Amicus Curiae Brief — Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 890 (2016) (No. 15-446)

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FLED

MAR 30 2016

No. 15-446 (UOERICEOF THe cien

CUOZZO SPEED TECHNOLOGIES, LLC,

Petitioner,

Vv.

MICHELLE K. LEE, Under Secretary of Commerce

for Intellectual Property and Director,

Patent and Trademark Office,

Respondent.

On Writ of Certiorari to the United States

Court of Appeals for the Federal Circuit

AMICUS CURIAE BRIEF OF MYLAN

PHARMACEUTICALS INC.

SUPPORTING RESPONDENT

Joseph J. Gleason

Counsel of Record

GLEASON LAW LLC

780 Morosgo Drive #14084

Atlanta, GA 30324

(404) 594-3550

joe@gleason.legal

Counsel for Amicus Curiae

— SS eee

Becker Gallagher Cincinnati, OH Washington, D.C. 800.890.5001

TABLE OF CONTENTS

TABLE OF AUTHORITIES

STATEMENT OF INTEREST

INTRODUCTION AND SUMMARY OF

ARGUMENT

if.

CONGRESS VESTED THE PTO WITH

BROAD AUTHORITY TO PROMULGATE

RULES “GOVERNING” IPR, AND THAT

AUTHORITY INCLUDES THE POWER TO

SET THE CLAIM-CONSTRUCTION

STANDARD.

THE PTO’S DECISION TO USE THE

BROADEST-REASONABLE-

INTERPRETATION STANDARD IS

ENTITLED TO DEFERENCE.

A. For nearly 100 years, the PTO has

applied the broadest-reasonable-

interpretation standard in contexts where

the patentee has a right to amend its

claims.

B. Legislative history shows that Congress

anticipated that the PTO might adopt the

broadest-reasonable-interpretation

standard for IPR.

C. That IPR has “adjudicatory” aspects does

not meen that it must mirror district-

court litigation.

ill

Il. CUOZZO’S POLICY ARGUMENTS ARE

IRRELEVANT AND OVERSTATED. 23

IV CONGRESS EXPRESSLY BARRED

JUDICIAL REVIEW OF THE PTO’S

INSTITUTION DECISIONS. 28

CONCLUSION 33

ill

TABLE OF AUTHORITIES

Cases

62 Cases, More or Less, Each Containing Six Jars of

Jam v. United States,

340 U.S. 593 (1951) 30

Ashcroft v. Iqbal,

556 U.S. 662 (2009) 22

Barnhart v. Thomas,

540 U.S. 20 (2003) 6, 24

Brand v. Miller,

487 F.3d 862 (Fed. Cir. 2007) 21

In re Carr,

297 F 542 (D.C. Cir. 1924) 16

Chevron, U.S.A., Inc. v. Natural Res. Def. Council,

Inc.,

467 U.S. 837 (1984) passim

City of Arlington v. F.C.C.,

133 S. Ct. 1863 (2013) passim

Conn. Nat'l Bank v. Germain,

503 U.S. 249 (1992) 19, 28, 29

CSX Transp., Inc. v. Ala. Dep’t of Revenue,

562 U.S. 277 (2011) 11

In re Cuozzo Speed Techs., LLC,

793 F.3d 1268 (Fed. Cir 2015) passim

Dell Inc. v. Acceleron, LLC,

__ F.3d __, No. 2015-1513, 2016 WL 1019075

(Fed. Cir. Mar. 15, 2016) 27

Finnigan Corp. v. Int'l Trade Comm'n,

180 F.3d 1354 (Fed. Cir. 1999) 22

Fresenius USA Inc. v. Baxter Int'l, Inc.,

21 F.3d 1330 (Fed. Cir. 2013) 25

Genentech, Inc. v. Chiron Corp.,

112 F.3d 495 (Fed. Cir. 1997) 21

Hardt v. Reliance Standard Life Ins. Co.,

560 U.S. 242 (2010) 9, 10

Hartford Underwriters Ins. Co. v. Union Planters

Bank, N.A.,

530 U.S. 1 (2000) 29

Leo Pharm. Prods., Ltd. v. Rea,

726 F.3d 1346 (Fed. Cir. 2013) 16

Nat'l Cable & Telecomm. Ass’n v. Brand X Internet

Servs.,

545 U.S. 967 (2005) 2, 3, 9, 14, 28

Nike, Inc. v. Adidas AG,

812 F.3d 1326 (Fed. Cir. 2016) 26

PPC Broadband, Inc. v. Corning Optical Commc’ns

RF, LLC,

__ F.3d __,, No. 2015-1361, 2016 WL 692368

(Fed. Cir. Feb. 22, 2016) 27

In re Prater,

415 F.2d 1393 (C.C.P.A. 1969) 18

Reiter v. Sonotone Corp.,

442 U.S. 330 (1979) 10

Rubin v. United States,

449 U.S. 424 (1981) 29

Straight Path IP Grp., Inc. v. Sipnet EU S.R.O.,

806 F.3d 1356 (Fed. Cir. 2015) 26

United States v. Mead Corp.,

533 U.S. 218 (2001) 8, 15, 23, 24

United States v. Ron Pair Enters., Inc.,

489 U.S. 235 (1989) 30

In re Yamamoto,

740 F.2d 1569 (Fed. Cir. 1984) 16, 18, 21

Statutes

35 U.S.C. § 2(b)(2)(A), 9

35 U.S.C. § 301(a)(2) 19

35 U.S.C. § 314(a) 6, 22

35 U.S.C. § 314(d) 7, 29, 30, 32

35 U.S.C. § 315(b) 31

35 U.S.C. § 315(e)(2) 5

35 U.S.C. § 316 10

35 U.S.C. § 316(a) 11

35 U.S.C. § 316(a)(2) 11

35 U.S.C. § 316(a)(3) 10

35 U.S.C. § 316(a)(4) passim

35 U.S.C. § 316(a)(5) 6, 10, 11, 22

35 U.S.C. § 316(a)(9) 10,11

35 U.S.C. § 316(aX11) 6, 22

35 U.S.C. § 316(b)

35 U.S.C. § 316(d)

35 U.S.C. § 316(d)(1)

35 U.S.C. § 316(e)

35 U.S.C. § 319

Rules and Regulations

37 C.F.R. § 42.100

37 C.F.R. § 42.200(b)

37 C.F.R. § 42.300(b)

Fed. R. Civ P 26(b)(1)

Other Authorities

157 Cong. Rec. 3400 (2011)

157 Cong. Rec. 3416 (2011)

157 Cong. Rec. 3421 (2011)

157 Cong. Rec. 3428 (2011)

157 Cong. Rec. 3433 (2011)

Changes to Implement Inter

5, 15,17

17, 18

6, 22

7, 26, 29, 30

26, 32

4,19

Partes Review

Proceedings, Post-Grant Review Proceedings,

and Transitional Program for Covered Business

Method Patents, 77 FR 48680-01

vil

Connor N. Raso & William N. Eskridge, Jr.,

Chevron As A Canon, Not A Precedent: An

Empirical Study of What Motivates Justices in

Agency Deference Cases, 110 COLUM. L. REV

1727 (2010) 11

H.R. REP. No. 112-98, pt. 1 (2011) 15, 23

PwC, 2015 Patent Litigation Study 14 (July 2014),

http://www.pwc.com/us/en/forensic-services/

publications/patent-litigation-study. htm] 22

Amicus curiae Mylan Pharmaceuticals Inc. submits

this brief supporting Respondent.’

