No. 15-446

Supreme Court, U.S.FILED

b~V - 9 2015OFFICE OF THE CLERK

5in the ~upreme ~ourt of the iEtnite~ ~btate~

CUOZZO SPEED TECHNOLOGIES, LLC, PETITIONER

V.

MICHELLE K. LEE, UNDER SECRETARY OF COMMERCE FORINTELLECTUAL PROPERTY AND DIRECTOR, PATENT AND

TRADEMARK OFFICE

ON PETITION FOR WRIT OF CERTIORARITO THE UNITED ,~TA TES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

AMICI CURIAE BRIEF OF 3M COMPANY, BRISTOL-MYERS SQUIBB CO., CARGH,L INCORPORATED,CATERP~ INC., ELI LII~Y AND COMPANY,

GLAXOSMITH~E LLC, ILLINOIS TOOL WORKSINC., JOHNSON & JOHNSON, MONSANTO

COMPANY, PFIZER INC., THE PROCTER & GAMBLECOMPANY, QUALCOMM INCORPORATED AND

SANOFI US IN SUPPORT OF PETITIONER

November 9, 2015

BARBARA A. FIACCOCounsel of Record

DONALD R. WARESARAH S. BURGFOLEY HOAG LLP155 Seaport BoulevardBoston, MA 02210(617) 832-1000bfiacco@foleyhoag.comCounsel for Amici Curiae

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TABLE OF CONTENTS

INTEREST OF AMICI CURIAE ...................................1

SUMMARY OF ARGUMENT ....................................3

ARGUMENT ......................................................................9

The Federal Circuit’s Decision isInconsistent with the Language of AIAand its Legislative History .................................9

Ao Congress Intended to Create anAdjudicative Proceeding toDetermine the Validity of PatentClaims, Not Another ExaminationProceeding ............................................9

Bo The Provisions of the AIA Confirmthat Congress Did Not "Ratify" theBRI Standard .......................................14

II. The PTO’s Promulgation of the BRI Ruleis Invalid ...............................................................16

Ao The AIA Did Not Provide the PTOwith Substantive RulemakingAuthority ....................................................16

Bo The BRI Rule is Not a ReasonableInterpretation of the AIA .......................17

ii

III. The Federal Circuit’s Decision PermittingDifferent Claim Construction Standardsin Different Adjudicative TribunalsUndermines Sound Patent Policy andWarrants This Court’s ImmediateIntervention .........................................................19

CONCLUSION ................................................................25

oooIII

TABLE OF AUTHORITIES

CASES

Biogen Idec, Inc. v. GlaxoSmithKline LLC,713 F.3d 1090 (Fed. Cir. 2013) ...............................19

In re Buszard,504 F.3d 1364 (Fed. Cir. 2007) ............................12

Cooper Teehs. Co. v. Dudas,536 F.3d 1330 (Fed. Cir. 2008) ............................16

In re Cuozzo Speed Teehs., LLC,793 F.3d 1268 (Fed. Cir. 2015) ..........................6, 9

In re Cuozzo Speed Teehs., LLC,793 F.3d 1297 (Fed. Cir. 2015) ........................7, 10

Flo Healtheare Solutions, LLC v. Kappos,697 F.3d 1367 (Fed. Cir. 2012) ............................24

Girouard v. United States,328 U.S. 61 (1946) ...............................................10

Graham v. John Deere,383 U.S. 1 (1966) .................................................11

Markman v. Westview Instruments, Inc.,52 F.3d 967 (Fed. Cir. 1995) all’d517 U.S.

370 (1996) .................................................. 11, 19, 20

Michigan v. EPA,

__ U.S. __, 135 S. Ct. 2699 (2015) ....................18

Peters go Active M£g. Co.,129 U.S. 530 (1889) .............................................18

Phillips v. A WH Corp.,415 F.3d 1303 (Fed. Cir. 2005) .......9, 11, 12, 14, 22

In re Prater,415 F.2d 1393 (C.C.P.A. 1969) ............................12

Sourco Soareh Toehs., LLC. v. LendingTroe,LLC,588 F.3d 1063 (Fed. Cir. 2009) ............................25

Vitronies Corp. y. Coneeptronic, Inc.,90 F.3d 1576 (Fed. Cir. 1996) ..............................11

White v. Dunbar,119 U.S. 47 (1886) ..............................................18

In re Yamamoto,740 F.2d 1569 (Fed. Cir. 1984) ............................15

STATUTES

5 U.S.C. § 8347(a) .....................................................17

35 U.S.C. § 2(b)(2)(A) ...............................................16

35 U.S.C. § l12(b) ...................................................i. 10

35 U.S.C. § 252 .........................................................22

35 U.S.C. § 282(b)(2) ..................................................4

35 U.S.C. § 282(b)(3) ..................................................4

V

35 U.S.C. § 301(a)(2) ................................................14

35 U.S.C. § 301(d) .....................................................14

35 U.S.C. § 3~ ...........................................................4

35 U.S.C. § 316 .............................................14, 16, 17

35 U.S.C. § 316(a) .....................................................17

35 U.S.C. § 316(a)(4) ................................................16

35 U.S.C. § 316(a)(5) ................................................17

35 U.S.C. § 316(d) .....................................................15

35 U.S.C. § 316(e) .....................................................14

35 U.S.C. § 318 .........................................................14

35 U.S.C. § 318(c) .....................................................21

35 U.S.C. § 321 ...........................................................4

35 U.S.C. § 325(d) .....................................................14

35 U.S.C. § 326 .........................................................14

35 U.S.C. § 326(e) .....................................................14

35 U.S.C. § 328 .........................................................14

38 U.S.C. § 501 .........................................................17

Leahy-Smith America Invents Act, Pub. L.No. 112-29, 125 Stat. 284 (2011) ........................2, 5

