SCOTUS Rules Against Cuozzo, Upholds Standards For Patent Validity
June 21, 2016 (IP Flow) — In a decision handed down on June 20, the US Supreme Court affirmed a 2015 ruling from the US Court of Appeals for the Federal Circuit in Cuozzo Speed Technologies v Lee, upholding the claim construction method that the Patent Trial and Appeal Board (PTAB) uses.
The validity of Cuozzo’s vehicle speedometer patent was challenged by Garmin and on the basis of an inter partes review (IPR) instituted against Cuozzo’s claims, the PTAB held that the claims were obvious in view of prior art and invalidated them in 2012. Cuozzo and Garmin settled during the appeal process, but the USPTO intervened to defend the PTAB’s decision.
The questions considered by SCOTUS were whether it is appropriate for the United States Patent and Trademark Office to use a different claim constructions standard than is used in federal district court and whether institution decisions are insulated from judicial review.
The lead attorney for Cuozzo, Garrard Beeney, partner at Sullivan & Cromwell, provides a concise summary of the issues considered prior to the Supreme Court decision:
In a unanimous decision (8-0), the decision rejected Cuozzo’s challenge that the broadest reasonable interpretation (BRI) standard used by the PTAB in IPR proceedings has made it too easy to successfully cancel patents. It further ruled that the USPTO’s decision to institute such proceedings is not appealable to Federal Courts.
Michelle Lee, director of the USPTO, welcomed the decision, stating:
The USPTO appreciates the Supreme Court’s decision which will allow the PTAB to maintain its vital mission of effectively and efficiently resolving patentability disputes while providing faster, less expensive alternatives to district court litigation.
The industry reaction to the decision was mixed with many stakeholders expressing unease at the result that two different standards will continue to be used in trial proceedings regarding patent validity depending on the forum in which the case is heard. The USPTO and PTAB will employ the BRI standard whereas the plain ordinary meaning standard will continue to be used in federal district courts.
Looking to the future, eyes have now turned to see if the Supreme Court will grant review of Cooper v. Lee and MCM Portfolio v. HP, which consider the constitutionality of inter partes review.
Note: Sullivan & Cromwell is a client of our sister organization, Mimesis Labs.