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

Supreme Court brief2016

Ask Donna

What actually matters in this document.

Text

| OFFICE OF THE CLERK

IN THE

Supreme Court of the United States

CUOZZO SPEED TECHNOLOGIES, LLC,

Petitioner,

MICHELLE K. LEE, UNDER SECRETARY OF

COMMERCE FOR INTELLECTUAL PROPERTY AND

DIRECTOR, PATENT AND TRADEMARK OFFICE,

Respondent.

On Wait or CERTIORARI TO THE UNITED States Court

OF APPEALS FOR THE FEDERAL CIRCUIT

BRIEF OF AMICUS CURIAE UNIFIED

PATENTS INC. IN SUPPORT OF

RESPONDENT

KEVIN JAKEL Scorr A. McKrown

JONATHAN STROUD Counsel of Record

SHAWN AMBWANI STEPHEN G. KuNIN

UNIFIED Parents INc. JEFFREY I. Frey

2 North 1st Street, 5 Floor OsLon, McCLELLAND, MAIER

San Jose, California 95113 & Neustapt, L.L.P.

(650) 999-0899 1940 Duke Street

Alexandria, Virginia 22314

(703) 412-6297

smckeown@oblon.com

Counsel for Amicus Curiae

COUNSEL PRESS

(800) 274-3321 + (800) 359-6859

TABLE OF CONTENTS

TABLE OF CONTENTS.

TABLE OF CITED AUTHORITIES

STATEMENT OF INTEREST

INTRODUCTION.

SUMMARY OF THE ARGUMENT.. .

ARGUMENT

I. Inter partes review (IPR) procedures

are a refinement of patent examination

and reexamination processes all using

the BRI standard, which have for more

than a century sought to improve patent

quality, thus reducing problematic district

court patent litigation .

A. IPR is an administrative proceeding

not intended to replace litigation in

district court

B. IPR is a refinement of an earlier PTO

post-grant procedure, inter partes

reexaminations, which construed

claims using the broadest reasonable

interpretation (BRI)

Page

Table of Contents

II. Amendment is not more limited in IPRs than

in other post-grant procedures, even in other

adjudicative proceedings, and post-grant

amendment is available by other routes at the

U.S. Patent and Trademark Office (PTO)

Il.

Claims may be modified in

reexamination proceedings, which,

like IPR, are post-grant proceedings at

the PTO that allow limited amendment,

and use BRI

Interference proceedings, which

are adjudicatory proceedings

at the PTO that allow amendment

(and on which IPR procedure was

based), use BRI

Patent reissue is a post-grant proceeding

that likewise allows patentees to

amend claims, and uses BRI

Many factors have contributed to

the limited number of amendments

made to date in IPRs

When properly applied, the standards

of construction in the PTO and in the

courts are paths to the same result

Page

.14

int

Table of Contents

A. Because the PTAB properly applied

the BRI standard, Petitioner received

the “plain and ordinary” claim

interpretation it seeks

B. The PTO recognizes that BRI

and “plain and ordinary meaning”

are not alternatives.

C. The U.S. Court of Appeals for

the Federal Circuit recognizes

that BRI and “plain and ordinary

meaning” are not alternatives .

D. Factors other than BRI can result in

differences in claim construction in

the PTO and in the courts

Claim construction procedures

under the PTAB and in the courts

differ only inconsequentially

IV. Congress assumed BRI would continue to

be used by the PTO in post-grant patent

proceedings, as shown by the specific

statute of the AIA it promulgated, to

avoid claim-construction gamesmanship

by patentees .

CONCLUSION

Page

.24

.25

TABLE OF CITED AUTHORITIES

CASES

American Hoist and Derrick Company v.

Sowa & Sons Inc.,

725 F.2d 1350 (Fed. Cir. 1984) .6, 25

Bamberg v. Dalvey,

No. 2015-1548 (Fed. Cir. March 9, 2016) 18

Bamberger v. Cheruvu,

55 U.S.P.Q.2d 1523 (B.P.A.I. 1998). 17

Blackberry Corp. v. Mobilemedia Ideas LLC,

IPR2013-00016, Paper No. 31

(PTAB December 11, 2013). .10

Blackberry Corp. v. Mobilemedia Ideas LLC,

IPR2013-00036, Paper No. 64

(PTAB Jan. 21, 2014) .10

Chevron, USA, Inc. v.

Natural Resources Defense Council, Inc.,

467 U.S. 837 (1984). 25, 26

COMMIL USA, LLC v. Cisco Systems, Inc.,

135 S. Ct. 1920 (2015). 10

eBay Inc. v. MercExchange, L.L.C.,

126 S. Ct. 1837 (2006) 10

Cited Authorities

Ethicon, Inc. v. Quigg,

849 F.2d 1422 (Fed. Cir. 1988)

In re Cortright,

165 F.3d 1353 (Fed. Cir. 1999)

In re: Cuozzo Speed Techs., LLC,

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

Lacavera v. Dudas,

441 F.3d 1380 (Fed. Cir. 2006)

Laitram Corp. v. NEC Corp.,

163 F.3d 1342 (Fed. Cir. 1998)

Masterlmage 3D, Inc. and MasterImage 3D

Asia, LLC v. RealD Inc.,

IPR2015-00040 (PTAB July 15, 2015).

Merck & Co. v. Teva Pharms. USA, Inc.,

347 F.3d 1367 (Fed. Cir. 2003)

Microsoft Corp. v. i4i Limited Partnership,

131 S. Ct. 2242 (2011).

Microsoft Corp. v. Proxyconn, Inc.,

789 F.3d 1292 (Fed. Cir. 2015)

Miel v. Young,

29 App. D.C. 481 (D.C. Cir. 1907).

Page

.26

.20

.24

Cited Authorities

Omega Eng7g, Inc. v. Raytek Corp.,

334 F.3d 1314 (Fed. Cir. 2003)

Phillips v. AWH Corp.,

415 F.3d 1303 (Fed. Cir. 2005)

Podlesak v. McInnerney,

1906 Dec. Comm’r Pat. 265.

Trivascular, Inc. v. Samuels,

No. 2015-1631 (Fed. Cir. Feb. 5, 2016)