STATEMENT OF INTEREST

Mylan is one of the largest generic and specialty

pharmaceutical manufacturers in the world. It is

dedicated to providing greater public access to high-

quality medicines by bringing lower-priced drugs to the

market when and where they are needed. To that end,

Mylan often challenges suspect patents before district

courts and the Patent and Trademark Office (PTO)

because invalid patents hamper the flow of commerce

and keep more affordable medicines from the public.

Since Congress passed the America Invents Act

(AIA), Mylan has instituted numerous inter partes

reviews (IPR) that have employed the broadest-

reasonable-interpretation standard. Mylan files this

amicus brief because it believes that the PTO’s decision

to adopt that long-used standard advances Congress's

goal of creating an expedited and cost-effective process

for ferreting out bad patents. Second-guessing that

decision would throw ongoing IPR proceedings into

disarray (including many to which Mylzn is a party),

but more importantly, it could discourage would-be

' In accordance with Supreme Court Rule 37.6, amicus curiae

states that no counsel for a party authored this brief in whole or in

part and that no party or counsel fur a party he!ped fund the

preparation or submission of the brief. No person other than

amicus curiae or their counsel funded work on the brief.

On February 3, 2016, Cuozzo filed a letter consenting to the filing

of amicus briefs. On March 16, 2016, Mylan notified the Solicitor

General of its intent to file an amicus brief, the next day, the

Solicitor General sent a letter consenting to the filing of the brief.

patent challengers from challenging overbroad, invalid

patents that never should have issued in the first place.

The end result is that the public may miss out on

important and competitively priced medicines.

INTRODUCTION AND

SUMMARY OF ARGUMENT

The cascade of policy arguments in Petitioner

Cuozzo’s brief (and in the briefs of its supporting amici)

suggests that this case comes to the Court on a clean

slate—that the Court must decide in the first instance

which claim-construction standard should apply in

IPR. That, of course, is not correct. Congress has

spoken through the AIA, and the PTO has spoken

through federal regulations, so this Court faces a more

modest task: It must decide (1) whether the AIA vests

the PTO with authority to set the claim-construction

standard for IPR and (2) if so, whether the agency’s

choice of the broadest-reasonable-interpretation

stendard is a “permissible construction of the statute.”

Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc..

467 U.S. 837, 866 (1984).

Those questions fade to the background in Cuozzo’s

brief, and for good reason: The AIA is silent about

which claim-construction standard should apply in

IPR, but Congress vested the PTO with broad authority

to fill the gap and “prescribe regulations

establishing and governing inter partes review.” 35

U.S.C. § 316(a)(4). In using the unqualified word

“governing,” Congress did not grant the PTO a small

crumb of interpretative authority; it granted the

agency wide authority over every aspect of IPR on

which Congress has not otherwise spoken (and spoken

plainly). See Nat'l Cable & Telecomm. Ass’n v. Brand X

Internet Servs., 545 U.S. 967, 982 (2005) (“Chevron

established a presumption that Congress, when it left

ambiguity in a statute meant for implementation by an

agency, understood that the ambiguity would be

resolved, first and foremost, by the agency, and desired

the agency (rather than the courts) to possess whatever

degree of discretion the ambiguity allows.”) (internal

quotation marks omitted).

Unwilling to give the word “governing” its natural

meaning, Cuozzo and its supporters instead strain to

import a meaning not found in the statute. They argue

that Congress gave the PTO broad authority to

promulgate “procedural” rules but not “substantive”

ones. The statute does not draw that distinction; it

exists only in the pages of Cuozzo’s and its supporters’

briefs. Absent a clear congressional directive to draw

such a distinction, this Court should “not waste [its]

time in the mental acrobatics needed to decide whether

an agency's interpretation of a statutory provision” is

substantive or procedural. City of Arlington v. F.C.C..,

133 S. Ct. 1863, 1871 (2013) (rejecting as a “mirage”

the distinction between “jurisdictional” and “non-

jurisdictional” agency interpretations). Unlike in other

parts of § 316—where Congress drew fine distinctions

between “procedures” and “standards”—Congress did

not distinguish between “substance” and “procedure” in

§ 316(a)(4). These labels are nothing more than an

“empty distraction because every new application of a

broad statutory term can be reframed” as “substantive”

or “procedural,” depending on which label suits which

party’s interests. Jd. at 1870.

The only remaining question, then, is whether the

PTO’s decision to employ the broadest-reasonable-

interpretation standard in IPR is a “permissible

construction of the statute.” Chevron, 467 U.S. at 866.

This Court’s Chevron jurisprudence makes clear that

“permissible” does not mean “best.” It means

permissible. “[T]he question in every case is, simply,

whether the statutory text forecloses the agency’s

assertion of authority, or not.” City of Arlington, 133

S. Ct. at 1871. Here, the answer to that question is no.

To begin with, the broadest-reasonable-

interpretation standard did not appear out of thin air;

the PTO has employed that standard in a variety of

contexts for over 100 years. Courts presume that

Congress knew that history when it gave the PTO

authority to fashion rules “governing” IPR. See City of

Arlington, 133 S. Ct. at 1868 (“Chevron provides a

stable background rule against which Congress can

legislate: Statutory ambiguities will be resolved, within

the bounds of reasonable interpretation, not by the

courts but by the administering agency.”); Jn re Cuozzo

Speed Techs., LLC, 793 F.3d 1268, 1277 (Fed. Cir.

2015) (“There is no indication that the AIA was

designed to change the claim construction standard

that the PTO has applied for more than 100 years.”).

Indeed, the AIA’s legislative history suggests that

Congress not only understood that the PTO might

adopt the broadest-reasonable-interpretation standard

for IPR but also may have wanted the agency to do so.

See 157 Cong. Rec. 3428 (2011) (statement by Senator

Kyl acknowledging that the “broadest reasonable

construction” standard would apply in IPR).

The reason why is plain. Employing the broadest-

reasonable-interpretation standard in IPR is consistent

with Congress’s directive that the PTO consider “the

effect of any regulation on the economy, the

integrity of the patent system, the efficient

administration of the Office, and the ability of the

Office to timely complete [IPR] proceedings.” 35 U.S.C.

§ 316(b). Applied correctly, the standard will reduce

questionable patent litigation by ridding the system of

invalid patents that never should have issued while

also providing those who hold good patents a more

efficient forum for defending against invalidity claims.

See 35 U.S.C. § 315(e)(2) (prohibiting IPR petitioners

from later challenging a patent’s validity in district

court or the ITC). In any event, whatever one thinks

about those or other policy justifications, the

dispositive point is the lack of “statutory text [that]

forecloses” the PTO’s decision to adopt the broadest-

reasonable-interpretation standard for IPR. City of

Arlington, 133 S. Ct. at 1871.

