Bill Proposes Changes to PTAB Claim Construction, CBM Practice, and Estoppel Provisions

On October 23, Congressman Bob Goodlatte (R. Virginia) introduced a bill that would alter aspects of practicing before the Patent Trial and Appeal Board. The bill, entitled “Innovation Act”, makes patent-law changes intended to curb “abusive patent litigation.” The bill includes five notable changes to IPR, PGR, and CBM practice.

First, the bill requires the Board to construe patent claims “as such claim would be in a civil action to invalidate a patent under section 282(b),” in “accordance with the ordinary and customary meaning of such claim as understood by one of ordinary skill in the art and the prosecution history pertaining to the patent.” These changes would abandon the “broadest reasonable interpretation” currently applied by the Board to IPRs, PGRs, and CBMs. Additionally, the bill requires the Board to consider claim constructions adopted in related district-court litigations.

Second, the bill adopts the definition of “covered business method” the Board applied in SAP America v. Versata. When instituting the SAP CBM, the Board noted that “financial product or service” should “be broadly interpreted” to encompass “patents claiming activates that are financial in nature, incidental to a financial activity or complementary to a financial activity.” Thus, no literal recitation of “financial products or services” is necessary to trigger CBM status. Rep. Goodlatte’s bill applies that reasoning to future CBM proceedings.

Third, the bill expands the printed prior art available in CBM proceedings. Under the bill, petitioners can seek to invalidate CBM patents under (pre-AIA) Sections 102(d), and 102(e), which were previously unavailable.

Fourth, the bill repeals the sunset provision that would otherwise phase out CBM proceedings in September of 2020. CBM proceedings would, however, remain available only for patents filed before the AIA’s first-to-file provisions took effect.

Fifth, the bill adjusts the estoppel applied to PGR proceedings, striking the phrase “or reasonably could have raised” from Section 325(e)(2). This change brings the scope of estoppel for PGRs in line with the estoppel currently applied to CBMs, meaning that parties are only bound by grounds they actually raise. The bill leaves the estoppel provision for IPRs unchanged.