PTAB Abandons its Practice of Broadly Interpreting Claims of Challenged Patents in favor of Phillips Standard of “Ordinary and Customary Meaning”

By Tom Engellenner
In a final rule published in the Federal Register on October 11, 2018, the U.S. Patent and Trademark Office (USPTO) took a remarkable step of acknowledging unfairness in the way its Patent Trial and Appeal Board (PTAB) has been conducting trials for the past six years. The rule change will apply to all of the new administrative patent challenge proceedings (inter partes reviews, covered business method patent reviews, and post-grant reviews) established by the 2011 America Invents Act (AIA).  The new claim construction rule will be applied to all AIA petitions filed on or after November 13, 2018.

The comments accompanying the USPTO’s Federal Register notice of rule change state:

[R]ecent studies . . . support the concerns expressed by stakeholders regarding the unfairness of using a different claim construction standard in AIA proceedings than that used by the district courts.

At issue is how claims are interpreted when new prior art references are cited by petitioners seeking to invalidate issued U.S. Patents. If a claim term is broadly interpreted, it is more likely that the prior art will be considered anticipatory or render the claim obvious.  (Novelty and non-obviousness are fundamental requirements for patent validity.)

From the very beginning, when inter partes review (IPR) proceedings under the AIA began in 2012, the USPTO adopted a claim construction rule known as broadest reasonable interpretation, i.e., claim terms are given their broadest reasonable interpretation in view of the specification to one having ordinary skill in the art at the time of the invention without importing limitations into the claims from the specification. This so-called BRI standard had long been the standard applied by the USPTO during pre-issuance examination of patent applications.

While BRI standard may be appropriate when patent applications are undergoing examination – where the applicant can amend the claims if the examiner adopt too broad an interpretation – getting the PTAB judges to consider claim amendments in AIA proceedings has proven to be extraordinarily difficult.

The new standard to be applied going forward (for petitions filed on or after November 13, 2018) is the “Phillips standard,” named for the the Federal Circuit’s 2005 ruling in Phillips v. AWH Corp. 415 F.3d 1303, 1313 (Fed. Cir. 2005). Under the Phillips standard, claims are to be given their “ordinary and customary meaning” – not their broadest meaning.  This is the standard applied by all federal district courts and the International Trade Commission when hearing patent cases.  The rule-making comments note  that “the scope of an issued patent should not depend on the happenstance of which court or governmental agency interprets it, at least as far as the objective rules go ” and further notes:

Employing the same standard for AIA proceedings and district courts improves uniformity and predictability as it allows the different fora to use the same standards in interpreting claims.

The new rule further states that any prior claim construction decision in a civil action “will be considered if that determination is timely filed in the record” at the PTAB.

While the PTAB judges are not explicitly required to accept prior claim constructions from federal district courts, the new rule certainly does appear to encourage conformity in interpreting patent claims.

CAFC Affirms PTAB’s Decision That Printed Matter Doctrine Can Be Used In Claim Construction

By Reza Mollaaghababa
In an inter partes review proceeding, a challenger cannot raise patent-eligibility as a ground of invalidity.  Rather, the invalidity grounds are limited to lack of novelty and obviousness.  Notwithstanding, in construing claim terms, the PTAB can decide not to give patentable weight to certain claim limitations that are not patent-eligible. In Praxair Distribution., Inc. v. Mallinckrodt Hospital Products IP Ltd., No. 2016-2616, 2016-2656 (Fed. Cir. May 16, 2018) the PTAB had employed the so-called “printed matter doctrine” not to give patentable weight to certain limitations as merely “providing information”  and the CAFC affirmed the PTAB’s claim construction.

Mallinckrodt is the owner of U.S. Patent No. 8,846,112, which is directed to methods of distributing nitric oxide gas cylinders for pharmaceutical applications.

Claim 1 recites a method of providing pharmaceutically acceptable nitric oxide gas, which includes obtaining a cylinder containing compressed nitric oxide gas, supplying the cylinder to a medical provider who is responsible for treating neonates who have hypoxic respiratory failure, including some who do not have left ventricular dysfunction. Claim 1 further includes the step of providing to the medical provider “(i) information that a recommended dose of inhaled nitric oxide gas for treatment of neonates with hypoxic respiratory failure is 20 ppm nitric oxide and (ii) information that, in patients with preexisting left ventricular dysfunction, inhaled nitric oxide may increase pulmonary capillary wedge pressure (PCWP), leading to pulmonary edema, the information of (ii) being sufficient to cause a medical provider considering inhaled nitric oxide treatment for a plurality of neonatal patients who (a) are suffering from a condition for which inhaled nitric oxide is indicated, and (b) have pre-existing left ventricular dysfunction, to elect to avoid treating one or more of the plurality of patients with inhaled nitric oxide in order to avoid putting the one or more patients at risk of pulmonary edema.”