Wnek v. Dobbs,

85 U.S.P.Q.2d 1159 (BPAI 2006).

ZTE Corp. v. ContentGuard Holdings, Inc.,

passim

24, 25

IPR 2013-00136, Paper 33 (PTAB Nov. 7, 2013) = .19

STATUTES

35 U.S.C. § 2.

35 U.S.C. § 102.

35 U.S.C. § 120.

35 U.S.C. § 282.

35 U.S.C. § 301

4, 28, 30

vii

Cited Authorities

Page

35 U.S.C. § 302. 15

35 U.S.C. § 305. 15

35 U.S.C. § 306. 15

35 U.S.C. § 307 15

35 U.S.C, § 311 15

35 U.S.C. §§ 312-16. 2

35 U.S.C. § 314 Be

35 U.S.C. § 315. 12

35 U.S.C. § 316 .13, 14, 29

35 U.S.C. § 317 .10

35 U.S.C. § 325. 2

35 U.S.C. § 326. A

Act of July 4, 1836, ch. 357, § 8, 5 Stat. 120 17

Pub. L. 106-113, 113 Stat. 1501 A-571, § 4606 (1999) .12

Pub. L. 96-517, 94 Stat. 3016, § 1 (1980) 11-12

viit

Cited Authorities

Page

Pub. L. No. 112-29, 125 Stat. 284 (2011). passim

OTHER AUTHORITIES

157 Cong. Rec. H4496 (daily ed. June 23, 2011). 3

157 Cong. Rec. S1097 (daily ed. Mar. 2, 2011)

(statement of Sen. Hatch) 3, 9-10

157 Cong. Rec. $1375 (daily ed. Mar. 8, 2011)

(statement of Sen. Ky}) A, 30

157 Cong. Rec. $5326 (daily ed. Sep. 6, 2011)

(statement of Sen. Leahy) 3,9

Brief of Amicus Curiae 3M Co. et. al. 17

Brief of Amicus Curiae New York Intellectual

Property Law Association, No. 15-446 17

Brief of Amicus Curiae of Pharmaceutical

Research and Manufacturers of America 17

Comments of Director of the USPTO

Michelle K. Lee, March 27, 2015 .20

Determining Patentability of a Claim in a

Patent Application, 2008 ABA Src. INTELL.

Prop. L. Rep. 108-3. 3

Cited Authorities

Page

H.R. Rep. No. 112-98 (2011) a

James Bessen and Michael J. Meurer, The

Direct Costs from NPE Disputes, 99 Cornell

L. Rev. 387 (2014) yA

Laura Whitworth, What’s in a Claim?: The

Importance of Uniformity in Patent Claim

Construction Standards, 98 J. Par. & TRADEMARK

Orr. Soc’y 21 (to be published, 2016) .25

Manual of Patent Examining Procedure § 2111 16

Manual of Patent Examining Procedure § 2260. 15

Manual of Patent Examining Procedure § 2272 .16

Manual of Patent Examining Procedure § 2672. 16

Mark Consilivo & Jonathan Stroud, Unraveling the

USPTO’s Tangled Web: An Empirical Analysis

of the Complex World of Post-Issuance Patent

Proceedings, 21 J. INTELL. Prop. L. 1 (2013). mel

Office Patent Trial Practice Guide, 77 Fed.

Reg. 48764 (Aug. 14, 2012). 28

U.S. Patent & Trademark Office, AIA Trial

Statistics—February 2016

Cited Authorities

Page

Patent Reexamination: Hearing on S. 1679

Before the S. Comm. on the Judiciary,

96th Cong. 15-16 (1979). ~ “wae

Patent Trial and Appeal Board Statistics, 1/31/2016 .14

Pauline M. Pelletier, The Impact of Local

Patent Rules on Rate and Timing of Case

Resolution Relative to Claim Construction:

An Empirical Study of the Past

Decade, 8 J. Bus. & Tecnu. L. 451 (2013) 7

Peter S. Menell, Matthew D. Powers, and Steven C.

Carlson, Patent Claim Construction: A Modern

Synthesis and Structured Framework. .28

PTO Report to Congress On Inter Partes

Reexamination 12, 13

Rules of Practice for Trials Before the PTAB,

77 Fed. Reg. 48648 (Aug. 14, 2012) .10

Trimble, Marketa, “The Impact of “Patent Trolls” on

Patent Lawand the Legal Landscape of the United

States” (2009). Scholarly Works. Paper 561 3

RULES

37 C.FLR. § 1.75(b) .29

Cited Authorities

Page

37 C.F.R. § 1.116(b) 15

37 C.F.R. § 42.20(e) 14

37 C.F.R. § 42.100(b) .21, 24, 28

37 C.ELR. § 42.121(a) 14

37 C.F_R. § 41.121 (a\(i). 18

37 C.FLR. § 42.122 19

37 C.F.R. § 41.208(a)(2) 18

]

STATEMENT OF INTEREST

Unified Patents Inc. is a member organization

dedicated to deterring non-practicing entities, or

NPEs, from using extortive litigation tactics to extract

settlements from operating companies based on patents

that are likely invalid before the district courts and

unpatentable before the patent office.’ Unified’s more

than 110 members are Fortune 500 companies, small

technology start-ups, automakers, industry groups, and

others dedicated to reducing the unnecessary drain on

the US economy of the now-routine baseless litigations

asserting infringement of broad patents of dubious validity

and patentability. Unified challenges patents, fighting

NPEs and helping to reduce the costs companies incur

fighting off their many dozens of annual NPE litigations.

Unified seeks to advance public policies that foster

competition and innovation by encouraging operating

companies to invest in commercializing technology.

Unfortunately, many companies are forced to spend many

millions of dollars in legal fees fighting off or licensing

baseless patent lawsuits brought by NPEs. Those NPEs

seek to exploit a severe imbalance in the cost of district

court patent litigation, 44% of which was before just one

district court, the Eastern District of Texas, in 2015.

1. This brief is filed with the written consent of all parties

through letters of consent on file with the Clerk. No counsel for

any party authored this brief in whole or in part, and no person

or entity other than amicus curiae, its members, or its counsel

made a monetary contribution intended to fund its preparation or

submission.

To those ends, Unified seeks to remove barriers to

cost-effective validity and patentability determinations

and to reduce the leverage afforded by the expense of

district court patent litigation. To date, inter partes

reviews (IPRs) have provided operating companies with

timely and cost-effective patentability determinations,

increasing certainty and dramatically reducing the costs

of baseless litigations. Over 4,000 IPR petitions were filed

in just under three and a half years, demonstrating that

operating companies have whole-heartedly embraced

them and use them in challenging the patentability of

patents of questionable validity. Many of the members

of the other amicus organizations arguing against the

tribunal's fairness and claim construction standard here

have nonetheless themselves taken advantage of the forum

and the claim construction standard when appropriate for

their individual business interests.

INTRODUCTION

Congress passed the America Invents Act (AIA)?

primarily to rescue American industry from the well-

documented problem of lopsided, costly, often questionable

patent lawsuits asserting low-quality patents. To address

patent quality, Congress created, among other things,

IPRs. IPRs allow interested parties to avail themselves

of agency expertise—that of the United States Patent &

Trademark Office (“PTO”)—to fast-track reconsideration

of issued patent claims based on evidence and arguments

not previously considered by the PTO.’

2. Pub. L. No. 112-29, 125 Stat. 284 (2011).

3. 35 U.S.C. §§ 312-16; § 325(d).

Prior to the AIA, some patentees were suing many

dozens of companies in single lawsuits, asserting that low-

quality patent claims, often of amorphous scope, covered

some public, critical technology common to an entire

industry.‘ Notably, major changes in the law in the 2000s

meant many patents had been issued on technologies that

“should never be patented.” At the time Congress was

debating and passing the AIA, the patent bar was hotly

debating patent claim construction in other contexts.* But

Congress actively chose to endorse and leave in place the

PTO’s “broadest reasonable interpretation” (BRI) claim

construction—the logical and just choice continuing 100

years of PTO practice.

4. See, e.g., Trimble, Marketa, “The /mpact of “Patent Trolls”

on Patent Law and the Legal Landscape of the United States” (2009).

Scholarly Works. Paper 561, available at http://scholars.law.unlv.

edu/facpub/561.

