Background
Cuozzo Speed Technologies held a patent on a speedometer that continuously displays the speed limit applicable to the road being traveled and alerts the driver when exceeding it. Garmin filed a petition for inter partes review (IPR) of Cuozzo’s patent under the America Invents Act, and the Patent Trial and Appeal Board instituted the review and ultimately cancelled several claims as unpatentable. Cuozzo challenged both the institution decision and the PTAB’s application of the “broadest reasonable interpretation” (BRI) standard for claim construction during the IPR proceedings. Cuozzo argued that the Federal Circuit’s Phillips v. AWH standard — which gives claims their ordinary meaning to a person of ordinary skill in light of the specification — should apply in IPR, as it does in district court litigation.
The Court’s Holding
The Supreme Court upheld BRI in IPR proceedings and also held that decisions to institute IPR are not subject to judicial review under § 314(d) of the AIA. On BRI, the Court found that the PTO has long used the broadest reasonable interpretation standard during examination to ensure that patents are not granted with unduly broad claims that have not been fully examined and refined. IPR is a continuation of the examination process, not equivalent to district court litigation — it allows patent holders to amend claims, gives the PTAB expertise in claim scope, and serves the same policy of ensuring that issued patents are no broader than what the specification supports. BRI is therefore a reasonable standard for PTO proceedings even if it differs from the Phillips standard used in court.
The Court also held that § 314(d) of the AIA — which states that the PTO’s decision whether to institute IPR “shall be final and nonappealable” — bars judicial review of the institution decision in all but the most exceptional cases. Courts cannot review whether the PTAB correctly applied the threshold for institution.
Key Takeaways
- The PTAB uses the broadest reasonable interpretation standard for claim construction in IPR, which is broader than the Phillips standard used in district court — meaning claims may be interpreted more broadly in IPR than in parallel district court litigation, increasing the risk of invalidity findings for broadly claimed patents.
- PTAB decisions to institute IPR are generally not subject to judicial review — patent holders cannot appeal institution decisions in separate court proceedings, even if they believe the PTAB applied the wrong legal standard for institution.
- The BRI/IPR gap was subsequently addressed by the PTO: in November 2018, the PTO proposed and adopted the Phillips standard for IPR and post-grant review proceedings, eliminating the BRI/Phillips asymmetry prospectively.
- Patent holders in both IPR and district court litigation must manage the risk that a broad claim interpretation in IPR could lead to cancellation, while a narrow interpretation in district court could narrow the scope available for enforcement.
Why It Matters
Cuozzo Speed Technologies v. Lee was the Supreme Court’s first major ruling on inter partes review — the new patent challenge mechanism established by the America Invents Act of 2011 that had rapidly become the most powerful tool for invalidating patents. By 2016, IPR petitions were being filed by the thousands, and the PTAB had earned the nickname “patent death squad” for its high cancellation rates. The Cuozzo ruling validated the BRI standard that made IPR particularly effective at cancelling broadly claimed patents.
The decision also confirmed that institution decisions are largely unreviewable, giving the PTAB broad discretion to decide which patents to review. These holdings, combined with the high patent cancellation rates at the PTAB, contributed to growing pressure on the patent system and ultimately led to the PTO’s 2018 transition to the Phillips standard for IPR claim construction — a change that somewhat leveled the playing field between IPR and district court proceedings and that was endorsed as permissible by the Supreme Court in Minerva Surgical v. Hologic (2021).