On May 8, the United States Patent and Trademark Office (USPTO) announced a proposed change to how it will handle challenges to patents. In essence, the proposal would result in a consistent claim construction standard between how district courts and the Patent Trial and Appeal Board (PTAB) interpret claims in trial proceedings.
The proposal would abandon the use of the broadest-reasonable-interpretation standard in reviews that fit under the America Invents Act: inter partes reviews, covered business method reviews, and post-grant reviews. If finalized, the PTAB would replace that standard with the more narrow standard used by courts and the International Trade Commission (ITC), commonly referred to as the Phillips standard.
The USPTO also proposed amending the rules to add that the PTAB would now consider any claim construction ruling made by a district court or in an ITC investigation. Previously, the PTAB did not give much weight to those rulings in its decisions. There is a 60-day public comment period on the proposal underway.
The Background & Implications
The idea behind this proposal has long been buzzing. Patent owners have argued for years that the use of different standards between the PTAB and district courts can give possible infringers unfair advantages. Major bar associations, including the American Intellectual Property Law Association, have also expressed support for the same standard to be applied. It is no surprise the PTAB has caught up. In its proposed rulemaking, the UPSTO said that “using the same standard in the various fora could help increase judicial efficiency overall.”
Be warned, however, that while the proposal would lead to more predictability regarding the claim construction standard, patent owners hoping the change will lead to more patents being upheld at the PTAB may be setting themselves up for disappointment. We simply do not believe the change in standard is likely to affect the outcome in most cases. In addition, when combined with the PTAB’s recent all-or-nothing mandate from SAS Institute, this may create the perfect environment for motions to stay district court cases while the PTAB decides claim construction, and ultimately validity, issues. (For analysis of the SAS Institute case and background on the America Invents Act, see our previous blog.)
While the proposal is currently just that, it is likely going to stick around. Moving forward, petitioners should consider using the Phillips standard in anticipation that the PTAB will make the switch before long. A sea change, no, but an important change nonetheless.
For more information, please contact me or your regular Parker Poe contact.