PTAB Proceedings Becoming More Indefinite

Robert M. Asher

By Robert Asher. Chair of our Patent Office Litigation Group

June 2018 PTAB Alert

Last month, I argued that indefinite claims would become more vulnerable to inter partes review (IPR) after the SAS Institute decision. Days later, the USPTO confused matters by issuing a Notice of Proposed Rulemaking, calling for a change in the claim construction standard that will benefit all patent owners. Instead of the broadest reasonable interpretation, the PTAB is on the verge of moving to the narrower Phillips standard used by federal courts.

Several years ago before inter partes reviews had gone into effect, I wrote Inter Partes Review: The New Markman Hearing? Favoring a single standard for claim construction in the courts and the PTO, I wrote “A unitary approach to claim construction of issued U.S. patents should create greater certainty and enhance confidence in the judicial system.” The article envisioned the PTAB taking the lead on claim construction. It appears that this day is about to arrive.

While a unified approach to claim construction will have its benefits, questions abound when it comes to indefinite claims, in particular, means-plus-function claims which lack a sufficient showing of corresponding structure in the specification. Courts are well equipped to deal with indefinite claims. If a court cannot construe a claim, it can declare the claim invalid for indefiniteness. But the PTAB is different. The Supreme Court has noted that “canceling a patent claim for ‘indefiniteness under §112’ in inter partes review” is outside the statutory limits of the PTAB. Cuozzo Speed Technologies, LLC v. Lee, 1316 S.Ct. 2131, 2141-2142 (2016). Thus constrained, how will the PTAB address indefinite claims?

To date, the PTAB has simply refused to institute challenges made against claims considered indefinite. But now, in view of SAS Institute, if the PTAB institutes an IPR, it will necessarily address all grounds and claims raised in the petition.

As to indefinite claims, uncertainty will reign until the PTAB adopts a uniform approach. To continue its practice of refusing to institute challenges against indefinite claims would be a drastic approach, because in the aftermath of SAS Institute it mean dismissal of the entire petition.

While denying institution might be palatable when the indefiniteness permeates a large portion of the challenged claims, when the indefinite claims make up only a small portion of the claims, such an approach will be quite disturbing to petitioners.

A better approach would have the PTAB devise a method for construing indefinite claims under the guise of Phillips construction. The courts have not established a controlling claim construction method for claims deserving to be adjudged invalid for indefiniteness. So the PTAB should be free to proceed on a clean slate. Without clear guidance from the claim language or the specification, a broad construction can be expected to flow naturally.

For example, a means-plus-function claim element lacking corresponding structure in the specification could encompass any structures that perform the recited function. The patent owner would then be faced with a broad construction that may subject the claim to a strong prior art challenge. Patent owners may need to resort to a motion to amend the claim to distinguish it over the prior art and make it acceptably definite. Petitioners will need to weigh whether the possibility of amendment is more of a concern than the cost and uncertainty of mounting an indefiniteness challenge in federal court.

The PTAB Notice states that according to Phillips a claim is construed to preserve its validity if “after applying all the available tools of claim construction, that the claim is still ambiguous.” On the other hand, the Notice continues, “the Federal Circuit ‘repeatedly and consistently has recognized that courts may not redraft claims, whether to make them operable or to sustain their validity.’” Moreover, even district courts will strike down indefinite claims rather than construing them to preserve their validity.

While it is possible the PTAB could use Phillips to find indefinite claims valid, such a result would be too incongruous to become an established practice. More likely, the PTAB will seek to operate in a manner consistent with the overall intent of the patent statutes. It should find a way to construe indefinite claims broadly so that they can be invalidated or amended. If the PTAB instead finds itself compelled to give a helping hand to indefinite claims that should otherwise be invalidated, the legislature may need to bail it out with a statutory change to allow indefiniteness to be asserted in IPR petitions.

The Notice is especially harsh in that it proposes to apply Phillips construction retroactively to all pending IPR proceedings. The PTAB believes that a change in claim construction standard will not impact the construction of most claims. Nevertheless, if retroactive effect is given to this change it would create enormous turmoil in hundreds of pending IPR proceedings, to the dismay of many petitioners. Comments concerning the proposed new rule are being solicited through July 9. Stay tuned.