In the first Federal Circuit ruling of an appeal from an inter partes review (“IPR”) decision, the Court held that the Patent Trial and Appeal Board (“the PTAB”) correctly applied the broadest reasonable interpretation standard to construct patent claims, held that it lacked jurisdiction to review the PTAB’s decision to institute an IPR, affirmed the PTAB’s denial of the patentee’s motion to amend its claims during the proceeding, and affirmed the finding that the patent at issue was invalid under 35 U.S.C. § 103. See In re Cuozzo Speed Techs., LLC, No. 2014-1301, 2015 U.S. App. LEXIS 1699 (Fed. Cir. Feb. 4, 2015). The majority of the 2-1 panel opinion focused on determining the appropriate standard for construing claims in an IPR, and whether the Court had jurisdiction to review a PTAB’s decision to institute an IPR.

In holding that the broadest reasonable interpretation standard should apply to construing claims in an IPR, the Court established that, like other U.S. Patent and Trademark Office (“PTO”) proceedings, the standard in an IPR differs from the standard used in a district court case. District courts must construe a patent claim in accordance with the ordinary and customary meaning of the claim as understood by one of ordinary skill in the art at the time of the invention. In contrast, for more than 100 years, PTO proceedings have applied the broadest reasonable interpretation standard. This standard provides the patentee with the broadest interpretation of the claim that the specification supports. The Court reasoned that because there was no indication from the America Invents Act (“the AIA”) to change the prevailing rule about the standard to apply in PTO proceedings, Congress impliedly adopted the existing rule. According to the Court, the policy rationales for using the broadest interpretation standard in other PTO proceedings should apply to IPR proceedings.

The patentee argued that applying the broadest reasonable interpretation standard for other proceedings is not instructive in the IPR context because the rationale for using the standard in previous judicial decisions relied on the applicant’s ability to amend its claims to avoid prior art. The Court dismissed this argument because the AIA allows the patentee to file one motion to amend. According to the Court, despite being limited to a single amendment that cannot broaden the existing claims and that must address the ground of unpatentability, there is no material difference between amending claims in an IPR and other PTO proceedings.

The Court also rejected the patentee’s argument that it should be allowed to appeal the PTAB’s decision to institute an IPR after the PTAB has reached a final decision. The Court, quoting from a portion of 35 U.S.C. § 314(d), held that the statute prohibits review of the PTAB’s decision to institute review at any time.

The Court’s decision to apply the broadest reasonable interpretation standard for construing patent claims sharply distinguishes the legal standard required at the district court and that required in an IPR. This may trigger more patent challenges through IPR because more prior art will read on claims construed using the broadest interpretation standard compared to the standard required in the district courts.