5. Representative Joseph Crowley, in debating the AlA and

urging its passage, described a patent claiming a method “soliciting

charitable contributions on the Internet” asserted against the Red

Cross, concluding that “[tJhese patents, and many others in this

space, are not legitimate patents that help advance America. They

are nuisance patents used to sue legitimate businesses and nonprofit

business organizations like the Red Cross or any other merchants

who engage in normal activity that should never be patented.” 157

Conc. Rec . H4496 (daily ed. June 23, 2011); see also 157 Cong. Rec.

S5326 (daily ed. Sep. 6, 2011) (statement of Sen. Leahy) (noting IPRs

were introduced “to weed out recently issued patents that should not

have been issued in the first place.”) 157 Cong. Rec. S1097 (daily ed.

Mar. 2, 2011) (statement of Sen. Hatch) (similar comments).

6. See, e.g., Determining Patentability of a Claim in a Patent

Application, 2008 ABA Sec. INTELL. Prop. L. Rep. 108-3.

The Patent Office has used BRI procedures,

under law and regulation, for more than a century, in

examination, reexamination, reissue, on appeal, and in

every patentability procedure the patent. office conducts,’

based on a lack of a presumption of valia'ty and because

the Office reviews patentability, not invalidity.* The

AIA’s Congressional proponents explicitly assumed the

PTO would adopt BRI.’ Aside from different names, the

Petitioner has not identified any substantive difference

in the claim construction methods—as none exists. Yet

Appellant attempts to side-step this century of PTO

history, Congressional intent, and Board rulemaking,

ignoring the fact that the very starting point for any BRI

analysis is, as it is under the district court standard, the

“plain meaning.” Petitioner seeks instead to silence the

7. Podlesak v. McInnerney, 1906 Dec. Comm’r Pat. 265, 258.

(“[njo better method of construing claims is perceived than to give

them in each case the broadest interpretation which they will support

without straining the language in which they are couched.”): Miel

v. Young, 29 App. D.C. 481, 484 (D.C. Cir. 1907) (“This claim should

be given the broadest interpretation which it will support.”).

8. A patent is presumed “valid” unless overcome by clear

and convincing evidence before a district court, in deference to the

issuing agency’s expertise. Meanwhile, a petitioner’s burden before

the Office is limited to proving “unpatentability” by a preponderance

of the evidence, as the patent is not presumed valid before the agency

that issued it. Compare 35 U.S.C. § 282(a) and § 326(e).

9. For example, Senator Ky] stated that a purpose of the new

§ 301(a)(2) was to “allow the Office to identify inconsistent statements

made about claim scope—for example, cases 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 an

inter partes review.” 157 Cong. Rec. $1375 (daily ed. Mar. 8, 2011)

(statement of Sen. Kyl).

expert agency’s technically trained assessment of claim

meaning in favor of a district court claim construction

standard it believes will be more favorable to costly

litigation efforts.

These outcome-independent complaints are nothing

but a proxy for a deeper dissatisfaction with the new

administrative system for being, at core, too competent at

cutting short questionable and costly litigation. By finally

forcing these parties to spend money to defend their

questionable assets rather than proceeding lopsidedly

in district court under zero-down contingency counsel

agreements, and by providing quicker expert review of

patentability of patent claims that might not have been

granted were they considered today, IPRs have brought a

sorely needed balance back to the uneven settlement math

often exploited in patent cases. The complaints aired here

by Petitioner stem from a deeper desire to return to the

more lucrative system that came before.

The phrase “broadest reasonable interpretation”

describes the same procedure applied in both the PTO and

by the courts. In both venues, claims must be construed

consistent with the specification as understood by a person

of ordinary skill in the art, and the starting point for either

forum’s construction is the plain and ordinary meaning of

the claims. See generally Phillips v. AWH Corp., 415 F.3d

1303, 1316 (Fed. Cir. 2005); Manual of Patent Examination

Procedure (MPEP) § 2111. While the PTO and courts have

occasionally differed in their claim constructions, those

few differences are a reflection of, among other factors,

the technical insight of the expert agency—and the limited

judicial authority with which it has been bestowed. The

Article | administrative law judges of the PTO’s Patent

Trial & Appeal Board (PTAB) are technically and legally

trained scientists and engineers that have practiced patent

law, and most importantly, they are chosen to be capable

of independently assessing a technical truth.”

Unlike the district courts, the PTAB is not picking

a winner in a contested proceeding between two parties.

It is not a battle of two claim constructions—that is, if an

accused infringer argues an overly narrow construction

to avoid infringement, the patentee’s construction (likely

argued to avoid invalidity) does not win by default; instead

the technical truth—as determined by the originally

issuing agency—rules the day. The PTAB seeks the

true construction of the claims, often disagreeing with

both parties and issuing what it believes is the true

construction.

Thus, while the PTAB and its fast-track IPRs may

have been disruptive for litigants relying on the costly

vagaries of district court patent litigation as a business

model—and those parties may complain when an agency

quickly arrives at an answer and puts an end to their legal

leverage—Congress sought to legislate an end to that bad

business with the AIA.

An unforeseen consequence of changing the PTO’s

claim interpretation practices would be to allow a patentee

in possession of an earlier district court claim construction

10. The administrative patent judges of the PTAB are generally

skilled in a relevant technical art, required to have at least a four-

year degree in engineering, chemistry, or biology, or the equivalent.

https://www.usajobs.gov/GetJob/PrintPreview/406508200. See also

American Hoist and Derrick Company v. Sowa & Sons Inc.,725 F.2d

1350, 1359 (Fed. Cir. 1984).

to wall off the expert agency from doing its own thorough

technical assessment.'! Such a result would undermine

Congress’s goal of culling improvidently granted patents

from the litigation lar.dscape.'* Because claim construction

is done using the same procedural guidelines in both the

PTO and the courts under these standards, the phrase

“broadest reasonable interpretation” is but a sideshow

highlighted here, masking its true purpose—as a vehicle

for a broader indictment of the new system. This Court

should not, as Congress did not, disturb the PTO’s

longstanding claim interpretation practices.

SUMMARY OF THE ARGUMENT

I. The new IPR challenge proceedings were built on

patent examination and reexamination before the

PTO, and have used the BRI standard for claim

11. It is especially critical to the success of the AIA that the

expert agency’s review of these patents not be hamstrung by previous

imprecision (or unnecessary exegesis) in claim construction.

12. Note that, in 2,871 cases studied for the period 2000-2010,

it took about twenty-two months to receive a court’s construction.

Pauline M. Pelletier, The Impact of Local Patent Rules on Rate

and Timing of Case Resolution Relative to Claim Construction:

An Empirical Study of the Past Decade, 8 J. Bus. & Tecnu. L. 451

(2013), available at http://digitaleommons.law.umaryland.edu/jbtl/

vol8/iss2/5. As the PTAB panels generally provide a preliminary,

nonbinding claim construction within about 6 months of filing of a

petition challenging patentability, only those patents litigated prior

to passage of the AIA are likely to have a construction that is first in

time. 35 U.S.C. § 314(b). Note that, should the standards applied in

both the PTAB and district court be the same, the PTAB will quite

be forced to issue claim construction positions first, positions that

may conflict with later district court rulings.

Il.