RULES AND REGULATIONS

37 C.F.R. § 42.300(b) ..................................................6

MPEP § 2111 ............................................................12

LEGISLATIVE MATERIALS

Court of Appeals for the Federal Circuit-1981: Hearings on H.R. 2405 Before theSubcomm. on Courts, Civil Liberties andthe Admin. of Justice of the H. Comm. onthe Judiciary, 97th Cong. (1981) (statementof the Hen. Howard T. Markey, C.J., Courtof Customs and Patent Appeals) ..........................24

H.R. Rep. No. 112-98, pt.1 (2011) .......5, 13, 15, 17, 18

Innovation Act: Hearing on H.R. 3009 Beforethe H. Comm. On the Judiciary, 113thCong. 39-46 (2013) (statement of David J.Kappos, Partner, Cravath, Swaine & MooreLLP) ......................................................................22

OTHER AUTHORITIES

Am. Intellectual Prop. Law Ass’n, Report ofthe Economic Survey (2013) ...............................20

Sterne Kessler Goldstein Fox, One YearLater: Observations from the First Year of

vii

Contested Proceedings at the USPTO,(Sept. 16, 2013),http ://www. skgf. corn/uploads/1230/doe/A/A_One_Year_Later_Report.pdf ................................23

USPTO, Patent Public Advisory CommitteeAnnual Report 2014,http ://www.uspto. gov/about/advisory/pp ae/PPAC_2014_AnnualReport.pdf ............................23

USPTO, Pa tent Trial and Appeal BoardStatistics (Sept. 30, 2015),http ://www. u s pto. gov/site s/de fault/file s/doeuments/2015-09-30%20PTAB.pdf ...................7, 23

USPTO, Performanee and AeeountabilityReport Fiscal Year 2014,http://www.uspto.gov/about/stratplan/ar/USPTOFY2014PAR.pdf .............................................20

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INTEREST OF AMICI CURIAE~

Amici 3M Company, Bristol-Myers SquibbCo., Cargill Incorporated, Caterpillar Inc., Eli Lillyand Company, GlaxoSmithKline, Illinois Tool WorksInc., Johnson & Johnson, Monsanto Company, PfizerInc., The Procter & Gamble Company, QualcommIncorporated and Sanofi US are among the oldestand most successful American innovators. Togetherthey spend tens of billions of dollars annually andemploy hundreds of thousands scientists, engineers,and others in the United States alone to develop,produce, and market new products. To protect theseactivities, Amici collectively hold tens of thousandsof patents and seek many more every year throughthe PTO.

Because of the nature of their businesses,Amici participate extensively in patent litigation, toenforce their patent rights against infringers and todefend against alleged infringement. Amici have asubstantial interest in the correct and consistent

~ Pursuant to Supreme Court Rule 37.6, counsel for Amicirepresent that they authored this brief in its entirety and thatnone of the parties or their counsel, nor any other person orentity other than amici or their counsel, made a monetarycontribution intended to fund the preparation or submission ofthis brief. Pursuant to Rule 37.2(a), counsel for Amici representthat all parties were provided notice of Amici’s intention to t~flethis brief at least 10 days before its due date. Pursuant to Rule37.3(a), counsel for amici represent that all parties haveconsented to the filing of this brief. Petitioner has filed a lettergranting blanket consent to the filing of amicus briefs; writtenconsent of Respondent to the filing of this brief is beingsubmitted contemporaneously with this brief.

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interpretation of the patent laws, including theimplementation by the United States Patent &Trademark Patent Office ("PTO") of inter partesreviews ("IPRs"), post-grant reviews ("PGRs"), andcover business method patent reviews ("CBMs")brought under the Leahy-Smith America Invents Act("AIA"), Pub. L. No. 112-29, 125 Stat. 284 (2011).2

The Federal Circuit’s decision below erred inendorsing the PTO’s rule that patent claimsadjudicated in an IPR proceeding should be giventheir ’~broadest reasonable interpretation." Thedecision is contrary to the text and history of theAIA, and disturbs the well-settled principle that theclaims of an issued patent should be construed thesame way for purposes of infringement and validity.The application of a uniform claim constructionstandard in PTO adjudicative proceedings, districtcourt litigation, and International TradeCommission ("ITC") investigations is necessary forthe proper implementation of the AIA as well as theproper functioning of the patent system as a whole.