For their part, Cuozzo and its supporters see the

broadest-reasonable-interpretation standard as a

repudiation of Congress’s intent to make IPR

“adjudicatory” in nature. From Congress’s expressed

intent to make IPR an adjudicatory proceeding, Cuozzo

and its supporters divine an unspoken intent to make

IPR mirror district-court litigation, right down to the

claim-construction standard.

That argument suffers from many flaws, not the

least of which is that it has no basis in the statutory

text. If anything, the statute shows that Congress did

not intend IPR to be district-court litigation by another

name. For instance, unlike in patent litigation, a

respondent in IPR can amend its patent claims at least

once to propose narrower substitute claims. 35 U.S.C.

§ 316(d). On top of that, different pleading and

evidentiary standards apply in IPR. See 35 U.S.C.

§§ 314(a), 316(e). Further still, discovery is much

narrower in IPR. See id. § 316(a)(5). IPR cannot stretch

on for years and years; it usually must conclude within

a year after institution. See id. § 316(a)(11). The list of

differences goes on, refuting the notion that Congress

intended IPR to be a copycat surrogate for patent

litigation.

Finally, Cuozzo’s argument that the broadest-

reasonable-interpretation standard will wreak havoc in

the patent world is one best directed to Congress, not

to this Court. “The proper Chevron inquiry is not

whether the agency construction can give rise to

undesirable results ” Barnhart v. Thomas, 540 U.S.

20, 29 (2003). An agency can make a reasonable choice

that ends up producing some negative consequences

(Chevron, 467 U.S. at 843); it is up to Congress to

address those consequences.

At any rate, the notion that the broadest-

reasonable-interpretation standard will destroy the

patent system and discourage innovation is overstated

at the very least. First, in certain instances, the

broadest-reasonable-interpretation standard will

produce the same result as the standard that district

courts apply Second, the Federal Circuit serves as a

backstop against unreasonable applications of the

broadest-reasonable-interpretation standard in IPR.

And third, Congress or the PTO can always step in if

the standard produces more mischief than good—an

unlikely scenario given the standard’s long history in

patent proceedings.

Until then, this Court must defer to the PTO’s

permissible choice to adopt the broadest-reasonable-

interpretation standard for IPR.

On the second question presented, the plain

language of 35 U.S.C. § 314(d) mandates that a PTO

decision whether to institute an inter partes review is

“final and nonappealable.” Congress could not have

spoken more clearly Limiting appeals of IPR to the

substance of the “final written decision” (35 U.S.C.

§ 319) properly focuses the Federal Circuit on the

underlying patentability question and avoids

unintended consequences and potential conflicts across

the patent statutes.

ARGUMENT

“When a court reviews an agency’s construction of

the statute which it administers, it is confronted with

two questions.” Chevron, 467 U.S. at 842. “First,

applying the ordinary tools of statutory construction,

the court must determine ‘whether Congress has

directly spoken to the precise question at issue.” City

of Arlington, 133 S. Ct. at 1868 (quoting Chevron, 467

U.S. at 842-43). If Congress has, “the [Clourt, as well

as the agency, must give effect to the unambiguously

expressed intent of Congress.” City of Arlington, 133

S. Ct. at 1868 (internal quotation marks omitted). “But

if the statute is silent or ambiguous with respect to the

specific issue, the question for the court is whether the

agency’s answer is based on a permissible construction

of the statute.” Jd. “If the agency’s answer is based on

a permissible construction of the statute, that is the

end of the matter.” Jd.

The AIA is silent about which claim-construction

standard should apply in IPR, but Congress delegated

to the PTO broad authority to “prescribe regulations

governing inter partes review.” 35 U.S.C.

§ 316(a)(4). That grant of unqualified authority to the

PTO to fashion rules “governing” IPR included the

power to select a familiar and often-applied standard to

test patentability in IPR. At the very least, the statute

plainly does not “foreclose|| the agency's assertion of

authority.” City of Arlington, 133 S. Ct. at 1871.

I. CONGRESS VESTED THE PTO WITH

BROAD AUTHORITY TO PROMULGATE

RULES “GOVERNING” IPR, AND THAT

AUTHORITY INCLUDES THE POWER TO

SET THE CLAIM-CONSTRUCTION

STANDARD.

An agency action is entitled to Chevron deference if

“Congress delegated authority to the agency generally

to make rules carrying the force of law, and the

agency interpretation claiming deference was

promulgated in the exercise of that authority.” United

States v. Mead Corp., 533 U.S. 218, 226-27 (2001).

Congress delegates the necessary authority by giving

an agency “power to engage in adjudication or notice-

and-comment rulemaking "Id. at 227; see also id.

at 230 (“It is fair to assume generally that Congress

contemplates administrative action with the effect of

law when it provides for a_ relatively formal

administrative procedure tending to foster the fairness

and deliberation that should underlie a pronouncement

of such force.”).

The AIA instructs the PTO to “prescribe

regulations _ establishing and governing inter partes

review.” 35 U.S.C. § 316(a)(4). Exercising that

statutory authority, the PTO promulgated regulations

governing IPR, including one providing that “[a] claim

in an unexpired patent shall be given its broadest

reasonable construction in light of the specification of

the patent in which it appears.” 37 C.F.R. § 42.100.

Because that regulation unquestionably is one

“governing” IPR, it is entitled to Chevron deference.

This Court should not disturb the PTO’s regulation

because it is a permissible construction of the statute.

Yet rather than take the word “governing” at face

value or address Chevron head-on, Cuozzo and its

amici manufacture a dichotomy between “substantive”

and “procedural” rules. According to them, Congress

gave the PTO authority to promulgate procedural rules

but not substantive ones. See, e.g., Pet. Br. at 35-42.

There is no trace of that distinction in the AIA. The

statute vests the PTO with authority to promulgate

rules “governing” IPR. It does not limit that authority

to rules “governing procedures in IPR.” Cuozzo’s

substance/procedure dichotomy finds no support in the

statute’s plain language.” See Hardt v. Reliance

* That lower federal courts have construed the Patent Act’s original

delegation to the PTO to “establish regulations” that “shall govern

the conduct of proceedings in the Office” (35 U.S.C. § 2(b2A)) as

authorizing only “procedural” rulemaking is of no moment. The

AIA is a new law with a new purpose and new, broader

language. And in all events, neither this Court nor the PTO is

bound by those earlier judicial interpretations. Nat'l Cable &

Telecommunications Ass'n v. Brand X Internet Servus., 545 U.S.

967, 982 (2005) (“A court's prior judicial construction of a statute

trumps an agency construction otherwise entitled to Chevron

deference only if the prior court decision holds that its construction

Standard Life Ins. Co., 560 U.S. 242, 251 (2010) (“We

must enforce plain and unambiguous statutory

language according to its terms.”).

