Motions to Extend Pendency of IPRs Based on Pending Cuozzo Supreme Court Case

B/E Aerospace, Inc. v. MAG Aerospace Indus., LLC, IPR2014-01510, -01511, -01513, Decision Denying Patent Owner’s Motion to Extend One Year Period for Issuance of Final Determination Pursuant to 35 U.S.C. § 316(a)(11), Paper 105 (P.T.A.B. Feb. 26, 2016)

On January 15, 2016, the U.S. Supreme Court granted certiorari in Cuozzo Speed Techs. LLC v. Lee.  In this case, the Supreme Court will decide whether it is appropriate for the PTAB to construe claims in an issued patent according to their broadest reasonable interpretation (“BRI”) rather than their plain and ordinary meaning (i.e., the Phillips standard).  This is a critical issue because many IPR, CBM, and PGR proceedings involve claim construction disputes, and the claim construction standard that is applied may prove to be dispositive in some cases.  See, e.g., PPC Broadband, Inc. v. Corning Optical Commc’ns RF, LLC, 2015-1361 (Fed. Cir. Feb. 22, 2016) (different claim construction would result if Phillips standard applied, as opposed to the BRI standard).

For patent owners before the Board, the use of the Phillips standard would generally be preferable to the petitioner-friendly BRI standard.  When a claim is interpreted broadly, it is more likely to run into invalidating prior art.

Recognizing this, in B/E Aerospace, Inc. v. MAG Aerospace Indus., LLC, IPR2014-01510, -01511, -01513, Patent Owner sought to extend the one-year period for issuance of the Board’s final written decisions by six months.  Patent Owner’s strategy was clear: if extended by this amount of time, the Supreme Court would issue its decision in Cuozzo before the Board’s final written decisions were entered.  Pending the outcome of Cuozzo, the Board could be required to apply the patentee-friendly Phillips standard in deciding the cases.

Although the Board authorized the Patent Owner to file a written motion to extend the pendency of the proceedings (Paper 102, authorizing the motion), the motion was ultimately denied (Paper 105, denying the motion).  In denying the motion, the Board focused on the fact that Patent Owner’s situation was not extraordinary—many other PTAB proceedings could be affected by the Cuozzo decision.  And practically speaking, the Board could not meet its statutory mandate of securing the just, speedy, and inexpensive resolution of every proceeding if a large number of cases were delayed.

In the B/E Aerospace, Inc. v. MAG Aerospace Indus., LLC proceedings, Petitioner filed petitions in September 2014.  IPRs were instituted in March 2015, and oral hearings were held in November 2015.  The Board’s final written decisions are due no later than March 26, 2016.

On February 17, 2016, a conference call was conducted between respective counsel for the parties and the Board, during which Patent Owner requested authorization to file a motion to extend the pendency of the proceedings by six months.  (See Paper 103, Transcript of February 17, 2016 Telephonic Proceedings.)  By statute, final written decisions in IPRs must be issued no later than one year after institution, except that the one-year period may be extended “for good cause.”  See 35 U.S.C. § 316(a)(11); 37 C.F.R. § 42.100(c).

Patent Owner asserted that good cause existed because the Cuozzo case could potentially have a material impact on the proceedings.  (Paper 103 at 4.)  Patent Owner also identified two cases before the Federal Circuit that could impact the proceedings.  (Id. at 4-5.)  Patent Owner argued that it would be more efficient for the Board to take into account these appellate decisions in its final written decisions, as opposed to fixing the final written decisions via a time-consuming appeal process.  (Id. at 10-11.)

During the conference call, Petitioner countered by arguing that the Board has repeatedly denied similar motions, citing Bank of Am., N.A. v. Intellectual Ventures I LLC, CBM2014-00028, Paper 14 (P.T.A.B. Feb. 11, 2014); Samsung Elec. Co., Ltd. v. Affinity Labs of Tx., LLC, IPR2014-00407, Paper 21 (P.T.A.B. Aug. 25, 2014); and Handi Quilter, Inc. v. Bernina Int’l AG, IPR2014-00270, Paper 21 (P.T.A.B. Feb. 17, 2015).  (Paper 103 at 6, 8-9, 12.)  Further, Petitioner argued, the Board should apply the law as it is and not wait on appellate rulings, consistent with the Board’s mandate to resolve matters in a speedy and just manner.  (Id. at 6-7.)

The Board authorized Patent Owner to file a 5-page motion.  (See generally Paper 102; Paper 103 at 14.)  Petitioner was not authorized to file a response to the motion.  (Paper 103 at 15.)  In its written motion, Patent Owner argued that Petitioner had relied heavily on the BRI standard in its unpatentability arguments and that the Cuozzo decision could therefore have a material impact in these cases. (Paper 104 at 3-4.)  Patent Owner also sought to distinguish the cases cited by Petitioner during the conference call, stating that “[n]one of those cases addresses the rare situation here in which controlling (indeed, preclusive) authority is expected to issue shortly after the one-year period for the Board’s final determination.”  (Id. at 4.)

The Board denied Patent Owner’s motion.  (Paper 105.)  The Board noted that at this time, no inter partes review proceeding has been extended beyond the one-year pendency period.  (Id. at 3.)  Further, the Board stated, the appellate cases of interest may not be completed during the requested six-month extension and may have no effect on the law applicable to the pending IPRs.  (Id. at 4.)  Finally, the Board stated that many PTAB proceedings involve claim construction issues, and it would not be feasible to delay all such cases in anticipation of the Cuozzo decision.  (Id.)  For these reasons, the Board held that Patent Owner had not shown good cause for the extension.  (Id.)

The takeaway?  The Board will not likely extend the pendency of IPR, CBM, and PGR proceedings based on the upcoming Cuozzo Supreme Court decision.  Until this decision issues, parties may consider presenting arguments under both claim construction standards, thus building a record of why they should prevail regardless of the standard that is applied.  Patent owners receiving adverse PTAB decisions that turn on the BRI standard should consider filing requests for reconsideration with the Board and then appeals to the Federal Circuit to keep their patents alive until Cuozzo is decided.

By: Joshua R. Nightingale (Jones Day Bio)