Under a new PTO administrative rule published today, October 11, 2018, the PTAB will apply the same claim construction standards in IPRs, PGRs, and CBMs filed on November 13, 2018 or later as would apply in litigation. 83 Fed. Reg. 51340 (Oct. 11, 2018). The PTAB will also consider claim construction decisions from litigation (whether from courts or the U.S. International Trade Commission) in construing claims in AIA proceedings. The new rule abandons the PTO's former approach of using the broadest reasonable interpretation ("BRI") in claim construction, and thereby reflects a continuing move from considering AIA proceedings analogous to prosecution to considering them analogous -- or part of -- the litigation process.
Currently, the PTAB uses the BRI to construe claims in the vast majority of AIA proceedings, the only exceptions being in cases where the patent has expired or is expiring imminently.[1] In doing so, it has treated the AIA proceedings as analogous to a continuation of prosecution (in which claims are given their broadest reasonable interpretation throughout the process). That approach makes sense in the historical context of AIA proceedings, given that it allows the PTO to use the same approach across almost all cases before it, AIA proceedings are to supplement -- not reargue -- issues that were presented during pre-issuance prosecution, and AIA proceedings share many similarities with prosecution (including limited ability to address the counterparty's claim construction arguments). Furthermore, the ability to amend claims during such proceedings provides a "safety valve" for an inopportune, overbroad claim construction.
However, practice has shown that parties are treating AIA proceedings like an aspect of litigation rather than a continuation of prosecution. A 2016 article cited repeatedly in the PTO's rule indicates that 86.8% of patents involved in AIA proceedings were also the subject of litigation or ITC investigations, and the PTO assumed that the pattern was continuing to date.[2] That is, AIA proceedings have been considered one front in an adversarial war rather than independent actions to ensure that patents had been properly granted. Furthermore, the differing claim construction standards in the different actions created at least the impression -- if not the reality -- that parties could leverage the differing standards to argue two inconsistent claim constructions in different fora, leading to inefficiency, lack of uniformity, and potential unfair outcomes.[3] In that context, it makes sense to use the same approach in all aspects of the disputes and to allow claim construction in one part of the dispute to inform claim construction in the other parts.
The standard used for claim construction in litigation, and soon AIA proceedings, is that discussed in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc), and its progeny. Under that approach,
[C]laim construction begins with the language of the claims. Phillips, 415 F.3d at 1312-14. 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." Id. at 1312-13. The specification is "the single best guide to the meaning of a disputed term and . . . acts as a dictionary when it expressly defines terms used in the claims or when it defines terms by implication." Id. at 1321 (internal quotation marks omitted). Although the prosecution history "often lacks the clarity of the specification and thus is less useful for claim construction purposes," it is another source of intrinsic evidence that can "inform the meaning of the claim language by demonstrating how the inventor understood the invention and whether the inventor limited the invention in the course of prosecution, making the claim scope narrower than it would otherwise be." Id. at 1317. Extrinsic evidence, such as expert testimony and dictionaries, may be useful in educating the court regarding the field of the invention or helping determine what a person of ordinary skill in the art would understand claim terms to mean. Id. at 1318-19. However, extrinsic evidence in general is viewed as less reliable than intrinsic evidence. Id.
83 Fed. Reg. at 51343.
Notably, the new rule recognizes -- and adopts -- the canon of construction that claims will be construed, if possible, to preserve their validity. Id. Phillips asserted that the doctrine is "of limited utility" and should be limited to cases in which "the court concludes, after applying all the available tools of claim construction, that the claim is still ambiguous." Id. (citing Phillips, 415 F.3d at 1328, 1327). Setting aside the propriety of using such a canon of construction in litigation (as opposed to finding the claims indefinite), the decision to import it into AIA proceedings is significantly more troubling. A patent owner may amend ambiguous claims in AIA proceedings, an option not available in litigation. But just as fundamentally, it seems improper for the PTAB to put its "thumb on the scale" in favor of validity when the validity of the claims is the underlying issue.
On the other hand, the wholesale adoption of the Phillips standard for claim construction provides a clear benefit: court and ITC claim constructions will be directly relevant to AIA proceedings, and vice versa. While the outcome of the claim construction process was previously generally the same under either standard, it technically involved different legal standards. See 83 Fed. Reg. at 51348 (citing, inter alia, In re CSB-System Int'l, Inc., 832 F.3d 1335, 1341 (Fed. Cir. 2016)). That distinction led the PTAB to ignore litigation-based constructions and courts to sometimes ignore PTAB decisions. See id. at 51342 (citing Automated Packaging Sys., Inc. v. Free Flow Packaging Int'l, Inc., No. 18-cv-00356, 2018 WL 3659014, at *3 (N.D. Cal. Aug. 2, 2018); JDS Techs., Inc. v. Avigilion USA Corp., No. 15-cv-10385, 2017 WL 4248855, at *6 (E.D. Mich. Jul. 25, 2017)). Now, the decisions in the two types of fora will be directly relevant to one another, increasing efficiency and decreasing cost. And because the rule specifically indicates that "[a]ny prior claim construction determination concerning a term of the claim in a civil action, or a proceeding before the [ITC], that is timely made of record in the . . . proceeding will be considered," the chance of inconsistent decisions will be greatly lessened. See 83 Fed. Reg. at 51345.
The change from BRI to the Phillips standard in claim construction in AIA proceedings will create more uniformity between those proceedings and litigation. At the same time, there are some potential downsides and difficulties. But for those parties who want to proceed under the BRI, the clock is ticking and their petitions must be filed within 30 days.
[1] In proceedings involving expired or soon-to-expire patents, the PTAB was already using the same standard as is used in litigation. See 83 Fed. Reg. at 51341 (citing Wasica Fin. GmbH v. Cont’l Auto. Sys., Inc., 853 F.3d 1272, 1279 (Fed. Cir. 2017)). In such cases, there is no practical way to amend the claims to avoid a finding of invalidity, so there is less reason to consider the proceedings similar to prosecution.
[2] See 83 Fed. Reg. at 51342 (citing Saurabh Vishnubhakat et al., Strategic Decision Making in Dual PTAB and District Court Proceedings, 31 Berkeley Tech. L.J. 45 (2016)), 51344.
[3] See 83 Fed. Reg. at 51343 (citing, inter alia, PPC Broadband, Inc. v. Corning Optical Comm’ns RF, LLC, 815 F.3d 734, 740-42 (Fed. Cir. 2016)); see also 83 Fed. Reg. at 51342 (citing Niky R. Bagley, Treatment of PTAB Claim Construction Decisions: Aspiring to Consistency and Predictability, 32 Berkeley Tech. L.J. 315 (2018); Kevin Greenleaf et al., How Different are the Boradest Reasonable Interpretation and Phillips Claim Construction Standards 15 (2018); and Laura E. Dolbow, A Distinction Without a Difference: Convergence in Claim Construction Standards, 70 Vand. L. Rev. 1071 (2017)).
