In re Cuozzo Speed Technologies, LLC
793 F.3d 1268 (Fed. Cir. 2015)
Authored by Iran Garcia Domenech
Statement of Facts: Cuozzo Speed Technologies (“Cuozzo”) is the assignee of a patent issued on August 17, 2004, entitled “Speed Limit Indicator and Method for Displaying Speed and the Relevant Speed Limit.” In re Cuozzo Speed Technologies, 793 F.3d 1268, 1271 (Fed. Cir. 2015). The patent “discloses an interface which displays a vehicle’s current speed as well as the speed limit” by using a global position system (“GPS”) to track the vehicle’s current location and identify the speed limit at that location. Id. The system discloses the speed limit by displaying speeds above the legal speed limit as red and speeds below the speed limit as white.
Procedural History: On September 16, 2012, Garmin International, Inc. and Garmin USA, Inc. (collectively “Garmin”) filed a petition with the United States Patent and Trademark Office (“USPTO”) for inter partes review (“IPR”) of claims 10, 14, and 17 of Cuozzo’s August 17, 2004 ‘074 patent. Garmin contended that claim 10 was invalid as anticipated under 35 U.S.C. § 102(e) and that claims 10, 14, and 17 were obvious under 35 U.S.C. § 103(a). The USPTO granted IPR and determined that there was a reasonable likelihood that all three claims were obvious under § 103(a) over 5 different patents, US Patent No. 6,633,811 (“Aumeyer”), 3, 980,041 (“Evans”), 2,711,153 (“Wendt”), 6,515,596 (“Awada”), and German Patent No. 197 55 470 (“Tegethoff”). In its final decision, the Patent Trial and Appeals Board (“PTAB”) stated that an “appropriate construction of the term ‘integrally attached’ in independent claim 10 is central to the patentability analysis of claims 10, 14, and 17.” Id. (internal citations omitted). The PTAB applied the “broadest reasonable interpretation standard” and defined the term “integrally attached” as “discrete parts physically joined together as a unit without each part losing its own separate identity.” Id. (internal citations omitted). The PTAB found claims 10, 14, and 17 were unpatentable as obvious under 35 U.S.C. § 103(1) over Aumayer, Evans, Wendt, Awada, and Tegenthoff. The PTAB also denied Cuozzo’s motion to amend the patent by replacing the three claims with substitute claims, 21, 22, and 23. The PTAB denied the motion to amend based on proposed claim 21 because “substitute claim 21 lacked descriptive written description support as required by 35 U.S.C. § 112,” and the substitute claims would “improperly enlarge the scope of the claims as construed by the [PTAB].” Id. at 1272. Cuozzo appealed, the USPTO intervened, and the Federal Circuit granted Garmin’s motion to withdraw as appellee.
(1) Did the USPTO properly institute IPR on claims 10 and 14 when it relied on prior art that Garmin did not identify in its petition as grounds for IPR as to those two claims?
(2) Can a party seek a writ of mandamus to challenge a USPTO’s decision to grant a petition to institute IPR after the PTAB’s final decision in situations where the USPTO has “clearly and indisputably exceeded its authority?”
(3) Did the PTAB wrongly apply the “broadest reasonable interpretation standard” in claim construction when it found the claims “obvious?”
(4) Did the PTAB properly construe the claims under the broadest reasonable interpretation standard?
(5) Did the PTAB correctly hold that claims 10, 14, and 17 were obvious?
(6) Did the PTAB properly deny Cuozzo’s motion for leave to amend and substitute claim with a substitute claim 21?
(1) Yes. The USPTO properly instituted IPR, even though its decision to implement such review might have been flawed.
(2) Yes. Mandamus may be available to a challenging party.
(3) No. Congress approved the broadest reasonable interpretation standard in the American Invents Act (“AIA”). Additionally, 35 U.S.C. § 316 provides authority to the USPTO to adopt the standard in a regulation.
(4) Yes. The Federal Circuit panel saw no error in the PTAB’s interpretation of the broadest reasonable interpretation standard.
(5) Yes. The PTAB correctly held that all three claims were obvious.
(6) Yes. The PTAB properly denied Cuozzo’s motion for leave to amend.
First, the Federal Circuit held that 35 U.S.C. § 314(d) prohibits review of a decision to institute IPR even after a final decision. Id. at 1273. The statutory provision excludes all review of the USPTO’s decision to institute IPR. That Garmin’s IPR petition could have been defective is irrelevant because a proper petition could have been drafted. Thus, there was no bar to finding claims 10 and 14 unpatentable based on the references not cited in the petition.
Regarding the second question presented, the Federal Circuit stated that three conditions must be satisfied to issue a writ of mandamus. Id. at 1274-75. First, parties seeking a writ of mandamus must have no other adequate means to attain the relief they desire. Second, the petitioning parties must satisfy the burden of showing that their right to issuance of the writ is clear and indisputable. Third, the issuing court must be satisfied that the writ is appropriate under the circumstances. Here, the situation does not satisfy the “clear-and-indisputable” requirement for mandamus because the grounds that would invalidate claim 17 would invalidate both claims 10 and 14, thus Garmin implicitly asserted that claims 10 and 14 were unpatentable when it asserted that claim 17 was unpatentable.