IIL.

interpretation for more than a century. Congress

sought to raise the level of patent quality by creating

an expedited reassessment and amendment procedure

for questionable issued patents. In passing the AIA,

Congress felt that administrative review of issued

patents would result in greater certainty about both

the validity and the meaning of a patent’s claims,

thus rebalancing the lopsided district court litigation

then taxing U.S. innovation. Changing the claim

interpretation standard, even in name only, is really

an attempt to prevent the agency from ruling in those

cases (such as this one) where an earlier district court

construction resulted in erroneous exegesis.

Petitioner greatly exaggerates the practical realities

of “defending” patents in IPR. Amendment is no less

“free” and no more iterative in IPRs than in patent

reexamination, reissue, or interference, which are

other post-grant PTO proceedings allowing claim

amendment. Patent interference is, like an IPR, an

adjudicative PTO proceeding applying BRI, and in

which amendment is by motion, nearly identical to

IPR. Petitioner cannot dispute that, as in patent

interference, amendments are available at the PTAB.

When properly applied, the PTAB and district court

claim constructions are procedural paths to the

same destination. Construction in district court and

in the PTAB is doctrinally indistinguishable: both

constructions begin with the plain and ordinary

meaning of claim terms, and both are performed in

the context of the patent specification as understood

by a person of ordinary skill in the art. With the

s.ume procedures properly applied, any differences

between court and PTAB claim constructions are

the result of differences in procedure, evidentiary

standards, presumption of validity, or the perspective

and authority of the adjudicator in differing venues.

To make the standards identical would be to imbue

and Article I tribunal with Article -II powers.

IV. Congress assumed BRI would be used by the PTO

in post-grant patent proceedings, as shown by the

text of the AIA statute promulgated to avoid claim-

construction gamesmanship by patentees.

ARGUMENT

1. Inter partes review (IPR) procedures are a refinement

of patent examination and reexamination processes

all using the BRI standard, which have for more

than a century sought to improve patent quality,

thus reducing problematic district court patent

litigation.

A. IPR is an administrative proceeding not

intended to replace litigation in district court.

IPRs advanced the quest for patent quality by

affording an expedited reassessment of issued patents,

leading to increased certainty about patentability, thereby

reducing problematic district court litigation. IPRs were

never intended to substitute for litigation itself. IPRs, like

reexamination, are administrative proceedings introduced

“to weed out recently issued patents that should not have

been issued in the first place.” 157 Cong. Rec. S5326 (daily

ed. Sep. 6, 2011) (statement of Sen. Leahy); see also 157

Cong. Rec. $1097 (daily ed. Mar. 2, 2011) (statement of Sen.

Hatch). IPRs were meant to allow improvidently issued

patents to be returned to the agency to give the PTAB

another chance to scrutinize patentability. This weeding-

out was intended to reduce the threat of litigation by, as

noted in this Court, “firms [that] use patents not as a basis

for producing and selling goods but, instead, primarily

for obtaining licensing fees.” eBay Inc. v. MercE xchange,

L.L.C., 126 S.Ct. 1837 (2006) (Kennedy, J., concurring).

The AIA was intended to reduce the threat of unjustified

litigation, along with the “harmful tax on innovation” that

is levied when patents are used “as a sword to go after

defendants for money, even when [the NPE plaintiffs’]

claims are frivolous.” COMMIL USA, LLC v. Cisco

Systems, Inc., 185 S. Ct. 1920, 1930 (2015).

Further, to protect the public—and as an example

of a major difference from what is permitted in a district

court—the PTAB can, under its discretion, continue an

IPR even where the petitioner settles and withdraws.

It may continue the proceeding after settlement at the

discretion of the Board according to “the particular

facts of each case.” 77 Fed. Reg. 48648 (Aug. 14, 2012).

Such facts might include clearly unpatentable claims,

id., or the stage of the proceedings, but in any case,

continuation after settlement is at the discretion of the

Board, 35 U.S. C. § 317(a), and the Board has in fact

continued proceedings after the parties have settled.

See, e.g., Blackberry Corp. v. Mobilemedia Ideas LLC,

IPR2013-00016, Paper No. 31 (PTAB December 11, 2013);

Blackberry Corp. v. Mobilemedia Ideas LLC, IPR2013-

00036, Paper No. 64 (PTAB Jan. 21, 2014). It must then

rule on claim construction. The possibility of continuing

the IPR even after the petitioner has settled is additional

evidence of the plain intent of Congress to protect the

public from low quality patents with IPRs, rather than

to substitute IPRs for litigation.

B. IPR is a refinement of an earlier PTO post-

grant procedure, inter partes reexaminations,

which construed claims using the broadest

reasonable interpretation (BRI).

Other Congresses had attempted to improve patent

quality prior to the AIA, but none of the earlier actions

proved as successful as IPRs. (The number of IPR petitions

filed to date, well over 4,000," is a testament to their

popularity and success.) In 1980, Congress introduced ex

parte reexamination to provide a vehicle for a third party

or patent owner to obtain reexamination of a patent, in

an attempt to increase patent quality.* Pub. L. 96-517, 94

13. As of March 1, parties had filed 4,038 petitions since

September 2012. See U.S. Patent & Trademark Office, AIA Trial

Statistics—February 2016 (last visited March 29, 2016), available

at http://www.uspto.gov/sites/default/files/documents/2016-2-29%20

PTAB.pdf.

14. H.R. REP. NO. 112-98, at 45 (2011); see also Patent

Reexamination: Hearing on S. 1679 Before the S. Comm. on the

Judiciary, 96th Cong. 15-16 (1979) (statement of Comm’r U.S. Patent

and Trademark Office Sidney Diamond) (finding “Reexamination

would eliminate or simplify a significant amount of patent litigation.

In some cases, the PTO would conclude as a result of reexamination

that a patent should not have issued. A certain amount of litigation

over validity and infringement thus wouid be completely avoided.”).

See generally Mark Consilivo & Jonathan Stroud, Unraveling the

USPTO's Tangled Web: An Empirical Analysis of the Complex World

of Post-Issuance Patent Proceedings, 21 J. INTELL. Prop. L. 1 (2013)

(providing a history of the legislation and motivations behind earlier

post-issuance regimes leading up to and including the AIA).

Stat. 3016, § 1 (1980). However, ex parte reexamination

proved unpopular because, although it was intended to

serve as a fast, low-cost alternative to patent litigation for

reviewing the originality aspects of patent validity, the

one-sided mechanism proved slow and unpredictable in

practice.'® Amendments were allowed, and the standard

for claim construction in ex parte reexamination was BRI.

In response to the tepid interest in ex parte

reexamination by patent challengers, Congress passed

the American Inventors Protection Act (AIPA) of 1999,

Pub. L. 106-113, 113 Stat. 1501A-571, § 4606 (1999). The

AIPA established a new inter partes reexamination (IPX)

procedure that allowed a reexamination requester more

participation than did the existing ex parte reexamination

procedure. The new IPX permitted third-party requesters

to submit a written comment each time the patent owner

filed a response to a PTO “office action” on the merits,

and to appeal an adverse decision of the patent examiner

to the Board of Patent Appeals & Interferences (BPAI)."*

Further, a requester could have full participation rights

in a patent owner’s appeal to the BPAI. As an additional

feature, if the requester were unsuccessful in the IPX,

any third-party requester would be estopped from later

asserting in any civil action, or in a subsequent IPX, the

invalidity of any claim the BPAI finally determined to

be valid and patentable on any ground the third-party

requester raised or could have raised in the IPX. 35 U.S.C.