It is not as if Congress is incapable of drawing those

distinctions. “Congress knows to speak in plain terms

when it wishes to circumscribe, and in capacious terms

when it wishes to enlarge, agency discretion.” City of

Arlington, 133 5. Ct. at 1868. In other parts of § 316,

Congress drew distinctions of the sort that Cuozzo

wishes Congress would have drawn in § 316(a)(4). For

instance, in § 316(a)(3), Congress delegated to the PTO

authority to promulgate rules “establishing procedures

for the submission of supplemental information after

the petition is filed.” And in § 316(a)(5), Congress

directed the PTO to promulgate rules “setting forth

standards and procedures for discovery of relevant

evidence,” demonstrating that Congress knows how to

distinguish procedural regulations from other types of

regulations when it wants to. See also 35 U.S.C.

§ 316(a)(9) (“The Director shall prescribe regulations.

setting forth standards and procedures ”).

Read against those more limited delegations of

authority, Congress’s use of the unqualified term

“governing” in § 316(a)(4) must be read to include more

than just “procedural” issues (however defined). Courts

presume that Congress uses language intentionally,

not superfluously. See Reiter v. Sonotone Corp., 442

U.S. 330, 339 (1979) (“In construing a statute we are

follows from the unambiguous terms of the statute and thus leaves

no room for agency discretion.”).

obliged to give effect, if possible, to every word

Congress used.”).*

This is not the first time that a party unhappy with

the results of an agency’s exercise of statutory

authority has tried to draw artificial lines to nullify

Chevron. Faced with the reality that courts usually

defer to an agency’s interpretation of a statute

committed to its trust (see Connor N. Raso & William

N. Eskridge, Jr., Chevron As A Canon, Not A Precedent:

An Empirical Study of What Motivates Justices in

Agency Deference Cases, 110 COLUM. L.REV 1727, 1767

(2010)), parties wishing to unwind agency

interpretations have taken to “sifting the entrails of

vast statutory schemes” in an effort to avoid Chevron.

City of Arlington, 133 S. Ct. at 1871.

But the Court decriec such divination in City of

Arlington, where the City argued that the agency had

* Cuozzo also invokes the ejusdem generis canon, arguing that

§ 316(a\4) is a “catch-all” delegation over “procedural” matters

because the delegations to the PTO in other subsections of § 316(a)

are “procedural.” Pet. Br. 8-9. The ejusdem generis canon “is not

relevant here.” CSX Transp., Inc. v. Ala. Dep't of Revenue, 562 U.S.

277, 294 (2011). Congress’s delegation to the PTO to prescribe

rules “governing IPR “is not a general or collective term following

a list of specific items to which a particular statutory command is

applicable (e.g., ‘fishing rods, nets, hooks, bobbers, sinkers, and

other equipment’).” /d. (internal quotation marks omitted).

Instead, it is the fourth of thirteen subsections—just “one of

several distinct and independent” provisions. Jd.

At any rate, Cuozzo paints with too broad a brush in claiming that

all the other subsections in § 316(a) are “procedural.” Three of

them give the PTO authority to set “standards” (differentiated

from “procedures”). 35 U.S.C. § 316(a)(2), (5), (9).

overstepped its bounds by promulgating a regulation

interpreting its own “jurisdiction.” 133 S. Ct. at

1868-69. The City argued—much like Cuozzo’s

“procedural’/“substantive” distinction here—that

Congress gave the F.C.C. authority to regulate “non-

jurisdictiona]” matters but not “jurisdictional” ones. Id.

This Court rejected that “false dichotomy between

‘jurisdictional’ and ‘non-jurisdictional’ agency

interpretations” because it had no basis in the statute

and ran counter to the Court’s longstanding application

of Chevron deference to an agency’s interpretation of

“statutes designed to curtail the scope of agency

discretion.” City of Arlington, 133 S. Ct. at 1872. The

distinction between “jurisdictional” and “non-

jurisdictional” questions was a “mirage” because “[n]o

matter how it is framed, the question a court faces

when confronted with an agency’s interpretation of a

statute it administers is always, simply, whether the

agency has stayed within the bounds of its statutory

authority.” Id. at 1868.

Cuozzo’s proposed dichotomy between “substantive”

and “procedural” questions is the same mirage. There

is no basis—none—in the AIA for Cuozzo’s purported

distinction.* It is no _ different from the

“jurisdictional’/non-jurisdictional” distinction rejected

‘ The PTO has adopted the broadest-reasonable-interpretation

standard in other contexts without challenge. The PTO has, for

instance, adopted the same broadest-reasonable-interpretation

standard—through notice and comment rulemaking—for both

post-grant review proceedings and covered business-method-patent

proceedings. See 37 C.F._R. § 42.200(b), 37 C.F.R. § 42.300(b). And

yet no one has suggested that those regulations are invalid because

they were “substantive” as opposed to “procedural.”

in City of Arlington. Both are backdoor attempts to

avoid Chevron by questioning the scope of the agency’s

delegated authority—which the challenger in City of

Arlington called “jurisdiction.” Compare City of

Arlington, 133 S. Ct. at 1868 (“The question here is

whether an agency’s interpretation of a statutory

ambiguity concerns the scope of the agency’s

statutory authority (that is, its jurisdiction).”). Given

the close identity between Cuozzo’s challenge and the

challenge in City of Arlington, this Court’s prophetic

warning in City of Arlington sees some fulfilment in

Cuozzo’s positions here:

The false dichotomy between “jurisdictional” and

“nonjurisdictional” agency interpretations may

be no more than a bogeyman, but it is dangerous

all the same. Like the Hound of the Baskervilles,

it is conjured by those with greater quarry in

sight: Make no mistake—the ultimate target

here is Chevron itself. Savvy challengers of

agency action would play the “jurisdictional”

card in every case. Some judges would be

deceived by the specious, but scary-sounding,

“jurisdictional”-“non-jurisdictional” line; others

tempted by the prospect of making public policy

by prescribing the meaning of ambiguous

statutory commands. The effect would be to

transfer any number of _ interpretive

decisions—archetypal Chevron questions, about

how best to construe an ambiguous term in light

of competing policy interests—from the agencies

that administer the statutes to federal courts.

133 S. Ct. at 1872-73.

The AIA’s plain language forecloses that kind of

power transfer to the courts. Through the statute,

Congress broadly delegated to the PTO authority to

“prescribe regulations governing inter partes

review.” 35 U.S.C. § 316(a)(4). That grant of

interpretative authority admits of no ambiguity:

Regulations “governing” IPR plainly encompass

standards for assessing patent validity. But even if the

AIA’s delegation of authority to the PTO were

ambiguous as to the scope of authority prescribed, this

Court “must defer under Chevron to an agency’s

interpretation of a statutory ambiguity that concerns

the scope of the agency’s statutory authority (that is,

its jurisdiction).” City of Arlington, 133 S. Ct. at 1868.

This Court likewise should and must defer to the PTO’s

assertion of authority over the claim-construction

standard to be used in IPR.

The only remaining question, then, is whether the

PTO’s choice of the broadest-reasonable-interpretation

standard is a “permissible” construction of the statute.

See Brand X, 545 U.S. at 982. For the many reasons set

out below, the answer is yes.

Il. THE PTO’S DECISION TO USE THE

BROADEST-REASONABLE-

INTERPRETATION STANDARD IS

ENTITLED TO DEFERENCE.

