In a final rule published in the Federal Register on October 11, 2018, the U.S. Patent and Trademark Office (USPTO) took a remarkable step of acknowledging unfairness in the way its Patent Trial and Appeal Board (PTAB) has been conducting trials for the past six years. The rule change will apply to all of the new administrative patent challenge proceedings (inter partes reviews, covered business method patent reviews, and post-grant reviews) established by the 2011 America Invents Act (AIA). The new claim construction rule will be applied to all AIA petitions filed on or after November 13, 2018.
The comments accompanying the USPTO’s Federal Register notice of rule change state:
[R]ecent studies . . . support the concerns expressed by stakeholders regarding the unfairness of using a different claim construction standard in AIA proceedings than that used by the district courts.
At issue is how claims are interpreted when new prior art references are cited by petitioners seeking to invalidate issued U.S. Patents. If a claim term is broadly interpreted, it is more likely that the prior art will be considered anticipatory or render the claim obvious. (Novelty and non-obviousness are fundamental requirements for patent validity.)
From the very beginning, when inter partes review (IPR) proceedings under the AIA began in 2012, the USPTO adopted a claim construction rule known as broadest reasonable interpretation, i.e., 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 without importing limitations into the claims from the specification. This so-called BRI standard had long been the standard applied by the USPTO during pre-issuance examination of patent applications.
While BRI standard may be appropriate when patent applications are undergoing examination – where the applicant can amend the claims if the examiner adopt too broad an interpretation – getting the PTAB judges to consider claim amendments in AIA proceedings has proven to be extraordinarily difficult.
The new standard to be applied going forward (for petitions filed on or after November 13, 2018) is the “Phillips standard,” named for the the Federal Circuit’s 2005 ruling in Phillips v. AWH Corp. 415 F.3d 1303, 1313 (Fed. Cir. 2005). Under the Phillips standard, claims are to be given their “ordinary and customary meaning” – not their broadest meaning. This is the standard applied by all federal district courts and the International Trade Commission when hearing patent cases. The rule-making comments note that “the scope of an issued patent should not depend on the happenstance of which court or governmental agency interprets it, at least as far as the objective rules go ” and further notes:
Employing the same standard for AIA proceedings and district courts improves uniformity and predictability as it allows the different fora to use the same standards in interpreting claims.
The new rule further states that any prior claim construction decision in a civil action “will be considered if that determination is timely filed in the record” at the PTAB.
While the PTAB judges are not explicitly required to accept prior claim constructions from federal district courts, the new rule certainly does appear to encourage conformity in interpreting patent claims.