315(c) (pre-AIA). The requester was also estopped from

15. See PTO Report to Congress On Inter Partes Reexamination

(PTO Report), http://www.uspto.gov/web/offices/dcom/olia/reports/

reexam_report.htm (undated).

16. The BPAI was replaced by the PTAB in the AIA.

later challenging in a civil action any “fact” determined

in the IPX. Section 4607 of the Optional Inter Partes

Reexamination Procedure Act of 1999, uncodified. In 2002,

third parties obtained the right to appeal IPX decisions

to the U.S. Court of Appeals for the Federal Circuit and

to participate in the patent owner’s appeal! to that Court.

But even with these refinements the IPX procedure also

proved to be unpopular, because the estoppel provisions

were unpopular, it did not allow discovery and cross-

examination, and it was slow. See PTO Report, 3-4. As of

2005, “a large number of reexamination proceedings hajd]

been pending before the USPTO for more than four years

without resolution.”’” Amendments were allowed, and the

standard for claim construction in IPX was BRI.

The IPR procedure introduced in the AIA expressly

addressed the deficiencies of the earlier reexamination

procedures, and importa~.ly added the additional

mandate of speed: in an IPR, the PTAB must finish its

work within | year (extendable to 18 months). 35 U.S.

Code § 316(a)(11) (2011). The AIA also incorporated

important administrative and time-saving refinements

to previous patent reexamination procedures. IPRs

replaced the duplicative patent examiner phase of patent

reexamination, leaving only a judicial review phase. These

measures resulted in a truncated timeline as compared

to the previous IPX procedure. See H.R. Rep. No. 112-98,

at 46 (2011). The success of IPRs is demonstrated by the

4040 IPR petitions that were filed between Sep. 16, 2012

17. Testimony of Mr. Jon Dudas, U.S. Sen. Comm. On the

Judiciary (Apr. 25, 2005), http:// www. idiciary.senate.gov/hearings/

testimony.cfm?id=e655f9e2809e5476862fr735dal04aa60khit it=e

655f9e2809e5476862f735dal04an60-1-1.

and Jan. 31, 2016. More important, as an example of the

effect of IPRs on judicial efficiency, in fiscal year 2015 out

of 1737 IPR petitions filed, 464 (27%) were settled within

15 months of filing."

Amendment of claims in an IPR is no less “free” than

in the re-examination procedures the IPR supplants.

In an IPR, a patentee may propose new claims on a

one-for-one basis, but these claims are only added if a

corresponding motion to amend claims has been granted

by the Board. In such a motion, the burden is on the patent

owner to show a patentable distinction of each proposed

substitute claim over the prior art. 37 C.F.R. § 42.20(c).

The particular standard used in interpreting a substitute

claim is irrelevant to the difficulty with which a claim may

be amended.

Il. Amendment is not more limited in IPRs than in other

post-grant procedures, even in other adjudicative

proceedings, and post-grant amendment is available

by other routes at the U.S. Patent and Trademark

Office (PTO).

Congress did not “eliminat[e] _.the right to amend

claims” in an IPR, as Appellant states. App. Bf 29.

In fact, as Appellant admits in the same paragraph,

“{iln IPR, the patentee may file one ‘motion to amend’

but must first confer with the Board. 35 U.S.C. 316(d@);

37 C.FLR. 42.121(a).” Jd. Amendment is permitted in IPR

proceedings, and is no more restricted than in certain

18. Patent Trial and Appeal Board Statistics, 1/31/2016, available

at http://www.uspto.gov/sites/default/files/documents/2016-01-31%20

PTAB.pdf.

other post grant, even adjudicative proceedings of the

PTO, which also use BRI. The lack of a large number

of successful amendments in IPRs to date is not rooted

in any reluctance of the agency to accept amendments,

but instead, to the impossibility of saving low quality

patents with amendments that lack technical distinction.

In addition, there are alternatives to IPRs available to

patentees who wish to modify their claims.

A. Claims may be modified in reexamination

proceedings, which, like IPR, are post-grant

proceedings at the PTO that allow limited

amendment, and use BRI.

Patent reexamination is a post-grant patent review

process whereby “[aJny person at any time may file a

request for reexamination by the Office of any claim of

a patent on the basis of any prior art cited.” 35 U.S.C.

§ 302; 311 (pre-AIA). Like IPRs, reexamination permits

a patentee limited amendment options; usually one. If

the patentability of any claim anpears questionable, the

patentee may propose new claims. 35 U.S.C. §§ 305-307.

However, contrary to appellant's mischaracterizations, the

amendment, or substitution, process in a reexamination

is hardly as easy as in an original examination—while

both proceedings have long used BRI. There is simply no

“back-and-forth between the Patent Owner and exarniner”

in reexamination. Instead, after the examiner initially

rejects the claims in a non-final office action, a patentee

is provided with a single opportunity to amend the claims.

MPEP § 2260, 37 C.F.R. 1.116(b).

If this amendment is deemed insufficient to overcome

the rejections, a final office action (or Action Closing

Prosecution (ACP) in IPX) will issue from the examiner.

Once prosecution is closed, it cannot be reopened absent

extraordinary circumstances and the Patent Owner has

no further opportunity to substantively amend the claims

as the reexamination is forwarded on to the PTAB with

special dispatch.

Consideration of amendments submitted after

fina] rejection and prior to, or with, the appeal

will be governed by the strict standards of 37

CFR 1.116. ... Both the examiner and the patent

owner should recognize that substantial patent

rights will be at issue with no opportunity

for the patent owner to refile under 37 CFR

1.53(b), or 1.53(d), and with no opportunity

to file a request for continued examination

under 37 CFR 1.114. Accordingly, both the

examiner and the patent owner should identify

and develop all issues prior to the final Office

action, including the presentation of evidence

under 37 CFR 1.131(a) and 1.132.

MPEP §§ 2272; 2672 (emphasis added)

Unlike patent application processing, there is no

option to “continue prosecution” absent extraordinary

circumstances, and there is no “back and forth” or

“iterative” amendment process. See, e.g., App. Bf. 5,13.

Yet, the appropriateness of the BRI standard for use in

reexamination, in which these obstacles are put in the way

of amendment, is admitted by Appellant. /d. at 23 (“Because

reexamination is the functional equivalent of an initial

examination, it uses the same claim construction standard

to advance the same goals. The examiner is required to

give a claim its broadest reasonable interpretation.”).

Appellant’s amici agree. See, e.g., Brief of Amicus Curiae

New York Intellectual Property Law Association, No.

15-446, at 23; Brief of Amicus Curiae 3M Co. et. al., at

12; Brief of Amicus Curiae of Pharmaceutical Research

and Manufacturers of America at 13.

B. Interference proceedings, which are

adjudicatory proceedings at the PTO that allow

amendment (and on which [PR procedure was

based), use BRI.