Cuozzo leaves nothing on the field in an effort to

persuade the Court that Congress intended for IPR to

be governed by the ordinary-meaning standard that

district courts apply. For more than thirty pages in its

brief, Cuozzo tries to discover congressional intent

about claim construction from a statute that everyone

agrees says nothing about claim construction. See In re

Cuozzo Speed Techs., 793 F.3d at 1275 (the AIA does

“not resolve the issue of whether the broadest

reasonable interpretation standard is appropriate in

IPRs; it is silent on that issue”).

Rather than set the claim-construction standard

itself, Congress delegated that authority—to “prescribe

regulations governing inter partes review’—to the

PTO. 35 U.S.C. § 316(a)(4). The PTO chose the

broadest-reasonable-interpretation standard. This

Court must defer to that choice unless it was

“procedurally defective, arbitrary or capricious in

substance, or manifestly contrary to the statute.” Mead

Corp., 533 U.S. at 227

Far from being arbitrary or capricious, the PTO’s

choice was not only reasonable but what Congress

likely intended. Through the AIA, Congress directed

the PTO when developing its regulations to “consider

the effect of any such regulation on the economy, the

integrity of the patent system, the efficient

administration of the Office, and the ability of the

Office to timely complete proceedings instituted under

this chapter.” 35 U.S.C. § 316(b). No claim-construction

standard better serves those goals than the broadest-

reasonable-interpretation standard. That standard

draws on the PTO’s experience employing the standard

in proceedings where claim amendments are allowed

while at the same time promoting Congress’s goal of

creating a “quick and cost effective alternative|] to

litigation.” H.R. REP No. 112-98, pt. 1, at 48 (2011).

Applying the Chevron deference that the PTO deserves,

the PTO’s choice of the broadest-reasonable-

interpretation standard is permissible and certainly

not foreclosed by the statute.

A. For nearly 100 years, the PTO has

applied the broadest-reasonable-

interpretation standard in contexts

where the patentee has a right to amend

its claims.

The PTO has applied the broadest-reasonable-

interpretation standard in various contexts for nearly

a century In 1924, the D.C. Circuit blessed the

standard for initial patent examinations. Jn re Carr,

297 F 542 (D.C. Cir. 1924). “This rule is a reasonable

one,” the court said, because it “tends not only to

protect the real invention, but to prevent needless

litigation after the patent has issued.” Jd. at 544. Over

the years, the courts of appeals have approved the

standard in other contexts, including inter partes

reexamination (the predecessor to IPR). See Leo

Pharm. Prods., Ltd. v. Rea, 726 F.3d 1346, 1352 (Fed.

Cir. 2013); see also In re Yamamoto, 740 F.2d 1569,

1571-72 (Fed. Cir. 1984) (ex parte reexaminations).

Courts have done so for good reason: As the Federal!

Circuit has recognized (and no one seriously disputes),

“Igliving claims their broadest reasonable construction

‘serves the public interest by reducing the possibility

that claims, finally allowed, will be given broader scope

than is justified.” Yamamoto, 740 F.2d at 1571.

Otherwise, overbroad and invalid patents will continue

to harm the integrity of the patent system and the

economy by blocking competition and roping off the

field to further innovation.

Cuozzo plays up that IPR differs in some respects

from those other contexts, but again, Cuozzo misses the

point: The question is not whether the PTO’s choice of

standard fits comfortably with past practice. It is

whether it is permissible given the delegation of

authority to the agency in the AIA and,

correspondingly, the purposes that lie behind that

statute. The PTO could have permissibly chosen the

broadest-reasonable-interpretation standard even if

IPR had no analog-in other patent-office proceedings.

Through the AIA, Congress directed the PTO to

promulgate rules that protect “the integrity of the

patent system” (35 U.S.C. § 316(b)) by creating a timely

and cost-effective process for ferreting out

improvidently granted patents. See In re Cuozzo Speed

Techs., 793 F.3d at 1285 (Newman, J., dissenting)

(describing goal to “facilitatle] the removal of patents

that were improvidently granted”). A broader claim-

construction standard, which captures a wider swath

of prior art, is the best—or, at the very least, a

reasonable—method for achieving that goal. It ensures,

to the greatest extent possible, that a patent is novel

and non-obvious by testing it against the totality of

relevant art. That, of course, is not only a permissible

goal, but exactly what Congress intended.

But the Court does not have to go that far to resolve

this case: The _ broadest-reasonable-interpretation

standard has always applied across a spectrum of

proceedings—each one different from the next—and

IPR bears hallmarks of those other proceedings.

One of those hallmarks is a patentee’s right to

amend its patent claims in IPR. Under the framework

that Congress created, patent owners who are

concerned about the consequences that might flow from

a broad reading of their patent claims may file a

motion to amend to “propose a reasonable number of

substitute claims” “[flor each challenged claim.” 35

U.S.C. § 316(d)(1). That ability to amend—carried over

from reexamination proceedings—distinguishes IPR

from proceedings in federal district courts. See In re

Yamamoto, 740 F.2d at 1572 (recognizing the same

distinction with respect to ex parte reexaminations).

Congress’s decision to give IPR participants the

right to amend creates problems for Cuozzo and its

amici because courts have found that right sufficient to

justify the broadest-reasonable-interpretation standard

in other contexts. In re Yamamoto, 740 F.2d at 1572

(an applicant’s “opportunity during reexamination

toamendhisclaims ___justiflies] using [the broadest-

reasonable-interpretation standard] in reexamination

proceedings”) In re Prater, 415 F.2d 1393, 1404—05

(C.C.P.A. 1969) (same for initial examinations).

Cuozzo’s response is to marginalize IPR amendments

by complaining that the right to amend is more limited

in IPR than it was in reex. :nination proceedings and

by marshaling anecdotal evidence that motions to

amend are sparingly granted. Pet. Br. 29-30. But no

court has held that the right to amend—which has

never existed in district court litigation—must be

employed generously for that right to justify giving

claims their broadest reasonable construction. Try as

Cuozzo might to portray it otherwise, a patentee in an

IPR proceeding has an absolute right to move to

amend; a right that has never existed in district court

proceedings. And succeeding on a motion to amend

depends on a patent holder’s willingness to trim the fat

off overbroad claims. If the patent owner is unable to

do so, then it should not prevail in IPR and its

overbroad patent should not have issued in the first

place.

B. Legislative history shows that Congress

anticipated that the PTO might adopt

the broadest-reasonable-interpretation

standard for IPR.

It is not just that the PTO’s policy choice to use the

broadest-reasonable-interpretation standard in IPR is

permissible; the AIA’s legislative history suggests that

Congress anticipated the PTO making that choice.

Although resort to legislative history is unnecessary

to sustain the PTO’s choice of the broadest-reasonable-

interpretation standard (see Conn. Natl Bank v.

Germain, 503 U.S. 249, 254 (1992) (“When the words of

a statute are unambiguous, then, this first canon is

also the last: ‘judicial inquiry is complete.”)), the AIA’s

legislative history confirms that Congress thought that

the PTO might choose that standard for IPR.

