Possible Changes on the Way in IPRs, PGRs and CBMs – From Broadest Reasonable Interpretation to a Phillips Standard, Consideration of Prior Claim Construction and Possible Retroactivity of Those Changes

As the sixth anniversary for implementation of inter partes reviews (“IPRs”), post-grant reviews (“PGRs”), and covered business method patent reviews (“CBMs”) under the America Invents Act approaches, the U.S. Patent and Trademark Office recently announced a possible shift in how patent claims will be interpreted in those proceedings.

On May 9, 2018, the PTO issued a notice of proposed rulemaking wherein it made three proposals: (1) “to replace the broadest reasonable interpretation (‘BRI’) standard for construing unexpired patent claims and proposed claims in these trial proceedings with a standard that is the same as the standard applied in federal district courts and International Trade Commission (‘ITC’) proceedings”; (2) “to add that the Office will consider any prior claim construction determination concerning a term of the involved claim in a civil action, or an ITC proceeding, that is timely made of record in an IPR, PGR, or CBM proceeding”; and (3) “any proposed rule changes adopted in a final rule would be applied to all pending IPR, PGR, and CBM proceedings before the PTAB.”   The Notice can be found here.

From BRI to District Court/ITC Construction

From the outset of AIA trials, as evidence by the Trial Practice Guide, the PTO’s battle cry was that the “Office has for decades employed the broadest reasonable interpretation standard to construe claims before the Office, and will continue to do so in IPR, PGR, and CBM proceedings for construing challenged claims as well as any amended or new claims. . . . This ensures that the public can clearly understand the outer limits applicants and patentees will attribute to their claims. On the other hand, inconsistent results would become a major issue if the Office adopted a standard of claim construction other than the broadest reasonable construction.”   77 Fed. Reg. 48756, 48764 (Aug. 14, 2012).

Inconsistent results have indeed been an issue, but not in the manner the PTO initially indicated. The Notice acknowledges that “although the BRI standard is consistent with longstanding agency practice, the fact that the Office uses a claim construction standard that is different from that used by federal district courts and the ITC means that decisions construing the same or similar claims in those fora may be different from those in AIA trial proceedings and vice versa. Minimizing differences between claim construction standards used in the various fora could lead to greater uniformity and predictability of the patent grant. In addition, using the same standard in the various fora could help increase judicial efficiency overall.” 83 Fed. Reg. 21221, 21222-3 (May 9, 2018).

The PTO’s substantial change to a Phillips standard stems from nationwide listening tours hosted by the PTO as well as Requests for Comments issued by the Office. Id. at 21222. The PTO seeks to “further shape and improve PTAB trial proceedings, particularly IPR, PGR, and CBM proceedings” and this Notice evidences a willingness by the Office to change, if warranted, even its most fundamental practices. See id.

The Notice indicates that under the proposed approach the “Office would apply the principles that the Federal Circuit articulated in Phillips and its progeny. For example, claim construction begins with the language of the claims . . . [and] the ‘words of a claim are generally given their ordinary and customary meaning,’ which is ‘the meaning that the term would have to a person of ordinary skill in the art in question at the time of the invention, i.e., as of the effective filing date of the patent application.’ . . . The specification is ‘the single best guide to the meaning of a dispute term and . . . acts as a dictionary when it expressly defines terms used in the claims or when it defines terms by implication.’” Id. at 21223. The Notice also addresses the remainder of a Phillips analysis, including the prosecution history being another source of intrinsic evidence and how extrinsic evidence, such as expert testimony and dictionaries, may be useful but is generally viewed as less reliable than intrinsic evidence. Id.

A notable aspect of the Notice is its mention that “consistent with Phillips and its progeny, the doctrine of construing claims to preserve their validity would apply to AIA trials.” Id. Alas, the Notice tempers the hopes of patentees by stating “[a]s the Federal Circuit recognized in Phillips, however, this doctrine is ‘of limited utility.’” Id.

As for the prosecution history to be considered, the Notice states that it will be “the prosecution history that occurred previously at the USPTO, including before an examiner during examination, reissue, reexamination, IPR, PGR, and CBM proceedings. This would also include prosecution before an examiner in a related application where relevant . . . and any argument made on appeal of a rejection before the grant of the patent for which review is sought, as those arguments are before the examiner when the decision to allow an application is made.” Id. at 21223-4. This language highlights for PTAB litigants the need to choose words carefully during prosecution, even in related applications.

Consideration of Prior Claim Construction

Without much discussion, the Notice states that the rules will be amended to add the following: “Any prior claim construction determination concerning a claim in a civil action, or a proceeding before the International Trade Commission, that is timely made of record in the . . . proceeding will be considered.” Id. at 21224. The Notice states only that it will “consider” any such prior claim construction determination yet does not explain what that consideration will entail. The discussion of consideration of prior claim construction is physically separate in the Notice from the Phillips analysis, so it remains to be seen how the Office will weigh prior claim construction relative to the Phillips analysis. It would not be surprising if comments to the Notice seek clarification on this point.

Retroactivity of the Proposals

Arguably the most controversial aspect of the Notice, hidden in plain sight towards the end of the discussion, is the pronouncement that “the Office intends that any proposed rule changes adopted in a final rule would be applied to all pending IPR, PGR, and CBM proceedings before PTAB.” Id. at 21224. The Notice does not explain how such application would practically play out. For example, if a trial has already been instituted and then the final rule is announced, the Notice does not explain whether the parties will be permitted additional briefing to explain the impact of a Phillips construction on the proceeding-to-date. Nor does the Notice actively encourage one anticipating or currently participating in a PTAB proceeding to devote a portion of its precious word and/or page count to addressing claim construction under both standards. Such real world considerations belie the Notice’s statement that “[t]his rulemaking is not economically significant, and is not significant, under Executive Order 12866 . . . as amended by Executive Order 13258 . . . and Executive Order 13422.” Id. at 21222. It would not be surprising if many public comments on the Notice welcome a Phillips standard, but only after a date certain reasonably far in the future so that litigants can reasonably tailor their time-consuming and expensive strategies.

Want to Weigh In?

The Notice solicits comments from the public on the proposed rule changes. Many comments have already been received, and the PTAB is posting them on a rolling basis here. Written comments must be received by July 9, 2018, to ensure consideration. Comments may be sent by email to PTABNPR2018@uspto.gov or submitted via the Federal eRulemaking Portal at regulations.gov. Comments should include docket number PTO-P-2018-0036.

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