The time to address this question of criticalimportance is now. The PTO has received a flood ofpetitions for post-issuance proceedings, the vast

2 This case presents the question of the proper claim

construction standard to be used in IPR proceedings, and Amicitherefore present their arguments in the context of IPRproceedings. However, the same issue arises in connectionwith PGR and CBM proceedings, and the same claimconstruction standard should be used in all three of the newpost-issuance proceedings created by the AIA.

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majority of which involve co-pending federal courtlitigation. IPR proceedings have become a fast-growing alternative to district court litigation foradjudicating patent validity. Congress did notintend that patent claims adjudicated in the PTO’sArticle I courts would be interpreted using astandard that is contrary to the standard used byArticle III courts.

As the number of IPR, PGR and CBMproceedings grows, the risk of inconsistent claimconstruction rulings between post-issuanceadjudications, on the one hand, and district courtand ITC litigation, on the other, also grows.Uncertainty as to the PTO’s proper interpretation ofthe claims of the thousands of issued patentscurrently under review creates opportunities forgamesmanship and inconsistent results. Thisuncertainty undermines confidence in the patentsystem, which has an adverse effect on the patent-owner community’s investments in the development,commercialization and enforcement their patentrights; patent licensing; design-around activities;and other patent-related business decisions.

SUMMARY OF ARGUMENT

Amici urge this Court to grant Cuozzo’spetition for a writ of certiorari and reverse theFederal Circuit’s ruling below to ensure that thePTO conducts and decides post-issuance proceedingsconsistent with the America Invents Act, itslegislative history and sound patent policy. TheFederal Circuit panel erroneously interpreted theAIA to permit the PTO to construe the claims of

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issued patents more broadly than the PTO and.patent owner intended at the time of their original.grants, and more broadly than any court would.allow.

This practice undermines the fundamentalprinciple of patent law that the claims of an issuedpatent should be construed consistently for purposesof adjudicating their infringement and validity. Itcan lead to invalidation of narrowly drawn patentclaims that would be held valid and enforceable byArticle III courts, unfairly upsetting expectationsand defeating the intent of Congress. Congresscreated IPRs as an alternative to litigation, not as avehicle for the PTO to promulgate new substantiverules that redefine how patent validity isadjudicated.

There is no dispute that Congress establishedpost-issuance patent review proceedings asalternatives to district court and ITC litigation toprovide less expensive and less time-consumingprocedures to determine the validity of issuedpatents.3 In doing so, Congress intended to "convert"

3 By way of background, an IPR proceeding is a procedure to

adjudicate the validity of patent claims based on patents andprinted publications. 35 U.S.C. § 311. A PGR proceeding is aprocedure to adjudicate the validity of patent claims on anyground that could be raised under 35 U.S.C. § 282(b)(2) or (3).35 U.S.C. § 321. A CBM proceeding is a procedure toadjudicate the validity of patents claiming "a method orcorresponding apparatus for performing data processing orother operations used in the practice, administration, ormanagement of a financial product or service, except that the

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the underutilized and protracted inter partesreexamination proceeding "from an examinational toan adjudicative proceeding...," renamed as "interpartes review." H.R. Rep. No. 112-98, pt. 1 (2011), at46-47.

The PTO’s decision to apply a ’‘broadestreasonable interpretation" of issued claims in post-issuance proceedings is contrary to the AIA andsound patent policy. Congress did not establish IPRsas an extension of patent examination orreexamination, where patent applicants have anunfettered right to amend their claims, and the useof the ’‘broadest reasonable interpretation" ("BRI")standard is therefore both traditional andappropriate. Rather, Congress established thesepost-issuance proceedings as adjudicativeproceedings which are to take place in a "court-likesetting’ where the use of "broadest reasonableinterpretation" has never been condoned. H.R. Rep.No. 112-98, pt. 1, at 68.

Consistent with this intent, Congressexpressly restricted the patentee’s ability to amendclaims in the new adjudicative proceedings. There isno right to amend claims. Instead, the patentee mayonly file a single motion to c~cel a challenged claim,and, having done so, can p.mpose a "reasonablenumber" of substitute claims. The PTO’s use of theBRI standard in these proceedings, rather than thewell-established principles of claim construction thatfederal courts and the ITC apply to issued patents,

term does not include patents for technological inventions."Leahy’Smith America Invents Act § 18(d)(1).

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departs from two fundamental tenets of patent law.First, the correct, legally binding scope of issuedclaims is based on the "ordinary and customarymeaning," considering all legally relevant intrinsicand extrinsic evidence, including the applicant’sstatements about claim scope during patentprosecution. Second, issued claims are to beinterpreted consistently to adjudicate both validityand infringement.

In its split decision below, the panel majoritydisregarded the long-standing distinction betweenthe way claims are construed in adjudicativeproceedings, on the one hand, and during their pre-issuance examination by a patent examiner orreexamination, on the other. Finding no expressjustification in the statutory language or legislativehistory, it held that Congress "implicitly" approvedthe broadest reasonable interpretation standard inpassing the AIA. In re Cuozzo Speed Techs., LLC,793 F.3d 1268, 1278 (Fed. Cir. 2015). The panelfurther stated that "[e]ven if we were to concludethat Congress did not itself approve the broadestreasonable interpretation standard in enacting theAIA," the PTO’s promulgation of 37 C.F.R. §42.300(b), which provides that claims challenged inan IPR are interpreted under a BRI standard, wasreasonable and entitled to Che~on deference. Id.

