- Broadest Reasonable Interpretation vs. Ordinary and Customary Meaning: - Challenges Introduced by Applying Different Claim Construction Standards at the PTAB and District Courts
- September 25, 2014
- Law Firm: Sughrue Mion PLLC - Washington Office
- Inter Partes Review (IPR) is quickly becoming a popular means to challenge the validity of issued patents at the United States Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB). According to USPTO statistics, 1,700 petitions for IPR were filed between September 2012 and August 28, 2014, and new filings continue to accelerate. Indeed, IPR challenges appear to have become a common defense tactic in modern patent litigation because of IPR’s lower bar for finding issued patents invalid, expedited timeline, and limited discovery. These advantages appear to provide alleged infringers with a better avenue for invalidating an asserted patent compared to traditional district court litigation. IPR also furthers Congress’ intent in creating new post-grant proceedings in the America Invents Act (AIA) to “provid[e] quick and cost effective alternatives to litigation.” However, by applying different claim construction standards at district courts and at the PTAB, new challenges and potential pitfalls have been introduced to both patent owners and challengers.
For example, 37 C.F.R. § 42.100(b) provides that claims are construed according to the “broadest reasonable interpretation” at the Patent Trial and Appeal Board (PTAB). Under the broadest reasonable interpretation, claim terms are given their broadest reasonable interpretation in view of the specification to one having ordinary skill in the art at the time of the invention in without importing limitations into the claims from the specification. The policy underlying applying the broadest reasonable interpretation during examination is that a patent applicant is free to amend pending claims during prosecution, thus applying the broadest reasonable interpretation may reduce the possibility that claims would be interpreted to give broader coverage than is justified after issuance. However, unlike traditional examination, claims may not be amended as a matter of right in IPR proceedings. Instead, the applicable rules and PTAB decisions have made it difficult for patent holders to amend during IPR proceedings.
Conversely, unlike the PTAB, district courts apply the ordinary and customary meaning of disputed terms according to the Federal Circuit’s guidance in Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir. 2005). Under the Phillips standard, district courts look to both intrinsic evidence such as the specification and claims of the patent itself as well as the patent’s prosecution history. Extrinsic evidence such as dictionaries and expert testimony may also guide claim construction, although extrinsic evidence is not given as much weight as intrinsic evidence.
35 U.S.C. § 282(a) provides that litigated patent claims are presumed valid. However, there is no such presumption during proceedings at the PTAB. Rather, claim validity at the PTAB is determined based on a mere preponderance of the evidence. The preponderance of the evidence standard looks to whether it is more likely than not that a patent claim is valid or invalid. In contrast, district courts must presume claims of an issued patent are valid, and clear and convincing evidence is required to overcome the presumption of validity to invalidate claims of an issued patent.
The disparity between the broadest reasonable interpretation and Phillips standards, as well as difference in the presumption of validity of issued patent claims, created ambiguity and inconsistent validity determinations in reexamination proceedings at the USPTO. For example, the Federal Circuit in In re Swanson upheld asserted claims as valid on appeal from district court proceedings only to later uphold a contrary USPTO reexamination decision holding the same claims invalid as anticipated by a prior art reference also asserted in the district court proceedings.
The different claim construction standards applied at the PTAB appears to contradict the Federal Circuit’s guidance in Source Search Techs., LLC v. LendingTree, LLC, which provided that “it is axiomatic that claims are construed the same way for both invalidity and infringement.”. As described with respect to In re Swanson, applying the broadest reasonable interpretation may result in both different claim construction and validity determination results. Similarly, the facts of the Federal Circuit’s recent decision in Starhome GMBH v. AT&T appear to present a similar scenario where the PTAB might reach a different claim construction result than a district court.
In Starhome, the district court looked to extrinsic evidence in the form of both a definition from a technical dictionary and statements made in related foreign patent prosecution in determining that the patentee had not clearly shown intent to depart from the ordinary and customary meaning of the term “intelligent gateway.” Under the broadest reasonable interpretation applied by the PTAB, extrinsic evidence in the form of dictionary definitions would receive less weight than at district courts and statements made in related foreign patent prosecution would be unlikely to receive weight. On the intrinsic record, it is possible that the Federal Circuit may have reached a different claim construction result, and as a result may have reached different validity or invalidity determinations.
In view of the shortcomings of applying different claim construction standards at the PTAB and district courts, there appears to be growing support to require the PTAB to construe claims according to the Phillips standard. For example, recently in Versata Development Group v. SAP America, a group of thirteen corporations including 3M, General Electric, Procter & Gamble and others filed a joint amicus brief challenging the PTAB’s application of the broadest reasonable interpretation in post-grant proceedings. Specifically, the brief argues that the USPTO exceeded its rulemaking authority in applying the broadest reasonable interpretation to Post-Issuance proceedings introduced by the America Invents Act (AIA), that applying the broadest reasonable interpretation is contrary to the language and congressional intent of the AIA, and that applying different claim construction standards in different adjudicative tribunals is contrary to policy concerns.
For the time being, both patent holders and IPR challengers should be mindful of potential difficulties caused by the current disparity between claim construction standards applied at the PTAB and at district courts.
 AIA Progress Statistics, (August 28, 2014), Available at http://www.uspto.gov/ip/boards/bpai/stats/082814&under;aia&under;stat&under;graph.pdf.
 H.R. Rep. No. 112-98, pt. 1, at 48 (2011).
 Manual of Patent Examining Procedure (“MPEP”) § 2111.
 See In re Prater, 415 F.2d 1393, 1404-1405 (C.C.P.A. 1969).
 Azy Kokabi, PTAB Limits Claim Amendment in Inter Partes Review, Patent Office Trials Blog, (Dec. 16. 2013, 4:07 AM), http://www.patentofficetrials.com/?p=16.
 Id. at 1312-1314.
 Id. at 1317.
 In re Swanson, 540 F.3d 1368, 1382 (Fed. Cir. 2008).
 558 F.3d 1063 at 1075 (Fed. Cir. 2009).
 Starhome GMBH v. AT&T, 2012-1694 (Fed. Cir. 2014).
 Brief for Neither Party as Amici Curiae, Versata Development Group v. SAP America, 2014-1194, (Fed. Cir. 2014).