Monday, June 20, 2016

US Supreme Court on Cuozzo

The Supreme Court had no trouble with the USPTO utilizing the BRI standard.

The concurring opinion by Justice Thomas discussed issues with Chevron, and stated:

The Court avoids those constitutional concerns today because the provision of the America Invents Act at issue contains an express and clear conferral of authority to the Patent Office to promulgate rules governing its own proceedings. See 35 U. S. C. §316(a)(4); ante, at 13. And by asking whether the Patent Office’s preferred rule is reasonable, ante, at 17–20, the Court effectively asks whether the rulemaking was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” in conformity with the Administrative Procedure Act, 5
U. S. C. §706(2)(A). I therefore join the Court’s opinion in full.

Of the amendment issue, the majority noted:

In inter partes review,however, the broadest reasonable construction standard may help protect certain public interests, but there is no absolute right to amend any challenged patent claims.This, Cuozzo says, is unfair to the patent holder.
The process however, is not as unfair as Cuozzo suggests. The patent holder may, at least once in the process,make a motion to do just what he would do in the examination process, namely, amend or narrow the claim.§316(d) (2012 ed.). This opportunity to amend, together with the fact that the original application process may have presented several additional opportunities to amend the patent, means that use of the broadest reasonable construction standard is, as a general matter, not unfair to the patent holder in any obvious way.

Cuozzo adds that, as of June 30, 2015, only 5 out of 86 motions to amend have been granted. Brief for Petitioner 30; see Tr. of Oral Arg. 30 (noting that a sixth motion had been granted by the time of oral argument in this case).But these numbers may reflect the fact that no amendment could save the inventions at issue, i.e., that the patent should have never issued at all.

To the extent Cuozzo’s statistical argument takes aim at the manner in which the Patent Office has exercised its authority, that question is not before us. Indeed, in this particular case, the agency determined that Cuozzo’s proposed amendment “enlarge[d],” rather than narrowed,the challenged claims. App. to Pet. for Cert. 165a–166a; see §316(d)(3). Cuozzo does not contend that the decision not to allow its amendment is “arbitrary” or “capricious,” or “otherwise [un]lawful.” 5 U. S. C. §706(2)(a).

Of the different standards issue

Second, Cuozzo says that the use of the broadest reasonable construction standard in inter partes review,together with use of an ordinary meaning standard in district court, may produce inconsistent results and cause added confusion. A district court may find a patent claim to be valid, and the agency may later cancel that claim in its own review. We recognize that that is so. This possibility, however, has long been present in our patent system, which provides different tracks—one in the Patent Office and one in the courts—for the review and adjudication of patent claims. As we have explained above, inter partes review imposes a different burden of proof on the challenger. These different evidentiary burdens mean that the possibility of inconsistent results is inherent to Congress’ regulatory design. Cf. One Lot Emerald Cut Stones v. United States, 409 U. S. 232, 235–238 (1972) (per curiam).

Of note, inconsistency is not unreasonable:

And we cannot find unreasonable the Patent Office’s decision to prefer a degree of inconsistency in the standards used between the courts and the agency,rather than among agency proceedings. See 77 Fed. Reg.48697–48698.

This inconsistency had been an argument for those supporting the Cuozzo position; Reuters noted:

Cuozzo was supported by several industry groups and companies, which urged the justices to take the case.

One friend-of-the-court brief filed in the case on behalf of 3M Co, Caterpillar Inc, Eli Lilly and Co and Qualcomm Inc said the patent office reviews and litigation in district court needed to be streamlined for the "proper functioning of the patent system as a whole."


The Wall Street Journal noted:

The Supreme Court acknowledged the Patent Office rules differ from those in court, but said the agency had taken a reasonable approach.

Justice Stephen Breyer, writing the court’s opinion, said the Patent Office approach “helps to protect the public” by preventing individuals and companies from claiming overly broad patents.

According to recent government data, trials completed so far in front of a Patent Office board have resulted in the cancellation of some or all of a patent more than 80% of the time.

[One notes that proposed patent reform legislation, such as the Goodlatte bill, specified the review standards would be the same.]


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