Patent interference is a venerable PTO adjudicative

proceeding that, like the new IPRs, limits amendment

options to a motion process and, like IPRs, applies BRI

in proceedings involving granted patents. Interferences

ensue when two different parties file a patent application

claiming the same invention. Pre-AIA 35 U.S.C. § 102(g).

Interferences are, like IPRs, adversarial adjudicatory

proceedings that use BRI, and were first codified in 1836.

Act of July 4, 1836, ch. 357, § 8, 5 Stat. 120.

Petitioner admits that amendment is possible in

an interference, and acknowledges that BRI is used in

interferences. App. Br. 13. Petitioner recognizes that BRI

is acceptable in interferences because “a patentee may

‘narrow its claims by filing an application to reissue the

patent [and] request that the reissue application be added

to the interference’,” citing Bamberger v. Cheruvu, 55

U.S.P.Q.2d 1523, 1526 (B.P.A.I. 1998) (non-precedential).

19. Interferences will disappear for patent applications and

patents with an effective filing date on or after March 16, 2013, due to

the new first-to-file provisions of the AIA, 35 U.S.C. § 102 (a) (2015).

App. Br. 25, F N6. Such a reissue is a form of amendment,

with the change in the claim in the form of a substitution,

or addition, of claims. 37 C.F.R. § 41.121(a)(i), 37 C.F.R.

§ 41.208(a)(2), and PTO Standing Order 208.5.2 (March 8,

2011). As in IPRs, motions to amend in interferences are

not entered as a matter of right, and are not uniformly

granted. See Bamberg v. Dalvey, No. 2015-1548, slip op.

at 8-9 (Fed. Cir. March 9, 2016) (motion to amend denied

because the movant didn’t comply with the rules governing

such motions). Further, leave to file an application to

reissue a patent involved in an interference and to have the

reissue application added to the interference—additional

requirements for “amendment”—must itself be sought on

motion under 37 C.F.R. § 41.121(a)(i), 37 C.F_R. § 41.208(a)

(2), and Standing Order 208.5.1, and such motions are also

not uniformly granted. In those cases where such a motion

is granted, there is no automatic right to present as many

new claims as one desires. Wnek v. Dobbs, 85 USPQ2d

1159, 1160 (BPAI 2006) (nonprecedential). With adherence

to the proper procedure, amendment is no less freely

possible in an IPR than it has been in an interference for

the last 180 years.

In sum, a patentee in an adjudicated IPR has the

right to amend his claims, as applicants in interferences

have had with virtually the same claim interpretation

standards and administrative provisions, for well over a

century. Appellant here has not even attempted to explain

why if BRI has been satisfactory in interferences, it is not

suitable for IPRs.

C. Patent reissue is a post-grant proceeding that

likewise allows patentees to amend claims, and

uses BRI.

Appellant recognizes, but does not elaborate for this

Court, another alternative to the amendment processes

he denigrates: patent reissue. See App. Br. 25, FN6. The

PTAB itself recognizes that a patentee might avail himself

of more expansive amendment options as an alternative to

amendment. ZTE Corp. v. ContentGuard Holdings, Inc.,

IPR 2013-00136, Paper 33 at 3 (PTAB Nov. 7, 2013) (“if a

patent owner desires a complete remodeling of its claim

structure according to a different strategy, it may do so in

another type of proceeding before the Office.”) A patentee

may also have considerable flexibility in integrating a

reissue proceeding with an ongoing IPR, because during

an IPR the PTAB has the power to “enter any appropriate

order regarding the additional matter including providing

for the stay, transfer, consolidation, or termination of any

such matter.” 37 C.F.R. § 42.122.

D. Many factors have contributed to the limited

number of amendments made to date in IPRs.

A patentee in an IPR has the opportunity to seek

to amend his claims, but the Board has found few claim

amendments aliowable in IPRs thus far. Yet the various

factors that have contributed to the low number of motions

to amend—both sought and granted—do not themselves

discount a patentee’s ability to amend claims in an IPR.

For instance, the newness of the IPR process has limited

parties’ success, as many patent owners as yet lack the

familiarity with new procedures that might assure them

a grant of any motions to amend. See, e.g., ZTE, id.

(“ContentGuard did not appreciate fully its burden of

proof.”). Patentees involved in active litigation are usually

careful not to amend their claims so that their accused

infringers no longer infringe, further constraining the

types of amendments patent owners are willing to put

forth.

On the other side, an absence of precedent may give

PTAB panels a reluctance to grant amendment motions,

which, upon grant, issue directly. The PTO is well-aware

of these issues; an expanded panel of the PTAB has

recently found it necessary to clarify the requirements

for obtaining amendments. See MasterImage 3D, Inc.

and Masterlmage 3D Asia, LLC v. RealD Inc., 1PR2015-

00040 (PTAB July 15, 2015). The amendment procedure

has proven cumbersome; in response, the PTO is initiating

a series of “quick-fixes” to streamline the amendment

process, and continues to issue new rules packages

updating their procedures and regulations governing

amendment. Comments of Director of the USPTO

Michelle K. Lee, March 27, 2015 http://www.uspto.gov/

blog/director/entry/ptab_s_quick fixes for.

Finally, patentees may be constrained by the fear

of intervening rights from proposing amendments that

are acceptably differentiated from the original claims.

A patentee must propose neither an amendment with

a change too small to be granted nor one containing a

change “substantive” enough to trigger intervening rights.

See Laitram Corp. v. NEC Corp., 163 F.3d 1342, 1346 (Fed.

Cir. 1998) (“If substantive changes have been made to the

original claims, the patentee is entitled to infringement

damages only for the period following the issuance of”

the modified claim). The fear of intervening rights is

especially prevalent in arts where licensing entities are

the most active, such as consumer electronics. In such

quickly developing technologies, an amendment may not

only give up past damages, but foreclose future damages

if the technology has already advanced beyond the

patented device or methodology. In sum, IPR amendment

is available, robust, and evolving; but the procedure is

new, and patentees involved in litigation are generally

reluctant to make significant amendments, whereas the

PTAB is reluctant to grant amendments for technically

trivial changes, where the earlier challenged claims would

be held unpatentable.

Iii. When properly applied, the standards of construction

in the PTO and in the courts are paths to the same

result.

A major feature of earlier patent reexamination

procedures carried over to IPRs is the use of the BRI

standard for claim interpretation.”° Petitioner contests

the use of this standard, although it is the standard

that the PTO has used in reviewing both patents and

patent applications for decades. Petitioner argues that

the Board should instead construe the claim in a patent

being examined by the PTAB according to its plain and

ordinary meaning, “as a federal court would be required

to do.” App. Bf at (I). Phraseology aside, both the PTO

and the federal courts are required to construe claims

using the same methods.

20. “Aclaim 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(b) (emphasis added).

As explained below, plain and ordinary meaning is

used by PTO regulation, and was used in the assessment

of Petitioner’s claims. As such, what Petitioner really seeks

is a decision of this Court to remove the different labels

from these frameworks such that the Petitioner can silence

the expert agency’s technically reasoned construction in

favor of its own preferred, and earlier, court construction.

Petitioner’s patent claims were found to be unpatentable

by the PTAB, IPR2012-00001, aff, In re: Cuozzo Speed

Techs., LLC, 793 F.3d 1268 (Fed. Cir. 2015), and Petitioner

implies that the result might have been otherwise had the

BRI standard for claim construction not been used.