Independent claim 7 includes a “recommendation that, if pulmonary edema occurs in a patient who has pre-existing [LVD] and is treated with inhaled nitric oxide, the treatment with inhaled nitric oxide should be discontinued” (the “recommendation” limitation). Claim 9 depends on claim 7 and further comprises the following steps: performing at least one diagnostic process to identify a neonatal patient who has hypoxic respiratory failure and is a candidate for inhaled nitric oxide treatment; determining prior to treatment with inhaled nitric oxide that the neonatal patient has pre-existing left ventricular dysfunction; treating the neonatal patient with 20 ppm inhaled nitric oxide, whereupon the neonatal patient experiences pulmonary edema; and in accordance with the recommendation of [claim 7], discontinuing the treatment with inhaled nitric oxide due to the neonatal patient’s pulmonary edema. Id.

The Board applied the printed matter doctrine to interpret the providing information, evaluating, and recommendation claim limitations “to be either printed matter or purely mental steps not entitled to patentable weight, as those limitations lacked a functional relationship to the other claim limitations except in claim 9.” In particular, the PTAB was not persuaded by Mallinckrodt’s argument that the recitation of “a pharmaceutically acceptable nitric oxide gas” in the preamble of the claims would require considering information provided in the label of the supplied product.  Rather, the PTAB construed this limitation as simply “nitric oxide gas that is suitable for pharmaceutical use.” Continue reading “CAFC Affirms PTAB’s Decision That Printed Matter Doctrine Can Be Used In Claim Construction”

USPTO Proposes Change In Claim Construction Standard For Post-Grant Proceedings

By Reza Mollaaghababa
On May 9, 2018, U.S. Patent and Trademark Office (PTO) issued a notice of proposed rule for changing the standard for construing claims in unexpired patents in inter partes review (IPR), post-grant review (PGR), and transitional covered business method (CBM) proceedings from current broadest reasonable interpretation (BRI) to the same claim construction standard that is utilized in the federal courts, i.e., the so-called Phillips standard.

Under the Phillips standard, the words of a claim are generally given their ordinary and customary meaning. In contrast, in post-grant review proceedings, the more expansive BRI standard is employed, which expands the scope of prior art that can be applied to invalidate the challenged claims.  The BRI standard  has been in fact outcome determinative in many of the proceedings.

The notice of proposed rule indicates that the U.S. Supreme Court has endorsed the PTO’s ability to choose an approach to claim construction for AIA proceedings. It also indicates that the proposed change in the claim construction standard could lead to greater uniformity and predictability between the claim constructions adopted by the PTAB and the federal courts.  This change will also harmonize the standard used for patentability and infringement, which could otherwise lead to unfair results.  For example, under BRI, it is possible for a patent claim to be invalidated based on a prior art reference although the construction of the same claim in an issued patent under the Phillips standard would not lead to a conclusion of infringement.  Moreover, there have been cases of a patent being found valid and infringed in a district court action but subsequently being found invalid by the PTO under the BRI standard.

The proposed change applies not only to the claims of an unexpired patent but also to claims presented in a motion to amend. “Under the proposed approach, the PTAB would construe patent claims based on the record of the IPR, PGR, or CBM proceeding taking into account the claim language itself, specification, and prosecution history pertaining to the patent.”  Further, consistent with the Phillips standard, extrinsic evidence, such as expert testimony and dictionaries, may be useful in determining what a person of ordinary skill would understand the claim terms to mean; however, extrinsic evidence is viewed as less reliable than intrinsic evidence.

Further, consistent with the Phillips standard, “the doctrine of construing claims to preserve their validity would apply to AIA trials.”  The notice, however, cautions that the doctrine of construing claims to preserve their validity has been limited to cases in which “the court concludes, after applying all the available tools of claim construction, that the claim in ambiguous.”  Further, the Federal Circuit “repeatedly and consistently has recognized that the courts may not redraft claims, whether to make them operable or to sustain their validity.”

The PTO intends that any proposed rule changes adopted in a final rule would be applied to all pending IPR, PGR, and CBM proceedings before the PTAB. The Office is presently soliciting comments on the proposed change, where written comments must be received by July 9, 2018 to ensure consideration.