At a congressional hearing discussing amendments

to the Act, Senator Jon Kyl assumed that the broadest-

reasonable-interpretation standard would apply in IPR.

Extolling the virtues of a provision allowing patent

owners to submit written statements on the scope of

their claims (35 U.S.C. § 301(a)(2)), Senator Kyl noted

that the provision would root out inconsistent positions,

such as “where a patent owner successfully advocated

a claim scope in district court that is broader than the

‘broadest reasonable construction’ that he now urges in

inter partes review.” 157 Cong. Rec. 3428 (2011).

Cuozzo tries to minimize the import of Senator Kyl’s

remark by arguing that it is “a single ambiguous

sentence by a single Senator.” Pet. Br. 39. But when it

came to the AJA, Senator Kyl was no casual observer:

He was one of five or six lawmakers at the center of the

effort to improve patent law, he cosponsored an early

amendment that was later folded into the AIA (157

Cong. Rec. 3421 (2011)), and was “instrumental in

making improvements to the bill” that was eventually

enacted into law. 157 Cong. Rec. 3433 (2011)

(statement of Sen. Grassley thanking Sen. Kyl). And

the statement is the opposite of “ambiguous.” Senator

Kyl obviously was talking about the very claim-

construction standard now applied by the PTO (and

challenged by Cuozzo). To Senator Kyl, it was a given

that the standard would apply in IPR.

Those faint objections do not obscure that Cuozzo

can point to no statement in the legislative record—by

Senator Kyl or anyone else—so much as hinting that

the AIA’s drafters believed that any other standard

would apply. Instead, Cuozzo highlights the drafters’

statements that the “shift from an examinational to an

adjudicative model” was expected to “expedite” the

process. Pet. Br. 32; id. at 39 (citing Senator Kyl’s

statement that IPR is an “adjudicative proceeding”).

Those statements, of course, say nothing about the

claim-construction standard that the drafters had in

mind. The only relevant legislative history supports the

PTO’s regulation.

C. That IPR has “adjudicatory” aspects

does not mean that it must mirror

district-court litigation.

With no good answer for Chevron, Cuozzo and its

amici try to sidestep the deference model altogether by

waving around the label “adjudicatory ” They claim

that because IPR serves an “adjudicatory” function, it

ust employ the same claim-construction standard

that district courts use. Pet. Br. 26—35. That is a non-

sequitur. That IPR has some “adjudicative” aspects

does not mean that it must mirror district-court

litigation. The PTO has long applied the broadest-

reasonable-interpretation standard in interference

proceedings—which are adjudicatory in nature (see

Cuozzo, 793 F.3d at 1278 (citing Brand v. Miller, 487

F.3d 862, 867-68 (Fed. Cir. 2007) and Genentech, Inc.

v. Chiron Corp., 112 F.3d 495, 500 (Fed. Cir. 1997))—so

“adjudicatory” is not code for “the same as district

court.”

Cuozzo’s efforts to remake IPR in the district court’s

image also cannot be squared with congressional

intent. Congress enacted the AIA in part to address the

inefficiencies and skyrocketing costs in patent

litigation. See Changes to Implement Inter Partes

Review Proceedings, Post-Grant Review Proceedings,

and Transitional Program for Covered Business

Method Patents, 77 FR 48680-01 (“The purpose of the

AIA _ istoestablish a more efficient and streamlined

patent system that will improve patent quality and

limit unnecessary and counterproductive litigation

costs.”). Congress did not want IPR to look exactly like

the system that produced those inefficiencies and costs.

That much is evident in the AIA. Instead of showing

that Congress meant IPR to be district-court !itigation

in another skin, the statute shows that IPR differs

from patent litigation in significant ways.

Perhaps most importantly, a patentee has the right

to amend its claims in IPR proceedings, unlike in

litigation. See Yamamoto, 740 F.2d at 1572

(distinguishing ex parte reexaminations from

proceedings in federal district courts based on the same

right to amend).

The standard of proof also differs in IPR: Whereas

in federal court “[t]he burden is on the party asserting

invalidity to prove it with facts supported by clear and

convincing evidence,” Finnigan Corp. v. Int'l Trade

Comm'n, 180 F.3d 1354, 1365 (Fed. Cir. 1999), the

challenger in IPR must prove unpatentability “by a

preponderance of the evidence.” 35 U.S.C. § 316(e).

Another difference: Pleading standards in district

court are not as stringent as those in IPR. In federal

court, a short and plain statement of the facts entitling

one to relief is enough to state a claim. See, e.g.,

Ashcroft v. Iqbal, 556 U.S. 662 (2009). Not so with IPR.

The threshold for getting an IPR instituted is much

higher: The PTO may not institute an IPR unless

“information presented in the petition” shows “a

reasonable likelihood that the petitioner would prevail

with respect to at least 1 of the claims challenged in

the petition.” 35 U.S.C. § 314(a).

Yet another difference: Discovery in district court is

broad, and includes not only broad fact and expert

discovery, but also live testimony regarding the same.

See Fed. R. Civ. P 26(b)(1). But for IPR proceedings,

Congress prescribed “that such discovery shall be

limited to the deposition of witnesses submitting

affidavits or declarations.” 35 U.S.C. § 316(a)(5).

Still another difference: Unlike patent litigation,

which averages nearly two-and-a-half years to

completion (see PwC, 2015 Patent Litigation Study 14

(July 2014), http://www.pwce.com/us/en/forensic-

services/publications/patent-litigation-study.html), IPR

must be completed “not later than 1 year after”

institution (absent an extension for good cause). 35

U.S.C. § 316(a)(11).

The list goes on, but it is clear that Congress did not

intend IPR to be a carbon copy of patent litigation. It is

a substitute for the old inter partes reexamination

process. The legislative history makes that explicit:

“The Act converts inter partes reexamination from an

examinational to an adjudicative proceeding, and

renames the proceeding ‘inter partes review.” H.R.

REP No. 112-98, pt. 1, at 46-47 (2011). Instead of

creating a new review process from scratch, Congress

took the old reexamination process (almost) down to

the studs and rebuilt it into IPR. Just as a renovated

house retains some features of the old, so IPR

permissibly retains several features of the inter partes

reexamination proceeding—including the broadest-

reasonable-interpretation standard.

At bottom, Cuozzo’s insistence on IPR’s retaining

“adjudicatory” aspects identical to those found in

district court is a stalking horse for its efforts to

convince this Court to withhold deference to the PTO’s

permissible choice of the broadest-reasonable-

interpretation standard.

lil. CUOZZO’S POLICY ARGUMENTS ARE

IRRELEVANT AND OVERSTATED.

The PTO’s regulation adopting the broadest-

reasonable-interpretation standard for IPR was “a

permissible construction” of the AIA comfortably within

the agency’s delegated authority. Chevron, 467 U.S. at

843. That is the end of the inquiry. See Mead Corp. , 533

U.S. at 226-27

Cuozzo knows that it loses under Chevron, which is

why it all but ignores the doctrine and leads with a set

of policy arguments about how the _ broadest-

reasonable-interpretation standard will turn the patent

world upside down. But those policy arguments are

irrelevant. “The proper Chevron inquiry is not whether

the agency construction can give rise to undesirable

results in some instances (as here both constructions

can), but rather whether, in light of the alternatives,

the agency construction is reasonable.” Barnhart v.

