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Iancu calls change to Phillips ‘critically important’

USPTO Director Andrei Iancu delivers the keynote speech at the AIPLA annual meeting on October 25, 2018.

“It seems self-evident that the same patent contested in different tribunals should have its meaning – its boundaries – determined using the same standard,” Director Iancu stated when discussing the ultimate guidelines implementing the Phillips normal on the PTAB.

USPTO Director Andrei Iancu delivers the keynote speech at the AIPLA annual meeting on October 25, 2018.

USPTO Director Andrei Iancu delivers the keynote speech on the AIPLA annual assembly on October 25, 2018.

On October 11, 2018, the U.S. Patent and Trademark Workplace revealed a last rule within the Federal Register that modifications numerous elements of the conduct of America Invents Act (AIA) patent validity trials on the Patent Trial and Attraction Board (PTAB). Though probably the most salient function of the rule change is the shift in declare development from the broadest affordable interpretation (BRI) normal to the Phillips commonplace, the whole thing of the rule change consists of different features that may enhance the prospects for patent house owners making an attempt to defend their mental property on the PTAB. The rule change will amend language present in 37 CFR Half 42, particularly 42.100(b), 42.200(b) and 42.300(b).

“Looking at the patent system holistically, this is a critically important rule change,” USPTO Director Andrei Iancu informed a luncheon gathering on the American Mental Property Legal professionals Affiliation annual assembly throughout his keynote speech on Thursday, October 25, 2018. “For the sake of predictability and reliability, the boundaries of a patent should not depend on which forum happens to analyze it.”

The change from the BRI commonplace to the Phillips commonplace, which interprets claims throughout declare development in accordance to their “ordinary and customary meaning” and is the usual used throughout an evaluation of patent validity in U.S. district courtroom and on the U.S. Worldwide Commerce Fee (ITC), will take impact for inter partes evaluation (IPR), coated enterprise technique (CBM) assessment and post-grant assessment (PGR) proceedings on the PTAB starting on November 13, 2018, the efficient date of the rule change.

The conversion from BRI to Phillips has been lauded by many within the patent group, but in addition by conservative commentators as properly. “The rule change is a fundamental step in the right direction,” stated James Edward, Government Director or Conservatives for Property Rights, in a phone interview. “This is one element of shoring up patents as a private property right and hopefully courts begin to recognize that they’re supposed to interpret and not make the law.”


The rule change revealed within the Federal Register notes that, whereas the BRI commonplace stays in step with the USPTO’s follow in analyzing patent purposes, its use in AIA trial proceedings will reduce variations between the PTAB and different fora the place validity could also be challenged. That is of specific significance given the 86.eight % of patents challenged in AIA trials that are additionally the topic of patent litigation in federal courts in accordance to a 2016 research cited within the remaining rule. Beneath the rule change, the USPTO may even contemplate declare constructions made in district courtroom or on the ITC if that development is well timed made from report in an AIA trial continuing.

“[U]sing the same claim construction standard should improve efficiencies for everyone involved,” Iancu advised the AIPLA annual assembly. “Parties can develop a single set of claim construction arguments and can leverage the work already done in district court proceedings, or vice versa. Plus, one forum can consider the work previously done by another forum. The rule will therefore also improve consistency between proceedings.”

Conservatives agree. “From a policy standpoint, it would seem that the change from BRI to Phillips would help eliminate the variance between the PTAB and the Federal Circuit so that you’d hope to see more consistency,” Edwards informed IPWatchdog. “It’s been a bit of a bizarre Kafkaesque situation that the PTAB is applying the same BRI construction standard from the examination stage which is totally inappropriate at the reexamination or challenge of validity stage.”

In eliminating the distinction in declare development requirements between the PTAB and different fora, the USPTO is addressing the potential for unfairness that may end result from totally different requirements to interpret the which means of the identical declare. That is notably vital given the truth that AIA trials don’t happen in a vacuum, however somewhat are overwhelmingly related to parallel proceedings in different fora. “After all, some 85 percent of patents contested at the PTAB are involved in parallel litigation,” Director Iancu defined throughout his keynote presentation. “It seems self-evident that the same patent contested in different tribunals should have its meaning – its boundaries – determined using the same standard.”

“Because the BRI standard potentially reads on a broader universe of prior art than does the Phillips standard, a patent claim could potentially be found unpatentable in an AIA proceeding on account of claim scope that the patent owner would not be able to assert in an infringement proceeding,” the Federal Register Discover reads. The rule change additionally extends the Phillips normal for declare interpretation to substitute claims that are proposed by patent house owners in a movement to amend.

