In a split 2-1 decision, the U.S. Court of Appeals for the Federal Circuit yesterday upheld Patent Office rules making it easier for companies to kill bad patents. This decision was the first issuing from an appeal of an inter partes review (IPR) decision. Created two and a half years ago, IPRs have become an increasingly popular process. Once commenced, the US Patent and Trademark Office (PTO) determines whether it issued a challenged patent in error. IPRs are generally faster and cheaper proceedings than court-based litigation. As a result, and because most federal courts will stay existing litigation pending the outcome of an IPR regarding the same patent or patents, the number of IPRs has increased dramatically since the new proceeding took effect.
Here, the US Patent and Trademark Office (PTO) instituted an IPR regarding a patent owned by Cuozzo Speed Technologies (Cuozzo), and later issued a decision invalidating some of the patent claims. On appeal, Cuozzo asked the Federal Circuit to examine if the IPR was improperly instituted and whether the PTO correctly construed the patent claims.
The Federal Circuit affirmed, holding that by statute it does not have the authority to review a PTO decision to institute an IPR. The Court also held that the PTO used the correct claim construction standard. By removing the PTO’s initial decision to commence an IPR from appellate scrutiny, and by confirming the propriety of the PTO’s claim construction standard, the decision will only solidify the popularity and importance of IPRs as an important weapon in the defensive arsenal of companies accused of patent infringement.