Thomas, 540 U.S. 20, 29 (2003). As this Court stated in

Chevron itself—and has repeated countless

times—“|w!hen a challenge to an agency construction

of a statutory provision, fairly conceptualized, really

centers on the wisdom of the agency’s policy, rather

than whether it is a reasonable choice within a gap left

open by Congress, the challenge must fail.” Chevron,

467 U.S. at 866; see also id. (“The responsibilities for

assessing the wisdom of [an agency’s] policy choices

and resolving the struggle between competing views of

the public interest are not judicial ones ”); Mead

Corp., 533 U.S. at 229 (“{A] reviewing court has no

business rejecting an agency’s exercise of its generally

conferred authority to resolve a particular statutory

ambiguity simply because the agencys chosen

resolution seems unwise a

But even if the Court could consider policy

arguments, they would all still fail. Cuozzo’s primary

complaint seems to be that the broadest-reasonable-

interpretation standard is leading the PTO to

invalidate more patents than ever before. Pet. Br. 34.

But dealing with suspect patents is precisely what

Congress intended when it passed the AIA. Jn re

Cuozzo Speed Techs., 793 F.3d at 1285 (Newman

dissenting) (acknowledging that one of the AIA’s goals

is “facilitating the removal of patents that were

improvidently granted”) (citation omitted). Cuozzo

acknowledges as much in its brief. Pet. Br. 2—3

(agreeing that IPR fulfills Congress’s “goal of improving

the quality of patents and reducing unnecessary

litigation costs.”). That is reason enough to uphold the

PTO’s regulation.

The other policy arguments that jump back and

forth between Cuozzo’s and its amici’s briefs are more

of the same and equally irrelevant. For instance, one

amici argues that the broadest-reasonable-

interpretation standard has led to the wrong result in

particular cases. InterDigital Am. Br. 24-28. But the

same is true for the district court standard that Cuozzo

espouses.

Cuozzo argues that IPR results sometime diverge

from litigation results on the same facts (Pet. Br.

34-35), but that, too, is a red herring. Potentially

divergent results already exist, and have always

existed, across PTO proceedings and district-court

litigation. See, e.g., Fresenius USA Inc. v. Baxter Int'l,

Inc., 21 F.3d 1330 (Fed. Cir. 2013) (addressing claims

found not invalid in district court, but later found

invalid in ex parte reexamination). Besides, Congress

recognized that potential tension and “expressly

authorizeld)] a stay of litigation in relation to such

proceedings. It is congressional intent that a stay

should only be denied in extremely rare instances.” 157

Cong. Rec. 3416 (2011) (statement by Sen. Schumer).

Another amicus party claims that IPR is

“displacling] district courts as a forum for adjudicating

patent validity.” Biotechnology Innovation Org. Am. Br.

at 26-27. But that argument contradicts Congress’s

clear intent (which even Cuozzo recognizes) for the AIA

to “limit unnecesssy and counterproductive litigation

costs ” 157 Cong. Rec. 3400 (2011) (statement by

Sen. Leahy).

Cuozzo is correct that the PTO’s decision to adopt

the broadest-reasonable-interpretation standard has

policy implications. But that is exactly as it should be.

The PTO—“the ‘agency to which Congress hlas}

delegated policymaking responsibilities”’—‘“lis] the

appropriate political actor to resolve the competing

interests at stake, ‘within the limits of that

delegation.” City of Arlington, 133 S. Ct. at 1881

(quoting Chevron, 467 U.S. at 865).

At any rate, the patent world is not undergoing a

sea change.

First, in certain instances, the broadest-reasonable-

interpretation standard may very well produce the

same result as the ordinary-meaning standard applied

in district courts; both standards first look to claim-

language’s plain meaning. See, e.g., Nike, Inc. v. Adidas

AG, 812 F.3d 1326, 1346-47 (Fed. Cir. 2016) (affirming

PTO’s “plain meaning” conclusion that “flat knit edge’

is ‘an edge of a flat knit textile element, which is itself

flat knit”).

Second, the Federal Circuit serves as a backstop

against unreasonable applications of the broadest-

reasonable-interpretation standard. The Federal

Circuit has authority to review final written decisions

from IPR. 35 U.S.C. § 319. When a party takes an

appeal from IPR, the Federal Circuit “conduct|s] a de

novo review of the Board’s determination of the

broadest reasonable interpretation of the claim

language.” Straight Path IP Grp., Inc. v. Sipnet EU

S.R.O., 806 F.3d 1356, 1360 (Fed. Cir. 2015). If the

PTO misapplies the broadest-reasonable-interpretation

standard—just as district courts sometimes misapply

the ordinary-meaning standard—the party on the

receiving end of that mistake can ask the Federal

Circuit to correct it.

And the Federal Circuit is not shy about doing so.

Earlier this month, the Federal Circuit considered

appellate challenges by both sides after an IPR. See

Dell Inc. v. Acceleron, LLC, ___ F.3d __, No. 2015-

1513, 2016 WL 1019075 (Fed. Cir. Mar. 15, 2016). The

Federal Circuit affirmed the PTO’s decisions on a

number of claims but vacated the PTO’s cancellation of

two claims—one of which the PTO had cancelled

because of purported claim-construction problems. Id.

at *5. And in February, the Federal Circuit vacated the

PTO’s determination in another IPR that some claims

were unpatentable, while upholding the agency’s same

determination about other claims. See PPC Broadband,

Inc. v. Corning Optical Comme’ns RF, LLC, __ F.3d

___, No. 2015-1361, 2016 WL 692368 (Fed. Cir Feb. 22,

2016). Those are just two (very recent) examples.

Others abound. Appellate review of final written

decisions in IPR will keep the broadest-reasonable-

interpretation standard from working all the evils that

Cuozzo ascribes to it.

Third, and finally. even if the sky were falling, or

looked like it might start falling, both the PTO and

Congress have the authority to change the standard in

the future. Congress can always specify the claim-

construction for IPR. Bills are pending that would do

just that. In re Cuozzo Speed Techs., 793 F.3d at 1299

(Dyk, J., concurring in denial of rehearing en banc)

(citing, among other things, proposed legislation that

would set the claim-construction standard for IPR as

something other than the broadest reasonable

interpretation). Beyond that, the PTO—the agency

“authorized by Congress to administer this legislation”

(Chevron, 467 U.S. at 864\—is also free to exercise its

delegated authority to select a different standard

should the need arise. In fact, “the agency must

consider varying interpretations and the wisdom of its

policy on a continuing basis.” Brand X, 545 U.S. at

981-82 (quoting Chevron, 467 U.S. at 863-64). The

ongoing ability of Congress and the PTO to act is more

than sufficient reason for the Court to stay its hand

here.