A. Because the PTAB properly applied the BRI

standard, Petitioner received the “plain and

ordinary” claim interpretation it seeks.

But Petitioner did receive a claim interpretation

based on plain and ordinary meaning. The PTAB made

clear to Petitioner that “the Board interprets claim

terms by applying the broadest reasonable construction

in the context of the specification in which the claims

reside. Also, we give claim terms their ordinary

and accustomed meaning as would be understood by

one of ordinary skill in the art.” Inst. Dec. 3—4 (internal

citations omitted; emphases added). Thus, “for purposes

of this decision we proceed on the basis that the plain

and ordinary meaning of words in their common usage

applies, albeit taken in the context of the disclosure of the

‘074 Patent.” Jd. at 4. Here, the Board properly applied

BRI using the methods of Phillips, i.e., the same methods

used in the courts.

B. The PTO recognizes that BRI and “plain and

ordinary meaning” are not alternatives.

In order to differentiate BRI from the district court

procedure, Appellant misrepresents the BRI standard

the PTAB is required to use, stating that this standard

“directs the Board to give claims their ‘broadest

reasonable construction rather than their plain and

ordinary meaning.” App. Br. 35 (emphasis added). But

both the PTO generally and the PTAB in particular make

clear that plain and ordinary meaning is fundamental to

any claim interpretation of the PTO. Expanding upon

“broadest reasonable interpretation,” the PTO explains

that

The broadest reasonable interpretation does

not mean the broadest possible interpretation.

Rather, the meaning given to a claim term

must be consistent with the ordinary and

customary meaning of the term (unless the

term has been given a special definition in the

specification), and must be consistent with the

use of the claim term in the specification and

drawings. Further, the broadest reasonable

interpretation of the claims must be consistent

with the interpretation that those skilled in the

art would reach.

MPEP § 2111. This explanation of what the PTO means by

“broadest reasonable interpretation” contains, identically,

the features of a claim interpretation based on Phillips:

“the words of a claim ‘are generally given their ordinary

and customary meaning the meaning that the term

would have to a person of ordinary skill in the art in

question at the time of the invention,” Phillips at 1312-

1313 (internal citations omitted); and, “claims must be

construed so as to be consistent with the specification, of

which they are a part.” /d. at 1316 (quoting Merck & Co.

v. Teva Pharms. USA, Inc., 347 F.3d 1367, 1371 (Fed.Cir.

2003)). The PTO’s Trial Practice Guide for IPRs similarly

states 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(b).

The PTAB in this case followed the published PTO

procedures regarding claim construction. Thus, the PTAB

accorded the patentee the proper, broadest reasonable

interpretation—of which he now argues he was deprived.

C. The U.S. Court of Appeals for the Federal

Circuit recognizes that BRI and “plain and

ordinary meaning” are not alternatives.

The Federal Circuit is consistent in its understanding

that the BRI standard comprises a “plain and ordinary”

understanding: for example, in Microsoft Corp. v.

Proxyconn, Inc., 789 F. 3d 1292, 1298 (Fed. Cir. 2015), the

court stated that claim constructions during IPR must

not be “unreasonable under general claim construction

principles” (emphasis in original). In addition, claims

should always be read in light of the specification and

teachings in the underlying patent, the PTO should consult

the patent’s prosecution history, and the construction

“must be consistent with the one that those skilled in the

art would reach.” /d. In Trivascular, Inc. v. Samuels, No.

2015-1631, slip op. at 6-7 (Fed. Cir. Feb. 5, 2016), the court

stated—invoking numerous citations from earlier decisions

(omitted here)—that “[uJnder a broadest reasonable

interpretation, words of the claim must be given their

plain meaning, unless such meaning is inconsistent with

the specification and prosecution history.” In particular,

“[w]hile the broadest reasonable interpretation standard

is broad, it does not give the Board an unfettered license

to interpret the words in a claim without regard for the

full claim language and the written description. Jd.

D. Factors other than BRI can result in differences

in claim construction in the PTO and in the

courts.

Differences between the courts and the PTO in claim

interpretation may be attributable to factors other than

the claim construction standard. One of these factors is

the statutory presumption of validity, which is a court’s

expression of “the deference that is due to a qualified

government agency presumed to have properly done its

job which includes [personnel] who are assumed to have

some expertise in interpreting the references and to be

familiar from their work with the level of skill in the art

and whose duty it is to issue only valid patents.” American

Hoist and Derrick at 1359.*: In short, a court will defer

21. This deference to technical qualification is distinguishable

from the deference to administrative agencies’ construction of

statutes administered under the authority of that agency as dictated

by Chevron, USA, Inc. v. Natural Resources Defense Council,

Inc. 467 U.S. 837 (1984). See generally Laura Whitworth, What's

in a Claim?: The Importance of Uniformity in Patent Claim

Construction Standards, 98 J. Pat. & TRADEMARK OFF. Soc’y 21 (to

be published, 2016). Under the two-prong Chevron test, in the AIA

(1) Congress was expressly silent regarding the precise issue of claim

construction standards in IPRs, even though it was conscious of the

to agency expertise—the technical expertise used by the

PTO in review proceedings, initial examination, and claim

construction and the nature of PTO examiners, staff,

and PTAB judges. District court judges must deal with

a broad universe of cases, and are not required to have

the engineering or scientific background required of PTO

examiners or PTAB judges, whose focus is much narrower.

In contrast, the PTAB determines technical truth guided

by its own technical and scientific training, with the input

of the parties. Absent deference to the expertise of the

agency, there is no presumption of validity.

question; and (2) Congress did not withdraw any of the powers given

to the PTO in 35 U.S. Code § 2(b). Therefore the PTO is entitled to

Chevron deference under this test. See also Lacavera v. Dudas, 441

F.3d 1380, 1383 (Fed. Cir. 2006)(“Because the PTO is specifically

charged with administering [35 U.S.C. § 2(b)(2)], we analyze a

challenge to the statutory authority of its regulations under the

Chevron framework.”)

22. The influence of the presumption of validity and defining

patent claims to require un-recited limitations in a court decision is

evident in PPC Broadband Inc., v. Corning Optical Communications

RF, L.L.C. (Fed. Cir. Feb. 22, 2016), which issued after this petition

was granted certiorari. The PTAB decided that “continuity” in the

context of the patent referred only to physical contiguity, and did

not require continuity in time. The court agreed with the PTAB’s

BRI construction, but in dicta volunteered that “(u)nder Phillips,”

which required both physical and temporal continuity.” The court’s

narrower claim construction would have preserved the validity of

the claims in question as the prior art did not demonstrate temporal!

continuity. As can be appreciated in this case, the USPTO stands in

the way of those seeking to enforce patent claims with un-recited

requirements. Such definitions are often times finessed from forums

lacking technical expertise more focused on selecting between

competing party-constructions as opposed to technical correctness.

