Cuozzo Speed Technologies v. Lee - Oral Argument - April 25, 2016

Cuozzo Speed Technologies v. Lee

Media for Cuozzo Speed Technologies v. Lee

Audio Transcription for Opinion Announcement - June 20, 2016 in Cuozzo Speed Technologies v. Lee

Audio Transcription for Oral Argument - April 25, 2016 in Cuozzo Speed Technologies v. Lee

John G. Roberts, Jr.:

We'll hear argument next in Case 15-446, Cuozzo Speed Technologies v. Lee. Mr. Beeney.

Garrard R. Beeney:

Mr. Chief Justice, and may it please the Court: I'd like to begin this morning with why the use of the broadest-reasonable-interpretation expedient in no way comports with the congressional purpose of inter partes review, and then address why the Board's ultra vires determination in instituting inter partes review is subject to judicial review. Consistent with history, Congress left to the judiciary to determine construction standards, and therefore, in the American Invents Act, there is no explicit statutory language directing the Patent and Trademark Office to use any particular standard of claim construction. But this Court should reverse, as a matter of statutory construction, for four reasons.

First, in summary, all agree that the broadest-reasonable-interpretation expedient demands a broad ability to amend claims, and that's so because the broadest reasonable interpretation brings into play a broader array of prior art that may be distinguishable if the claims were given their actual interpretation. In establishing inter partes review, Congress sought to substitute and provide a district court-like litigation for the determination of patentability, and therefore, did not provide the wide liberty to amend claims, as Justice --

Sonia Sotomayor:

I might be moved by your argument if Congress had not given any right for the Board to amend, because that would be consistent with practices in the district court, where district court can't amend under any circumstance.

But basically, Congress here said you can amend once.

I'm not sure that that supports your proposition.

Garrard R. Beeney:

I think -- Justice Sotomayor, I think there is a distinction between allowing a party to make a motion to amend and the absolute right to amend even once.

And Congress did not provide any right to amend in inter partes review.

It provided only an extremely limited ability to seek to amend.

And, in fact, in practice, that opportunity to seek to amend is almost always denied.

And it is denied consistent with congressional intent of establishing inter partes review to be court -- a court-like adjudication.

So simply as a matter of numbers, the Board has denied 95 percent of the motions to amend.

In 42 months of inter partes review, the Board has allowed five motions to amend and allowed four -- less than 30 claims to be amended, while canceling 10,000 claims.

John G. Roberts, Jr.:

What's the second of your four?

Garrard R. Beeney:

The second reason why, Your Honor, the -- the result below should be reversed is because the -- Congress, in establishing inter partes review, intended inter partes review to adjudicate property rights.

And in doing so, it makes no sense to attribute to those property rights a hypothetical interpretation of their meets and bounds rather than doing what district courts do, which is to give claims their actual plain and ordinary meaning. The third reason, Your Honors, why this Court should reverse and -- and have the Patent and Trademark Office use the ordinary claim construction matter is because there are a number of anomalies that injure the patent system and injure patentees that stem directly from the use of inter partes review.

Those include a claim meaning different things in the courts and before the Board.

Those include different results in the courts and the Board as to whether a patentee's property rights are taken away.

And those include claims meaning one thing for patentability in the Board but a wholly different thing for infringement in the district courts.

That's simply untenable, and there's no reason to suspect that that was anywhere within Congress's intent in enacting inter partes review. Finally, this Court should reverse because the government really has not in any way offered a support of using the broadest reasonable interpretation that is in any way tethered to inter partes review.

It simply says historically, we've done this before, and so we should be permitted to do it again. Strikingly missing from the government's position, however, is really any objection to taking the district court's substitute that Congress enacted, and using the claim construction that the district courts do, the ordinary meaning of the claim terms. There is nothing really in the government's brief that suggests that it would be inappropriate to use that claim construction, and that's the claim construction that should be used.

Samuel A. Alito, Jr.:

Is the standard -- is the standard of proof for invalidity the same in an infringement action in district court as it is in inter partes review?

Garrard R. Beeney:

It is not, Justice Alito.

And I think the reason -- there was a sensible reason behind it in that Congress tweaked the court-like adjudicatory system and recognized that it was establishing a board of experts, and therefore, there was no reason to have the presumption in favor of patentability that we find in the district courts. But that in no way suggests that the Congress, in enacting inter partes review, was suggesting that there be a different claim-construction standard that are used in the district courts when inter partes review was to be a substitute for district court litigation. If I may Your Honors, I'd like to delve into the question that Justice Sotomayor asked about the amendment process. I think it's important to recognize, as the Patent and Trademark Office repeatedly has before its merits brief in this case, the profound distinction between the -- permitting a party to make a motion to amend in an adjudicatory context and the absolute right to amend in the examinational contest -- context.

And, in fact, the PTO, as it participated in the Microsoft v. Proxyconn case, submitted a letter to the Federal Circuit making exactly this point on April 27, 2015. What the PTO said to the court was that, in fact, there is this very profound distinction between the right to make a motion to amend in an adjudicatory context and the ability to amend patents in the examinational context where there is an iterative, back-and-forth, generally cooperative process between the examiner and the patentee. That is diametrically different to the system that Congress established in inter partes review, as the Patent and Trademark Office represented to the district court. And going back to the statistics that I was citing in response to Justice Sotomayor's original question, 95 percent of the motions to amend in inter partes review are denied.

Less than 30 claims have been amended, while 10,000 have been canceled.

And there is simply not the kind of ability that is necessary in order to avoid the prejudice to the patentee of giving her claims a construction broader than what they actually are that's afforded in inter partes review.

Samuel A. Alito, Jr.:

Do the Board's institution decisions always set out what it understands the broadest reasonable interpretation to be? And -- and if they do, is it -- must the Board stick with that throughout the proceeding? And in that -- if that is true, why does the patentholder need more than one opportunity to amend?

Garrard R. Beeney:

The -- IPR proceeds in two separate stages, as -- as your question implicates, Justice Alito.

First, there is the institution decision.