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Individuals or entities wishing to challenge the validity of competitors’ patents after they have been granted have multiple options available to them – one of which is an inter partes review by the Patent Trial and Appeal Board of the United States Patent and Trademark Office. This week, the U.S. Supreme Court upheld this process for challenging patents.

The Supreme Court issued an opinion in Cuozzo Speed Technologies LLC v. Lee, holding that:
  1. In an inter partes review (IPR), the United States Patent and Trademark Office (USPTO) may give a patent claim its broadest reasonable interpretation (BRI) in determining its validity.
  2. A patent holder may not appeal the issue of whether the USPTO complied with the authorizing statute in deciding to initiate the review.

BACKGROUND

In an IPR, the USPTO may “reexamine the claims in an already-issued patent and to cancel any claim that the agency finds to be unpatentable in light of prior art.” Regulations state that, in an IPR, a claim is given “its broadest reasonable construction in light of the specification of the patent in which it appears.” Further, the director of the USPTO is given the authority to determine whether to institute an IPR, and his or her decision is considered “final and nonappealable.”

The present case focused on a patent held by Cuozzo Speed Technologies Corp. that claims a technology for alerting drivers when they are speeding. The GPS technology company Garmin Ltd. Sought an IPR of the patent, asserting that one of the claims was obvious in light of prior technologies. The USPTO agreed to reexamine the challenged claim, as well as two other claims that were integrally related to the challenged claim. Through IPR, the USPTO ultimately found all three claims to be obvious and therefore not patentable. The Court of Appeals for the Federal Circuit affirmed. Further, the Federal Circuit upheld the USPTO’s decision in applying the BRI standard when reviewing claims in IPR. The Federal Circuit ruled that it lacks authority to review the USPTO’s decision on whether or not to institute an IPR.

THE SUPREME COURT’S RULING

In evaluating the BRI standard, the unanimous Supreme Court held that the USPTO has “the legal authority to issue its broadest reasonable construction regulation.” That is, that the BRI regulation represents a reasonable exercise of rulemaking authority that Congress delegated to the USPTO to create regulations governing inter partes review.

In evaluating the appealability issue, in a 6-2 vote, the Supreme Court held that Congress intended that USPTO’s decision on whether to institute review should be considered final as “determination by the [USPTO] whether to institute an inter partes review under this section shall be final and nonappealable.”

KEY TAKEAWAYS

With this decision, supporters believe that the Supreme Court is reaffirming the importance of inter partes review and providing an efficient, cost-effective patent review alternative to federal lawsuits. Critics believe that the decision will encourage companies to essentially eliminate patents through the inter partes review process.

No matter the viewpoint, companies should focus on developing robust, strategic patent portfolios that will survive any challenges brought through either inter partes review or federal litigation.

For questions regarding the Supreme Court’s ruling, other patent issues, and the role our attorneys can play in developing effective intellectual property strategies individually tailored for your company’s needs, please contact one of our intellectual property attorneys or the attorney listed below.
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