Cuozzo Speed Technologies, LLC v. Lee
579 U. S. ____ (2016) (2016)
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Rule of Law:
Under the America Invents Act, a court may not review the Patent and Trademark Office's (PTO) decision to institute an inter partes review (IPR). The Act also grants the PTO statutory authority to issue regulations governing IPRs, including the use of the "broadest reasonable construction" standard for interpreting patent claims.
Facts:
- Giuseppe A. Cuozzo invented a speedometer that uses a GPS receiver and a colored display to indicate to a driver when they are exceeding the current speed limit.
- In 2004, the U.S. Patent and Trademark Office (PTO) granted a patent for this invention.
- Cuozzo Speed Technologies, LLC (Cuozzo) later acquired the rights to this patent.
- In 2012, Garmin International, Inc. filed a petition with the PTO for inter partes review (IPR) of Cuozzo's patent.
- Garmin's petition specifically challenged claim 17 of the patent as being obvious in light of three prior patents.
- The PTO's Patent Trial and Appeal Board (Board) instituted an IPR for claim 17, and also for claims 10 and 14, reasoning that because claim 17 was dependent on claims 10 and 14, they were implicitly challenged by Garmin's petition.
Procedural Posture:
- The Patent Trial and Appeal Board (Board) instituted an inter partes review (IPR) on claims 10, 14, and 17 of Cuozzo's patent.
- After the IPR proceeding, the Board issued a final written decision canceling the three claims as obvious, applying the 'broadest reasonable construction' standard to interpret the claims.
- Cuozzo, as appellant, appealed the Board's final decision to the U.S. Court of Appeals for the Federal Circuit.
- A divided panel of the Federal Circuit affirmed the Board's decision, holding that 35 U.S.C. § 314(d) barred judicial review of the decision to institute the IPR and that the PTO's regulation adopting the BRC standard was a lawful exercise of its rulemaking authority.
- The Federal Circuit denied Cuozzo's petition for rehearing en banc.
- The U.S. Supreme Court granted certiorari to review both holdings.
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Issue:
First, does 35 U.S.C. § 314(d), which states the Patent and Trademark Office's (PTO) decision to institute an inter partes review is 'final and nonappealable,' bar a court from reviewing that decision after a final agency action? Second, does the America Invents Act grant the PTO the statutory authority to issue a regulation requiring the use of the 'broadest reasonable construction' standard for claim construction in inter partes review proceedings?
Opinions:
Majority - Justice Breyer
Yes, to both issues. First, 35 U.S.C. § 314(d)'s plain language stating that the determination to institute an IPR is 'final and nonappealable' bars judicial review of that decision. Although there is a strong presumption in favor of judicial review, it is overcome here by 'clear and convincing' indications from the statute's text, structure, and purpose that Congress intended to preclude review of this specific preliminary agency decision. This bar applies to ordinary statutory challenges to the institution decision but may not extend to constitutional claims or questions well beyond the scope of this section. Second, the PTO has the authority to promulgate the 'broadest reasonable construction' (BRC) standard for claim construction in IPRs. The statute contains a gap regarding which standard to apply, and 35 U.S.C. § 316(a)(4) expressly grants the PTO rulemaking authority. The BRC regulation is a reasonable exercise of that authority because it serves the public interest by ensuring patent claims are precise, aligns with the PTO's historical practice in other proceedings, and the patent holder has an opportunity to amend the claims.
Concurring - Justice Thomas
Yes, to both issues. While agreeing with the majority's judgment, this opinion questions the continued validity of the Chevron deference framework. The Court correctly upholds the PTO's regulation not because of Chevron's 'fiction' of implicit delegation, but because the America Invents Act contains an express and clear grant of rulemaking authority in § 316(a)(4). The Court's inquiry into the reasonableness of the rule is consistent with the standard of review under the Administrative Procedure Act.
Dissenting - Justice Alito
No, as to the first issue, and Yes, as to the second. The provision making the institution decision 'nonappealable' should be interpreted to bar only immediate, interlocutory appeals, not to preclude review of the institution decision in an appeal from the PTO's final written decision. The strong presumption favoring judicial review is not overcome by the statutory text, and barring all review would allow the PTO to exceed the statutory limits Congress placed on its power without any judicial check. The dissent agrees with the majority, however, that the PTO acted within its authority when it adopted the 'broadest reasonable construction' standard.
Analysis:
This decision significantly strengthens the power and autonomy of the PTO's Patent Trial and Appeal Board (PTAB). By insulating the PTAB's decision to institute an IPR from judicial review, the Court ensures that the IPR process remains a swift and efficient mechanism for challenging patents without being delayed by litigation over preliminary matters. The ruling solidifies a bifurcated system for patent claim construction, affirming that the PTAB can use the patent-challenger-friendly 'broadest reasonable construction' standard while federal courts use the narrower 'ordinary meaning' standard in infringement litigation. This distinction makes the PTAB a highly attractive forum for accused infringers seeking to invalidate patents.
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