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Major Firms Line Up At High Court To Fight AIA Claim Rules

By Ryan Davis

Law360, New York (March 2, 2016, 10:16 PM ET) -- Exxon Mobil Corp. and Procter & Gamble Co. were among a slew of major companies and drug industry groups that urged the U.S. Supreme Court Monday to change the patent claim construction standard for America Invents Act reviews, calling the current test unfair to patent holders.

A host of amicus briefs were filed supporting a petition by Cuozzo Speed Technologies LLC asking the justices to require the Patent Trial and Appeal Board to use the claim construction standard to interpret patents that is used in district court, rather than a broader standard that they say results in too many patents being found invalid. Cuozzo was the first company to have a patent invalidated under the AIA inter partes review system, which took effect in 2012.

The justices agreed in January to hear the case, and arguments will occur later this spring. The briefs framed the question as one of grave importance for all patent owners, saying the U.S. Patent and Trademark Office flouted the intent of Congress when it established claim construction rules that are different in AIA reviews than in district court.

“This court must correct the [USPTO’s] foundational legal error before it causes irreversible damage to the patent system,” the Biotechnology Innovation Organization said in its brief.

BIO, a major industry trade group that changed its name from the Biotechnology Industry Organization in January, told the justices that said that the different standards put proceedings in district court and at the PTAB on "unequal footing."

"Despite the fact that both proceedings are designed to answer the same question — whether the patent is invalid — they use different legal standards to answer that question," it said. "And because the PTAB's standard is friendlier to those challenging a patent’s validity, the district court has become all but irrelevant."

In America Invents Act reviews, the PTAB construes the claims of challenged patents by giving them their "broadest reasonable interpretation," while in district courts, judges construe claims by giving them their "plain and ordinary meaning." Cuozzo and the amici say the claim construction standard should be the same in both types of proceedings.

Myriad major companies signed on to a single amicus brief, including Exxon Mobil, Procter & Gamble, Eli Lilly & Co., Johnson & Johnson and Qualcomm Inc. They said that the current standard makes patents particularly vulnerable to invalidation and deprives patent owners of their property rights.

Congress intended AIA reviews to be a cheaper alternative to district court, they said, "but nothing in the statutory language or legislative history even suggests that Congress ever intended to make it easier for challengers to invalidate patents by having the [PTAB] construe the claims more broadly in such proceedings than they would be construed in court, making them more likely to run afoul of otherwise distinguishable prior art."

The different standards create opportunities for gamesmanship and conflicting results, the companies said, which "undermines confidence in the patent system and chills investment in the development and commercialization of patent-protected technologies by both large corporations and small businesses."

Pharmaceutical Research and Manufacturers of America, a major drug industry group, said that "there is no reason to assume" that Congress intended AIA reviews to use a different claim construction standard from district court.

"Such a regime is the antithesis of what Congress enacted," which was a system in which AIA reviews are a substitute for district court litigation that uses the same standards, PhRMA said.

The New York Intellectual Property Law Association also filed an amicus brief in the case, but said it was taking no position on the claim construction issue. Instead, it focused on the second question presented by Cuozzo, which challenges the Federal Circuit's ruling that decisions to institute AIA reviews are not appealable, even if the PTAB exceeds its authority.

"That conclusion is at odds with a long line of decisions by this court," the group said. "It turns the statutory limits on the [USPTO's] authority into a toothless nullity and effectively gives the [USPTO] a blank check to expand its authority beyond clear statutory limits without judicial constraint."

3M and the other companies are represented by Barbara Fiacco, Donald Ware and Sarah Burg of Foley Hoag LLP.

NYIPLA is represented by Eugene Gelernter, Irena Royzman and Jason Vitullo of Patterson Belknap Webb & Tyler LLP; Dorothy Auth of Cadwalader Wickersham & Taft LLP and Charles Macedo and David Goldberg of Amster Rothstein & Ebenstein LLP.

PhRMA is represented by Pratik Shah, Emily Johnson, Z.W. Julius Chen of Akin Gump Strauss Hauer & Feld LLP and in-house counsel James Spears, David Korn and Melissa Kimmel.

BIO is represented by William Jay, Eleanor Yost and Andrew Kim of Goodwin Procter LLP.

Cuozzo is represented by Garrard Beeney, Jeffrey Wall, Stephen Elliott and James Williams of Sullivan & Cromwell LLP.

The government is represented by Solicitor General Donald B. Verrilli as well as Benjamin C. Mizer Mark R. Freeman and Melissa N. Patterson of the U.S. Department of Justice.

The case is Cuozzo Speed Technologies LLC v. Lee, case number 15-446, in the U.S. Supreme Court.

Editing by Jill Coffey.

http://www.law360.com/articles/766308/major-firms-line-up-at-high-court-to-fight-aia-claim-rules


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