The panel majority erred in holding thatCongress implicitly ratified BRI for such proceedingswhen it enacted the AIA. The statute’s expressprovisions and legislative history show thatCongress intended to create an Article I adjudicatoryproceeding within the PTO as an efficient

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alternative to Article III litigation of patent validitychallenges. Congress did not intend to givechallengers the ability to invalidate patents based onartificially broad claim scope. The panel furthererred in holding that the AIA conferred substantiverule-making authority on the PTO and in concludingthat the BRI Rule is a permissible interpretation ofthe AIA.

The Federal Circuit denied Cuozzo’s petitionfor en banc rehearing of the panel’s 2-1 decision by avote of 6-5. The joint dissent of five judgesemphasized that "[i]n adjudicatory proceedings,claims are given their actual meaning, not theirbroadest reasonable interpretation." In re CuozzoSpeed Teehs., LLC, 793 F.3d 1297, 1299 (Fed. Cir.2015) (dissenting opinion of Prost, C.J., Newman,Moore, O’Malley and Reyna). This deep divisionamong the Federal Circuit judges on an issue ofparamount importance to a properly functioningpatent system justifies review by the Court.

Indeed, it is difficult to overstate theimportance of this issue to our patent system andthe public confidence it. The PTO has received 3,973total petitions for AIA post-grant review as ofSeptember 2015, putting its docket close to the topjudicial district for patent litigation, and the numberof petitions is growing. See USPTO, Patent Trialand Appeal Board Statistics, http://www.uspto.gov/sites/default/files/documents/2015-09-30%20PTAB.pdf. The scope and meaning ofchallenged claims is a central issue in most, if notall, of these proceedings. As the 2-1 panel decisionand the joint dissent from the en banc denial

8

demonstrate, there is substantial disagreement overwhether the PTO may properly and lawfully applythe ’%roadest reasonable interpretation" standard inthese proceedings. It is imperative that the Courtdecide this issue now, before thousands of reviewsare completed under what Amici submit is anerroneous claim construction protocol.

The PTO’s improper promulgation and use ofthe BRI Rule has undermined the public’s confidencein the validity of patents issued by the PTO bycreating an infringer-friendly forum that threatensthe integrity of the patent system as well as thecourts. Under the Federal Circuit’s decision, patentclaims that would withstand invalidity challenges incourt can still be invalidated by the PTO when givena broader reading than the patentee intended. ThePTO’s substantive rule-making, in the absence ofany grant of Congressional authority to do so,deprives patent owners of valuable property rights,creates uncertainty, and is an invitation togamesmanship. The lack of certainty as to themeaning (and therefore value) of a patent is costly tothe inventive community and discourages bothinnovation and investment.

This Court should now grant certiorari toresolve this question of exceptional importance:whether in IPR proceedings, the Board may construeclaims of an issued patent according to theirbroadest reasonable interpretation rather than theirplain and ordinary meaning. This Court shouldcorrect the Federal Circuit’s misinterpretation of theAIA as to this issue of fundamental importance tothe patent system. And it needs to do so now, as

more petitions are filed and wrongly decided basedon incorrect claim construction, creatingunpredictability, inefficiency, and wastefulexpenditure of public and private resources.

ARGUMENT

The Federal Circuit’s Decision is Inconsistentwith the Language of AIA and its LegislativeHistory.

Congress Intended to Create anAdjudicative Proceeding to Determinethe Validity of Patent Claims, NotAnother Examination Proceeding.

The panel majority erred in concluding thatCongress intended for the PTO to use the claimconstruction standard it historically has used in itsexamination of ¯ pending claims, and inreexamination, to construe issued claims in IPRproceedings. The panel majority’s erroneous holdingrests on the incorrect assumption that because "thebroadest reasonable interpretation standard hasbeen applied by the PTO... for more than 100 yearsin various types of PTO proceedings," 793 F.3d at1276, Congress "impliedly approved" the use of the’%roadest reasonable interpretation" standard. Thepanel majority reasoned that the absence of anexplicit statement from Congress that it wished toadopt P]~iIlips claim construction standards for post-issuance proceedings should be interpreted as anendorsement of the use of the BRI Rule. In addition,according to the panel majority, it could be "inferred"

10

from the legislative history of the AIA that Congress"impliedly approved" the use of BRI. Id. at 1277.

This conclusion is unfounded. As dissentingJudge Pauline Newman wrote, "the question beforethis court is not whether to ’eliminate’ BRI, butwhether to impose it on issued patents, where it hasnot previously reposed." Cuozzo, 793 F.3d at 1306.In fact, Congress made no explicit reference to anyclaim construction standard applicable to AIA post-issuance proceedings. Its silence does not support"inferring" that Congress intended to adopt the useof BRI. See, e.g., Girouard v. United State~, 328U.S. 61, 69 (1946) ("It is at best treacherous to findin congressional silence alone the adoption of acontrolling rule of law.").

