It’s PTAB Week At The Federal Circuit

In a pair of decisions issued this week, the Federal Circuit has opined on the scope and limits of two kinds of administrative challenges to the validity of issued patents that can be filed with the Patent Trial and Appeals Board (PTAB), the administrative tribunal set up to decide such issues. Although the devil may be in the details, we’ll leave him there to focus on key holdings of broader interest to patent litigants.

In In re Cuozzo Speed Technologies, the court resolved some issues about the proper appellate review of inter partes review (IPR) proceedings in the PTAB, that is, validity challenges to which the challenger is a party. The key holdings of Cuozzo are:

• The Federal Circuit does not have the jurisdiction to review the PTAB’s initial determination to institute an IPR proceeding. It can only review the results of such a proceeding.
• The appellate court will apply the traditional “broadest reasonable interpretation” standard to construing claims of patents in IPR proceedings—this is consistent with past practice, but not consistent with the standard that applies in federal court litigation.

Judge Newman dissented from the majority opinion, and Chief Judge Prost and Judges Newman, Moore, O’Malley, and Reyna voted in favor of rehearing the case en banc. The court as a whole, however, voted against rehearing the case by a 6-5 count, leaving the Cuozzo opinion intact.

In Versata Development Group v. SAP America, the Federal Circuit tackled Covered Business Method Review (CBMR), a special program for challenging business method patents. In a lengthy opinion, the majority reached the following conclusions:

• While the appeals court cannot review an initial decision to open a CBMR proceeding, the court can review issues decided during the appeals process upon review of the final written decision of the PTAB—including the issue of whether the patent was a covered business method patent at all. (Judge Hughes dissented from this portion of the opinion.)
• The court, following the lead of Cuozzo, said that the “broadest reasonable interpretation” approach to claim construction should apply in CBMR proceedings.
• Section 101 challenges the subject matter–eligibility of patents can be brought in CBMR proceedings under the now–familiar two–part Alice test.

In sum, the court will not review the initial decision by the PTAB to institute an IPR or CBMR proceeding; will apply the usual administrative standard to claim construction; will entertain Alice challenges; but will feel free to review any and all issues implicated by a final decision of the PTAB.