The current change to the Phillips normal for declare development in AIA trials requires the USPTO to bear in mind “the claim language itself, the specification, the prosecution history of the patent, and extrinsic evidence, among other things, as briefed by the parties.” These accustomed to patent regulation will acknowledge that that is the usual strategy for deciphering the which means for claims in federal district courtroom and the ITC, the place each extrinsic and intrinsic proof are thought-about.

The prosecution historical past to be thought-about throughout PTAB trials pursuant to this rule change will embrace these actions taken by an examiner throughout examination, reissue, reexamination and prior AIA proceedings in addition to prosecution earlier than an examiner in a associated patent software the place related. Maybe the work of patent examiners will obtain higher respect and at the very least some deference on the PTAB. In any case, the work of the skilled company has sometimes been given a minimum of some significant consideration in federal courts and on the ITC given the experience of the company (i.e., the substantive experience of patent examiners, many who’ve examined in the identical space for a few years, typically many many years). 

The USPTO doesn’t anticipate that the rule change will end in direct prices to relevant entities and should even scale back oblique prices, noting that the PTAB has employed the Phillips commonplace in trials on expired and soon-to-be expired patents in some situations. Events in trials involving the Phillips normal haven’t required expanded web page limits nor have they incurred extra expense than these in AIA trials involving the BRI commonplace. Additional, using the identical Phillips normal throughout a number of fora leads the company to an inexpensive anticipation that the principles change will understand some effectivity within the PTAB’s authorized work by growing judicial effectivity and eliminating arguments associated to totally different requirements.

A lot of the public feedback acquired by the USPTO relating to the proposed rule have been supportive of the change in requirements and famous that the choice would doubtless lead to larger consistency in addition to higher certainty as to the scope of issued patent claims. Some commenters opposing the rule modifications argued that Congress meant the PTAB to use the BRI normal, an argument that had been superior in current months by Consultant Zoe Lofgren (D-CA).

Throughout his keynote speech on the AIPLA annual assembly Director Iancu acknowledged that stakeholders have been keenly within the proposed change to the Phillips normal, which has since subsequently gone ultimate. “We have received about 375 public comments, and the rule change has been met with widespread support from industry, academics, individuals, and trade organizations, including the AIPLA. A few, however, are not pleased with the change.” These few who weren’t happy have cited a consider that the change to the Phillips commonplace would usher in a return to decrease high quality patents.

With a little bit of a confrontational tone, Director Iancu took challenge with that, discovering the argument with out benefit:

That’s curious, as a result of all we did was to say that we’ll use the identical normal at present utilized by district courts and the ITC, and that has been utilized in numerous courtroom proceedings for a few years to date. Arguments that utilizing the exact same commonplace already utilized in federal courts preserves “low-quality patents” are, subsequently, unconvincing. In different phrases, no matter a “low-quality” patent means, it can’t be that it’s a patent that survives problem based mostly on a declare development commonplace utilized in district courtroom.

Put one other means nonetheless: There isn’t a cause for the USPTO to be utilizing a declare development normal in IPR that eliminates patents that may in any other case survive problem in District Courts. Doing so is an instance of what I’ve referred to as an over-correction that dangers throwing out the child with the bathwater.

In authorized phrases, to help the transfer, the USPTO famous within the Federal Register that the U.S. Supreme Courtroom just lately endorsed the company’s capacity to select an strategy to declare development for AIA trials by means of its 2016 determination in Cuozzo Velocity Applied sciences v. Lee, which expressly rejected the notion that the AIA required using the BRI normal. Nonetheless different commenters argued that using the Phillips normal in PTAB trials would lead to inconsistency inside the USPTO, which makes use of the BRI commonplace throughout examination proceedings. Citing to the Federal Circuit’s 2016 determination in In re: CSB-System Worldwide, the USPTO defined that declare development will stay the identical in lots of instances regardless of the usual used. The company additionally said that the statute governing the USPTO’s conduct in reissue and reexamination proceedings have to be in accordance with the procedures established for preliminary examination, which immediately contrasts with AIA proceedings.

“Director Iancu’s heart is truly in the right place and while he’s constrained in how far he can go, I think he’s trying to right the ship,” Edwards stated. “We’re also looking at Congress to pick up the ball at some point.”


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Gene Quinn

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