Third, the AIA does not bar the USPTO or the PTAB from utilizing the broadest reasonable interpretation standard in claim construction. There is no indication that Congress designed the AIA to change the claim construction standard that the USPTO has used for over a hundred years. Additionally, in 35 U.S.C. § 316, Congress provided authority to the USPTO to adopt the broadest reasonable interpretation standard. 35 U.S.C. § 316(a)(2) provides that the USPTO shall establish regulations ‘‘setting forth the standards for the showing of sufficient grounds to institute a review.’’ Id. at 1278. The Federal Circuit applied the Chevron two-step test to determine whether Congress authorized the USPTO to prescribe regulations. The Chevron test determines what standard of review should be applied by a court to a government agency’s own reading of a statute that it is charged with administering. Under Chevron, the first question is whether Congress has directly spoken to the precise question at issue. Chevron, U.S.A. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842 (1984). If the statute is found to be ambiguous, the second question is “whether the agency’s interpretation is based on a permissible construction of the statutory language at issue.” Id. Because 35 U.S.C. § 316 is ambiguous as to whether it approved the broadest reasonable interpretation standard, step one is satisfied. In re Cuozzo, at 1279. The second step of the Chevron test is satisfied because the USPTO’s interpretation of 35 U.S.C. § 316 is based on “a permissible construction of the statutory language.” Id. § 316’s language covers the action that the USPTO took because it is not a “sharp departure from historical practice.” Id. The USPTO provided a uniform approach that must be followed by administrative patent judges when deciding IPR proceedings.
Fourth, the Federal Circuit found that the PTAB was reasonable in interpreting “integrally attached” as included in Claim 10 as “‘discrete parts physically joined together as a unit without each part losing its own separate identity.” Id. at 1280. The specifications’ language supported the PTAB’s construction that the speedometer and speed limit are independent.
Fifth, the Federal Circuit held that Claim 10, 14, and 17 are obvious over Aumayer, Evans, and Wendt, because, in combination, the patents present a speedometer that “displays the speed limit for the current location of a vehicle as determined by a GPS receiver,” the same object that Cuozzo had in its ‘074 patent. Id. at 1282.
Finally, the PTAB found that Cuozzo’s substitute claims would enlarge the scope of the patent. Id. 35 U.S.C. § 316 and USPTO regulation 37 C.F.R. § 42.221(a)(2)(ii) bar amendments that would broaden the scope of the claims. When facing this question, the Federal Circuit has applied the following test: “a claim is broader in scope than the original claims if it contains within its scope any conceivable apparatus or process which would not have infringed the original patent.” Id. at 1283. Claim 21 was broadening because it encompasses a single LCD unit, wherein the speedometer and the colored display in issue are LCDs, which was not a part of the original claims.
Dissenting Opinion: Judge Pauline Newman dissented because she found that the majority’s rulings were contrary to the AIA. Judge Newman stated that one of the purposes of the AIA was for the PTAB to serve as a surrogate for district court litigation of patent validity. Judge Newman found that the panel majority’s decision precludes the PTAB from achieving “adjudication of patent validity comparable to that of the district courts, where validity is determined on the legally correct claim construction” and, thus, diminishing the role of the USPTO as “a reliable arbiter of patent viability.” Id. The panel’s decision goes against the AIA’s intention of invigorating and incentivizing the role of patents, by providing a faster, cheaper, and reliable determination of the validity of issued patents.
The dissent goes even further by finding that Congress, when it passed the AIA, intended the USPTO and the PTAB determine validity of claims under the legally correct, or proper meaning, claim construction standard. Here, the dissent argues that the USPTO changed the applicable statutes and determined its own test for how claims of issued patents are to be construed by using the broadest meaning claim construction standard. By deferring to the USPTO’s interpretation of its statutory authority, the majority allowed the USPTO to depart from the purpose of the AIA to create a surrogate for district court litigation, and allowed it to create regulations that do not serve the statute’s language and purpose.
Additionally, the dissent argued that review of the USPTO’s decision to institute IPR is not barred when material aspects that were decided in connection with the petition are in question. Judicial review of a final agency action cannot be barred unless there is a persuasive reason to believe that that was the purpose of Congress when it passed the applicable statute. Here, 35 U.S.C. § 314 does not preclude judicial review of whether the statute was applied in accordance with its legislated scope.
Subsequent History: After the panel’s decision, Cuozzo filed a petition for a Rehearing En Banc in the Federal Circuit. The Federal Circuit denied the petition. Of the eleven members of the Federal Circuit, five joined in dissenting from the Court’s denial of the petition. The dissenting judges argued in favor of eliminating the broadest reasonable interpretation standard in IPR proceedings because these proceedings are substitutes for district court litigation, thus the claim construction standard should apply and the right to amend in IPR proceedings is limited. The concurring judges found no reason for overturning the “longstanding practice” of applying the broadest reasonable interpretation standard in USPTO proceedings, and found nothing in the AIA to indicate congressional intent to change the standard.