As Chief Judge Prost, along with JudgesNewman, Moore, O’Malley, and Reyna, pointed outin their joint dissent from the denial of rehearing,"our background of existing law not only fails tosupport the conclusion drawn by the panel majority,it points to the opposite result." Cuozzo, 793 F.3d at1300 (emphasis in original). The well-settled lawgoverning interpretation of issued patents (of whichCongress was well-aware at the time it enacted theAIA), the historical basis for using the BRI standardin examination and reexamination proceedings, andthe legislative history of the AIA supply strongevidence of the panel majority’s error.

The claims of an issued patent define theinvention’s metes and bounds. 35 U.S.C. § 112(b). Itis the job of the courts to interpret the claims anddetermine the scope of patented inventions as part of

11

the infringement and validity analysis. Markma~ v.Westviow Instruments, Inc., 52 F.3d 967, 979 (Fed.Cir. 1995) (en bane) a£C’d 517 U.S. 370 (1996). Todetermine this "ordinary and customary" meaning,courts begin with intrinsic evidence: the elaims,specification and prosecution history. Phillips v.A WH Corp., 415 F.3d 1303, 1313 (Fed. Cir. 2005) (onbane). Intrinsie evidence is critical because it"constitute[s] the public record of the patentee’sclaim, a record on which the publie is entitled torely." Vitronies Corp. v. Coneeptronie, Inc., 90 F.3d1576, 1583 (Fed. Cir. 1996). The specification isrelevant to determine whether the inventor has usedany terms in a manner inconsistent with theirordinary meaning. Id. Likewise, the prosecutionhistory provides guidance as to the scope of theclaims because it contains:

the complete record of all theproceedings before the PatentandTrademark Office, includinganyexpress representations made bytheapplicant regarding the scope oftheclaims. As such, the record beforethePatent and Trademark Office is often ofcritical significance in determining themeaning of the claims.. Includedwithin the analysis of the file historymay be an examination of the prior artcited therein.

Id. (citing Graham y. John Deere, 383 U.S. 1,33 (1966)). For decades, this body of intrinsicevidence has served as the primary record by whichcourts adjudicating issues of patent validity and

12

infringement have determined the "ordinary andcustomary" meaning of patent claims. Philh’p,a, 415F.3d at 1313.

By contrast, the PTO has historically used theBRI standard to consider pending patent claims inexamination or unexpired issued claims inreexamination. This protocol gives claims "theirbroadest reasonable interpretation consistent withthe specification" but does not utilize other intrinsicevidence, including the prosecution history, orextrinsic evidence. Manual of Patent ExaminingProcedure ("MPEP"), § 2111. The PTO also uses BRIin most reissue, ex parte, and inter partesreexamination proceedings, which the PTO treats inthe same manner as original applications, as acontinuation of patent examination. Thejustification for BRI in examination andreexamination is the patentee’s ability to amendfreely. In re Prater, 415 F.2d 1393, 1404-05(C.C.P.A. 1969) ("[C]laims yet unpatented are to begiven the broadest reasonable interpretationconsistent with the specification during theexaminationof a patent application since theapplicant may then amend his claims, the thoughtbeing to reduce the possibility that, after the patentis granted, the claims may be interpreted as givingbroader coverage than is justified."); In re Buszard,504 F.3d 1364, 1366-67 (Fed. Cir. 2007)("[T]hepatent examiner and the applicant, in the give andtake of rejection and response, work toward definingthe metes and bounds of the invention to bepatented.").

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The legislative history of the AIA repeatedlyrefers to the new post-issuance proceedings asadjudicative proceedings, designed to providecheaper and faster procedures for bringing invaliditychallenges that previously could be heard only indistrict courts. The House Report draws a sharpdistinction between PTO examination proceedingsand adjudicative proceedings: "[t]he Act convertsinter partes reexamination from an examinational to~ adjueb’cative p~aceedi~g, and renames theproceeding ’inter partes review."’ H.R. Rep. No. 112-98, pt. 1, at 46-47 (emphasis added). The Reportexplained that the AIA would "[e]stablish a newprocedure, known as post-grant review, to review thevalidity of a patent. This option .... would take placein a co~zct-like proceeding .... " Id. at 68 (emphasisadded); see a]so id. at 75 (describing PGR and IPR as" adjudz’c~tive ~tem~’) (emphasis added).

The legislative history clearly shows Congress’intent to create adjudicatory proceedings that, toassess the validity of patents, would use the samelegal framework as Article III courts use toadjudicate issued patents.There is no indicationthat Congress intendedto create new andfundamentally differentsubstantive standardsgoverning patent validity when adjudicated in thePTO’s Article I courts.

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The Provisions of the AIA Confirm thatCongress Did Not ’~RatifT" the BRIStandard.

On the contrary, the express statutorylanguage confirms Congress’ understanding that thePI~illips claim construction standard would be usedby the PTO in post-issuance proceedings.Section325(d) authorizes the PTO Director toconsider the patent’s prosecution history (includingstatements made by the patentee) in deciding toinstitute a proceeding. 35 U.S.C. § 325(d). The AIAalso contemplates that the PTO consider "statementsof the patent owner filed in a proceeding before aFederal court or the Office in which the patentowner took a position on the scope of any claim of aparticular patent" in construing claims during anAIA post-grant proceeding. Id. §§ 301(a)(2) & (d). IfCongress had intended the PTO to ignoreprosecution history and apply the BRI Rule, thesestatutory provisions would have made no sense.

