Source: http://www.sbpatlaw.com/viewpoint/inter-partes-review-6-cuozzo-at-the-supreme-court/
Timestamp: 2019-04-18 10:39:47+00:00

Document:
The Supreme Court affirmed the judgment of the United States Court of Appeals for the Federal Circuit in a case concerning the conduct of inter partes review proceedings. Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. ___, 136 S. Ct. 2131, 8195 L. Ed. 2d 423 (No. 15-446, June 20, 2016).
The Court heard argument (the argument’s audio is available here) on April 25, 2016 and less than two months later issued its judgment and opinion. Justice Breyer wrote the opinion for a unanimous Court with respect to parts I and III and for the Court for part II.
The Court addressed two issues in deciding the case. First, does 35 U.S.C. § 314(d) bar a court from considering whether the Patent Office wrongly determined to institute an inter partes review when it did so on grounds not specifically mentioned in a third party’s review request? The Court concluded that the first provision, though it may not bar consideration of a constitutional question, does bar judicial review of the kind of “mine-run” claim at issue in Cuozzo Speed Technologies, involving the Patent Office’s decision to institute inter partes review. (The Court sometimes uses the term “mine-run” when others likely would use the term “run of the mill.” The first time the Court did so was in Monroe v. Pape, 365 U.S. 167 (1961) (opinion for the Court written by Douglas, J.), and in forty-four cases since then).
The second issue is whether 35 U.S.C. § 316(a)(4) authorizes the Patent Office to issue a regulation stating that the agency, in inter partes review, shall construe a patent claim according to its broadest reasonable construction in light of the specification of the patent in which it appears. The Court concluded that the Patent Office was authorized to issue the regulation.
With respect to the first issue, Garmin’s petition for inter partes review asked the Patent Trial and Appeal Board (PTAB) to institute review of claim 17 of the Cuozzo patent. The PTAB ordered inter partes review of claims 10 and 14 as well and on the basis of the same prior art as for claim 17. The Patent Office argued that the claims 10, 14, and 17 were logically interlinked (claim 17 depends on claim 14 which in turn depends on claim 10) and “a petition need not simply repeat the same argument expressly when it is so obviously implied” even though 35 U.S.C. § 312 requires that a petition for inter partes review must identify, “in writing and with particularity, each claim challenged, the grounds on which the challenge to each claim is based.
The Court agreed, citing the language of 35 U.S.C. § 314(d), which states that the “determination by the [Patent Office] whether to institute an inter partes review under this section shall be final and nonappealable [emphasis added].” The Court also was persuaded by what it considered an important Congressional objective, namely, “giving the Patent Office significant power to revisit and revise earlier patent grants” which would be undercut if the “agency’s final decision could be unwound under some minor statutory technicality related to its preliminary decision to institute inter partes review.” Furthermore, “the existence of similar provisions in this, and related, patent statutes reinforces our conclusion,” namely the non-appealability of determinations concerning petitions for inter partes reexamination.
Justice Alito, joined by Justice Sotomayor, filed an opinion concurring in part but dissenting in part with respect to whether the Patent Trial and Appeal Board’s decision to institute inter partes review is subject to judicial review. The Court dismissed the argument in Justice Alito’s opinion that the “No Appeal” provision forbids only interlocutory appeals but permits review of the decision to grant a petition during a final appeal from a decision on the merits.
The Court, however, pointed out that the statute contains a provision that grants the Patent Office authority to issue “regulations . . . establishing and governing inter partes review under this chapter.” 35 U.S.C. § 316(a)(4). The Court held that this statute gives the Patent Office the legal authority to issue its broadest reasonable construction regulation. The Court interpreted Congress’ grant of rulemaking authority in light of the Court’s decision in Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 842 (1984).
The “Chevron deference” doctrine requires that when a statute is clear, an agency must follow the statute, but when a statute leaves a gap or is ambiguous, the Court typically interprets it as granting the agency leeway to enact rules that are reasonable in light of the text, nature, and purpose of the statute. The Court has “recognized a very good indicator of delegation meriting Chevron treatment in express congressional authorizations to engage in the process of rulemaking or adjudication that produces regulations or rulings for which deference is claimed.” United States v. Mead Corp., 533 U. S. 218, 229 (2001). The statute allows the Patent Office to issue rules “governing inter partes review,” 35 U.S.C . § 316(a)(4), and the broadest reasonable construction regulation is a rule that governs inter partes review.
The Court therefore found an express delegation of rulemaking authority, a “gap” that rules might fill, and “ambiguity” in respect to the boundaries of that gap. Applying Chevron deference, the Court concluded that that the regulation represented a reasonable exercise of the rulemaking authority that Congress delegated to the Patent Office.
In the examination of patent applications the broadest reasonable construction is properly employed to protect the public from overly broad claims and give the applicant a fair chance to draft a precise claim that will qualify for patent protection. Cuozzo argued that in inter partes review the broadest reasonable construction standard may help protect certain public interests, but the patent owner has no absolute right to amend any challenged patent claims. The Court was not impressed with this argument because “[t]he process however, is not as unfair as Cuozzo suggests. The patent holder may, at least once in the process, make a motion to do just what he would do in the examination process, namely, amend or narrow the claim.” That motions to amend claims in inter partes review proceedings are rarely granted “may reflect the fact that no amendment could save the inventions at issue, i.e., that the patent should have never issued at all” (at least with those claims).
Justice Thomas filed a concurring opinion in Cuozzo expressing his desire (expressed previously, see, e.g., Michigan v. Environmental Protection Agency, 576 U.S. ___, 135 S. Ct. 2699, 2712, 192 L. Ed. 2d 674 (2015) (Thomas, J. concurring)) that “this Court should reconsider that fiction of Chevron and its progeny.” He concurred in the judgment in Cuozzo, however, because he believed the Court effectively asked whether the rulemaking was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” in conformity with the Administrative Procedure Act, 5 U. S. C. § 706(2)(A).

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