The use of a plain and ordinary meaning standard

in the courts is an implicit bow to the work of the expert

agency and the resulting presumption of validity, and

it affects the evidentiary standard as well. Given the

presumption of validity, in district courts invalidity must

be shown by clear and convincing evidence, Microsoft

Corp. v. 141 Limited Partnership, 131 S. Ct. 2242 (2011),

while in the PTAB a petitioner must show unpatentability

with a lower preponderance of the evidence standard,

under no presumption of validity. See, e.g., Ethicon, Inc.

v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988). Regardless

of the standard used for claim interpretation, it is easier

to show a claim unpatentable in the PTAB than invalid

in a court because of the differing burdens of persuasion,

as the patent is not presumed valid by the agency that

issued it. Changing the claim construction standard will

not change that reality, regardless of the outcome here.

E. Claimconstruction procedures under the PTAB

and in the courts differ only inconsequentially.

The following chart shows that in terms of evidence

available, and how that evidence is treated, there is little

difference between BRI and a Phillips claim construction;

the necessary conclusion is that, if properly applied, these

tools should lead to identical constructions, whether they

are made in the PTO from the point of view of examination

or in district court from the point of view of litigation:

Claim Interpretation PTO BRI District Court

Plain & ordinary Yes, for Yes, for

meaning in light of | undisputed undisputed

the specification and | terms.” terms.”

consistent with the

understanding of a

person skilled in the

art.

Intrinsic evidence. Yes. Yes.”

Extrinsic evidence. | Yes, if needed.” Yes, if needed.”

Claim construction {| Yes if astatements | Yes,

from prior litigation. | of the patent depending on

owner filed in a circumstances.”

proceeding before

a Federal court or

the PTO.”

23. MPEP § 2111; 2111.01 (IV) (2015); C.F.R. § 42.100(b); Jn

re Cortright, 165 F.3d 1353,1358 (Fed. Cir. 1999). see Office Patent

Trial Practice Guide, 77 Fed. Reg. 48764 (Aug. 14, 2012).

24. Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir.

2005).

25. MPEP § 2111.01 (IIT) (2015).

26. Phillips at 1313.

27. MPEP § 2111.01 (III) (2015).

28. Phillips at 1317.

29. 35 U.S.C. § 301.

30. See generally Peter S. Menell, Matthew D. Powers,

and Steven C. Carlson, Patent Claim Construction: A Modern

Synthesis and Structured Framework, available at http://ssrn.

com/abstract =1476395.

Claim construction

from patent family

members.

Yes.™

Yes.”

Claim

differentiation.

Yes."

Yes.**

Ability to amend

claims.

Yes.*®

No.

Claims construed to

preserve validity.

No.

Rarely.”

Any differences in the practices of the PTO and

the courts are not doctrinal, but rather a technical

disagreement experience of the competing decision

makers, and a recognition that the PTO will not presume

patents it issued valid.

31. 35 U.S.C. § 120.

32. Omega Eng’‘g, Inc. v. Raytek Corp., 334 F.3d 1314, 1334

(Fed. Cir. 2003).

33. 37 C.F.R. § 1.75(b).

34. Phillips at 1314.

35. 35 U.S.C. § 316(d).

36. The Federal Circuit has not “applied this principle

broadly” and has “not endorsed a regime in which validity analysis

is a regular component of claim construction.” Phillips at 1327

(emphasis added, internal citations omitted). Indeed, such a rare

construction is in deference to the PTO’s initial review, which has

no place in a later review proceeding conducted by the PTO itself.

IV. Congress assumed BRI would continue to be used by

the PTO in post-grant patent proceedings, as shown

by the specific statute of the AIA it promulgated,

to avoid claim-construction gamesmanship by

patentees.

Anticipating the differing frameworks, Congress

introduced a safeguard into the AIA to prevent patentees

from arguing a different claim interpretation in front

of the PTAB than it argued elsewhere. That safeguard

is 35 U.S.C. § 301, “Citation of Prior Art And Written

Statements.” Section 301(a)(2) solicits, from “any person

at any time,” written citations to “statements of the patent

owner filed in a proceeding before a Federal court or the

Office in which the patent owner took a position on the

scope of any claim of a particular patent.” Section 301(d)

states that such citations may be used by the PTO only

“to determine the proper meaning of a patent claim”

in an IPR, a re-examination, or a post-grant review.

Accordirg to Senator Kyl, the Section’s purpose was to

“help the Office understand and construe the key claims

of a patent,” and was meant to “allow the Office to identify

inconsistent statements made about claim scope—for

example, cases 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 an inter partes review.” 157 Cong. Rec. 51375

(daily ed. Mar. 8, 2011) (statement of Sen. Kyl, emphasis

added). By incorporating § 301 into the AIA, Congress

demonstrated that it not only recognized the existence of

the differently named frameworks of the court and PTO,

but also endorsed them, and acted to ensure that, in post-

grant PTO proceedings, the ultimate result would not be

influenced by gamesmanship.

CONCLUSION

Patents of high quality—which clearly and

appropriately claim an invention—reduce the costs and

delays of district court infringement litigation, thus

helping achieve Congress’s stated goals in passing the

AIA. Petitioner attempts to misrepresent the PTO’s BRI

standard for claim interpretation as somehow eschewing

the “plain meaning,” and contributing to inconsistency

between claim interpretations in an IPR and in court. But,

careful and correct assessment of a patent claim by either

a court or by the PTO should lead to the same construction,

as both forums apply plain and ordinary meaning to

disputed terms. That one forum’s imperfect application

of the “plain and ordinary meaning” sometimes inures to

a patentee’s benefit, under a framework that differs only

in the organization that applies it, is no reason to upend

a century of expert agency claim construction practices

and jurisprudence.

The rapacious litigants that Congress attempted

to restrain with the AIA were not inventors, operating

companies, or even licensing companies, but rather, were

legally trained profiteers whose business was based on

monetizing patents of low quality and then extracting

settlements for less than the high cost to defend these

suits. These profiteers, referred to as “NPEs” or more

pejoratively “patent trolls,” wield the high cost of district

court litigation (including the asymmetrical discovery

obligation that benefits organizations that exist only

to sue) as a sword to force otherwise unwarranted

financial settlements. Generally investing little, and

using contingency counsel, NPEs were taxing America’s

innovators to the tune of billions of dollars per year prior

to the AIA.” James Bessen and Michael J. Meurer, The

Direct Costs from NPE Disputes, 99 Cornell L. Rev. 387,

408 (2014).38 The AIA’s creation of, among other things,

IPR has significantly crippled NPEs’ ability to hold up

American industry through unjustifiable assertions of

low-quality patents by presenting a fast, efficient, low-

cost alternative to arcane, expensive, and time-consuming

patent litigation. The case before this Court seeks to start

to roll back that progress.

Respectfully submitted,

KEVIN JAKEL Scott A. McKrown

JONATHAN STROUD Counsel of Record

SHAWN AMBWANI STEPHEN G. KuNIN

UNIFIED PATENTs INc. JEFFREY I. FREY

2 North Ist Street, 5“ Floor Oston, McCLELLAND, MAIER

San Jose, California 95113 & Neustapt, L.L.P.

(650) 999-0899 1940 Duke Street

Alexandria, Virginia 22314

(703) 412-6297

smckeown@oblon.com

Counsel for Amicus Curiae

37. In aggregate costs, including legal costs, settlement costs,

and other costs for resolved lawsuits, unresolved lawsuits, and non-

litigated assertions.

38. Available at http://scholarship.law.cornell.edu/clr/vol99/

iss2/3.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.