Supreme Court Affirms Patent Office Procedures For Inter Partes Review

Although the political winds in the Senate continue to blow against the confirmation of a ninth justice, the oddities of an eight–person Supreme Court have not prevented the court from deciding patent cases in the past week. Today brings the opinion of the Court in Cuozzo Speed Technologies v. Lee, in which the high court affirmed the practice of the Patent Trial and Appeal Board (and the decision of the Federal Circuit) in handling inter partes review proceedings—that is, contested proceedings in the Patent Office in which a challenger seeks to invalidate the claims of an issued patent. The case posed two questions: (1) whether the PTAB’s decision to institute inter partes review is itself reviewable; and (2) whether the PTAB can apply the “broadest reasonable construction” standard to claim construction, even though that is different from the standard federal courts apply.

In an opinion written by Justice Breyer, the majority of the Court concluded that the answer to the first question is, No. Both the statutory text and the legislative history demonstrate that the PTAB’s decision to institute a proceeding is not a separate issue that can be appealed. (Justices Alito and Sotomayor dissented from this conclusion only.)

The Court’s unanimous answer to the second question is, Yes. The America Invents Act vested discretion in the agency to make rules to govern inter partes review proceedings. And, under the well–known Chevron doctrine of deference to agency interpretations of agency authority, the Patent Office’s rule that the “broadest reasonable construction” governs in PTAB proceedings was held to be a reasonable interpretation of an ambiguity in the statute. Citing the statute’s underlying purpose, the 100–year history of the “broadest reasonable construction” standard in the Patent Office, and the inherent differences between PTAB proceedings and federal litigation, the Court had no trouble concluding that the “broadest reasonable construction” standard was itself reasonable for the PTAB to apply in inter partes review proceedings.

Justice Thomas, in a solo concurrence, voiced his lonely view that the Chevron doctrine is a fiction that should be dispensed with…but not in this case.