Other provisions of the AIA likewisedemonstrate the unreasonableness of the PTO’sposition that the AIA authorizes the PTO to construeclaims in the new post-issuance adjudicativeproceedings as if they were undergoing examination.Reflecting Congress’ vision of IPRs as adjudicativeproceedings, the AIA mandates discovery,depositions, experts, an oral hearing and a finalwritten decision by the Board. Id §§ 316, 318, 326,328. Congress also placed the burden of proof on thepetitioner, just as the patent challenger bears theburden of proof in district court. Id. §§ 316(e), 326(e).

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Importantly, Congress created a materialdifference between (i) initial examination andreexamination, which permit multiple rounds ofiterative claim amendments, and (ii) adjudicativeproceedings, which do not. Under the AIA, thepatentee does not have the liberal right to amend itspatent claims in post-issuance proceedings. Section316(d) allows the patent owner only a one-timechance to request cancellation of a challenged claimand to propose "a reasonable number of substituteclaims" for the challenged claim. Id. § 316(d).Indeed, Congress eliminated inter partesreexamination because it was impractical toincorporate adversarial participation into aprocedure allowing the patentee multipleamendments of the claims in play. H.R. Rep. 112-98,pt. 1, at 45-46.

The panel majority’s offhand reference to apatentee’s theoretical ability to amend claims duringan IPR proceeding glosses over the strict statutorylimitations on amendments in post-issuanceproceedings. First and foremost, as the AIA hasbeen interpreted by the PTO, the patentee has noright to amend claims in these proceedings. Rather,under § 316(d), the patentee only has the right to filea motion to cancel a challenged claim or to propose asubstitute claim. 35 U.S.C. § 316(d). There is noguarantee that the PTO will allow such a motion--incontrast to the continuing, unfettered right of apatentee to amend any or all claims in examinationand reexamination proceedings, upon which theFederal Circuit relied in upholding the use of BRIthere. See In re Yamamoto, 740 F.2d 1569, 1571(Fed. Cir. 1984).

II.

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The PTO’s Promulgation of the BRI Rule isInvalid.

Ao The AIA Did Not Provide the PTO withSubstantive Rulemaking Authority.

The Federal Circuit also erred in concludingthat Congress granted, authority to the PTO to adopta rule that would alter the standard used todetermine the claim scope of issued patents in post-grant proceedings. Nothing in Section 316 conferssubstantive rulemaking authority. Cooper Teehs.Co. v..Duda,~, 536 F.3d 1330, 1336 (Fed. Cir. 2008)(stating "[a] rule is ’substantive’ when it ’effects achange in existing law or policy’ which ’affect[s]individual rights and obligations."’). Under thePatent Act and the AIA, only procedural, notsubstantive, rules arewithin the rulemakingauthority of the PTO. Id.

The AIA did not confer any new substantiverulemaking authority on the PTO that would expandits authority to promulgate rules governing claimscope of issued claims. Section 316 merely directsthe PTO to promulgate regulations "establishing andgoverning" IPRs "and the relationship of such reviewto other proceedings under this title," 35 U.S.C.§ 316(a)(4). This authority is no broader than thePTO’s existing authority to promulgate rulesgoverning the conduct of examination proceedingsunder Section 2(b)(2)(A). 35 U.S.C. § 2(b)(2)(A)(conferring upon the PTO the authority topromulgate procedural rules). No language in theAIA authorizes the PTO to promulgate rulespermitting the PTO to assess the validity of issued

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patents using an artificially broad claim scope, orotherwise confers authority for substantiverulemaking.4

Section 316 specifically identifies regulationsthe PTO was to promulgate, such as regulationsproviding for public access to the file of theproceeding in certain proscribed circumstances;establishing standards for the discovery of relevantevidence, "including that such discovery shall belimited" in certain proscribed ways; and providingeither party with the right to an oral hearing as partof the proceeding. Id. § 316(a)(5). The HouseReport’s analysis of Section 316(a) does not suggestany grant of rulemaking authority beyond what isexpressly identified in that provision. See H.R. Rep.No. 112-98, pt. 1, at 76.

Bo The BRI Rule is Not a ReasonableInterpretation of the AIA.

The BRI Rule is not a reasonableinterpretation of the AIA and for that second,

4 The absence of any language in the AIA expanding the PTO’snarrow rulemaking authority contrasts with the broad, expressauthority Congress has granted to other agencies. WhenCongress intends to delegate rulemaking authority, it makesthat purpose clear. See, e.g’., 38 U.S.C. § 501 (Secretary ofVeterans Affairs authorized to prescribe "all rules andregulations which are necessary or appropriate to carry out thelaws administered by the Department..."); 5 U.S.C. § 8347(a)(Office of Personnel Management has authority to prescribe"such regulations as are necessary and proper to carry out [theCivil Service Retirement Act]").

