Supreme Court Unanimously Upholds PTAB Standards, As Urged by Unified

On June 20, 2016, the Supreme Court unanimously upheld the U.S. Patent and Trademark Office's (USPTO's) use of the broadest reasonable interpretation in claim construction for America Invents Act (AIA) proceedings, ending years of debate and silencing a well-funded and sustained challenge to the PTO's rulemaking authority.

The court also held, 6-2, that §314(d) precludes judicial review of the PTAB’s decision on whether to institute an inter partes review (IPR).  A two-justice dissent-in-part would have limited the reach of that provision to interlocutory appeals.  The court left for another day whether the provision precludes direct appeals on constitutional issues, challenges to administrative authority, or other non-threshold issues. 

It is worth noting that Unified Patents, in conjunction with respected PTAB practitioner Scott McKeown, filed an amicus curiae brief that urged the court to ignore these challenges as premised more on policy disputes than legal merit, stating that "[t]hese outcome-independent complaints are nothing but a proxy for a deeper dissatisfaction with the new administrative system for being, at core, too competent at cutting short questionable and costly litigation."  Br. at 5. 

That brief has been cited and discussed by IP Watchdog in their coverage of the decision, who quoted Mr. McKeown as observing, "the major backdrop to the case was whether forty years of patent reexamination or one hundred years in patent interference was too significant to sweep under the rug," a point the opinion discussed at length.  He added that, "Despite the best efforts of Cuozzo and his amici to advance their ‘alternative to litigation’ mantra, the Court shrugged that off as baseless,” and, “[w]ith this favorite attack platform gone, any significant modification to PTAB practice will have to come from Congress.”

Notably, the opinion repeatedly cited the PTAB's duty to the public interest, noting that "inter partes review is less like a judicial proceeding and more like a specialized agency proceeding. Parties that initiate the proceeding need not have a concrete stake in the outcome." Slip Op. at 15.  Justice Breyer recognized that the AIA statute was about broadly improving patent quality as a public good, and to benefit the "public's paramount interest" in limiting illegitimate litigation.  See id. ("inter partes review helps protect the public's paramount interest in seeing that patent monopolies . . . are kept within their legitimate scope.”). 

As Richard Lloyd, a journalist for IAM Magazine, noted, "The AIA gave the agency huge leeway in the implementation of post-issuance review proceedings, and in Cuozzo, the Supreme Court effectively confirmed the extent of those powers."  He quoted Unified's Jonathan Stroud as adding that the court "applied the longstanding doctrine of Chevron deference in a just and reasoned way. The often-overlooked (and increasingly critical) intersection of patent and administrative law appears to have carried the day."