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  • USPTO Issues Final Rule Adopting District-Court Claim Construction Standard For AIA Trial Proceedings

    On October 10, 2018, the United States Patent and Trademark Office (“USPTO”) announced that it had published its final rule changing the America Invents Act (“AIA”) trial proceeding claim-construction standard to the same standard used in district court and International Trade Commission (“ITC”) proceedings.  (83 FR 51340.)  As we previously reported, see Shearman & Sterling LLP, USPTO Issues Proposed Rulemaking to Adopt District-Court Claim Construction Standard for AIA Trial Proceedings, the USPTO in May 2018 proposed this change as part of its ongoing efforts to “shape and improve” AIA trial proceedings.

    The final rule will replace the “broadest reasonable interpretation” (BRI) standard with the standard used in district courts and the ITC, commonly known as the Phillips standard after the Court of Appeals for the Federal Circuit’s en banc decision in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005).  Of note, the new standard will not be retroactive, and instead will apply only to petitions—including petitions for inter partes review, post-grant review, and covered business method patent review—that are filed on or after November 13, 2018.  Additionally, and consistent with the initial proposed rulemaking, the final rule requires the USPTO to consider prior district court or ITC claim construction determinations.

    Although there is very often little or no substantive difference in claim construction under BRI and Phillips, this change may still have profound effects on AIA trial-proceedings, and parties would be wise to reevaluate their current strategy.  No longer will parties be able effectively to isolate claim construction arguments before the USPTO from those in district court or the ITC.  Among other things, the new rule should eliminate (or at least substantially reduce) the common-Petitioner practice of pursuing a narrow claim construction in district court to avoid infringement and a broad construction before the USPTO to show invalidity.  The new rule also increases the possibility that the USPTO will defer to a prior district court or ITC claim construction determination, and that a district court will find issue preclusion based on a USPTO claim construction.  Practically speaking, this rule should lead to the USPTO’s intended goals: “greater consistency and harmonization with the federal courts and the ITC and . . . greater certainty and predictability in the patent system.”

    The Final rule was published on October 11 in the Federal Register, 83 FR 51340.