* * *

“The arguments over policy that are advanced in the

briefs create the impression that [Cuozzo and its

amici] are now waging in a judicial forum a specific

policy battle which they ultimately lost in the agency

"precisely what this Court warned against doing

in Chevron. 467 U.S. at 864. It is not this Court’s role

to mediate that policy battle. Cuozzo should direct its

policy arguments to Congress or the PTO, the political

actors who actually have authority to make the

judgment calls that Cuozzo desires.

IV. CONGRESS EXPRESSLY BARRED

JUDICIAL REVIEW OF THE PTO’S

INSTITUTION DECISIONS.

In interpreting a statute, this Court “always turn(s|

first to one, cardinal canon before all others”: the plain-

meaning rule. Conn. Nat'l Bank v. Germain, 503 U.S.

249, 253 (1992). The Court presumes that “Congress

says in a statute what it means and means in a statute

what it says there.” Hartford Underwriters Ins. Co. v.

Union Planters Bank, N.A., 530 U.S. 1, 6 (2000)

(internal quotation marks omitted). “When the words

of a statute are unambiguous,” the “first canon is also

the last: ‘judicial inquiry is complete.” Conn. Nat'l

Bank, 503 U.S. at 254 (quoting Rubin v. United States,

449 U.S. 424, 430 (1981)). This Court’s analysis of the

appealability question should start and stop with the

AIA’s plain language.

In stark contrast to Congress’s silence on the claim-

construction standard, Congress could not have spoken

more clearly in stating that the decision to institute

IPR is not appealable. Section 314(d), entitled “No

appeal,” mandates that “[t]he determination by the

Director whether to institute an inter partes review

under this section shall be final and nonappealable.” 35

U.S.C. § 314(d). It is difficult to envision a clearer

expression of Congressional intent. By declaring

institution decisions “final and nonappealable,”

Congress unambiguously. and without qualification,

foreclosed review of the PTO’s institution decisions.

Despite that unconditional directive, Cuozzo argues

that this section does not completely preclude review of

institution decisions altogether but merely postpones

review until the PTO issues a final written decision

appealable under Section 35 U.S.C. § 319. Pet. Br

46—54. That strained interpretation cannot be squared

with the plain language and purpose of the AIA. As the

Federal Circuit recognized, the statute:

provides that the decision is_ both

“nonappealable” and “final,” i.e., not subject to

further review A declaration that the decision to

institute is “final” cannot reasonably be

interpreted as postponing review until after

issuance of a final decision on patentability.

In re Cuozzo Speed Techs., 793 F.3d at 1273. Without

qualification, the statute forecloses judicial review of

the PTO’s institution decision in all instances. See

United States v. Ron Pair Enters., Inc., 489 U.S. 235,

242 (1989) (“The plain meaning of legislation should be

conclusive ”) (internal quotation marks omitted);

62 Cases, More or Less, Each Containing Six Jars of

Jam v. United States, 340 U.S. 593, 596 (1951)

(“Congress expresses its purpose by words. It is for us

to ascertain—neither to add nor to subtract, neither to

delete nor to distort.”).

Under the statutory scheme that Congress

established, a patent owner dissatisfied with the PTO’s

final written decision is entitled to obtain review of the

merits of the Board’s patentability determination, but

is not entitled to challenge the PTO’s threshold decision

to institute the proceeding. 35 U.S.C. §§ 319, 314(d).

That is Congress’s plain intent, not to be second-

guessed or re-written by the courts.

That interpretation is not only required but is also

good policy. It focuses judicial review and resources on

the merits of the PTO’s patentability decision while

avoiding unnecessary review of threshold questions

that are not relevant to the proper scope of the patent

owner's exclusive rights. In other words, if the Federal

Circuit ultimately affirms a meritorious patent

challenge, then that patent is rightfully invalidated

(and was “improvidently granted” in the first instance),

regardless of any procedural issues surrounding the

institution. Such a scheme supports the public’s

interest in efficiently eliminating invalid patents,

particularly in industries like pharmaceuticals, where

invalid patents can (and do) bar market entry of

competing generic products longer than Congress

intended.

Essentially calling for a get-of-jail-free card, Cuozzo

and its supporters seek to exploit judicial review of

institution decisions in an effort to insulate invalid

patents. But as the Federal Circuit recognized, a

flawed decision to institute review is not a basis for

setting aside a decision on the merits that a patent

should not have issued in the first place. See Jn re

Cuozzo Speed Techs., 793 F.3d at 1274 (“The fact that

the petition was defective is irrelevant because a

proper petition could have been drafted.”). Holding

otherwise works a disservice not only to the consuming

public, but to the integrity of the patent system as a

whole.

Cuozzo and its supporters also overlook that, in

many instances, an IPR petitioner could be statutorily

time-barred by another AIA provision from refiling a

meritorious petition to correct procedural issues. That

separate provision forecloses a party from filing an IPR

petition one year after receiving a complaint alleging

infringement. 35 U.S.C. § 315(b). So under Cuozzo’s

rule, in many cases, a party who had successfully

challenged a patent in IPR only to see that challenge

undone by a post-hoc finding that the institution

decision was “defective” would be foreclosed from

refiling a new IPR petition. It defies logic to suggest

that Congress intended that result. Yet in Cuozzo’s

world, despite investing substantial time and resources

in a successful patent challenge, a would-be challenger

would be left with no alternative but to invest even

more money and time re-challenging the patent in

district-court litigation. In essence, patent owners

would be able to maintain an invalid patent and escape

on a technicality in the initiation of review. It is an

understatement to say that this neither serves the

purpose of the AIA nor the interests of the public at

large, not to mention Congress’s intent.

Prohibiting review of institution decisions is also

consistent with the AIA’s purpose. As even Cuozzo

recognizes, Congress enacted the AIA to create “a more

efficient and streamlined patent system [to] improve

patent quality and limit unnecessary and

counterproductive litigation costs ” 157 Cong. Rec.

3400 (2011) (statement by Sen. Leahy); see also Pet. Br.

3, 16 (the “cornerstone” of the AIA was the creation of

patent proceedings to “provide a reliable early decision,

by technology-trained patent-savvy adjudicators, with

economies of time and cost” and to “reliably resolve

most issues of patent validity, without the expense and

delay of district court litigation.”) (quoting App.

32a—33a (Newman, J., dissenting)). Allowing patent

owners to safeguard invalid patents by appealing

procedural violations rather than the merits of the

challenge undermines the very benefits of the efficient

and cost-effective scheme that Congress sought to

achieve through the AIA.

The statute’s language is plain. It forecloses judicial

review of the PTO’s institution decisions in all

instances. Simply put, there is no basis to construe

“final and nonappealable” to mean conditional and

appealable—the exact opposite of the clear language

used in Section 314(d). See generally In re Cuozzo

Speed Techs. , 793 F.3d at 1273. (“A declaration that the

decision to institute is ‘final’ cannot reasonably be

interpreted as postponing review until after issuance of

a final decision on patentability.”). The statute’s clear

language alone should end the enquiry.

CONCLUSION

For all these reasons and those stated in the

Respondent’s separate brief, this Court should affirm

the judgment below.

Respectfully submitted,