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independent reason, it is invalid. See Michigan v.EPA,_ U.S. __, 135 S. Ct. 2699, 2706 (2015). Asdiscussed in Section I, supra, the BRI Rule is notconsistent with the AIA’s provisions, legislativehistory or Congress’ intent to create "court-likeproceedings" to adjudicate patent validity. H.R. Rep.No. 112-98, pt. 1, at 68.

It is a fundamental tenet of patent law thatissued claims should be interpreted the same forpurposes of adjudicating their validity andinfringement. See, e.g., Peters v. Active Mfg. Co.,129 U.S. 530, 537 (1889) ("It]hat which infringes, iflater, would anticipate, if earlier"); White v. Dunbar,119 U.S. 47, 51 (1886) (a patent claim is not "a noseof wax which may be turned and twisted in anydirection"). There is no reasonable basis on which toconclude that Congress intended that the scope of anissued patent would be interpreted one way bycourts and in a different way by the PTO in an IPRproceeding. Nor is there any reasonable basis toconclude that Congress intended the PTO to ignorethe effort and expense invested by the patentapplicant and the PTO during the originalexamination of a patent involved in an IPRproceeding--an approach that starts over with ablank slate rather than where the PTO left off at thetime it concluded the patent should be granted. Insum, there is nothing in the language or legislativehistory of the AIA to suggest that Congress intendedto create new post-issuance review proceedings thatviolate fundamental principles of patent law andcreate unbalanced playing fields tilted againstpatent owners in the manner that the PTO’srulemaking has done.

III.

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The Federal Circuit’s Decision PermittingDifferent Claim Construction Standards inDifferent Adjudicative Tribunals UnderminesSound Patent Policy and Warrants ThisCourt’s Immediate Intervention.

The Federal Circuit’s decision has invitedinconsistency and uncertainty in the law andencourages gamesmanship. The application of theBRI Rule in post-issuance proceedings presents aquestion of exceptional importance and demands theurgent attention of this Court. Use of the BRI Rulein post-issuance proceedings threatens the integrityof the patent system at the expense of publicresources.

By broadly interpreting the claims untetheredto statements made by the patentee duringprosecution of the patent that were intended tonarrow claim scope, the use of BRI will underminethe public notice function of the patent’s prosecutionhistory, which historically has provided the publicimportant information about the scope and meaningof the claim. See Markma~, 517 U.S. 370, 373;Biogen Idoe, Inc. v. GlaxoSmithKline LLC, 713 F.3d1090, 1095 (Fed. Cir. 2013). Where the PTO has setforth its ’%roadest reasonable interpretation" ofpatent claims in a post-issuance proceeding and theyare not determined to be invalid, there is likely to beuncertainty as to which interpretation defines thescope of the claimed invention going forward.

Uncertainty as to the scope of claims is costlyto the inventive community and discouragesinnovation. Indeed, this Court in Markman

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explained that "uniformity in the [claimconstruction] of a given patent" was critical in orderto avoid a "zone of uncertainty which enterprise andexperimentation may enter only at the risk ofinfringement claims [that] would discourageinvention only a little less than unequivocalforeclosure of the field." 517 U.S. at 390. Suchuncertainty adversely affects patent licensing,design-around, and other critical business decisions,contrary to the goals of the AIA.

More generally, it is highly inefficient for thePTO to ignore the months or years of workundertaken by patent examiners and patentapplicants during the original examination only tobegin on a blank slate, without the benefit of thepatentee’s statements about the prior art and claimscope--producing results inconsistent with theoutcome a court ultimately would reach based on theprosecution history. The development of theexamination record represents a substantialinvestment of resources by both the patentee and thePTO. The average patent prosecution consumes 27.4months. USPTO, Performance and AccountabilityReport 2014, http:llwww.uspto.govlaboutlstratplanlar/USPTOFY2014PAR.pdf. Typical charges forpreparing and filing an original application rangefrom $7,622 to $11,944. Am. Intellectual Prop. LawAss’n, Report of the Economic Survey 1-90-91 (2015).Costs for filing each amendment range from $2,479to $4,541. Id. at 1-108-110.

The BRI Rule requires the PTO’s Article Icourts to ignore the prosecution record created afterso much time and expense. Consider, for example, a

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newly-issued claim against which a PGR petition isfiled. That claim may have undergone years ofexamination, during which the patent owner mayhave disclaimed claim scope or made statementsdistinguishing the claim from the same prior artcited in the PGR petition. It makes no sense for thePTO to pretend the prosecution history created didnot exist and start over from scratch, even as to thesame art it just considered during prosecution. Yetthat is the result created by the PTO’s adoption ofthe BRI Rule.

That result encourages unnecessarychallenges to legitimate patent rights and increasespatent costs. Claims that would be construed inlight of the prosecution history and upheld underjudicial claim construction rules could be invalidatedwhen subjected to an overly broad reading under theBRI Rule. This is unfair to patent owners and anopen invitation to gamesmanship. Moreover, theapplication of different standards in PTO anddistrict court proceedings means that eachproceeding’s claim construction has no estoppeleffect for subsequent proceedings, furtherencouraging gamesmanship.

