way, BRI is both a help (for establishing infringement) and a harm (for establishing unpatentability) to the patentee, rather than a pure nuisance as it present stands.

        For better or worse, however, the PTO has no power to dictate that the courts use BRI. Therefore, to the extent that the PTO is going to be the party attempting to resolve the discrepancy between claim construction standards, the PTO has no other option than to copy what the courts do, even though it would be better if the courts were, instead, to copy the PTO’s standard.

        1. 1.2.1.1

          “what is ‘reasonable’ in view of the spec and file wrapper” – How is that different than how Phillips is applied now?

          1. 1.2.1.1.1

            Is it your understanding that ambiguities under Philips are always resolved in favor of broader scope. It seems to me that the Philips rule in practice is exactly the reverse—that ambiguities are resolved against the drafter (and therefore in favor of the alleged infringer).

            1. 1.2.1.1.1.1

              Unsure what “ambiguities” you are considering.

              1. Start with plain and ordinary meaning (POM).
              2. See if PO used his own meaning in the spec to redefine/alter/limit POM.
              3. See if there is disclaimer – either explicit or argument to narrow the POM.

              If there are “ambiguities” then you deal with it under 112/2.

              1. 1.2.1.1.1.1.1

                You are right to take issue with “ambiguities.” That is the wrong term to use for what I was trying to describe. In any event, the analytic schema that you set out as Philips is the same analytic schema that the PTAB uses. Trivascular Inc. v. Samuels, 812 F.3d 1056, 1062 (Fed. Cir. 2016). It seems to me that the difference between Philips and BRI is that at any given point of dispute between the patentee and challenger under BRI, a tie always goes to the broader construction. It is not clear to me that there is such a tie-goes-to-the… rule under Philips.

                In any event, if your point is that Philips and BRI are often the same construction, you will get no argument from me. The real advantage of the PTO saying that it will use the same standard as the courts is that this take an (often illusory) point of contention off the table.

                1. Does it have to do with what (stick in the bundle… oh wait) the presence and level of presumption is?

                  You appear to be doing two things here:
                  1) presuming “always” broader, and
                  2) presuming “always” broader is always better.

                  Not sure if 1) adheres as much as you are indicating, given that the presumption of validity would not always present itself in one direction; and re: 20, this is the very first time that I have ever seen anyone ever indicate that BRI is an advantage for the patent holder.

                  I will note that the direction chosen does align with my previous suggestions…

        2. 1.2.1.2

          Applying BRI in litigation is perhaps one of the most ridiculous proposals I’ve ever read in these comments.

          BRI exists only in the context where the claims can be amended, such as original prosecution, reexamination and other post-grant reviews. The justification is that when evaluating validity, the PTO should apply a broader standard and not get mired up in esoteric claim construction disputes as to what the claims mean. If the patentee wants a narrower meaning, they just amend their claim to add explicit narrowing language. That rationale has no place whatsoever in litigation since patentees obviously cannot amend their claims there.

          Your comment that in litigation, BRI would be “both a help (for establishing infringement) and a harm (for establishing unpatentability) to the patentee,” is pretty silly. Infringement is much easier to prove than invalidity because the latter requires “clear and convincing evidence,” whereas the former does not. Broadening the claims (to the extent BRI would make any real difference which is debatable) would disproportionately benefit the party seeking to prove infringement.

          1. 1.2.1.2.1

            Applying BRI in litigation is perhaps one of the most ridiculous proposals I’ve ever read in these comments.

            You are clearly not familiar with my larger body of work. I am sure that I have offered worse suggestions.

            In any event, perhaps it is not a great suggestion. As I alluded to above, it will not happen because it cannot happen (absent the rather unusual step of the CAFC reconsidering Philips en banc, which it just finished doing a few years ago anyway), so the awful suggestion is unlikely to mature into an awful result.

            1. 1.2.1.2.1.1

              You are clearly not familiar with my larger body of work. I am sure that I have offered worse suggestions.

              That did make me chuckle, even as it deflected the actual criticism.

              That your suggestion was rather dubious to be enacted was actually one of its saving points….

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