Use of the BRI Rule can also lead, unfairly, tothe creation of intervening third party rights.5

Under the law of intervening rights, when a patent’sclaims are substantively amended during a post-issuance procedure, an accused infringer may be

5 Intervening rights will attach to a claim amended in an IPRproceeding. 35 U.S.C. § 318(c).

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shielded from liability under the original claims. 35U.S.C. § 252. A competitor facing infringementlitigation might initiate a post-issuance proceedingin hopes of forcing the patentee to narrow its claimsto overcome additional prior art that becomesrelevant under the BRI standard. By triggeringthird-party intervening rights, the patent owner mayforfeit valuable, legitimate patent scope (based on aPhiIlips construction) vis-h-vis anyone who practicedthe invention prior to the issuance of any new oramended claim.

The inconsistent results arising fromapplication of the BRI Rule create a strong incentivefor parties to challenge patent validity in post-issuance proceedings while patentees seek to enforcethe same patent in district court. The BRI Ruleexacerbates the problem by creating an avenue forinconsistent treatment of patents. Indeed, formerPTO Director David Kappos testified to the HouseJudiciary Committee that "having the USPTO applya different standard than the courts is leading, andwill continue to lead, to conflicting decisions."Innovation Act: Hearing on H.R. 3309 Before the H.Comm. On the Judiciary, 113th Cong. 39-46 (2013)(statement of David J. Kappos, Partner, Cravath,Swaine & Moore LLP).

The need for uniformity, as between post-issuance adjudicative proceedings in the PTO on theone hand, and district court and ITC proceedings onthe other, is all the more acute due to the largenumber of proceedings filed annually. In November2014, the PTO reported on its Patent Trial and

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Appeal Board’s ("PTAB") caseload as compared tothe caseloads of federal district courts:

The PTAB received 1,494 petitions fromSeptember 2013 to September 30, 2014;in all of 2013, 1511 complaints werefiled in the Eastern District of Texas,1335 in the District of Delaware, 408 inthe Central District of California, and248 in the northern District ofCalifornia. The number of PTAB filingsin FY 2014 was 1,494, thereby puttingthe PTAB ahead of all but one of thefederal district courts in terms of patentdisputes that they are handling.

USPTO, Patent Public Advisory CommitteeAnnual Report 2014, 48, http://www.uspto.gov/about/ a dvisory/p pae/P P A C_2014_Ann ualReport, pdf.

The rate of post-issuance filings in theseproceedings has continued to increase in each yearsince their creation. In September 30, 2015, thePTO reported that 1,897 filings have been made in2015, significantly exceeding last year’s total.USPTO, Patent Trial and Appeal Board Statistics(Sept. 30, 2015), http://www.uspto.gov/sites/default/files/document s/2015-09- 30%20PTAB.pdf.Many, if not most, of these patents are the subject ofconcurrent litigation. Various sources report that80% of all IPRs are also in related co-pendinglitigation and 100% of CBM proceedings have co-pending litigation. See, e.g., Sterne KesslerGoldstein Fox, One Year Later: Observations fromthe First Year o£ Contested Proceedings at the

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USPTO, 1 (Sept. 16, 2013), http://www.skgf.com/uploads/1230/doc/AIA_One_Year_Later_Report.pdf.

Lastly, the PTO’s BRI Rule will imposesignificant burdens on the judiciary when theFederal Circuit is faced with appeals directed todiffering constructions of the same claims by thePTAB and a district court. Such discrepancies willpose challenges for effective appellate review,compounded by uncertainty in the Federal Circuit’sjurisprudence as to whether any deference is owed tothe PTO’s claim construction. ~qee Flo HealthcareSoIutions, LLC v. Kappos, 697 F.3d 1367, 1378 (Fed.Cir. 2012) (Plager, J., additional views).Simultaneousreview of discordant PTAB anddistrict courtclaim constructions threatens toundermine the goal of uniformity that the FederalCircuit was created to achieve. "The crying need fordefinitive, uniform, judicial interpretation of thenational law of patents, on which our citizens mayrely and plan with some certainty, has beenrecognized for over 60 years." Court of Appeals forthe Federal Circuit-1981: Hearings on H.R. 2405Before the Subcomm. on Courts, Civil Liberties, &the Admin. of Justice of the H. Comm. on theJudiciary, 97th Cong. 42-43 (1981) (statement of theHen. Howard T. Markey, C.J., Court of Customs andPatent Appeals).

In sum, the PTAB’s use of the BRI Rule inAIA post-issuance proceedings not only contravenesthe intent of Congress in creating efficientalternatives to district court litigation, it alsothreatens fundamental tenets of our patent system:that the "ordinary and customary meaning" of the

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claims of an issued patent defines the invention’smetes and bounds, and that the "claims areconstrued the same way for both invalidity andinfringement." Source Search Techs., LLC. v.LendingTree, LLC, 588 F.3d 1063, 1075 (Fed. Cir.2009).

CONCLUSION

Amici respectfully submit that the Courtshould grant the petition for a writ of certiorari.

Respectfully submitted,

Barbara A. FiaccoDonald R. WareSarah S. BurgFOLEY HOAG LLP155 Seaport BoulevardBoston, Massachusetts 02210(617) 832-1000bfiacco@foleyhoag.comCounsel for Amici Curiae

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